turn around it is important to known that the ivb is just off of the session lows. it's 20% of the healthcare which has been a leader in this market. great stuff from nantucket. >> it's been a crazy market day. you have janet yellen speaking tonight at 5:00 p.m. eastern time. you will watch the futures after the overall cash market closes. could be a wild evening as well. will she walk back interest rate expectation as soon as a lot more to do here on cnbc. thanks for watching, everybody. "closing bell" starts right now. >> yes, hi, and welcome to the "closing bell" i'm kelly evans. >> and i'm bill griffeth. it must be important because we're already sitting at the set at post 9 at the new york stock exchange. the dow has come back. we could be positive any moment here, we've come back from a 260 point decline earlier in this session. who knows, maybe it's on hopes that janet yellen could strike a

more dovish tone when she speaks on market policy. that's coming up in two hours at 5:00 eastern time. meantime, the stock market still dragging down the markets. caterpillar is a huge decliner today after announcing this morning it is cutting 10,000 jobs. >> we will break down the ripple effects of that news coming up for you. also walmart stressing its suppliers? china look to go benefit from a cheaper yuan. >> if you haven't heard netflix is getting into virtual reality. you can watch house of cards, wouldn't that be interesting? they have a new partnership with ocul uchlt s. we have the ceo on a first on cnbc interview. we were talk being the incredible 360 videos that they are able to produce. there is one on facebook. my head is exploding from all the pockets that we were talk being a little while ago which we will get into in a little while here.

>> facebook.com/"star wars" if you want to prep for this interview. >> let's start with the stock dragging down this market it is caterpillar. >> the dow component is contributing nearly 30 points to the dow decline after the industrial giant slashed its 2015 revenue forecast up to 5,000 employees will lose their job between now and the end of 2016 and that number could rise to 10,000 jobs through 2018. now, this restructuring plan announced today is expected to lower operating costs by about $1.5 billion annually. but investors don't seem to be. >> bringing down the broader industrial sector. bill and kelly. >> all right. thank you very much.

let's dig deep floor this market. what is now a come back bob pisani. we were down 260 on the dow, now a decline of 50 points. what's going on here? >> the first thing that happened was a rally in oil and i was waiting for the overall market to sort of catch up. it took a very long time. oil rallying around 11:00, 1:15 slowly moved some of the oil names into positive territory, exxon up 1%. chevron doing the same thing, up 1.5%. i think much more important than just the energy stocks rallying is the broad rally in the last hour. we've been talking about the beaten up sectors, the global industrial names. bost of them down 2% today, names like emerson, fleur, ingersoll-rand, these stocks were down 2%, they've rallied in the last faur. fleur is positive, emerson is positive. these stocks were all down 2%

for more just about two hours ago. we're getting notice ability volume biking up on a fairly mild volume day. most of the big names are down about 20%. that includes ingersoll-rand and caterpillar united technology and fleur. it's hard to describe 1% down every day. what happens is it really builds up eventually. let's hope there is some bottom being put in for those big names. >> big drop. wow, bosh. that's bob pisani. >> joining us at post 9 here at cocaine contributor heather hughes, we have jeff sock from raymond james and steve grasso. you and i have long had that personal joke about oil, it's all about oil. is it all about oil? what's this come back today? >> i think when you start to see oil, oil is the can a nary in

the coal mine. cat used to be so everyone looks for oil and the complex. if you start to see the oil complex rally, those are the high bet at that names, the names that are the most shorted in this environment. people get tipped off thinking that maybe china or growth is going to be better than expected. this is a one-day event. nothing something to buy into in my opinion. >> this market will have to overcome the commodity slump. china's groelt is slowing but is that enough to stake down the broader market? >> it has been. it's been a cornucopia of bad events that have capped that gave up a capitulation low on august 24th. bottoming tends to be a process not an event. it's rare to get a v-shaped bottom like we had october 15th. you tend to come down, make a low, have a throw back rally, come back down and test the lows. >> what do you make of the mindset of the market? it definitely has been negative since last thursday in the fed meeting, now we are waiting for

janet yellen to say something in a couple of hours. >> you would have thought that if we're not raising rates you would have seen a rally in the markets, but since it was expected and anticipated the markets of course have declined since that meeting. we will hear more from her this evening. i know she doesn't have a q and a session afterwards but maybe she will have a more dovish tone. we need a change even though we have had a great rally over the past hour, i think we need a change, a fundamental change in the market internals. we're talking about volume across the board all of the sectors, energy is coming back, that's a positive. when you look at earnings results, really earnings growth is only coming from consumer discretionary, health kwar and sfnls right now. we need a more broad market participation. >> on that point, jeff, what do you want to hear from janet yellen tonight? do you want to hear a message of we're going to raise rates because everything is fine, we are still doing it or do you want to hear her say things are

looking a little too shaky and we will hold off. >> i'd like to hear her say that we still have the intention of raising rates. speaking to the earnings, earnings will be down between 4 and 4.5%, but if you x out the energy sector earnings are positive. >> at some point in some time if you scope saying we're going to raise rates somebody is going to call your bluff. >> i think they have lost credibility. i said it a week ago that i don't think is that ms. yellen can -- or the fed can raise rates hit. they're painted into a corner and they don't want to come out -- we all talked about the dual mandate. they have 17 mandates and he can't juggle them all. >> why is that a negative for the stock market? every time they didn't raise rates the markets would rally. >> i think they missed the window of opportunity before china imploded -- in fact, imploded and was in a process of bottoming they should have raised rates. they should have raised rates

when they saw china market outperforming. they had a window of opportunity to do that. right now the hands are tied. >> there is this growing chatter of a global capacity overhang. we if we don't see is that happening they may not have a hard landing, but their economic date at that points may not be guaranteed positive results going forward. >> there is a wide belief that we could go back to the august 25th lows and maybe even the october 15th lows that jeff was talking about. would that be healthy? would that be troubling? what would you guys think? >> i'm looking for at the very least the 1867, most recent low, i'm look for that test, the august lows, but the 18120 low, you were talking about the october 2014, that's a must hold. if we break that level, level exist -- it always feels like bugs bunny, if you cross it now what. but if we do cross that level it

gets really frightening. 200 handles lower in the s&p for real support. >> stocks are trading below their 200 day moving average still. >> it could get extremely ugly. i was hoping to get that 1867 test. we zirvz . >> i think healthcare complex, demographics are going that right way. >> even with the biotech pressure. >> i'm talk being the solid names that have earnings growth and dividend growth t makes a lot of sense over the next three to five years. >> heter. >> right now we have had growth outperform value as of late. if we do get a pull back in the markets and slower global growth as that continues you may see a reverse to value out performing

growth. >> steve. >> u stilts. they outperformed today. you know you're getting yield there. the other way you're looking for ms. yellen to give you the hint on yields. >> thank you, everybody. >> thanks, folks. >> anything is possible in this next hour here clearly because it's already happened today. the dow down 260 at the low, we came back, were down just 50 points when kelly aged started now we are down another 110 points. >> exactly. quite volatile ahead of hearing from the fed chair. much more of a market coverage still to come including one bull who says we may be just a few weeks away from a big rally. >> g whiz technology from october lus vr. they are partnered with netflix to let you watch a virtual reality edition of your favorite tv show. when we come back.

