>> global equities say they could deliver the high end of the range for the month so that's one that we're watching today as we are seeing the dow clo close to session highs up 73 points. >> thank you for watching "power lunch." >> "closing bell" is up right now. welcome to the "closing bell," i'm sara eisen in today for kelly evans at the new york stock exchange. >> i'm bill griffeth. big rally on wall street albeit on light volume, energy one of the big winners in today's session, oil catching a bit. you can see all ten sectors of the s&p 500 are higher today, tech and biotech among the leaders today driving the market higher, we will dig deeper into what's behind this rally and whether it can hold into the new year here with santa claus clearly on wall street at least today. >> speaking of rally, amazon shares hit be an all time high today on the back of those strong holiday numbers, the stock now up more than 120% just

this year. is the run almost over or not? we will discuss it. >> meanwhile, apple shares higher today despite another iphone red flag. digit times is reporting that the company's iphone sales could come up short for the fourth quarter. we are going to talk about whether the bloom continues to come off the rose for this beloved stock. and intel's head of m&a hinting at more acquisitions in the future, a top analyst will tell us which companies to be up for grabs in the chip space. >> i have no idea how we are going to fit all this in. we will try our best, though. let's start with stocks following oil higher today, bob pisani, trolling the floor of the new york stock exchange looking for action there, bob. >> you say trolling so nicely. i like it when you say this that way. important thing about today is what do you want, oil is up nicely, we had a nice gap up in european trading, if you can't get a rally out of that something is wrong, but we are getting a rally. i'd like to see the beaten up

energy names and material names rally a little bit more, not really happening. look at exxon, gapped up beautiful beautifully, close to $80 at the open, they sold right into it, it's still up a half a percent but off of the highs. same thing with chevron, it was close to $92 at the open and they sold up to that as well, it's up fractionally. same thing over here, caterpillar, they gapped up, close to $70 at the open and then they sold right into it again, same thing. all right, it's up nearly 1% but it was doing a lot better even earlier in the day. it's not all like sell into the rally of the beaten up names. look at walmart. this is the worst performer on the dow this year, down about 28%. that grand up nicely and that stayed up all throughout the day, that's held on very well. some of the other ones, too, like united technologies, another loser for the dow, it's down 14% or so, that gapped up and it's held on pretty well. finally if i'm complaining about losers on the dow here, ibm is probably down 12 or 13% on the

year, that moved up at the open and that's holding on as well. here is the thing that i'm concerned about, the most beaten up names should be rallying like these, the material names, the industrial names and the energy names. that's not really happening, we are getting a rally, it's pert than two to one advance in the declining stocks and we have a good shot if oil behaves ending positively for the year. this is telling me they are not going to start buying those energy names just because oil is stabilizing in january, which is what a lot of people are looking for. back to you. >> bob, thank you. we will see you later this hour as we head toward the closing bell. let's get to our exchange for this tuesday, jim lowell from advisory investments is with us, see is peter costa and rick santelli checks in per usual from chicago. peter costa, i note a very light volume here, in fact, traders have been coming around today, yeah, we're higher but look at the volume. does that knee great what's going on today or what do you do with this? >> i think it knee greats gates it a little bit, but i think the

bigger issue is that you see the names that have been in the positive for most of the year are really rallying today. i think what it is it appears to me a lot of money managers are putting more into the winners and they are not really jumping into what could be some great value plays, be it, you know, a chevron, an exxon, ibm, just like bob said. i think, you know, there will be some movement in there going into next year, but it looks like everybody is going into and just building up a little bit better position in the winning stocks that they have had. >> jim, you have some specific predictions here for the new year in terms of stocks, 5 to 10% valley for the s&p during the year but potentially a 10 to 20% correction along the way. what signals are you getting that are leading to these kind of numbers and moves? >> one of the things we're looking for in 2016 is a likely repeat of what we saw in 2015 with consumer driven businesses faring fine, business to businesses not faring as well. the global market remaining very uncertain. today's oil trade i'd say is short covering on the commodity.

