have a great day. >> thank you for washing "closing bell" as well. "closing bell"? it's great when you have a nice show and you screwed up right at the end. >> you're doing fine, brian. bring it home now. >> thanks for watching, america. "closing bell" starts right now. yes t does, welcome to the "closing bell" i'm carl kant knee a in for bill griffeth and i'm kayla tausche in for kelly evans. maybe bill and kelly will be on squawk alley tomorrow. >> biotech bust, dragging down the nas dak today. >> and microsoft entering the pc wars, announcing its new surface book laptop and we will have a live report from that event in new york city coming up. >> today is the day egg mcmuffin lovers have been waiting for, the all day breakfast but will it be worth the high pressure? >> a new report says home prices

have risen for the 42nd consecutive month. why does kevin owe leery still say housing is such a bad investment? he will join us to explain. >> let's get right to the selloff in biotech which has been one of the big stories of the day, bertha coombs clocking that action. >> very tough day for biotechs, they've come off their throws lowe's from morning, but the nasdaq biotech intention off 4%, it's getting to a r another negative inflection point, the so-called death cross, it's 50 day moving average falling below the 200 day moving average. today it's those big cap biotechs and the arca biotech index. bio pharma pricing continuing to come under scrutiny. two big head lines, exact sciences receiving a lower preliminary fda rating on it's colorectal test, goldman sachs can you get its price target in

half. biotech earnings are expected to outperform ilumina pre announcing lower sales due in weakness and europe and asia factors in in this issue, too. negative head winds for the sector include the trans-pacific partnership. you've got to the wall. that would limit patent exclusivity to bio drugs for ten years instead of 10 to 12 and you're seeing nam of names tunnel r tumbling today. we're going to watch to see how that proceeds. carl. >> bertha coombs thank you very much. we should mention the ceo of the biggest biotech listing ak a vent sciences. >> and some blockbuster news on the alzheimer's front. >> jackie deangelis has details. >> a near 5% spike in oil prices today, it really sort of came out of the blue for a lot of traders telling me they weren't

expecting t but here were the reasons that we were up. you had the eia with its short term energy outlook showing a month to month drop from august to september in u.s. production of 120,000 barrels a day. also you had a weaker dollar today which is typically supportive. having said that, traders growing increasingly concerned about russian air strikes in syria as well. the bearish factors are still out there. this afternoon we will get the api inventory report, department of energy tomorrow. expect to go see an inventory build here and also the lackluster session in equities and concerns about global growth still could be a problem for oil prices. we took off the 47 level whiskey technically, we closed over 48, 48.53 is where wti settled and most traders are telling me we think $50 is the next stop. >> let's talk about these markets in our "closing bell" exchange. joining us peter chick kenny, jonathan corp. in a and rick santelli in chicago.

guys, good afternoon. jonathan, pretty good start to october. is it changing your view as to how you felt in september? >> september was a tragic month to look at, you look at the charts and look at your portfolio statements, but fourth quarter has started off nicely. this is a little bit of a hangover recovery, we're getting a bounce. are we going to be able to sustain this over a period of time? i'm not sure yet. third quarter earnings are going to give house good outlook as to what's going to happen. clearly exposure to oil prices, exposure to europe and china is going to help or hurt those individual reports there. in time i think in the next week or so we're going to start to get a better feel of what fourth quarter is going to look like. >> peter, the s&p has only made up half of its losses since the high earlier this year. do you feel there is a bottoming pattern? does it feel good to you? >> sentiment had been very negative after that august low on the 24th. we rallied, we felt we would retest the low, sentiment was very, very negative.

the interesting thing is positioning is very, very light which is one of the reasons why six days ago now we actually called for this rally. generally speaking positioning very light, nets are very low, people don't have a lot of conviction, they are also not hedged very well. so our thesis was that into the end of the year folks would have to make returns and therefore they would stretch somewhat into the end of the year. to us i think the rally has happened a little bit more quickly than i thought it would and frankly i would be look to go fade it around 2000 to 2050 on the s&p 500 simply because i don't think the fundamentals are there at all. we're tactically bullish but strategically bearish. >> speaking of the fundamentals, rick santelli, the regional surveys, ism have been disappointments now we get those flat yields. what's your view on that? >> there was some curve steep thing but after the fed -- remember, right before the september fed meeting there was a real reluctance on investors'

part to dabble in the note auctions in particular which occur every week. yesterday was the exception. doesn't look like the fed is going to do anything not in their words, but at least in the eyes of many investors they charged in the t bills, we see that yields on short term maturities 2 and 3 year have dropped dramatically, the curve steep nd. we only had one day if you blinked you miss it had closed under 2% on the longer end but that's all somewhat kind of boiled on, meaning that everything is very comfortable. we're actually seeing some buying coming back, some of the pressure was corporate issuance which is a green light especially concerning what the fed didn't do, but the supply isn't huge and let's face t the 30 year still above it's 275 where it settled last year, 10 year notes aren't all that far away from unchanged at 2717 and the nasdaq is basically sitting on it on change. you can make the argument change is where we should be depending on the fed and global economy,

on the latter trade information on the august trade balance was very enlightening. we saw imports up a little over 1%, exports down 2%, on a dollar basis some of the weakest exports in three years that. gives you a microcosm look into the glide path of the global economy. the dollar index is at the lowest level since one day after the fed meeting. that makes sense. >> them telethat to pepsi and the container store. we are seeing deja vu all over again with these companies starting to report earnings and reporting ex foreign exchange and seeing that take a real bite out of their revenues. >> it's going to be about managing expectations at this point. the fear is there, the gauge moving toward. i think we know what outlook is going to be, it's a question of can investors temper that outlook going forward. if it comes in line, if it comes in somewhat acceptable levels, i think investors might be okay getting back into this market. >> guys, good to see. >> you thank you.

>> thanks very much. >> with just a few minutes before the closing bell less than an hour the dow still in positive territory, largely thanks to dupont, the s&p had stalled midday, touching negative territory, we will see where it closes in a few moments. >> the ceo of the largest biotech ipo ever discusses his company's push to win approval for an alzheimer's treatment. >> and also will mcdonald's all day breakfast deliver mcprofits?

take a look at the markets right now, this is how the major sectors are performing with the dow still in positive territory, energy up 2.13% largely on the fact that crude has had its best day in nearly three weeks, healthcare, though, down by 2.3%. you can thank the biotech falloff. a tale of two groups of sectors today. >> absolutely. biotech hit hard again today including axavent science, they

have a test for alzheimer's. >> the stock was the biggest biotech ipo ever, happened earlier this year, it's now down more than 50% since it's june ipo. joining us is the ceo of axovant who recently appeared on the cover of forbes magazine. >> good to be here. >> tell us what is so momentous about what is happening for your company today. >> today is a big day not only for our company but for the field of alzheimer's disease and patients. it's this day that we have announced the start of our phase three study. this is a large global study designed to confirm the results of the study that we already have in hand for alzheimer's disease. it's an exciting day for the field no. new drugs have been approved for over a decade and patients are scrambling for new options >> what's happened now that hasn't happened for ten years? >> i think the difficulty with alzheimer's disease is we as a field don't yet understand the

underlying biology of the disease completely, but there are a few things that we do know and the way that our drug works which bi increasing the concentration of a neuro transmitter, we do know that that has been impact on improving cognition and function in these patients. we had a large study proving that a little bit ago and actually now we are on the eve of starting this exciting study to hopefully confirm those results. >> this is a drug that's been tested before, it was a drug that glaxosmithkline had before you purchased it a few years ago. what's different about it this time around? what you think you know about this drug and about this study that glaxo didn't know. >> actually the thing about the actually that we're starting is directly modeled on the study we already have in hand and that was a unique study because the drug hit -- that is to say it was statistically significantly better than placebo on both metrics that the fda has historically required for the approval of a new drug on cognition and function. what we're doing in this new study is we have designed it