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two sectors in the green at the moment, you heard it from steve grasso, utilities are leading the way again. >> and energy is snm two. boy, they're strange bed follow lows. we have had a come back rally for oil today and that is what sparked this come back in equities as well and there's jeff scott's healthcare sector at the bottom of the heap. >> lagging along with financials. some interesting signals as we wait to hear from the fed chair in a couple of hours. >> facebook's $2 billion acquisition of oculus rift last year is now being put to use. just yesterday the company rolled out this 360 degree video technology. disney and lucas films jumps n the action they are use to go promote their new "star wars" movie the force awakens. you can find it, maybe of you

can -- i can't which we will talk about, but it's on facebook today. >> moments ago it was also announced that netflix will be belong the new partners for streaming video to virtual reality. first on cnbc interview from the oculus connect conference we are joined by brendan iribay who is the ceo of oculus. welcome to the program. >> thank you. >> bren dan, this has been a frenzy of media attention for you and your company lately. today new announcements. for those of us who look at this scratching our head why is this so tranls formative, this virtual reality? give us a glimpse into the 360-degree few tour. >> like mark said there has been sharing for the last many years from texts to photos to videos and virtual reality is that next immerse sieve way to not just share but play and play games. that's what we really focused on in a big way at this conference was the developers of our

community around playing games and experiencing entertainment so you really felt like you were there, like you're inside of the actual experience, whether it's a game or a movie. >> mark, being your new boss mark zuckerberg of facebook i'm going to nitpick just a bit. i have my ipad sitting here waiting to look at this video, this 360 video on facebook and i can't do that, it's not available in ios, it's not available on certain browsers. is it going to be eventually or what's going on here? you have a little turf war going on? >> right now we're partnered with samsung to make the consumer gear vr, the portable vr device and you need a galaxy phone or note made by samsung to work with that device. we also have the oculus rift which will be compatible with pcs starting on windows. so you either need a windows pc or samsung galaxy phone to experience oculus virtual reality. >> has tim cook called you at

all? >> you know, we're big fans of apple and everything that they do as well. we will see if and when it comes to an apple platform. >> there's a cover in vanity fair this month which is all about reportedly mark zuckerberg, brendan, but quite clearly it's about how mark zuckerberg seeing the future of facebook is being oculus rift and quote from the article he is not only talk being gaming and maybe real estate and some of those aspects but he says eventually i think we are going to have technology where we can communicate our full sensory experience and emotion toss someone through thought. how soon before that is the reality? >> yeah, there's going to be incredible innovation and progress that happens over the next few years in virtual reality. really the next decade or two is going to be one of the most exciting times, i think, for many people in our entire life, like the dawn of computers, it's

now the dawn of vr and vr allows you to teleport around different places on earth, allow you to be face-to-face with people and connect with people in a way that's richer and more immerse sieve than we ever have. it's a race to reality. we want to have virtual reality mimic reality and have it be as believable, as comfortable and as immerse sieve as reality. >> but those head sets they're so clunky. >> well, they start out big today, i think computers started out big in the beginning and then they miniature rise ds and now you have a super computer on the palm of your hand on on your watch. virtual reality will start out bigger and shrink down to sunglasses in not that many years. >> google on line two for you, they're look for a use for google glass still at this point. we have the gee whiz factor, you're going to play games, you have all of that, but what about practical application as soon as i will tell you kelly and i were talking to somebody a little

while ago who is looking into the real estate aspect, you can view he will state that's for sale using this. what about these kind of bracket skal applications and how long before this kind of technology seeps into industry? >> well, we are really focused on games at oculus, but being a part of facebook we are also looking at how to get this out to auto broader audience and how to be able to capture moments like mark was talking about from the transition from kind of the text photos to video to being able to capture moments whether it's architecture or capturing the inside of a house or you capturing your kids or a birthday and being able to share that with your family. so it feels like they're actually there. they actually were at the party or in the house, the real thing. so it's just beginning, it's going to start on games, it's going to be mostly about games and entertainment but it will quickly go broad. >> is this going to arrive in time -- what is your timing or oculus rift and what are you looking at in terms of cost?

>> so we just announced today with samsung that gear vr will be $99. so you will be able to get this mobile vr this first step into virtual reality for $99 which is a pretty low price point. that's certainly accessible for most people. and then the oculus rift connected to the pc we're targeting being able to have a rift and a p skrchlt combined, you have, you know, most people will be getting a new computer, not everybody, but if you did need to get that new computer and a rift it's going to be less than $1500. here at the show we announced pcs under $1,000 and we haven't announced the rift's price yet. >> you also have this announcement this joint venture with netflix where you will be able to watch 360 views of our favorite tv shows. how is that going to work technologically and what kind of financial arrangements are we talking about. >> that's targeted to your vr, consumer gear vr, you will be able to put on the headset and

have a huge theater view netflix. this is just the beginning. where we want this to go is imagine in the future when you have virtual reality is just a pair of sunglasses and you can pin up netflix on any wall, you can pin up tv on any wall, you don't actually need tvs in the future. you do today and we're certainly not replacing tvs now, but you can imagine in the future when a tv screen could be pinned on any wall or float nothing front of you anywhere you go. >> what about the u.s. military, are you guys working together to deploy this technology? >> so we provide the oculus rift on our website as a developer kit, we are getting ready to launch the consumer version soon. samsung provides the other addition. we have heard both of these products are being heavily adopted by the military. we don't have a direct relationship, they are just on our website or in stores and from what we've heard definitely a big part of the military is moving all of the old vr that

didn't work that well over to this consumer vr. >> finally, now we will let you go after this question, i'm the guy that asks the fun ones. are you guys making any money on this? >> so right now we're focused on getting the best virtual reality out to the most people possible. we want to get this out to the broadest audience, millions of people and that's our partnership with samsung as well as our own device. right now we're focused on not losing money and getting it out to the widest audience. we have a big future ahead and we're very, very confident that this will be a big part of facebook in the future. i think mark agrees, you heard it today. >> understood. brendan iribe the ceo of oculus. thanks for joining us today. >> thank you. >> thank you. >> and certainly breathing fresh air into shares of netflix which are up 74% today on the news. >> years and years ago the late nerve griffin had a tv talk show and he was stalk being virtual

reality, nobody knew what he was talking about but he said some day virtual reality will be here where the viewers watching on television it will be like you could be sitting on the sofa with the guests on the nerve griffin show immersed in the thing and we thought this guy is out of his mind. i think it's finally going to happen. >> you can come silt on the set with us perhaps. >> we're going to be heading to the close, 37 minutes left in the trading session snoot dow down 67 points at the moment, it is the worst performerf of the major averages, scat peculiar is having a horrible session, the s&p down 4 points, the nasdaq down 14. >> when we come back a look at some of the silver linings on an otherwise down day on wall street. >> and more executives out at volkswagen. we have the details and impact on germany's economy when we come back. ♪ isn't it beautiful

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pretty volatile today, the dow was down 260 points at the low of the session, came back, we were down 50 about 30 minutes ago, now down 82 points. >> let's take a look at some of the big winners on wall street today. gold rallying nearly 2%. that's giving a lift to the gold miners. welcome relief to these stocks. there you can see 6 to 10% gains across that sector. utilities another safety trade winner as investors seek out high dividend paying stocks. up nearly half a percent since the fed decided not to raise rates. that compares to the 4% decline

for the s&p 500. goldman sachs upgrading monster beverage to a buy. that implies more than a 20% upside to its closing price. it's currently trading at about 138. >> volkswagen is about to name a new ceo in the wake of this huge emissions scandal. sfil lebeau stepping in with the latest developing on that. >> tomorrow is a big guy at vw head quarters in germany. a number of things on their plate. let's run down what we expect to happen tomorrow. is a board meeting we do expect there will be some kind of a statement about how many people were involved, who will be leaving the company. unclear if we will get specific names and their level of knowledge about what's been happening with these diesel emissions. we do expect at the board meeting a new ceo will be named. we have been told by sources that it will be this man, this man being mattias mueller.