clearly nobody has got the nerves to go long on the equity in the oil market just yet. i think that's right-minded. what we see is a fed that's willing to defend our slow growth here at home, we know the stimulus in europe and japan has a safety net underneath those market plaflss but we do think that 2016 will be a market that is likely full of unsettling disruption as we wind our way through t not the least of which might be towards the end of the year when of course election year reaches a fever pitch. >> rick, they are selling treasuries pretty hard today, two-year note, five-year high on the yield for the two-year and of course the tens and 30s are going higher as well. is it as simple as them selling bonds to buy stocks today or is something else going on? >> i think it's most likely something else going on. it's a very thin market, you can tell by the poor demand in yesterday's two year and today's five-year note auction. it's just a thin trade all around, but just like equities, you know, strategically these

light volume sessions have meaning, but if you hit a bit or lift an offer you still get a check or have to send a check, the numbers are real and right now you're right april of 2010 last time we have seen these two-year yields, but on fives right now it's a close call, we could move the comp from june 10th of this year all the way to september of 2014 and right now tens and 30s is as the crow flies right where they are at are some of the highest yields we have seen since the second and third week respectively of this year in november. so yields are on the move, getting close to some real significant highs. that five year i can't stress enough, five year is such an important fulcrum on the yield curve right now. not only does it represent a certain reality for financial activity period, but it has kind of a little bit of the short-term issues of the fed, a little bit of the long-term issues of the economy so you want to monitor that and keep in mind not that many days ago we were close to unchanged, we

settled at, you know, 166 on a five-year, now we are getting close to 180, we settle at 216 on a ten year, we are now hovering at 230. so these yields i think are actually more significant on light volume than what we see on the equity side. is there any doubt out there within 100 points of unchanged on the dow, i don't know how they do it, plunge protection, the japanese buying futures, i don't know, but i will tell you what, i think it's still a pretty safe bet that you're going to eek out close to unchanged on the year on the dow before its all said and done. >> you are wise. you are wise, rick santelli. >> peter costa, commodities are at the center of all of this sex tift, whether it's the long end of the bond curve or stocks as we have been talking about. oil strategists did not get the price of oil right in 2015 or in 2014, nobody predicted the dramatic slide. how often earth can you predict what the stock market is going to do next year if nobody knows what's going happen with oil?

>> you can't. it's a fool's errand. you can't predict it. you go with the knowledge and understanding of what the economy or what you think the economy is going to do first, second, third and fourth quarters and try to figure out, you know, based on historical precedent where the market is going to go, but i don't think, you know -- it's very, very hard to predict what the markets can actually do next year. there's going to be one person that's going to get it right and 500 that get it wrong and you never hear from them again, but the one person you do hear get it right, which is probably me, you will hear about it endlessly. >> that's why we love you, peter, you are so modest. >> there is no modesty. >> having said this all, jim lowell, are you comfortable? you are not the only person who says, hey, i see a correction for the u.s. market, i'd rather be in europe and japan in 2016. a the love people feel the same way, you're going to tip the boat over with everybody on that one side of the ship, aren't you? >> i don't think it's an either/or decision. we will still be heavily weighted in the u.s., especially because the ugs consumer is as

strong as they are and we expect the job trends will continue to be net positive, wage trend net positive, that bodies well for the u.s. and every business, both domestic and foreign indicator to it. we do think that the valuations continue to point towards europe and japanese small, mid cap, to, we like the established market, rule of law, rule of order, economies and political systems that we both understand and believe in a little bit more than the emerging markets and less sensitive to the price swings in commodities. so that's where we will definitely be looking for some added return advantage in 2016. >> all right. very good. thank you, guys. see you later. have a good new year if we don't see you later. amazon hitting its highest level since its ipo. are you kidding me, back in 1997. >> are remember that? >> that would make it an all time high, i guess. can amazon stay red hot? >> let's bring in edmond lee. the latest leg higher can we

attribute to those holiday numbers we got? >> it's definitely the holiday numbers. they touted the fact they generated 3 million more prime subscribers in the week leading up to christmas. that goes to show you all the advertiser, all the marketing they're doing, trying to get people into prime is working. >> seems like the stock has hit a new gear, though, doesn't it? >> yeah, what's going on? >> it's getting very strong here. >> i think part of it is i think investors are getting a better lens on amazon as a company all together. it's not just selling stuff to people. it's a services company, it's doing everything it can to get goods and services to people, whether that's physical products or aws which is their cloud service, they are also -- a big part of their business is their marketplace division which has other vendors selling stuff through amazon and that's the faster growing part of the business, they are ultimately a logistics company, want to deliver stuff, give you services more than just the products they're selling. >> how do you value a company like this and how high up --