directly to confirm the results of that study only have made it big for give it added statistical power. >> you're starting the trial at a time where drug pricing has become one of the big political debates in this country and i wonder if you think the debate has been fair so far and if the incentive to develop drugs like this will be impacted if, in fact, drug price something controlled. >> i think that the companies that are really going to be rewarded over the long run are those that are developing innovative new medicines that address new unmet -- big unmet needs like alzheimer's disease and to price them in ways that are fair for the system. to share the benefit of delivering those new drugs with the healthcare system and that's exactly what we are doing, a new drug for an important disease and it will be a win not only for us but patients and the healthcare system and i think those will be the companies that will continue to succeed. >> the companies that have drawn the most criticism are those

that are runs by finance years, prchlg drugs at low prices, raising the prices later down the road to an exorbitant degree. how could you respond to that? >> that's the opposite of our business model. we're focused on doing r & d to deliver new value, to deliver new innovative medicines to patients. today is an important milestone for that. in alzheimer's disease there hasn't been a new drug approved in well over a decade and we hope that on the other side this have trial that's exactly what we will dlifr to the system is new innovation rather than taking the prices of old drugs and jacking their price, we think a more sustainable future is delivering new medicines, new innovation and hopefully in a way that can share that value with patients and with the healthcare system more generally. >> is alzheimer's going to be your key category for a while? >> we're focused on dementias more generally. alzheimer's disease is the leegds cause of dem sharks but we are also focused on other forms of dementia. >> example?

>> louie body dementia. robin williams was diagnosed with dementia with louie bodies. there are no drugs approved to this day and yet it's a serious disease that hasn't received the level of attention from the industry that it should have. that's part of the mission of our company so to deliver new drugs. even r t101 we think could be in testing. >> you've also said that you will use the ipo proceeds to go out and build a portfolio to combat dem shachlt are you out in the market right now? what are you looking at? >> in terms of our strategy we're going a dementia solutions company. we're going to use multiple drug candidates to target all aspects of the disease and multiple forms of dementia. rb t101 is not the end, it's the beginning to deliver new medicines that can help change the face of dementia. >> one of the big conversations

we have been having in the market is sharp selloff in biotechs. there was a sharp change in momentum earlier this year. as a ceo who is regularly talking to invest whaers sense do you get about how much appetite there is to continue buying biotech stocks? >> over the long run i can't comment on the market on a day to day basis, but on a long run basis i think what really matters is companies that deliver actual value to the system. new value creating new value in a sustainable way i think those companies through quality r & d, through taking drugs through clinical trials are the ones that not only will have a sustainable future overall but the ones we see investors rooting for the success of. that's what we're trying to do here at axovant. >> please come back. >> thank you for having me. it's a pleasure. thank you very much. just a few minutes before the bell. the dow hanging on to a 28 point gain although the s&p still down about 6.5.

>> but mcdon has hit a 52 week high in the afternoon. the fast food giant takes its all day breakfast program nationwide. we will discuss whether all the high pressure around that will lead to a higher bottom line for that company. >> new data on housing shows pretty healthy price gains, but are they being artificially inflate bid those mortgage rates. diana olick and kevin owe leery will discuss that.

dow is positive by about 17 points although it's been propped up to a large degree by dupont and some of the oil names as oil does very well. meantime, fast food giant yum! brands expected to post quarterly results after the bell tonight. analysts expect the owner of fast food chains kfc and taco bell to report earnings of 1.07 a share, revenue of $3.68 billion. >> before fried chicken and pizza we have to talk about egg mcmuffins. it's the day you will finally be able to get your egg mcmuffin at any time of the day. shares of mcdonald's are higher today, up by .75% and hitting a 52 week high. >> will it live up to the hype? nick says it smells like desperation but dan fitzpatrick thinks it's a good move. >> nick, we know the day part has worked for them, we know the margins are fatter in that time

of the day. why don't you like this? >> you know, when it worked for them they were trailblazer the day part. everyone else followed suit. it was really led by coffee and the coffee at cash rates are what makes that day part profitable. afternoon, dinner day part, you are not going to see those type of coffee attach rates. it's highly likely that those margins will be poorer than the rest of the day. franchisees are already up in arms against continuously lower profits year after year. i'm not sure how this address that is issue. >> dan, the strategy has been built up for so long, we finally got t i'm wondering if you think that this will be a sustainable sales boom or something that we see just come into q4 and disappear. >> no, i think it will be sustainable. i like mcdonald's. i'd like to get breakfast beyond 10:30. here is what you've got to remember about mcdonald's because we are really talking about the stock and how it

reacts to the business. this is a company that pays 3.5% dividend by offering breakfast beyond 10:30 it's not like they're cannibalizing something else. they're bringing in more customers. i don't really see how it can be a net negative. you're going to sell more of those high priced drinks along with breakfast than you would, you know a big mac or something like that. so i think you're going to get happier franchisees as well. i honestly don't see a negative in this whatsoever and technically the stock has been phenomenal as far as the base that it's building, it's been underperforming the dow for -- forget about 2015, everything has been sideways here, but since -- in 2012, '13, '14 nothing but sideways consolidation. and that builds a really strong base for the stock to spring. with earnings they had declined last year, the stock didn't go down and that's really what

we're talking about is whether we're going to make money on the stock and i think it's at a really strong technical level if it breaks through 103, i think it can see 110, maybe even 120 by the end of 2016. >> it's already about the sixth best performer on the dow for the year to date. >> nick, i'm trying to judge -- we are all trying to judge easter brooke to some degree, but the fact that he was able to get owner operators behind this move and we know it's a bit of a headache for them, is that at least impressive in your view? >> the franchisees had to go along with it, there are no other ideas coming from him. anything else is kind of medium to longer term oriented. so in the near term something had to be thrown out there, hopefully it sticks, you know. yes, it has grown the rest of the market year to date, since 2012 it's done absolutely nothing when the stock market has gone nothing but higher. so us it's all about

fundamentals and whether this drives any sales. if it does result in low significant comps at the end of the day is that really that impressive? it's probably just going to be a b. a year or so that those positive comps last. what happens after that? there are some core issues with mcdonald's that have to do with the menu, the core menu, sort of the higher end of that menu. breakfast is the only thing that works for them. extend tg all day in the short term patch, not a long-term solution to the structural problems that mcdonald's faces. >> certainly there are structural problems to deal with, but, gunmdan, thinking ab the hash browns, egg mcmuffin, do you think that they win out over the chick-fil-a chicken sandwich or what we're competing against at burger king, french toast sticks and jack in the box? >> you know, pardon the food pun here, but i think we're really comparing apples to oranges.