he has strong support on the vw board according to one source i've been talking to in germany. he can get his arms around this crisis that is basically dogging volkswagen right now. meanwhile, with regard to this scandal, the emissions scandal, it continues to grow. the german transport minister saying that volkswagen admitted that it was rigging engines and the emissions of those engines in europe, not just here in the u.s. but in europe as well. the european commission is calling for testing of other vehicles, not just volkswagen models. within the last few minutes we have seen a report out of italy that it plans to test all models that are sold in italy as a number of countries in europe are now saying just how widespread is it in terms of diesel engines not meeting their

requirements when it comes to clean air emissions this. standel continues to grow. take a look at shares of volkswagen t has been a day of a lot of headlines, most recently involving bmw with a report earlier today that it was also rigging the emissions. came out and said, no, we are not doing that. now the company that put out the report, the publication, has said, we were wrong, they are not rigging their emissions. just gives you some sense of what's happening in the auto space november europe. >> the economist saying this could be the end of the diesel car industry. >> i wouldn't go that far. i think that it's certainly going to hurt what chances they had of catching on in the united states but you are looking at half of the vehicles in europe, kelly, they are diesel models. that is the structural infrastructure cultural issue over there. i'm not sure you will get people who will say i'm not driving diesel anymore simply because of this. >> it's not a matter of whether people will want to drive them

but whether in an era of stricter emissions standards whether diesel will make the grade. the question becomes whether or not they can make the great. what their motivation was remains to be seen, the bottom line i have stalked to people who have said diesel engines can become more fuel efficient. >> the subject of a scathing wall street journal op-ed today. thank you very much. our sfil lebeau with the latest on the diesel -- what are we calling t debacle. time now for a cnbc news update. let's get over to sue herrera. >> here is what's happening this hour. while russian president vladimir putin and president obama have

agreed to meet at the u.n. on monday, they don't seem to have the same agenda. the kremlin saying syria will dominate the discussion while the white house said ukraine will be on the top of the agenda. >> a terrible accident in seattle, a ride the ducks tour video has collided with a charter bus on a bridge in seattle killing two and critically injuring at least nine others. the amphibious duck vehicles have been involved in several accidents, most recently one in july. implt bm announcing a new san francisco location for its artificial intelligence unit watson signaling an expansion of that business. it is widely known for beating human contestants on jeopardy. in addition big blue is expanding its watson product offering to developers. sprint announcing a $1 per month plan for apple's new iphone 6. it is upping the anti in a battle among top u.s. carriers to sign up customers ahead of the phone's launch tomorrow.

t-mobile offering the phone for $5 a month. no deliveries of the iphones in manhattan where the pope is. >> that's right. >> not for the next couple days. >> not for the next couple days. >> not a lot of things will be going on while the pope is here. i knew the phone companies couldn't wean themselves with the initial announcement you would have to pay full price and then no skrt. i knew they would come up with another age snool consumers don't want to pay for the phone. that's it. >> but somebody has got to pay. sue thank you, sue. >> we are inside that last half hour of trading, the down 59 points. is it possible that we could have positive by the end of the close? >> also, walmart stepping up the pressure on its suppliers by asking them to bass along the savings from chooirn's devalued

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there have been more zigs and zags in today's market than the pope'sity rear for new york city tomorrow. what a day we are having here and early this morning the selloff was caused by this huge selloff in caterpillar as they are announcing this big selloff and laying off of as many as 5,000 workers. that stock down 6.4% still. that has not come down much. and their rivals, deer and joy global also suffering as a result of sthachlt they are among the worst percentage decliners in the s&p 500. >> with less than half an hour to go we are watching with markets into the close with matthew chess lock. what do you have your eye on? >> one thing we will look at is

janet yellen and they are talk tonight. i think that's going to be overanalyzed as it normally is going into it. >> it looks like it's being bogged going into it. >> i think we are still a little bit of a rally. we had good data on the housing numbers, durable numbers weren't as bad as they had forecast or could have possibly been. this market was due for a little bit of a rally. >> the dow down 72 points, s&p down 5, what's the most significant about the numbers, the trading activity we are seeing here? >> we held key at least psychological levels, 16 down on the dow, 1900 on the s&p and we bounced off those and that's where we are right now. one thing i'm looking for over the next couple days a china. they will close for holiday, we are going to see probably some selling going into that. no one wants to be unable to trade china for a whole week. they've been leading this market over the last month and a half certainly. fed is going to have their eye on that. >> mostly to the down side. >> yes, unfortunately. >> we will let you go, matt. happy birthday to your mom today. >> thank you very much. happy birthday, mom.

>> walmart seeking more discounts from its suppliers. this time reportedly asking its overseas suppliers in china to share those savings that are being generated by the devaluation of the chinese currency that was announce this had summer. let's bring in january kanifan and did he havy link. first we want to note that we reached out to walmart for comment on this, they said they don't have anything to add on this story at this time. jan what, do you think? it makes sense. they keep close tabs on their suppliers anyway. if they are going to get a savings from the lower yuan why not share that? >> i think the news would be if we can say the dollar strengthened by 2% against the yuan and nobody decided to go take it out of the supply chain. this won't just be walmart, this will be every major retailer that brings product out of china

i guarantee you is over talking to people saying we need that 2%. they will either get it out of this order or the next order and i would be really surprised if that were not happening. they all need that right now. and walmart really needs it. they raised wages by quite a bit. they need to get money out of the supply chain. this is an easy 2%. >> stephanie. >> i think it's more than just the wages that november offset. clearly they are going after costs, that's obvious, but in terms of their investment spend that they have been having to do because they are at a competitive disadvantage at this point so it's higher wages, higher investment, growing more internationally, trying to get higher sales in the face of lower margins. not to mention the fact that the stock is down 24% because a lot of their competition is ahead of them on this. i think they have a lot that they have to do and this is certainly something that at least is going to get them in the right direction. >> even if they didn't face those head winds it makes sense

to go to your suppliers and say if the chinese are going to lower their currency why don't we get some of those savings? >> i totally agree with you. the issue i have you might have ramifications for the consumer. they may not be getting as good of a price from their suppliers and can't offer every day low prices like they had. i think the consumer is at risk in terms of seeing higher prices >> i don't see that happening. i see prices going anyplace but up. they've been going down, we have had deflation in, for instance, apparel retailing for 13 years. walmart is going to drive down prices, not drive up prices. they're trying to get this out. yes, they're trying to extract it so they can be more efficient, but eventually everything walmart does gets passed through the consumer. i don't think walmart is behind the game here. walmart has got the most efficient supply chain of anybody in the world. yes, they're taking a lot of pressure from people like amazon

who aren't making a profit and delivering it to the bottom line, but walmart is being very efficient, they're also trying to make a buck. >> they may be efficient but the stock is down 24% and it's telling you that they actually haven't been very competitive. they have to go after something and cost i applaud them for doing it but i don't think this is going to lead to lower price force the consumer at all. >> just knowing how the world has changed in the last 10 or 15 years how much of walmart's supplies on shelves are from china. this overwhelmingly significant? >> it's very important and as i said 10,000 suppliers and they are using their size and their scale clearly and again it's a good move for them to get their cost structure in line, i'm not sure it's going to do that, though. >> but kelly, you make a good point. it is true is that product is moving out of china. walmart still has an enormous involvement in china, it's their biggest source of goods, but we are seeing movement out of china and that's another reason that

this pressure on the supply chain can be there because chinese manufacturing is giving up jobs, not gaining jobs. so they have a hard time saying no when there's pressure on the supply chain and there's money to be giving back like this 2%. >> you said you figure other retailers will do the same thing. do you have any ideas, target? >> i not only figure they are going to be i assume they are right now. if macy's isn't talking to china, pennies isn't talking to china i would be stunned. >> very good. good to see you both. >> thank you so much. >> we will see you in just a minute, steph. 18 minutes to go into the close. the dow down 60, s&p down about 4 or 5. so it's actually the outperformer of the broader index, nasdaq down 13 points. >> down more than 10%. we're going to go live to the nasdaq, talk about where it's going from here the rest of the year. >> later on the "closing bell" former congressman barney frank and bernie kudlow weigh in on

jeb bush's plan to wipe out federal regulations. >> that ought to be over big. >> we're watching cnbc first in business worldwide.