>> you mean when the margins -- pennies on the dollar, yeah, or penny on the dollar or less than a penny on the dollar. >> how does the math work? >> assen investor you're buying into bezos' mandate, which is we're going to grow as fast and quickly as possible, dominate every market we go into, whatever product or service we want to sell and we are not going to give you much margins on that, i can give you margins today if i want to but i'm not going to do that because i want to use that money to build the business. if that's for you, that's fine. i don't see any point in the near or long-term future where he is like, now i'm going to give more back. i don't see that happening anytime soon. >> let's move on to apple, then. a former darling, if you will. are we just acknowledging that the mystique -- >> is over? i don't know about that. i think the cooling economy in china is definitely affecting their sales. apple still a great marketing

company, they make great products but they're also really good at marketing. what i mean by that, you live in the u.s., you live in europe, if you want an iphone you probably already have one. there is a limited market there for you, it's china, it's india, it's other developing parts of the world that they need to really get into. if the economy cools in china, one of the biggest markets out there that's going to affect your sales. >> there was a report out today saying that iphone shipments for the fourth quarter could come in 5 to 10% below expectations. pretty specific, something that an lists have been writing about. >> also that's q 1 of next year. >> we have also heard other warnings from suppliers. is this baked in is the question into the stock, into the company forecast? >> i think given the fact that analysts have been looking at that for a while now i think that is definitely baked into the stock at this point. i think we're all waiting to see what -- okay, what's next? >> exactly. >> the watch didn't quite work. >> you know the iphone sales are going to slow down. you have to have something to come nice next, right? >> exactly. >> what is that?

>> whether it's apple tv, i don't mean the hockey puck device, i mean selling subscriptions, competing with cable companies, whether it's the car or something, they need better visibility, they need to talk to us more about what's going on. >> the information technology index up 7% so far this year and apple down 1%, completely underperforming. >> apple has always had the higher bar to cross for a lot of investors, they lead the way but also they can lag in the fact that if you don't meet that high standard they will start selling it. >> are we underestimating tim cook, though, at this point? >> i give him the benefit of the doubt. i think there is something to come, i think he could pull something off, maybe not next year, but soon. we will have to see. >> yes, we will. >> i like the idea of a waterproof iphone which i heard they were working on for the next one, the 7. >> that would be big. >> if i dropped it in the rain or in the toilet. thank you, ed. >> thanks very much, ed.

and just to note that nbc news group is a minority stakeholder in r recode and we have a partnership with them. we have a pretty nice rally, it is broad based, all major sectors in the s&p are higher right now, we are looking at a gain of 1.17%. pretty strong there. the dow now up near session highs, more than 200 points. nasdaq up almost a percent and a half. >> and i thought you were a snork snorkeler. >> that, too. >> new daytota out this morning show property prices booming once again. we will find out if you are living in one of the most expensive markets in the area. we will talk with phillip white coming up. intel's m&a chief calling alterra a great first acquisition. which company to be next if intel is on the prowl. why the chip consolidation story

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rally day on wall street. the dow up 217 points, that is the highs of the session right there, but the nasdaq is the better performer today with a gain of 1.5%, tech, biotech, pharma, oil, all doing pretty well today. all ten sectors are doing well. weight watchers is also doing well, rising after oprah tweeted her first ad for the organization. back in october she announced she was taking 10% stake in weight watchers, joined its board, became a spokeswoman for the company and all it takes is a tweet from oprah and you get a pop of 3.75%. >> that was a crazy day. >> that was a 10% gain when she announced -- even more. i mean today she just tweets an ad for the company and up it goes 3.of%. >> she lost 20 pounds since joining weight watchers. you should listen to the ad, it's emotional and quite effective. the power of oprah.