people that like mcdonald's, that like their hash browns are going to go there irrespective of what's happening at burger king or one of the others. i don't really see this pulling customers away from these other -- from these others food chains. i think it's rm more pulling people in who are just looking for breakfast. also, remember the big daddy movie with adam sandler, the whole bit there has them not being able to get breakfast after 10:30. so this solves that whole thing and makes that entire movie a thing of the past. i really like -- i like this idea. and the fact that it might be desperation, i don't really disagree with that at all. i just say if it's desperation it's the right move that they should be making because i think it works right now. >> finally, nick, what would you expect october comps to look like once we have a full month this have new menu? >> i wouldn't be surprised if we are positive low single digit, but again, that's coming off of

years of negative and flat performance. eventually especially -- consumer is doing very well right now, that's the only segment that we're seeing take a step up. in the context of an overall improving economy, improving lower income demographic i wouldn't be surprised to see low, very, very low single digit positive comps at mcdonald's. >> they're getting a lot of free advertising today, there's no doubt about that. nick, dan, thank you so much. >> thanks for having me. let's get over to kate rogers and get a quick market flash. >> we're watching sharing of ener sis which has reopened, the stock is up 6%. shares had spiked on a dow jones report saying johnson controls is in talks to buy the company. the stock was up over 11% before a volatility halt. >> time for a cnbc news update

with sue herrera. sue. >> hi kayla and carl. here is what's happening at this hour. democratic presidential candidate hillary clinton says she will lay out her plan to reign in wall street abuses within the next week. she made those remarks at a davenport, iowa, campaign stop. california governor jerry brown signing legislation that gives female work nurse that state new tools to challenge gender-based wage grams. the bill goes farther than federal law by placing the burden on the employer to prove a man's higher pay is based on factors other than gender. a protester threw eggs at kosovo's prime minister as he made a speech at a public event. it was the second time eggs had been thrown at him in the last two weeks. this time the eggs missed. two people, though, were arrested. and thousands of people joining yoko own know in central park in new york city to try to set a world record for the largest group of humans forming a peace sign. it's an effort to honor her late

husband john len nonbut the attempt fell a bit short. len nonwould have turned 75 on friday, he was shot and killed in new york city in 1980. that's the cnbc news update this hour. back to you. >> thank you very much. just about a half hour until the bell. the dow hanging on to a 31 point gain, s&p still down 6. >> anything can happen in the final and most important half hour of trading. we will see if things turn around when a top trader tells us what he's watching. also microsoft unveiling new gadgets at an event in new york city, josh lipton will show you what's being offered when we come back. i'm here at the td ameritrade trader offices.

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just about a half hour before the close, the dow has been add to go some of its gains now up by about 40 points largely thanks to chevron and dupont which have added about 45 points. crude oil up by nearly 5%, more than 5% right now, brent up by

5.5%. the best gains for oil in three weeks. >> thank you very much. as you know half an hour left. we do co-see some unusual volume. joining us kelly colpari joining kn me on the floor. until earnings start happening we don't know anything? >> i think it's like 1970s, 2000, maybe 1950 to the down side, 2000, but until we start to get them and actually hear what the ceos and cfos are staying about future guidance and china and the u.s. consumer and u.s. economy. until we get a better feel there's no ran rn to break up or down. >> pepsi aren't enough of a tell. >> dupont slashed their numbers and the ceo resigned and the stock was up 3% and pepsi -- there was talk about them disappointing, they surprised and didn't have so much of a dlr issue the way a lot of people have been talking about it. i actually think earnings season

is not going to be as bad as they're preparing snoot range is probably -- >> i think 1950 on the low side and 2,000 on the up side. we had plenty of resistance at 2000 until there is a reason for us to pierce something through it. >> once the conference calls get going what's your ear going to be tuned to other than guidance. >> it's going to be tuned to the china story. people are so convinced that china is going to bring this whole thing down and i think they are going to be pleasantly surprised, i don't think it's going to happen. >> kayla, over to you. they're back, home prices, that is, new numbers showing gains after a flat summer and diana olick joins us with the details. >> the big home price gains that we saw in the past two years had really started to ease at the beginning of this year, as we said, they are turning back up again. home prices were 6.9% higher in august compared to a year ago according to a new report. that annual gain is larger than gains we were seeing at the beginning of the year.

the culprit still very low interest rates combined with tight supply of homes for sale. home builders are increasing starts, but that's been a real pit of production compared to 1995 when single family starts came in at just over 1 million. 2015 will likely end up just over 700,000. our population today is a whole lot bigger than 20 years ago. so are we in a price bubble now that all that easy credit from the last housing boom is gone? one analyst in california says, yes, you can read about why on cnbc.com. others say you can't compare to the last housing boom because those mortgages don't exist anymore. one thing everyone seems to agree on is that higher mortgage rates will hurt housing. >> we're going to talk a little more about this right now. >> with mr. wonderful, kevin o'leary joins us, author of the new book "cold hard truth on family, kids and money." what do you think? what is the environment right now for home price as soon as.

>> a lot of people focus on the high end in markets like los angeles, new york, boston, for example, atlanta had some weird numbers out in this last report. i would caution everybody about housing. we keep forgetting even the mid market r market, even $250,000 kondo if you want to sell it you face transaction fees of 5 to 7% and closing and taxation and when you talk about the high end, these houses that are selling over a million dollars there's virtually no liquidity. if you need your money out you are going to wait until somebody wants to pay up and that could be a long time. i'm making a prediction, i predict if you put and bought a house today and you include the cost of carrying it, the tax and transaction to get in and out, you are going to underperform every other index in the market, housing is going to suck in the next five years. it's going to stay flat. not correct. i say at best stay flat and the transactional cost up to 12% and carrying cost of that mortgage we will call it 3 will make it

underperform everything else. don't buy a house, rent. >> interesting debate. diana i'm curious what you have to say about this. one of the problems is inventory. we're talking about what happens when you buy a house, that's if you can find a house to buy in your price range. >> i would agree that the transactional fee makes it prohibitive and that's why we have such a low inventory of homes for sale. you don't necessarily have to sell your house to see if your investment could grow. we're seeing that in the cash out refinances. people are seeing home prices improve and i'm crease and they are able to pull cash out and spend it on either putting more money into the house and improving the value for later or they are using it for something else. it's a good investment in that sense in that you can make extra money off the house if you don't want to sell t if you do want to sell it it's going to be a lot harder >> how about this idea is that as long as there's foreign buyers, especially in urban markets looking to ex patriot cash, buying condos and homes with cash for their kids or

themselves, the house they are going to live in for two weeks out of the year that's going to support the market? >> i like that stooer, particularly for those guys that are developing $40 million houses in los angeles just in the hills in hollywood hills and that's happening. they need a russian. they need a guy that's i got to get out of my home country. those transactions are so thin and rare. i just said as an asset class we have had -- give me one reason, carl, that housing will go up if rates can't go any lower because i say they can't, they have a high probability of going up. this illiquidity in anything mortgage of a million dollars. nobody ever focuses on those transaction costs which can be as high as 14%. you need your house to grow by 14% to break even after transaction costs >> what about shear demographics and the fact that our population is growing, we have had a lack of home building not just a recession a depression in home building, builders will build more over the next coming year. it's not going to be a boom, it's going to be a slow recovery

and maybe we are in the fourth inning, but it's just basic supply and demand and demographics of a growing population and millennials who will actually buy. >> i'm not sure about those millennials, the ones i'm talking to that work for me in over 30 companies -- >> i stalked to one today, she wants to buy a home, just can't afford t eventually they will want to own a home and raise their kids there. >> guys, you don't have to talk about me, i'm right here. >> you want to plunge yourself into debt or are you happy to rent? >> it's hard living in a big city, i have to say that. it's an overheated market if you want to buy in new york and san francisco, which we happen to live in. >> but that's not the rest of the country. >> agreed. >> you guys are talk being multi-million dollar segments, 2, 4% of the market. you look to the middle of the country, look to where most people live and housing is relatively affordable. >> diana, before we go this core logic report that's out today it says that if it had to estimate that housing would peak in april 2017. it seems like a pretty fine point to put on t what context

can you add to that? >> i don't know where fegt that 2017. i'm not sure what it's based on, there are all kinds of forecasts for home prices but we cannot make a forecast if we don't know what's happening with interest rates. they are key to home prices. >> diana, kevin, good debate. we will see you guys later. let's get over to kate rogers and get a market flash. >> we're watching the container store nearing lows, the stock taking a hit after reporting a quarterly profit of 6 cents a share. the company points to a stronger dollar and higher marketing expenses for the miss. back hover to you guys. >> kate rogers, we will continue to watch that stock. an ugly take today. with 20 minutes before the bell the dow still in positive territory, the s&p being hurt by healthcare, currently down just about a third of 1%. microsoft meanwhile unveiling new products for its windows 10 system and one could shake up the pc industry.