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welcome back. 15 minutes to go. it's red again on wall street. today but we have moderated our declines as we await janet yellen speaking at 5:00 on inflation dynamics and monetary policy. still the dow weighed down by caterpillar, down half a percent or 72 points. >> we know the speech is about monetary policy. will it just be a lecture or will it try to signal what their intentions are for the future? >> there is no q & a. it might be a reiteration what have we heard last week. the question still remains what does this market want? >> you are asking why are we showing blackberry. shares of the company can be down 1% ahead of the earnings report due out tomorrow. blackberry skre john chen will be on squawk alley tomorrow at 11:00 a.m. eastern time to talk about the company'sel future. >> the nasdaq is set to turn in its first negative quarter in

two and a half years. let's check in with bertha coombs. >> the big reason for that is biotech. biotechs have been up a record ten straight quarts and are on pace for their first negative quarter in about that time. biotechs today have come well off the lows of the session but at one point today they did breach the august 25th low. we've already seen a change in sentiment about biotechs this week. today that's one of the few sectors that is trading at above average volume. where as the rest of the day it's kind of been an average sort of day. we have seen a bit of a reversal. apple has turned around some stocks like sea gate technology that hit a new low today, also turning around sea gate we have seen nam of executives that have seen filings that they have been biology the stock at a one year low i guess that's attack testify. we are also seeing all those virtual reality players doing

pretty well. you've got facebook in a deal and netflix also saying it's going to be using the technology or a deal where they will be using it on netflix and gopro saying that it's offering the video. bill, i just want to show you because i have multiple flat forms i do have a samsung phone and it's really cool. i guess you can't see it because of the lights but it is cool when you tilt your phone you can see different planes, it gets it three different ways. you can a game there are would be a real game changer and a whole lot of fun i would imagine. >> i am very jealous. >> you can come borrow it, come on up to the nasdaq today if you can make your way through the papal gridlock. >> i'm understand it's not available on black ber gee. >> i'm still confused by the whole thing. bertha, thank you so much. our bertha coombs, a glimpse into the future. >> i want to bring your attention to shares of trans ocean right now, the shares are drochg by 7%. a bloomberg report says that

trans ocean was reportedly cited in the car wash investigation and that's why you are seeing shares more lower. according to this report a former petro grass employee has testified he received payments from someone supposedly to be a representative of trans ocean in exchange for a rig contract. this is clearly a developing story. shares down 6.6%. >> a big hit for them. at least in the stock for now. we will continue to sfoel developments there. ten minutes left in the trading session with the dow down 71 points. we have already established a lot of volatility stood and it is anybody's guess -- you know, energy has had an impact in that is correct the slow down in china, the impact that has had on caterpillar. >> utilities again the outperform outperformer. >> now, despite today's selloff we have someone who says the dow can still hit 20,000 by the middle of next year.

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seven and a half minutes left. i forgot to mention before the commercial break art cashin stepped by, gave us the signal it was $300 million to sell going into the close, that's the bias of the imbalance with the dow down 82 points. joining us right now a couple of bulls, oliver porsche and bryce headily from big friends.com. frank, you are the one seeing the dow down 27 -- >> we are getting record levels of pessimism i think we regain all the ground we've lost in short order driven by earnings. i think you will see the earnings come mid-october be better than expected. they may not look at good as people would like but i think the markets will rally because it's baked in the cake and we pour in the seasonal push. >> oliver. >> generally agree. i think a lot of the head winds that you saw in the first and second quarter of this year with earnings and revenues are behind us. you have had the dollar trading

sideways, you have china baked n you have europe that did pretty well in the third quarter from an economic perspective. we think that the fourth quarter will be very strong. >> do you think china is baked in? you just said that, but when we get a surprise like cat flar who is saying they have to throw in the towel because of -- >> you're going through a lot of emotion at in the market wherein investors are overly bearish. you're also going through what for some most people was a surprise by the fed keeping things at zero. most are recalibrating their expectations. the u.s. economy continues to improve at a moderate pace, labor markets continue to improve. if you have good earnings come out in q 3 i think the seasonality, i think the positive earnings will drive things up and you could easily see a 10% ral rein the fourth quarter. >> before we go what are you expecting or what do you want to hear from janet yellen this evening? >> i think she will soothe people that fed got too negative

or worried and i think she will talk them down and say things are okay. my expectation right side that it's all about how the market reacts. today was a fairly good reaction going down 1250 and recovering a lot of that in the face of caterpillar news. i'm looking at good reactions to bad news. >> assuming the fed raises rates in the next few months, is that a positive for stocks? >> i don't think so, but i don't think a quarter point is going to derail anything. i think it's more the markets wondering how far the fed is going to go. i don't think they will go too far, especially in a presidential election next year. >> when they raise they will be viewed as a positive and you will see a market rally. >> thank you, gentlemen. >> we have it on video, we might make a 360 video. >> bradley is going to help us with that. >> bob and i will come back with a closer count down review this volatile day in just a moment. >> after the bell nike earnings set to be released a new minutes. analyst right side predicting a big day. we will get a complete breakdown

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that's wreaking havoc with their business in chooiina. down 6%. that accounted for roughly 30 downed dow points today. without caterpillar we would be down 25 points onts the industrial average. let's compare the dow to the price of oil and see how they did. oil came back the stock market did to some degree and you can see it tracking here with oil up 1.5% but there were maybe other reasons that the market came back this afternoon, bob. >> some people think the pope upgraded the u.s. economy. that may have been just a little humor on a down day. there is a fellow at jpmorgan, he tracked the following a few weeks ago commenteding on some of the causes of the august 24th decline. it did apparently have a note out saying that a lot of the technical selling we've seen recently he feels is over at this point. he that came out close to 2:00. the market did lift around then. it's hard to say. there's a lot of speculation

will janet yellen of course but that may have been a mix in the factor -- in the mix today. i want to note that the volumes did not particularly blow up, still on the moderate size. >> see you later. going out with modest declines, certainly didn't look like that this morning but the volatility does continue. what about tomorrow? we will get you ready coming up on the second hour of the "closing bell." i will see you tomorrow. thank you, bill. welcome to the "closing bell," everybody, i'm kelly erchs. here is how we're finishing the day on wall street. dow giving up 75 points, nearly half a percent. the biggest decliner is caterpillar with a decline of 6% for that giant. the s&p 500 broadly speaking held up reasonably better, it was down about a third of a percent, gave up 6 points, the nasdaq for its part was down 18 and healthcare had a tough session today. joining the panel with key