>> a new report showing home prices are rising at the fastest rate since august of last year, diana olick has the details on today's report. >> the gains in home prices are gaining, the latest read on them from s&p kate schiller shows values in october up 5.2% from a year ago. that's a wider gain than september and the largest why jump in over a year. what's pushing prices is a lack of homes for sale, especially on the low end wherein investors ate up so much of the distressed housing stock. builders aren't helping much, still putting up homes at a slower pace than normal even as demand rises. let's go local. the top 20 cities in the u.s. saw a bigger gain of 5.5% with some in double digits, san francisco, denver and portland, oregon, the highest all with annual gains of 10.9%, but dallas and seattle were not far behind them, the smallest gains were in chicago, new york and right here in d.c. that may be because we're seeing more supply on the market, especially new kondo construction.

so as of october home price right side back to their winter 2007 levels, but still down about 13% from their peaks in 2006. >> very interesting. lot to talk about there. thank you. as diana said while the schiller index showed a rise in house prices the luxury market has seen a drop in prices. luxury homes posted their first drop since back in 2012 for the third quarter of this year. >> for more on the state of the luxury market phillip white, he will be ringing the closing bell in just a little while. >> thank you for having me here. >> what do you make of this latest development for luxury prices. >> i think the report was accurate in that prices that have almost retraced their all time lows which was -- i mean all time high which was 2006. 11 to 13% below the peak. so to me that suggests that there's more to go, more to

gain. sharp drop off as we all know and it's taken a long time to really get to this recovery point. so i think the other poind is inventory is a little challenging in some markets but we have had a very good year at sotheby's international realty, a good three or four-year period where we have outpaced the overall market really by about two to one. >> it was kind of a weird market for luxury especially in new york city because while you have prices polling now you also saw records shattered this year, i'm thinking of 157 and that penthouse that sold for $100.5 million. the most expensive town home the brooklyn sold this year. seems like a mixed picture in that way. >> i could see how you would say that. we have seen fairly stable pricing this year, even in the upper end, but we have markets where the prices have really gone up substantially. the aspens, even salt lake city, park city, parts of california

are still very strong, newport beach, san diego, la jolla, we have a record price there. it is a mixed bag. >> right. and it doesn't matter whether the fed raises rates to those markets, right? >> not really. a lot of our transactions are all cash and each the slight short-term interest increase really doesn't affect the mortgage rates in a significant way. >> but is it really the same luxury market that you saw before the crash in '08? >> you know, i think it's even stronger. >> is it? >> yeah, i think it's more stable. it's less erratic. you know, i think the long-term value is even stronger than it was then. it was two frothy as we all know from our experience back then. >> but what's also stronger and bill knows i'm going here. >> i was waiting for this. >> is the u.s. dollar which has detracted a lot of foreign buyers which was important in luxury markets like new york,

right? >> we are seeing a little drop off with international buyers. the socioeconomic picture, political picture in some of the countries, even the weaker economy in china, even though it's the number two economy in the world still going to grow at close to 7% and we are still seeing chinese buyers certainly in the western part of the country, in california, they still have a great eagerness to buy u.s. real estate. so we don't think this will be a long period of time where the international buyers are a little bit more on, you know, the sidelines. but the international buyers are a very big factor in the upper end market and will continue to be. >> you mentioned inventory challenges early, i intrigued by that. there are certain parts of the country where they aren't building anymore or enough to keep up with demand, is that what you're eluding to? >> some of it. for instance, we talk about new york and san francisco, but i was talking to our affiliated

company in charleston, south carolina, wonderful historic place, the typical inventory level there is about 12 to 13 homes at any given time and it's less than half that right now. >> why is that? >> that is the challenge. you know, i think it's just the buyers have bought up the supply. i think you mentioned t there is not as much new inventory building built. >> right. >> that's certainly a catalyst. and those are the driving factors. >> waiting for those home builders to get their confidence back so they can start building again. >> back to where we were prior to the crash which was a million homes a year and we are far off that pace at this point. >> i know they're anxious to get you upstairs to get ready to ring the bell. >> thank you so much. >> phillip white. we're heading to the close, we have 35 minutes right now, the dow just off the highs of the session with a gain of about 210 points here. up next, winter is back, delaying or canceling hundreds

of flights and creating messy commutes for millions across this country. we will take you live to one of the nations busiest airports. and later, help wanted. we will discuss tesla's hiring binge and what it says about the increasingly competitive electric car market with a leading silicon valley recruiter. that's all to come on "closing bell."