still ahead, an insider trading scandal rocking the booming sports fantasy world today. we will talk about that impact.

healthcare second for weighing broadly on the dow right now, united health cake taking 23 points off the index, merck and pfizer are the next biggest lag guards on the index, that is largely canceling out a lot of what we're seeing from dupont and chef ron which are adding quite a bit of gains, the dow up by just about 23 points, good for a little bit more than a tenth of a percent. >> windows 10, today microsoft unveiling a new line of products to run its operating system, our josh lipton joins us with some details. hey, josh. >> the biggest hardware launch in microsoft history and the big surprise today no doubt was this. this is microsoft first laptop, the surface book. just to go over quickly some of the specs of this new device, 13.5 snch laptop t has touch support, a stylus, microsoft

saying it's twice as fast as the macbook pro, the price, $1499. more broadly i also asked microsoft executives about whether windows 10 would give the pc market a much needed boost and they did sound confident. >> we've seen the stronger demand, 8 million pcs on windows 10, it's the fastest move we have ever had for a version of windows and we've seen growth for the first time, growth in this quarter with windows all up relative other eco systems. >> microsoft also unveiling today two new smart phones priced at $549 and $649 as well as a new surface pro 4, competition in that category really heating up with apple recently introducing the ipad pro and, carl, as you mentioned, more than 100 million devices already running on windows 10. the ceo was on stage saying that's the fastest ramp the company has ever seen.

microsoft's goal is to have 1 billion devices running on windows 10 within three years. devices like the ones we saw today need to find a lot of fans. back to you guys. >> josh, stocks having a pretty decent day, you've got to go back to mid-august or so, maybe a six-week high. how much of this do you think is truly going to be reflected in the upcoming quarter? >> well, a lot of these devices are shipping later. i think these are moves that we're just beginning to see. smart phones coming out, i think some of the -- what i heard from analysts and the impact in the quarters ahead i did think was interesting. i talked to a couple different tech analysts. just on the smart phones, that's a category where microsoft has a challenge, windows phone running only 3% of smart phones around the world, but i talked to analysts today about those phones, they were impressed by the specs, they said those specs are solid, there is that app gap, the microsoft, they do need

to do a good job of getting developers excited about powerful apps, attract more consumers, but the tech analysts said those specs were solid and maybe a lot of it departments already familiar with windows and windows apps could take a second look at these new lumia phones. >> i.t. budgets, especially in those are renewed for the fourth and first quarter. josh, thanks so much as always. >> with just a few minutes before the bell taking look at the dow. still in positive territory, the s&p, though, down by a third of a percent. >> neither kayla nor i are regularly on this show, but up next another irregular event, david car st who is usually here on fridays will join us today for his take on the markets. don't go away. i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement. and i help doctors identify cancer treatments.

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markets losing a little bit of steam as we head toward the close. joining us is independent investment consultant david darst. david, such a great treat to have you today. >> great to be here with you and carl. happy october. happy autumn. >> tell us what you're watching today. what should we be on lookout for. >> we should be watching the six c's, credit, the junk bond yields the spreads have been widening, usually not a good

side, on a precursor of the low down in the economy, bigger slow down than we've been experiencing. currencies, so you want to watch the dollar, janet yellen said to keep your eye on the currencies. china, commodities, crude oil and most importantly corporate profits. right now we're going through a lull in the action. the greek drama term for a lull in the action is chorus, it comes from the word meaning to dance on stage. basically the markets are marking time to see if they can get some inc. nation from corporate chief financial officers, chief executive officers as to the outlook for the fourth quarter and into 2016. i do note that morgan stanley and the fed have come out with slower and lower numbers for next year. again, around the 2% level, not a real write home about performance. so profits, watch profits. >> i've heard two things today,

one argues that china has done a pretty good job bringing relatively stability, but then others said look at german factory orders today, big miss, huge trading partner, china is obviously having an effect. what do you think it is? >> carl, i think that china we get too hung up on china's stock market. their real estate market is to them what our stock market is to us and their real estate market they managed to stabilize. so that's a good thing for the chinese consumer as they attempt to bring stability to the economy. i personally believe along the theory of george sore rows reflex ift it's not just what happens in the economy but what the authorities do in response. and i could see some form of stimulus coming from china. >> i wish i could explain that floor shot just now as you were talking, david. i do see time warner and disney on the podium. >> comic-con. >> i did see a couple of

superheroes. >> quite a few superheroes all in costume heading up to the podium. we will see exactly what spectacle -- >> carl, i was riveted on your roving eyes. >> back to china. on squawk box ben bernanke said when asked whether china fallout would be systemic he says it's hard to know what is going on inside. >> there is an opacity and opaqueness to their data. you have to look at the leak chang index, it's electrical power consumption and exports and those are hard to fudge. there has been some slowing. you are probably in reality not a 7% number but more like a 5% to of% number for china this year. don't forget, 5% growth for china is greater than china's 14% growth seven years ago in terms of the economy is so much

bigger. it's contribution to the world with 5% growth on a 9 trillion dollar economy versus 14% growth on a 5 to $6 trillion economy. >> good to see you. >> carl and kayla. >> we do have a show, it's on earlier in the show. >> he knows. we do have a new ace lert today on the proposed merger of pep co and ex long. >> that's right. washington, d.c. mayor bowser is expected to announce a negotiated settlement for the pep co, axelon merger. in the statement from a nay i don't remember's office it says it increases exelon's investment in the district from $14 million to $78 million. the settlement will be put forth to the public at 430. ex long still in the red but did come off of its lows and we will monitor the announcement and bring you more as it comes.

>> thanks so much for that update. kate rogers back at headquarters. when we come back we have the closing count down. >> after the bell fantasy sports not racking up any points today as an insider trading like scandal slams draft kings and fan duel. we will talk to a ceo of another fantasy outlet to talk about what it means for the sports industry. romantic moments can happen spontaneously, so why pause to take a pill? and why stop what you're doing to find a bathroom?

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just a few minutes before the closing bell. we're joined on the floor with mary thompson who has been watching the trading today. we had a rally that stalled out in the middle of the day, the dow was able to regain some steam, the rest of the averages were not. >> i don't think anyone was surprised by that. when we came into the trading session today we had a five-day rally for the s&p 500 it was bumping up against key resistance levels, didn't break through that. what we did see is this continued split in the market that we have seen recently. we saw strength in energy and materials, dupont was one of the big stories and the gain that we saw in oil it continues to move higher, the energy sector broke above it's 50-day moving average. so the dow managed to gain, helped again by dupont, and the energy stocks, but the rest of the markets under pressure by the weakness in biotech and healthcare. >> we have had pepsi report, contain were report that reported, yum! brands after the

bell but we don't have earnings in earnest until later this week. >> right. >> set us up for what investors are expecting. >> alcoa is the unofficial start to earnings season, people watching that. the heart of it starts the following week when we get the numbers from the banks. again, pretty i think tepid first third quarter for them. what we've seen coming into this is not a lot of warnings or guidance from the companies. people will be look to go see whether we have any setup for 2016 from the companies as well. again, it's smoesd to be no earnings growth for the third quarter redikd but a decline in earnings. >> some of these companies have pre announced situational events, dupont, ellen cullen retiring in november. >> each one has a different story. we did have dupont warning when ms. cull man skepd down as well, she is retiring, but the company being affected by the weak

innocence brazil and currency impacting that company as well. boosting its coasts, that's a big story there. >> all right. that is the closing bell. send it over to carl at post 9. >> thank you, kayla. welcome to the "closing bell." i'm carl quintanilla in for kelly evans. here is how we will finish the day on wall street. the dow up 13 points, it was really saved by dupont and the positive action that brought despite broader weakness, s&p unable to make it six in a row is going to close down 7. joining us on the panel we have michael santelli, steve grass will join us in a moment. mike, we've already talked about one of the better beginnings to october that we have seen in a while, wiping out september's losses and then some, what is