events including michael earning and janet yellen we have skarl roth and stephanie link and with us more on today's market session "fast money" trader tim see more. let me just begin -- let me come back to this in just a second here. are we going to see them now or no? all right. we'll wait. we'll wait. i'm jumping the gun. a lot of excitement. all right, tim, i will begin with you, then. you came well off the lows of the session, what do you think was going on in the market, especially towards the end of the day? >> i think in the morning we were digesting more glen core down 10%, caterpillar's announcement has clearly put all of the growth risk factors of the world, the brazilian rial was blowing out. all the reasons people are defensive right now, were playing out. i think you got to a place by the afternoon -- i think things were a little oversold, key technical levels in which the market bounced off. a close in the s&p of 1930 is

pretty constructive. the fact oil is holding in, that volatility is stepping away from the market which i also think is constructive. good numbers out of germany, good jobless claims numbers. i don't think the world is that bad a place. >> steph. >> em encouraged that the market came back because the cat news was disappointing but it doesn't surprise anybody. they have had problems for years and years and years. i guess maybe the magnitude down 5% in terms of guidance was a little surprising, i'm encouraged that we came back. this economy has been two tier. you don't want to be involved in the industrials or mining or anything like that, on the other hand consumers have been pretty good and we got pretty good housing date at that this morning. people were trying to figure it all out and i think that's happened. >> what do you think, carol? >> i love being on the panel with these optimists. the thing that concerns me when i see a name like caterpillar or in august it was hp is the level of the job losses and what the

implications are there. i think that there is strength in the middle market, there is strength in some of the smaller names but it does concern me that some of these bigger names, especially those that have the international exposure are continuing to really struggle and that that -- they are having these major layoffs. we're 10,000 for caterpillar, umpteen thousand from hp and what will that mean to the strength of the u.s. economy when we are trading, really nice paying jobs for potentially ones that are more part-time in nature. >> i have to say that is what's disappoint being a little bit of the market action, it really can't get over the falling oil, it really can't get over the fact that these big industrial names are struggling so much. what is it going to take to find a way to rally again? >> earnings season. when we hear of companies, particularly the consumer at 75% of our economy. i'm pretty hopeful, but i am pretty confident that the

consumer is going to be pretty good, particularly in housing, also in auto, it's still very strong. so i'm rlg very honed in on that particular part of earnings season. it's going to start off pretty ugly because alcoa starts it and we know it's not going to be pretty. >> i'm looking at the biggest read of consumer sentiment is going to be the holiday season and the early surveys are immediate yoker. >> gasoline prices with down and these companies their commodity costs are down. let's just see, let's listen to what they have to say. >> if you look at middle market consumer types of names, those names that don't have the overseas exposure, whether it's the overseas customer, whether it's the dollar exposure, those can be some of the very nice surprises that we see through the upside as we go into the back half of the year. >> and real quick, how is nike going to play into this? what do we have to hear in order to encourage people? >> nike has an interesting

business, they are more global and more exposed because they are more global. nike is not cheap relative to its history but these guys will below 10% and talk about the currency head winds. i think these guys have a unique business in that the direct to consumer, women's wear in addition to the athletic footwear and i just -- that is an important read right now, they are a global take on the chinese consumer consumption and i think that's largely better, especially in that sector where i think the state is pushing consumer consumption. carol. >> and also the strength and bands. i think that you are going to be playing the consumer space you want to have the most top notch brands, the ones that consumers aren't going to trade away frchlt i think nike is one of those, a starbucks is one of those, apple. those marquis names that if a consumer has to made a tradeoff, a choice, those aren't the ones that they are going to be making the choices on. >> i'm thinking back to the op ed and he alluded to basically

under armour, hasbro saying the chinese consumers want these brands, they want authenticity, that market potential perhaps still to be tasked. >> there's no doubt about it, there's very much power in brands. look at this week. red hat and race guidance, i mean, those are beg your pardon lar names but they are not consumer names. general mills, autozone. so let's just take a deep breath and listen to what these companies have to say. >> i love what general mills had to say is that people are eating cereal game. >> they will come back to these stocks when the sentiment improv improves. >> stocks are coming back today on hopes that janet yellen will strike a dovish tone. it's the first time she will be speaking since last week. >> it's been one week since fed

chair janet yellen capped interest rates unchanged. here is a look at on asset classes have performed. stocks, the dow, s&p 500 and nasdaq are all lower by around 3% with transports leading the decline down 5 rs due in part to the strength of the u.s. dollar even though some say there's less clarity as to when rates will rise begin the macro uncertainties out there tradesers have been buying the save haven currency up 1% and that's been sending commodity prices lower, particularly oil off nearly 5%, copper react to go another round of disappointing manufacturing numbers out of china, policeman pmi for september fell to a six and a half year low, the seventh consecutive month that we have seen a contraction in china's manufacturing sector. you have to wonlder what this means for the fed's timetable given yellen's extended reference to china in last week's speech. >> tim, what's your thoughts on all this have?

>> the chinese pmi is such an emotional number for people and a lot of people never look toe underlying component. this last number was far from good but totally in line with everything we have had in the last three years and seasonal effects which made it a slower month. alibaba's ticket price and their consistency i think things are not as bad. carol, come on, bring it on. i think we are in a place where china is not going time plowed. today brazil almost looked like it was going to and i understand why people are looking at emerging to be the place that is the center of the storm. i don't think it's china. i think brazil has major problems but they are not coming back to this economy right now. >> it might be coming back to trans ocean. there could be further names tied to not just what's happening in brazil, what's happening in malaysia. when growth goes away sometimes that's when corruption comes to

the fore. >> we have been arguing on whether china is as big of a deal as people are making to t i will point to caterpillar as evidence that it is. i think back to yellen. i've been saying for a long time that it's not likely that they raise rates this year and i think from a risk/reward profile it makes sense for them to be behind the curve on this one instead of out in front of it. so i wish that janet yellen would just take it off the table, say, things are so uncertain it's going to be a little bit of time, we want to give it several months in a row to see a trend so that the market ask stop worrying about that and we can take that piece of uncertainty off the table. i don't think that it's realistic. >> what do you think, steph? >> back to china, i mean, caterpillar horrible, but starbucks wasn't horrible, apple wasn't horrible. my suspicion that mcdonald's and yum brands won't be horrible. i think it really depends on where you're talking b where you're focusing on in china because we know they are going to a consumption base and they are in the process of it.

>> earnings this week beating expectations. looks like we have another name to add to that mix as j bell circuit. >> up about 8% now after the company reported earnings and revenues is that beat analysts' expectations. earning came in at 53 cents per share versus the 43 cents expected. the company raised its outlook for the 2016 fiscal year. shares up 8.5% in after hours trade. >> big pop there. tim, what do you think? >> some of these jails have been beaten down and some these names are names that suffered under the weight they were go to names and sweetheart names, there was a lot of fluff around the edge. that's what you have to watch right now, the names that i think we've talked about on the show tonight are ones that don't necessarily fit that level even though they have multiples in disney and nike and starbucks that are probably a little elevated relative to their history. not surprising to see this move on a move for a stock

that was somewhat ba league erred. >> anything you want to add to that one? >> it looks like their revenues and n. their diver sight electronics business is up 38%. they have been trying to figure out how to find some growth. it's encouraging to me that they're seeing some results. that is a smaller sector of the company, but i do think they're making progress. to tim's point the stock was beaten down, sentiment was really low, low bar means a my yer stock price. >> i think the fact is that investors are sensitive to earnings and to the forward guidance and i think as more and more of them continue to come out it's the forward guidance is at least less alone i think that's going to be positive for a lot of these names that were perhaps beaten up a little too much. >> speaking of the consumer we will get nike earnings a few minutes. it's interesting, so much of it has been lately about the chinese consumer and how is that going to develop but frankly a lot of this discussion is about the american consumer. >> yeah, so a couple weeks ago