all right. we are about half an hour to go before the closing bell and we are still in rally mode, the dow is up 200 points right now, broad based rally, all sectors are higher, the s&p 500 up more than a percent, the nasdaq the best with some of the tech names strong, information technology the best performing sector in the s&p as well. check out natural gas continuing to surge, it's up 6.5% gaining ground on more forecasts of colder weather expected next month. that could help soak demand, help ease supply. remember, bill, natural gas had been trading near the lowest since 1999. so far it's bounced back 35% since those recent lows. >> part of that reason is the winter has arrived in the northeast. storms are creating a travel nightmare for millions today. we're checking in with nbc's

adam reese at laguardia airport in new york city. adam. >> reporter: good afternoon, guys. weather continues to affect operations not only here at laguardia but across the country, some 2600 delays today, 1,000 cancellations. airports affected include chicago, detroit, newark, dallas, of course here at laguardia. all the way to boston where they saw a fair amount of snow this morning, yesterday, 5,000 delays, 3,000 cancellations. this is all part of a come know effect that started last weekend when we saw those tornadoes and storms rip through texas, affecting the hubs in dallas and houston, moving through the great plains and hitting laguardia here this morning. we arrived, there were people sleeping in the food court, waiting online for hours to be sold to come back tomorrow. a lot of frustrated passengers. >> it's just frustrating, but i've been in new york for 12 years now and i hate to say it, but it's kind of par for the

course. every time there's bad weather, and particularly this one particular airport, it's always a struggle. you know, it's just one of those things you just have to grin and bear it. >> now, that was ian, he had to go back home, he will try to get to atlanta again tomorrow. just a reminder once again, don't come to the airport until you call your airline, make sure your flight is on time. once you get here you might end up in one of the lines like this. back to you guys. >> and multiply that by all the other airports in the area, too. that's what's going on. adam reese, nbc. thank you. it is time for a cnbc news update with sue herrera. hi, sue. >> hi. here is what's happening at this hour. one person is dead following a small plane crash in alaska. investigators say that the aircraft clipped one building in downtown anchorage before crashing into another building and then bursting into flames. there is still no word on the cause of that accident. the so-called affluenza teen

who violated probation and fled to mexico with his mother may face jail time. texas authorities say they will push to have ethan couch's case moved to the adult system when he faces a judge. couch was a minor when he killed four people while driving drunk. a star from the tv series glee has been arrested on the suspicion of holding child pornography. the 33-year-old played puck on glee. macy's recalling 121,000 sets of martha stewart cook wear over an issue with some of the frying pans, the consumer product safety commission says metal discs covering the pan's rivets can pop off and hit consumers. customers can return items to macy's for a full refund. that is the cnbc news update this hour. i will see you in an hour. >> thank you, sue. good thing nobody got me a frying pan for the holidays.

less than half an hour to go before the closing bell. we are looking at pretty nice gains, with the dow up 207, the s&p 500 up firmly above 1%. by the way, back in positive territory for 2015, just like that. >> just barrel. >> and the nasdaq up 1.4%. >> she snorkels, she cooks, we learned so much about sara. is this the santa claus rally that wall street has been waiting for? a top trader will tell us what he is he's watching. intel's head of m&a implying more acquisitions could be in the pipeline. we will discuss which companies could be next in line to get hitched.

rally continues on wall street. the dow up just about 200 points today. light volume, though, very light volume here at the new york stock exchange especially this christmas week. dupont one of the components that's contributing to this gain after announcing it's going to cut 28% of its delaware-based work force ahead of its planned merger with dow chemical. that works out to about 1,700 of it's 6,100 employees in its home state. the cuts are part of a previously announced plans to slash it's 63,000 strong work

force by about 10%. but the stock today is up 1.8%. sara. >> less than half an hour to go before the closing bell. this is where it gets interesting. with me to discuss steven guilfoyle, better known as sarge. broad based rally what levels are you watching? >> right now s&p level 2077. it was resistance this morning, took us a couple of tries to get over it, it's been supported about three times now, i expect us to test it again. if we can hang on to that level technically it bodies well for a continuation of this santa claus rally. >> santa claus rally. we are seeing some of the losers of the year on top, we are also seeing gainers like amazon make new highs. what does all that tell you? >> i'm a pretty conservative guy, yeah, the fangs are nice and fancy and winners are all good but i think you have to play what looks good in 2016 to you. you think about the consumer is going to do well, which i do, you want to play the staples above the discretionaries and