today's action? >> everybody on their heels a little bit because it was kind of like it looks like it could be a bottom but here comes october so it is a little too early to call t i think today is a little bit a necessary positive just because wirn so short term overbought five days up straight. i think the story continues to be the beaten up stuff continues to outperform. emerging markets exposed, coal stocks, steel stocks, all that stuff is getting a lift. that leaves the question is this kind of a counter trend bounce rather than something else. >> it's hard to ignore oil up 2.50 almost. >> the day that you started to be able to buy the s&p x oil in an etf form that was the day a few days ago to start buying the energy itself. >> and then you have a vix which silently tweeted below 20, it had been above 20 for five weeks, that was seen as a caution flag for the overall markets. do you think the wreckage at

this point is safe to buy and what does the vix tell us? >> wing we have to stee define what safe means? the market is less agitated than it was, less confused than it was when the vix refused to get down below the mid 20s. nothing magic about 20, it is the long-term average and when it gets down below that people say maybe it is more of a normal functioning with two way market, but i don't think yon that necessarily it's an all clear. >> what do you say to those who believe this is a gift, that this is another chance to unload the names is that you couldn't get rid of at 18.70, for instance? >> without a doubt. there is a large number of people how know are playing it that way, they regretted not doing so the first time we lifted off of that 18.67 mark. we've gained less than half of what was lost during the correction. you are still at this upper end of this new lower range. i will say two-thirds of stocks coming into today were still down more than 10% even though

the s&p was down only 7. you have a third of the market down more than 20%. so you can look at that two ways, either a ton of damage needs to be retired r paired or a lot of cheap stuff to shop. >> steve grasso is joining us. steve, give us some context for what we have seen in the markets in the last three days. what started friday was largely a short covering rally, people were calling it low quality at the beginning. then on monday it continued, it was a high volume day to the upside and then today all of the gains pretty much evaporated midday. >> it looks eerily similar to the day that we bounced the first couple days that we bounced off that 18.67 low. after three days we bounced to about 19.89 in the s&p cash. we did basically the same exact thing yesterday and stopped dead in our tracks. what do i feel? i feel that it still is that short covering rally, is it any coincidence that china has closed for the week. right? what were we talking about here a week ago?

glencore, commodities. so if you take the biggest catalyst to the down side off line what happens? the market lifts. you don't short a dull market. china back online i think changes this whole thing. >> let me ask you this, though, when we got there the first time on that bounce everyone said that low needs to be retested, we have to go down there and see if it breaks. last tuesday arguably was a close enough retest? >> we did retest originally, went from 18.67, traded up to 19.90 or so, traded back down, then to 2020 and then back down to 1872. is it a good retest? >> you never know. >> you never know. it's always like i always say it's like bugs bunny, you draw the lines and see how many times they cross them. >> we're going to find out. there's still some out of there of jim paulson arguing a revisit of 1890 needs to occur. >> how can you say we've formed a substantive bottom in the marketplace when china is off line? does that make any sense to

anyone on this desk? >> to me the key is going to be how credit behaves. you have not seen a lot of improvement in credit spreads, they obviously blew out. they've calmed down but have not improved. to me it doesn't mean it wasn't a low, but it means your pe is capped at the upside if the high yield market can't find a firmer thrown. >> people say the dow crossed the 50-day moving average yesterday. there are a lot of techniqcal signs, steve that is correct at least a technical bottom was put in, there were not? >> you can say it is healthier that we're trading higher than where we were, you can say there is a couple different technical signals that signal we bounced. losing steam, we lost a little bit of steam midday, i'd like to see when china comes back online where we're trading in a week. >> good point. thank you very much. as they said, another tough session for biotech today, bertha coombs joins us with more on that action. >> it's kind of a triple whammie

for biotechs. continued scrutiny over pricing, on top of that an earnings warning and on top of that the trans-pacific trading agreement. let's start off with the biotech action, came well off of the lows, that negative sentiment translating into an awful lot of selling at a high volume. among the biggest losers today, exact sciences which got kind of unfavorable rating pre announced rating on one of its colorectal cancer tests. also then you had that warning from ilumina lowering its guidance for the third quarter. then nectar therapeutics, they were down more than double digits at one point today and part of that is because of the trans-pacific partnership. in that there is an intellectual property agreement that would limit exclusivity for these bio lodge iks to five years. here in the u.s. patent exclusivity is 12 years t could be extended, it could be good

for bio similar makers, those are the ones that make the generic versions of some of my biologics but it throws the whole idea of intellectual property, exclusivity into doubt. it wouldn't necessarily impact sales here in the u.s., but it could impact sales abroad, specifically in asia. so a lot of folks in the industry very unhappy with that. we will see if that holds and whether that's going to be approved here by congress. nonetheless, a lot of negative sentiment about pricing and push back on the situation in bio pharma. back to you. >> thank you very much, bertha coombs. for more on that selloff in the biotech legs lends bring in len affey. >> hi. >> what do you think the bigger dynamic s the valuation hurricane or political hurricane they're in? >> it's a combination of both. the valuations have come down quite a bit with the biotech

index having corrected about 30%. the political issues, while i'm not ascribing much significance to them in terms of long-term policy changes, are definitely making investors nervous, especially foreign investors who aren't familiar with how things work in the united states and so correctly for their philosophy they are sell first, but to the extent we can figure out which companies are less likely to be expected that's a buying opportunity. >> that's a pretty valuable thing to be able to predict, len. how do you go about doing it? what do you make of this wall street journal story today that price increase right side seemingly arbitrary in the drug market? >> i don't think that they're arbitra arbitrary. we went through a period of four years ending in 2013 where pharmaceutical spending in the u.s. grew by less than 3% and that was in part because of the significant patent expiration cycle and not as many new

expensive drugs coming to market. last year those expenditures grew by 13% and they're likely to continue growing at a 10 plus percent rate over the next five years. some of the price increases are due to the companies catching up off the lower growth period, some of it is we have had an unprecedented period between 2000 and 2014 of new buy lodge iks being introduced to market that have had a very favorable effect on either survival or quality of life. i'm not using that as an excuse for many of the other price increases that have occurred in lesser quality drugs but we have to recognize that in some cases these drugs are worth at least as much as they are priced at, not all of them by any means, and that's how we have to try to separate either through legislation or through the pharmacy benefit managers which drugs will be covered. >> len, you mentioned you have to look company by company in this sector, you had so many

people address it with the etfs, like the ibb which are dominated by extremely profitable mature biotechs and the rest of it is speculative and they have have their own fortunes. it is wrong to buy this sector that way? >> well, between 2009 and 2014 we had an inn cress i believe rising tide lifting all boats and the pe of the sector at that time was about 14 times, it went up to about 28 times earlier this year. so in times when all stocks are going up it's very appropriate to buy the etf and when they are going down on the reverse one can short it. i think now we are at a period where we're going to separate out the haves from the have notes, this is a time when stock picker or somebody who mansion money in the sector earns their stripes. in that regard i think that the etfs are only going to give you

pa balanced type performance and that some of the stocks will go up, the ones of lesser quality will continue to go down. i think there's a big separation coming and that's the type of market that we're in with the correction we've had. >> len, good to see you. thanks for that. talking some bioteching here. we're getting interesting guidance out of adobe. kate rogers has more on that. >> the stock is falling on the news a date of birthy is giving three year growth strategy and financial plans. the big headlines coming out of this 2016 guidance not looking so good. adobe is giving total revenue estimates of $5.7 billion that's below the street estimates of $5.93 billion. also nongap eps $2.70 versus the street estimates of $3.19. also over the next three years they are giving guidance of 20% revenue growth, also 30% nongap earnings growth and adobe will be having a conference call at