bar clays had a consumer staples conference, back to cereal, nearly every company at that conference reiterated guidance, talked about trends being in line. it was almost like a sigh of relief. we all expected sthef for horrible things to say it and it wasn't horrible. >> kraft bought kashi. have they shifted to adapt to the millennial consumer. >> absolutely, but i also think back to the lower modity cost that's helping their margins. these companies have been cutting cost over the last several years and it's starting to level off for them. >> and they've also lowered the bar so many times that at this point they kind of have to beat it. >> i'm also remind minded bill speed was on the show arguing saying millennials are starting to get older and have babies, not going to schip olt lay as much as they used to and all the

consumer staples companies are getting a second wind snoot supermarket companies are catering to the millennials, too. now you can get the food delivered to you. they are like grocery stores, we can use them now that they can deliver them to us, what a novel idea. >> and it's fresh and organic and there's stuff? these stores that people actually want now. >> tim, are you an inn at that card fan? >> it's good to get these kids out of their parents' basements is what i say. and you can see also in the housing stocks, too, you can see it home depot and lowe's, the consumer housing renovation stories are alive and well, these stocks are trading near all time highs. >> we will have nike earnings to discussion discuss, investors anticipation the company will post good news. we will find out next. >> still ahead, our political tag team bernie frank and barry kudlow on jeb bush's plan to

wipe out federal regulations. you're watching cnbc, first in business worldwide.

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i've been with pg&e nine years. as an employee of pg&e you always put your best foot forward to provide reliable and safe service and be able to help the community. we always have the safety of our customers and the community in mind. my family is in oakland, my wife's family is in oakland so this is home to us. being able to work in the community that i grew up in, customers feel like friends, neighbors and it makes it a little bit more special. together, we're building a better california. tough session for markets today, the dow down 78, the s&p 6, the nasdaq 18, largely on

weak innocence caterpillar and a lot of related materials and industrials companies. sector wise hue tilts hung in there. it was the financial sector that was lagging on this session. meantime keeping an eye on janet yellen talking at 5:00 p.m. today about inflation dynamics and money tear policy. some discussion of traders as they say buying the fed speak and selling it as soon as it happens. i will bring that to you shortly. >> nike earnings are out, we're digging through the numbers, tim see more is with us for his reaction. also with us camille alian who has a hold rating on the stock. do we have those numbers? we will talk to camillo about what you are expecting snoot numbers just came out they look fantastic. really not much to poke a hole at here. good growth numbers, 5%. most importantly the futures at

a 17% growth. we are looking for 11% growth and the market was right around that low double digit range. on the surface it looks like a very strong quarter. >> dominic chu is digging through it. >> those nike numbers are out. we will recap top line numbers. $8.4 billion worth of revenues, analysts estimates were for $8.2 billion. earnings per share $1.34. analysts looking for $1.19. just checking out the share reaction as you can see we're up by 4% in the aftermarket session, 253,000 shares have shade traid sod far. those global futures orders are coming in better than expected. we will go through the breakdown but for what we can see here this is a very bullish report at least at first blush. the shares are already up 19% year to date, up 42% over the past 12 months. we should also point out that the options market was pricing in the cost of insurance around

this earnings report was just around 4%, that mark, so this was an expected trade in the after hours session but to the upside we're going to go and break down those global futures orders because they play such an important part of that overall story with nike. back over to you. >> stephanie, wow, what do you think? this was a high bar for them to clear. they had strong quarters in the prior hujs. >> it's huge, 17% futures orders. no one is doing these kinds of growth numbers at this size. >> right. >> it's a huge company. really big -- i think it implies that the margins might be a little better. we were expecting 50 basis points higher year over year for them to increase, maybe it was a little better than expected, we will have to see. maybe finally after years of investment they are really starting to see that operating leverage and that's what you look for when you look for consumer discretionary stocks. >> they just did it. they just did it. and what i love about this company is that they have some monster return on equity. you want to see a double digit

return on equity. they have in the mid 20s to high 20% return on equity. they know how to deploy their capital and make it work for them. i know everybody is concerned about their valuation, but i think it's appropriate given their execution and i think that you can't bet against a company that is flawlessly executing and has a fantastic brand. >> what do you do now as a shareholder? >> i mean, you have to look at what do you do in 2016. it will be interesting to see with these gross margins. there's a lot of leverage left in this company in terms of the upside, the gross margins are a lot better, they will be better. if you think about the footwear industry nike and adidas have been a duopoly for a long time and have major pricing power. now you get into the@leisure part of the business and women's side of the business and these are major drivers. how much do you want to upgrade 2016 numbers? i think the street is going to be bullish. there was good moment tim going into the numbers by the street. >> you have the strong dollar,

the@leisure category which has never had more participants in it to syphon off demand from nike, under armour looking stronger than ever. you heard what their ceo was telling us where they see revenue in the next couple of years. how can nike continue to beat expectations. >> these guys have -- it's such a well run company but their logistics are so important and also dtc is over 25% of their business and that segment is growing dramatically. if these guys are seeing that kind of expansion in that business, it's only going to help margins. it's a business that these guys dominate globally, they are well ahead of everybody and that sector is skiking it in the constructive sector. >> a lot of investors don't realize what a small portion women's is of their over all business and what a huge growth opportunity of the company. >> you asked about why there is such growth and that's because the consumer is spending three

times as much on@leisure wear versus regular apparel. in addition you have this company that has filed so much in terms of r and d, they have what people want, they have it. just like starbucks has it, just like chipotle have it, if you have it consumers will go and pay for it >> this is an off year in terms of the sports cycle. i mean, again, i'm trying to find ways as an investor that maybe you would have to say -- almost like what we say with apple, they get so big, they do well that starts to spook people. does this set the bar for comps going forward in a way that would make it difficult to keep achieving -- >> remember, they had problems in china for a couple of years, that's starting to turn, they had problems in europe, that is clearly starting to turn. maybe the u.s. is getting a little more mature if the call 12% futures orders mature. i think they have other places that they can grow and gain

shares. >> including european morkts. >> they are going on an offensive strategy. brazil is a mess for their guys. the world cup comps fall off the calendar. they're going where there is business and brazil's macro is affecting the consumption story. i don't think it's affect tg in the same way in china. they're going after the highest segment, highest margin part of the segment and winning. i'm wearing sweatpants right now, everybody is on to the athlete leisure. >> there's one thing you guys didn't talk about, everything you said is correct how well they're performing across categories and regions, but it's remarkable they are able to raise price on their products. pricing has been a big component of the growth. what they did with the converse relaunch, they basically took a shoe that hadn't been changed for the last 90 years and raised it by $20 and that sell through

data has been pretty good. as far as the rating, this is a great company. we decide -- we choose to favor the higher growth company in a space, under armour over nike, it's purely a choice of one performing longer term visibility in the growth story. we are going to choose the david over the goliath. >> you're raising some eyebrows. >> taking nothing away from nike. >> camillo, from a valuation standpoi standpoint, under armour's valuation is more than three times nike's. >> as is its growth rate, too. there's some equilibrium there that's justified with the valuation relative to how fast it's growing. put another way, i think it's a lot easier for under armour to capture $4 billion of sales over the next three years than it will be for nike to capture $15 billion of retail sales over that same time period.

>> camillo, thoour for adding some debate to this segment, otherwise we have a lot of nike bulls in this house snoof tim, thank you for sticking around, especially on this one. there's much more of tim seymour coming up "fast money" at 5:00. also full team coverage of janet yellen's speech which particulars off at the same time. we do have another earnings alert this time on pier one. >> shares of pier one imports falling 11% in after hours trade. the company posting earnings and revenues that missed analyst's expectations. earning per share at 4 cents versus estimates of 7 cents. revenues came in at $430 million versus expectations of $436 million. pier one also posted weak guidance for the third quarter and fiscal year 2016. that stock down better than 11% in after hours trade. >> wow. all right. that one going a different direction. thank you.

presidential hopeful jeb bush saying he will go after financial regulations including the dodd-frank act. we will hear from the co-author of the bill barney frank. first it's a form of spice, the government giving companies tax breaks and other incentives to research rare diseases, how this is impacting your prescription prices next.

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crude oil prices did turn up a little bit, that helped the broader market which finished down 78 points on the dow. consumer staples which we were just discussing were up by a tent of percent. jeb bush saying he will push to repeal five regulations including dodd-frank. joining us now are cnbc contributors barney frank and larry kudlow. welcome to you both. >> welcome. >> hell loerks kelly. >> hello, mr. frank. >> hi, larry. >> gentlemen, we will come back to you in moment f you don't mind. first we are going to go to our meg terrell who is keeping a close eye on an important part of what is happening with pharma prices and that is government support. what can you tell us? >> that's right, there has been a lot of focus this week on a drug for a rare disease whose price was raised by 5,000% overnight. one of the company's reasonings for this they told us was that it actually put it in line with

other drugs for rare disease. other drugs for rare diseases are developed by companies in recent years not having been around since the '50s. there were some differences. we decided to take a look at some of the incentives behind developing drugs for rare diseases. it dates back to a law called the or fan drug act. we should say a lot of people in the united states have rare diseases, 30 million americans are living with a rare disease, 7,000 rare diseases have been identified. before 1983 fewer than ten drugs between 1973 and 1983 were approved for a rare disease, once this law came into effect since 1983 there have been more than 400 drugs approved for rare diseases. the way this law incentivizes drug development in this area primarily is to give extra exclusivity to their drug, no competition to those drugs for seven years if you get orphan drug designation, there are also things the government does, waiving fees that you have to apply for approval, which can be

more than a million dollars and giving tax breaks. this is a big market. cowan estimates $9.2 billion growing to $14.2 billion. more than $500,000 pir year as we discussed yesterday, however, these drugs do a lot fofr patients' lives. these are diseases that would kill them if they didn't have them. when you have a company like turing in the news this week it really gives a bad name to everybody else who is doing important work, kelly. >> that's exactly right. focusing on an area particularly as orphan drugs. >> stephanie, how is that all going to change as it comes under more scrutiny? i think it will be an overhang for a while, but whether it gets -- whether if clinton gets in and there is passage, that's a big if, by the way, there is a lot of uncertainty. clearly what happened in week was not good, but as meg said a

lot of these products work and help and they are for the good of the consumer, of the patient. you have to keep that in mind. i kind of use it as an investor point of view, i look and see who has a great product pipeline in the pharmaceutical industry they have worked for years on all these issues regarding their patents, expiration, they have rebuilt their pipeline so you want to look at diversified pipeline. >> who are in your bikes pics in the space? >> lily is one, i think their diabetes drug that came out the data that came out is very positive. i like pfizer, i think they are a break up story and acquisition story. i also think if you want to get away from pharmaceutical and the noise you look at the hmos which aren't going to be impacted either way and you are going to a very streamlined group of companies from five big players to three. talk about prizing power, that's going to be the theme for next year. >> those areas i know you look of the market. stephanie, when it comes to some of these provisions that have helped develop the drugs like

the orphan drug act, as we're talking about whether these high prices that act is really all about, what steps do you expect -- i know i guess maybe depends on 2016, right n which direction this goes. >> that's absolutely right. what the drug industry is trying to do is differentiate what it does in developing new drugs from this idea of price gouging. but the high cost of drugs is going to continue to be a big problem and some of the things that we've seen, especially the democratic candidates laying out, would try to get companies to justify why their drugs cost so much. some biotech companies which say their drugs save lives, change lives, extend lives are welcoming that, other drug companies that are raising prices maybe for less good reasons are not welcoming that. >> maybe we will hear more about that in the upcoming debates. meg, thank you. time for a consumer news update, sue herrera, what's happening? >> here is exactly what's happening at this hour. pope francis wrapping up his historic visit to washington,

d.c., just a few moments ago departing joint base andrews for new york city. he was the first pontiff to address congress when he spoke before the legislative body this morning, calling for the u.s. to end the death penalty, welcome immigrants and fight global warming. iranian leader ayatollah complainy says the saudi government should accept responsibility for a stampede outside the muslim holy city of mecca, it stild kild more than 700 worshippers. he said it was caused by government miss management. >>. the death toll rising to four between a ducks charter and bus in seattle. 2 others were critically injured. the duck vehicles have been involved in several vehicles, a fatal accident in july. taco bell is opening a location in san francisco that will eventually serve beer and wine. it's near at&t park, that's where the giants play and it features a patio and window

where customers can pick up orders. last week the chain opened its first location in chicago that serves alcohol. that's the cnbc news update. back to you. >> our sue herrera. six days away from a potential government shutdown. up next, larry kudlow and barney frank will be here going head to head on what congress needs to do to keep the country running. you're watching cnbc, first in business worldwide. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change.

we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.

welcome back. as we wait to hear from fed chair janet yellen here is a reminder where tox finished. the dow well off the lows of the session, closed down 78, the s&p gave up 6, the nasdaq 18. we have an earning alert on bed, bath and beyond. >> shares are falling in after hours trade. earnings per share came right in line with analysts expectations at 1.21. res noose came in below expectations, $3 billion versus the estimate of $3.03 billion. bed batting and beyond announce ago it.3 billion stock buy back program chlgt the stock is falling in after hours trade. the stock has been under immense pressure down about 25% year to

date. >> all right. seema. thank you. presidential hopeful jeb bush saying he will push to appeal five regulations including dodd-frank. joining us barney frank and larry kudlow. welcome to you back. barney, let me begin with what jeb bush said. i will work with congress to appeal significant works portions of the 2010 dodd-frank at any time law and will reform the rules that govern financial institutions. is he wrong for trying to do so? >> well, he is wrong it seems to me first of all to say that without any specifics. i haven't read the article. he is certainly wrong i think both substantively and politically to say that we're going to repeal much much what was done in response to the crisis and not tell us how to replace t one point ought to be clear, we are not talk being a partisan bill. that legislation was adopted with significant input by hank paulson beforehand and then while we were debating t while

we were writing it, ben bernanke and sheila bear bush's fdic share had a major role in this. we had serious problems from irresponsibility and we tried to deal with them. if you have specific improvements you ought to put them forward. if he is going to campaign on that notion i welcome in. >> larry, do you know what some of these specifics would be? >> i don't know all the specifics. i would say barney frank deserves credit, it was a bipartisan bill, there are parts of that bill i would like to change but it was bipartisan. what i gather and i don't know the specifics, first of all, the too big to fail provision has loopholes and i think bush is against too big to fail and wants to close those loopholes. i agree, there are issues here. secondly, the consumer financial protection board or whatever it's called, you know, i think that was done all wrong. it's funded by the federal reserve, not congress. i think that's wrong. that reduces, by the way, the federal oversight from conks. i think that's wrong.