5:00 that we will listen to and bring more med lines on. the stock is down by more than 10% now. back over to you. >> thanks so much. kate rogers, back at hq. steve grasso, perhaps you jinxed t me and mary talking moments ago about the fact that we haven't seen that many negative pre announcements. that's quite a big one. >> if you start to see earnings come in -- this will be the first time we have had back to back earnings declines since 2009. there is a lot of these signals that are written on the wall. i personally am 50% in cash. it's warranted to sit on your hands just a little bit longer to get a little more clarity. i hate to sound like janet yellen. >> it really depends how the stocks behaved. >> a pre announcement. >> that was one of the best looking charts we had left. >> there was not a lot of room for error there. >> all right. steve grasso, thanks so much for hustling over here, we appreciate t you are going to hustle up to "fast money" after this where you can catch steve and the rest of the crew coming

up. 5:00 p.m. eastern and they will be joined by billionaire venture capitalist mark andresin. >> he won the battle to a joint jack dorsey twitter's new ceo but are they looking at efforts to shake up the board. >> plus, will allegations of insider trading-esque activity in the world of fantasy sports threaten the future of this fast growing and multi-billion dollar industry. you're watching cnbc, first in business worldwide.

take a look at some of the bright spots on the dow today. far and away the leader in today's session was due month, but followed by some other names that are doing well in this environment, chevron, caterpillar, ge, intel followed by names like cisco and exxon. >> a scandal is sending shock waves through the increasingly popular world of fantasy sports. eamon javers has that story from washington. >> this is a story about draft kings and fan duel. if you watch sports on television and i know you do you have seen the ads for these two fantasy sports companies, "the new york times" with the story this morning including two key allegations, one that a draft kings employee admitted to inadvertently releasing data early, that employees later

winning a substantial amount of money on a rival site. also allegations that employees at both firms are allowed to or were allowed to bet on rival sites and make money racing questions about whether they could use inside information they learned from inside the firms as they made bets on other firmts' similar websites. these allegations getting significant attention here in washington today. we saw senator harry reid the democratic leader in the senate, he is from nevada of course representing las vegas and along interest in gambling and online gambling, he was can calling today for congressional action. here is what he had to say earlier today. >> i think it also should be a warning shot to everybody that online gaming is a real scary thing and we better look at all of it. >> also the two companies now putting out a statement saying that they are going to change their policy in the wake of the story. here is the statement from the two kps jointly issued while the industry works to develop and release more detailed policy,

draft kings and fan duel have decided to prohibit employees from participating in online fantasy sports contests for money. guys, i should also say that comcast ventures and nbc sports ventures have stakes in fan duel. so we should put that out there as well, guys. >> eamon, thank you for that. we will talk about that scandal a lot more in a moment. first we are getting earnings from yum! brands, our jane wells has that those numbers. >> yum!'s hoped recovery in china has stumbled. the company missing on the top and bottom lines, reporting revenues of $3.43 billion, the street was looking for close for $3.7 billion. adjusted earnings up $1, the street was looking for $1707. the street expected for same store growth to go position testify in chain and it did. the street was looking closer to 10%. what we're saying chargd china we are now estimating full year same store sales to be low

single dujt negative and given that pace of recovery or lack of it the ceo is saying combined with additional foreign exchange impact we now expect 2015 eps growth to be well below our target of at least 10%. we will continue to look at this. you can see what's happening to shares now. we will have more on "fast money." back to you. >> that's quite a drop after hours, down 17% for yum! stock. mississip mike santoli, china sales did i say appointing. >> the analyst consensus did not go down much in the last three months. basically did you not have people lowering their sites too much into this report. that's going to be the tell this earning season. people have priced it in. we can't see it with regard to yum! despite all the news flow in china. >> we will continue to watch those headlines out of yum! brands let's get back to the fantasy sports scandal. we are joined by the ceo of

another fantasy sports site, much smaller than draft kings orphan dual but you may have seen one of his commercials. >> let's bring in brian keller. it's good to have you with us, thanks for joining us, david. >> my pleasure. >> are you worried about the model of these businesses overall suddenly having to change as they get all this negative attention? >> i mean, i don't think that the model has to change, certainly there needs to be scrutiny over how data is handled at the companies but i don't think that i am packets the moldel of the games themselves. >> if it needs to be handled better why wasn't it handled well to begin with, especially given that a lot of people had suspicions about the way these businesses were operating and their high rate of growth. >> well, i mean, i think that's an excellent question. begin the investors and the partners of those two companies in particular i'm surprise that the there wasn't more scrutiny given not only to the user data

but sensitive data that could be leveraged in the man that are it is being alleged it has been. i am sure that this will spark some new reforms in terms of how data is handled at those companies . >> i wonder what else you think might be coming around as more scrutiny is applied to this industry in terms of potential regulations. if is it qualifies as a game of skill which is what the 2006 law requires what else can be done? can they mandate minimum payouts, essentially what kind of odds are expected there? >> i wouldn't expecting in like that. whether the regulations come from the industry itself or state or federal level that most important is what's going to protect the integrity of the game play so users feel secure in playing these games on those sites or any site. so i don't know about what those regulations will be, but i'm sure that a lot more scrutiny will come to the industry as a result of this. >> you know, it would seem easy enough, david torques put a moratorium on employees at these companies being involved

whatsoever in fantasy sports given that they work in the sector, but i'm wondering if you think that would have an effect on recruitment, on hiring, given how widespread participation is in fantasy sports and how much you have to assume people who work at these companies are already involved with their friends, extracurricularly. >> i think that's an excellent point. restrictions could be point in place for people or employees of those companies playing at a competitor's site that offers the exact same game that that company itself offers, considering that there could be information that's leveraged to gain an advantage on those sites. it doesn't mean that people can't play with their friends in free games and i think as long as the proper protections are in place to who has access to the sensitive data that could in theory give a competitive advantage, you know, that's really what's most salient here is how is someone capturing data internally to leverage extern external externally. as long as those protections are in place i don't see it being a big issue.

>> i'm trying to think of all those people who see the ads all the time but they have never tried t they've thought about trying it but haven't yet. would you expect new user addition toss come to a halt as people think, well, that whole business looked crooked to me? >> i would have to be very naive to consider this isn't going to have some impact on in particular someone that is on the fence that has heard about these particular companies or this industry and is tempted to give it a try to have to pause and consider who they are competing against. i think that extends beyond competing against employees of those companies, but also the sort of, quote/unquote, sharks or other users who are using sophisticated algorithms to gain an advantage in competitive play. i think that for a casual fan who is considering play this will definitely cause them to pause. >> certainly gotten the attention of the high frequency yufrs, too. >> david, not the last we will discuss it. thank you. >> terrific. my pleasure. >> coming up, why collecting too

much data may have cost google a high profile connected car deal. >> first, miej judge and a leg berg the compute sieve producers ever silicon valley will tell us how closely art really i'm dates life on that show.

some big movers in the market after hours. take a look at yum! brands, down nearly 17% after it reported earnings that were well below

expectations and also said that eps growth in 2015 will be well below its previously set target. you can see what that's done to that stock. andcdonald's, it's also dragged down in sympathy, that's now down about 1.5%, it had previously touched a 52-week high after rolling out all day breakfast chltd and then adobe systems down 11% on its negative pre announcement for earnings. a lot of red in the aftermarket for these names. >> absolutely. the vanity fair new establishment summit recognizing major players in technology, politics, business and media is underway in san francisco. joining us andrew ross sork inn with a couple special guests. >> i am here with a special special guests, mike judge and alec berg, the guys behind -- the brains behind the hit comedy silicon valley. thank you for being here. you guys are about to start shooting season three. >> correct. >> so when you start to give out

this season how much art is going to imitate light or life imitate art and bubbles and where we are in this crazy world. >> i know a guy with a garbage can, that's okay. >> that's the sign of the bubble. >> that's ominous. >> yeah, well, i hope it doesn't burst for the sake of the world, but we have talked about that. if it bursts in our show that would be okay. >> the big fear is it bursts between when we're done shooting and when we air so we feel like a period piece when we come on. >> does it matter to you? >> a real thing or issue for you? >> yeah. >> yeah. >> i mean, i think we had a moment where we met with several millionaires while doing this show but we had a moment where we were sitting talking to a certain billionaire and he was talking about a deal and how

much the users were worth and it was a multi-billion dollar deal, all based on just speculation of what a user is worth and we just kind of both looked at each other and went there is just a big bubble coming. >> you guys have had all sorts of great came yoes from folks in the valley in the show, kara swisher was walking past us saying hello before. how much do you have to beg them in the show and how often are they begging you to be in the show? >> it's kind of changed from season one we had to beg everybody we could and a lot of people weren't interested just because they didn't know what the show was, it hadn't aired yet so people were not interesting to stooping to whatever it was we were up to. once they saw the show it got a little easier. >> i was surprised the people -- we got eric schmidt, kara swisher helped, but michael arrington, i'm trying to think who else, but that was with the show never being on the air. then it definitely -- now they

come to us. >> can you give us a little hint of what's to come season three here? what's going to happen? >> it's thoord give you what we don't have. we're still figuring it out. >> still writing and -- >> okay. different question, then. not cameos but how often do you get a situation where somebody that is in the valley who is a name that might be the basis of one of your people tries to back channel you? how does that work? >> well, we have had -- we have had several people think that maybe a character was based on them and there hasn't yet been anybody that's upset about it or anything. >> peter teal has called or not? >> we've met with him. his people, yeah. and -- >> his character is no longer with us, that's a spoiler alert. >> that character in fairness to chris evan welch was not really a one for one with peter teal. i think that was easy to see

afterwards. when we were looking at video of peter teal we were like, okay, i see what people were saying but that was not the design at the time. >> i don't know if chris had seen any voof peter teal, he was channeling something, you know, that -- he has been around some tech people, he lived in seattle and i think he just was channeling something that he con jurd up. it also seems -- there are other tech people that you could argue that he sounds like. >> we've got to send it back. real quick, did you imagine watching the show on an ipad or phone? >> the way you think your stuff is going to be consumed? does that make you happy or bother you? >> a phone bugs me a little bit. an ipad is looks good. >> you spend a lot of time composing certain shots and if somebody is watching it on their watch it does -- it takes away from the experience. >> gentlemen, thank you for coming in. we appreciate you. i'm going to send it back to carl and kayla. >> thank you. >> thank you. >> all right.

thanks so much. great stuff tough. the new establishment summit. andrew will be back in the next hour, he will be joined by mark an dreesen. you won't want to miss that. let's get to sue herrera and a news update. sue. >> hi, kay l.a. here is what's happening. senate majority leader mitch mcconnell says there are a number of troubling parts to the deal for a pacific free trade act but added they were still examining the agreement. >> the senate is moving forward on a sweeping $612 billion defense policy bill despite a presidential veto threat. the vote was 73-26, 13 votes more than immediate kneaded to break any filibuster, it's expected to pass tomorrow and be sent to president obama. reseeding floodwaters are revealing the depth of damage and destruction in south carolina's capital. hundreds of people are volunteering with the red cross around the state to dispense drinking water and set up shelters. and officials say human

error was not to blame in yesterday's amtrak derailment in vermont. the train carrying 102 people struck some rocks that had fallen from a ledge and that sent the locomotive and passenger car into a ravine. seven people on board who were injured have been released from the hospital. that's good news anyway. that's the cnbc news update this hour. back to you guys. >> thank you very much, sue herrera when we come back why the fbi is trying to recruit cyber security experts from your local high school. >> billionaire investor chris sack can a will tell us about the changes he wants to make to the company's board now that jack dorsey has been name ceo. he will join us up next on "closing bell." rd? 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?

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twitter attempt to go introduce moments today, it's its first new product launched since jack dorsey officially returned to the c suite, stock down 2% as investors have their eye on the board of directors instead. >> chris sacca joins us now, he is founder and chairman of lowercase capital and he has been vocal in his desire for jack dorsey to return. now he is turning his attention to changes on the board. thanks for joining us.

>> sure. it's always fun to be called vocal. >> vocal, outspoken, we have our range of adjectives to choose with fr with you. you were most critical of peter curry on the board who yesterday on the conference call sounded an awful lot like an ambassador for the board. what did you make of the conference call and where peter curry's position is in this whole matter? >> i just -- i completely respect a board who wanted to go through a process and the traditional sense. that would apply and be effective in most companies. here we knew the outcome was inevitable. we knew there was one person suited to run this company. he was already running it doing a great job and we needed to get past this and remove this cloud that was looming over the company. that's what was frustrating me, other investors, members of the management team, employees, just the entire world. >> when jack tweeted yesterday as part of this announcement he

alluded to some changes forthcoming to the board. what would you hope to see on the board and how soon do you think we should expect some changes? >> there's a few things i'd like to see on the board. there are some investors there -- or there are members of the board who don't actually have a lot of skin in the game and aren't active users of the product. i don't think they can bring a lot to the discussion at twitter. i'd like to see them move on. i think we'd like to see fresh ideas. i as an investor would like to see more women on the board and people of color. if you think about what percentage of the users of twitter and great content user come from people of color there should be folks like that on the board of directors, maybe a shonda rhimes. one thing we've seen from jack at square he is incredibly talented when it comes to building board and knows how to attract the right talent, good and strong voices that can challenge him and the company to be its best and i think he will do that at twitter. >> snoop dogg is upset he didn't

get the ceo job but the chairman job still open. who would you expect or want to see at least explored for the chairman role? >> look, the interview process for the new ceo took long enough that i have to believe they considered snoop dogg at some point. you can't do anything that thorough and not take an interview with that guy. i don't necessarily know for the chairman role. i want to see evan williams get more engaged. i don't know if the chairman role has to be his but i want to see him back in the company. he has incredible product vision, he took the company from 2 million users to 2 billion users. i'd like to see him come back and get involved. for the last few years he has been on the sidelines and i hope jack brings him in. >> some people would argue for any public company the main job of the board is to pick the right ceo, give that ceo the right incentives and then stay out of the way. now that you have one of the founders as ceo how much more does the board need to be shuffled around.

>> does the company need to keep undergoing this kind of turnover or attention in this way? >> well, frankly there hasn't been a lot of turnover on the board and i think that's something that sets the company up for retooling. frankly i don't think the board's job is to get out of the way. i think the board is really there to serve the ceo in a way as much as they are his boss, his or her boss, they are also there to serve and teach and inspire and call bs when bs needs to be called. i think this board was inactive for too many years, saw the writing on the wall for some of these problems that we're hitting in terms of growth and didn't act when they should have acted before. i'm looking forward to a new board that will inspire jack to be his best as well as hold him accountable. >> finally, we've been waiting for project lightning for a while, we got moments today. your review and it is it enough? would you expect it to evolve over the near term? >> carl, i have seen you using it all day long. it's amazing, better than i expected actually and i think the key thing to see there is

that it is perfect for brand-new users, people who aren't heavy twitter users today will be heavy moments users. it just makes sense, it's completely intuitive. give it to friends of yours who aren't bigger users, older folks, younger folks they get it. the other thing that i would be remiss if i didn't point out it's so damn easy to monetize, it's video centric. this thing is going to hit the bottom line soon. >> it's been a long time since the company has had a new vertical. chris, we always appreciate your insights on a company that you know better than most people. >> great, guys, thanks for having me. meantime, we have a news alert on starbucks this afternoon. jane wells has some details. jane. >> well, read what you will into a title, starbucks is replacing its chief information officer with its very first chief technology officer. so out with the cio, in with the cfo, jerry martin flickinger,

she is the first cto for starbucks, a former adobe senior executive and moving over. she is supposed to start november 2nd. she's replacing kurt garner the chief information officer. now, ms. martin flickinger will not be reporting to howard schultz but instead starbucks president and coo kevin johnson. in addition to experience she spent 30 years in the i.t. industry at adobe, she is a pacific northwest native and leaving that business to get into the coffee business. as you guys know, starbucks mobile ordering, they are developed mobile order and pay and howard schultz has said that that app it has helps drive sales. >> howard schultz considers it a tech company that happens to sell coffee. continuing to refashion the company in that way, jane. thanks. up next, porsche picking apple over android for one of its most famous models, why the

luxury car maker isn't gaga for google. >> the newest batch of fbi recruits aren't even out of high school yet. why teenagers are the hottest commodity in the fight against hackers. before. before. efore. fore. ore. re. . .