and i think generally the whole vocal rule still a mishmash what you can and cannot do with respect to myrna sets and trade. and it's holding up. i think the net effect of this, i'm sorry to say this, but the net effect of dodd-frank is it's holding up bank lending and credit creation, part of that is because examiners have gone hog wild but part is because of the complexity of the law. i'd like to see it cleaned up. >> carol, go ahead sniem going to agree with the larry, i think one of the inn intended consequences here especially in the pull back in lending is the effect on small businesses. i think if we want the economy to continue to grow we have to make sure that capital is available to these small businesses but also that they are not buried under regulation, whether it's dodd-frank or some other regulation. i'm hoping that larry kudlow will run for senate and bring back free market so small businesses can prosper. >> any updated comment, sir larry. >> i'm hoping we clean up the

vocal rule, i completely agree with carol. >> can i respond? >> before you do let me also read the first paragraph. what jeb said, he said according to the world bank not exactly a right wing think tank the u.s. ranks 46th in the world in the terms of the ease of starting a business, that's unacceptable. >> first place, our legislation has nothing to do with the ease of starting a business, nothing whatsoever. secondly, the vocal rule has nothing to do with lending with small business, this is why i asked for specifics. what the local rule talks about is large banks who will be doing derivatives in the same place they're doing other things. lend to go small business, if you are a smaller bank you are not involved in this, if you are a big bank -- nothing in the vocal rule respects bank lending. there have been higher kplal standards and they may restrict the amount to be lent, but nothing in the legislation either restricts the startups or

does anything about small business. and as to the consumer bureau there is a yat inconsistency there. larry says the federal reserve funds the consumer bureau and it's not regulated by the congress. if that's true that's true in the federal reserve. why do you worry about the consumer bureau not going through congressional appropriate nation appreciations and not worry about the federal reserve. >> actually, barney, i do worry about the much bigger picture. >> you don't hear about it, larry. you don't hear about that. you never talk about it. >> i do want to say -- >> because you really don't like consumer protection and therefore you're trying to weaken it. >> wait. >> if you cared about congressional appropriations you would be going after the federal reserves snoot court are showing everywhere that that consumer financial protection board has gotten itself entangled in every local bank across the country and even credit card decisions and even payday decisions. i mean, it's sticking its

fingers everywhere. >> which report are you talk being? >> that's why congress should have the funding authority in order to exercise its oversight. >> but not over the federal reserve. congress should not have -- >> barney, simply submit it to a cost benefit review by the white house, would you find that acceptable? >> it depends on how it's phrased. i would submit a lot of things are better, agricultural subsidies, whether or not we go to mars. if we didn't send out just one piece and did that i would look at it, but the notion -- by the way, there is a recent report by the federal reserve based on home mortgage data which shows that lending for mortgages, for originations as opposed to refinancing has not in any way been diminished by the legislation. again, i have to stress if it's a problem for a small agency stob run without congressional financing why is it not a problem for the federal reserve, office of the controller of the currency and the fdic? >> we will leave it there.

>> every agency -- every agency not only should be funded by the congress -- >> you may say that when i bring it up. >> -- subjected to the oversight of the congress and that includes the federal reserve. >> thank you both. this is a small version of the debate i hear. >> barney frank, larry kudlow, very much appreciated, gentlemen. be sure to catch cnbc's republican debate on wednesday, october 28th. we will see if it can match up. the pope has left washington, d.c. and is en route to new york city. up next, the impact his visit will have on the big apple. we're back in two.

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welcome back. let's begin here with a market flash on marvel technologies, seema, what can you tell us? >> rising 8% after hours, the ship maker announcing 17% reduction in its global work force as it restructures its mobile flats form miss. marvell will take a charge ever 100 to 130 million on that restructuring. . the stock up 8% after hours t has been under a lot of pressure down 32% so far this year. kelly. >> that's the strong kind of mali we usually see this hour. pope francis making history on capitol hill today and he is en route to new york city. mary thompson has been covering the pontiff's first ever trip to

the us. >> pope francis is expected to touchdown at new york's jfk airport in just about 20 minutes in what was close to the midpoint of his six-day tour in the u.s. from jfk he will be taken by chopper to the wall street held port and will motorcade to st. patrick's cath tropical for a prayer service. all this have following his historic and wide ranging speech to congress today where he urged greater dialogue among lawmakers so they can work toward common good. >> the challenges facing u today call for a renewal of godspeed of cooperation which has accomplished so much good throughout the history of the united states. >> congress giving an enthusiastic welcome to the leader of the catholic church

who urged them to live by the golden rule, but his speech was more than a cat kichl, francis asking the world's largest warm's exporter to end the arms trade, abolish the death penalty and for congress to remember ans focused on creating jobs, putting people before profits. back to you, kelly. >> stay right there i love that part where he did say business is a noble profession and especially those people who are focused on creating jobs. >> i thought it was really a master class in leadership before our politicians. i can't think of a group who needs a master class in leadership more than they do. even though i don't's grow with a lot of his positions, i thought it was a very uplifting speech. i hope it motivates them to take a little bit of a different tack the way they've been running this country. >> any early word on that, mary? >> it's interesting if you're reading some of the statements released by members of the congress in the wake of that.

they basically embrace the message. whether or not they put it into practice, of course, is another thing. certainly for one day, there seemed to be openness to this dialogue that francis is trying to encourage. >> i happened to be at the gym during it and everyon on the treadmills was applauding different parts. that was something to see. thank you very much, mary thompson. leave it to a business school to develop a disruptor to the student loan market. how one company got its start at stanford. then fed chair janet yellen will speak publically the first time since that fed decision last week. 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?

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welcome back. all this week we've been running a series called designing disruptions. today we take a look at the origin story of the lending start-up taking on the big banks. julia boorstin has the story. >> today it's funded more than $4 billion in student loans and offers mortgages and personal loans.

that scale plus 3/4 billions raised, started learning business school how to fail. mike cagney was inspired to think big about disrupting financial services during a fellowship at stanford graduate business. his idea became sofi. >> there were unique characteristics that allowed sofi to grow. having the initial customer base, the student body. >> cagney started testing and failing. >> if we weren't in stanford, we probably would have banged our heads against the wall. instead we went and hung out at the office and accosted people as they left asking why they didn't take our loan. >> that experimental approach what is professor zenios encourages in his start-up garage. >> fundamentally, the key steps are get out of the building and test your idea. test your idea with customers. in mike's case they are stanford students. >> while the starred-up garage gives students a safe place to

fail, other successful entrepreneurs return to inspire and advise. >> he talks about all the times that the door drops. that is liberating for students. most of our students have never failed at anything. >> cagney tapped onto that alumni network when he raised his first round of funding. mike cagney tells us he envisions taking sofi public within the next year. one to watch. >> oh, yeah. plenty talked about around here. thank you. julia boorstin. fed chair janet yellen speaking the first time since holding rates steady. investors desperate for clues about monetary policy. at&t and directv are now one.

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>> why won't she let the fed governors speak? it's confusing. >> carol roth, stephanie link, thank you for joining us on "closing bell" today. markets anticipating what we will hear from the fed chair in a couple of seconds. let's get straight over to steve liesman with details now. >> fed chair janet yellen says it will likely be appropriate to raise the federal funds rate some time later this year. she says a rate hike delay could force an abrupt tightening of rates. here what is she says specifically and what's important here, she is associating herself with the idea hiking rates late they are year. she declined to do so at the press conference last week. "most of my colleagues and i anticipate it will likely be appropriate to raise the target range for federal funds rate some time later this year." last week she just said participants at fomc. she does say rate hike is depending on the