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with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. porsche choosing apple over android to turn the newest version ever its famous the 911 model into a connected car. phil lebeau has details. >> this is all about the battle between apple car play and

android auto which is owned by google. it all comes down to what info tanment system will be in a new. porsche has decided at least for the 911 it will be the apple car play system that it's going to be including. android auto will not be offered. the suggestion that was in motor trend magazine is that porsche is skipping android auto because it does not like the idea that perhaps it would have access to some of the performance metrics of the vehicle being driven. we reached out to google and android auto for a statement and they say we take privacy seriously and do not collect the data the note or trend article claims such as throttle position, oil temp and coolant temp. they say at the end of the day you opt into whatever information is going through android auto so you know it as a driver that you are going to be sharing this information with android. porsche right now like so many auto makers in the process of deciding whether it's a.m. car play or android auto.

for porsche it will be interesting to see whether or not this drives sales, not that they need a lot of pep right now, the market is up 5% overall but porsche year to date sales are up 11%. porsche is one of the brands that's under the vw umbrella. it is not likely to be impacted by the scandal, although at the end of the day nobody can say for sure. take a look at shares of jooe volkswagen in the last month down 31%. >> we will bring in mic sanity told of yahoo fans to talk about this. when you listen to the debate in the smart car do you wonder why apple is not going overt about building a car. >> the thing i do wonder is exactly how big it is a business as a component maker like apple or google. thee companies have made it a priority on its own it should be a pretty good business to be part of that whole supply chain ecosystem that supplies 70 million stars kars year, it's a

big market. whether they have to make their own, i still think it's smart of apple to be coy about it and stay as a neutral player. >> i've seen cell side notes lately that look at the companies that are leveraged to an apple car as long-term as that may be, but also the kpts that are exposed to volkswagen as short term as that may be. >> it is an interesting time in terms of the short term versus the long-term. what i think is interesting and mike touches on it with his comments about apple is for apple there is no reason to show their hand at this point. it's smart of them to sit back and say do we want to ultimately license what we're doing with the automobile to auto manufacturers or do we want to get into the manufacturing game and perhaps create another eco system. things will shake out over the next five years and the auto business is going to be far different five years from now than what it is right now, likely consolidation and likely new players. who would have guessed five years ago that tesla would be

ruffling feathers the way it is right now. >> the world is changing very quickly, phil. we appreciate having you here to put it all in perspective for us. phil lebeau in chicago, thanks. >> if you are a car fan, be sure to catch the premiere episode of jay leno's garage, tomorrow 10 eastern on cnbc. >> the fbi is starting a new program to target teenagers but not in the way you might think. we will hear from the special agent trying to recruit teens interested in cyber security. that's when we return. sure, tv has evolved over the years.

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for all binge watchers. movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. the fbi is launching a new program to enlist teens to fight cyber crime. it is aiming to recruit students in the pittsburgh area before the teens get lured into private sector jobs or run into the challenges of youth that could lead to a failed background check laettner life. >> joining us for more on the program is fbi agent special agent in charge of the pittsburgh division scott smith. scott tell us how pittsburgh became the testing great for through and how you put the pilot program together. >> thank you for having me. it is part of a larger strategy from fbi headquarters. we've tried to identify and recruit and retain the work talent and it is competitive out there. so we started to look at

opportunities and in western pennsylvania there is a lot of high schools that operate science technology, engineer and mathematics programs which fit the bill to integrate a cyber agenda or curriculum and pair up with the fbi. >> so what sort of skills are you hoping that these students will learn? what do you think is necessary to be a future fbi agent that these kids are not learning right now? >> you know, it is just the opportunity for us to introduce the fbi mission to them. to start having conversations with them about life choices that helps them make decisions that would fit in some of the requirements and also bring them technology skillsets. often some of the same type of skills we're teaching new agents at t at t at t at the academy. when things like marijuana that make it a challenge to recruit young people, the director said

he won't change the drug policy but do you see it evolving over time? >> the fbi is always evolving. and fbi always had very high standards for a lot of different categories, including the drug policy. there is room within the drug policy for some experimental use of drugs. but i don't think that you need to change the entire policy to fit something that is a decision that may not be what we're looking for. >> and just to put more of a point on it, obviously this kind of talent is scarce in general. does the fbi standards for hiring maybe it a more limited pool. in other words, is it an extra effort to try to fill the ranks? >> i don't see it as the main issue with us filling the ranks. a lot of it comes down to more of the competitiveness of finance. the style of lifestyle decisions of movement that sometimes are involved with -- with a position

in the fbi. >> scott, i'm just thinking about how this will progress. it will be introduced next fall. at what point do you think the fbi will figure out whether this is actually paying dividends, even though the agency isn't necessarily funding this program itself? >> that is correct. we're not funding it. these are already government programs in place. and other than us supplying some additional resources, some different agents to go and help with some of the instruction and the curriculum, i think we'll know pretty early by next fall that the prerequisites put into place. there are some areas in ninth and tenth grade this they have a background in to handle the skillsets, the real life probables we'll bring to the table and let them solve them with real life and real world solutions. >> we're getting creative in how to keep our country safe.

but we appreciate what you are doing. fbi special agent scott smith. >> thank you. disney lovers may shell out $1,000 for annual passes. we'll tell you what is behind the price hike in a minute. become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most. awe believe active management can protect capital long term. active management can tap global insights. active management can seek to outperform. that's the power of active management.

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you're next disney theme park visit will be magical and more costly. disney hiking the season pass to $1,049 as it deals with overcrowding in the park. >> that is a $300 increase from the old pass which includes perks like parking and discounts inside the park. the old season pass, mike, $779 and the season pass at disney world in florida, is in the $800 range. maybe this is to offset the decline in viewership at espn. >> i don't know if there is a high enough price for the high end to not pony up for it. because you have a massive demand. you can't increase supply. it is a constrained world that you are offering people admission to. and that is why they want to keep it affordable, some days of the week, at the mid to low end and you have other people pay for it. >> stock was a darling all year long and still can't find its way back to $105. >> and i don't think that will

change until people get clarity about the cable economy right now. >> that tipping point on espn was fascinating. thank you so much. mike sant olie. that does it for us here on "closing bell." "fast money" with melissa lee starts right now. "fast money" does start right now. live from nasdaq, overlooking time square, this is "fast money." i'm melissa lee. dan, steve, karen and guy here today. tonight on fast, oil surging 5%, hitting a two month high and the commodities makes a big call on it. live here in studio to reveal it. plus mark andreeson is here with a interview and you won't believe where he's putting his money right now. he'll reveal in an exclusive. and later, wonder why apple is left out of the rally. a top trader has the answer. and kfc plunging 8% on a massive earnings miss and the bad news from