hedge it somehow, a sector that might not do so well, how about healthcare, maybe you want to buy puts in that sector as a hedge. >> wonder how the rest of the markets are filtering through into this rally. we're seeing the dollar under some more pressure and oil is higher today. >> you know, as long as oil is all right, doesn't have to do well, as long as it's all right and as long as the dollar stays put we can play our game. if we can play our game we can do whaef to do, let's go for 2085, let's be conservative, go for 2085 tonight or maybe on the open. >> final word on volume, they are low. >> volumes are low but so much of this market is algorithm driven now that it's not as important as it used to be. >> thank you very much, sarge. we will see you in a bit. let's talk about intel officially closing its biggest acquisition ever this week after buying chip maker alterra. their m&a president told the financial times alterra is a

great first acquisition. so which other companies could be next if that's what he's alluding to. joining us depon nong. >> hi, bill. >> intel has been known for its in-house development for years, now they are suddenly buying other companies. what happened? what changed? do you think there are other companies coming? >> yeah, you know, ever since intel appointed brian to be the new ceo back in 2013 the company is much more aggressive about entering new growth markets and about exploring new opportunities. alterra is a deal that is focused on the data center market, it lurchit leaf reg's i environment. names like micron, names like invidi:come to mind and intel has said they will be net cash break even exiting 2016 so i think sometime in '17 they may be ready to go again. >> what leads to you those names? what's driving the further

acquisitions as you project here? is it the slow growth and the need for cost cutting and synergy just to get leaner or is there really a hunt for some new innovations out there? >> yeah, i mean, i think it's all of the above. the industry is slowing as you mentioned and large companies are looking for inorganic ways to grow. at the same time the small companies are finding rising design costs so they need to partner with larger companies in order to stay viable. on top of that you see the chinese government focused more on investing in the space and there's a lot of capital flowing around. 2015 is going to go down as one of the biggest record -- biggest years on record for spending m&a and i don't think there is any reason to believe that 2016 won't be the same. >> so far we are just talking about intel. it won't be the only acquirer. could there be other big companies out there looking to do the same -- are they going to have competition for consolidati consolidation, in other words? >> i think so. we have seen a lot of large deals done in 2015, broad come

and avago comes to find mind, i think qualcomm has struggled, they will be on the market, texas instruments said they might be interested in analog companies and we also see names like avago that might be have the financial wherewithal together back involved in 2016. i think the chinese government is a wild card, they have a lot of money and not a lot of places to put it. if they see a winning seller i think they will be keen to jump on to that. >> we talk about what's going on in the auto industry and tech industry and the merger of these these two industries, we know apple and google are sniffing around to get into this game. how much of that is a driver for some of thieves chip makers who is powering this and does that make some attractive acquisition targets, the auto industry? >> absolutely. you see the automotive space being one of the few markets where there really is growth. as you mentioned things like connectivity going into multiple

cars, advanced driver assist systems, basically the way i think about it driverless cars are kind of buzzy term right now. i like to think of it as drivers do less cars, people are doing less when sitting in the cockpit of that car and that means a lot of electronic content. names like nxp come to mind, it has a large presence, but basically every large semi-conductor company is trying to position themselves well for this emerging opportunity. >> very interesting. something to think about for next year in the chip market. good to see you. thank you. happy new year. >> happy new year to you. thank you. >> see you later. 20 minutes left in the trading session here. coming off those highs a little bit, but sarge saying he was looking at 2085 for the up side. >> he touched it higher. before he said 2077 which we were above. >> we are just below that now. >> that was his next level we're watching. we still have a 1% gain on the s&p 500. watching the nasdaq, too, as the

outperformer, amazon's record high share price helping seal the gains over there. kate rogers will be breaking down the other big winners next. find out why housing and auto stocks could boost your portfolio in the new year. more things to think about coming up on "closing bell."

dow up 190 with 15 minutes to go before the close, s&p firmly up 1% with all the sectors higher, nasdaq up 1.3. check out shares of triumph group. it's surging today, it's an aviation equipment maker and it announced the appointment of daniel crowley as ceo, he is the former president of two rafeon units and served as the coo at lockheed martin. certainly shareholders happy with the announcement. shares are up 18%. >> 18 plus percent. it's like the nasdaq on that tear you were mentioning. outperforming the other major averages. kate rogers talks about what's behind the nasdaq surge. >> we are up by about 1.3% and tech and biotech are helping to lead the gains at the nasdaq, up 8% for the year to date,

outperforming the dow and s&p. vertex up 3.5%, illumina up 4%. the ibb nasdaq biotech etf up 13% for the year, that is its seventh straight year of games, qualcomm is surging on the heels of a patent license agreement with two chinese firms, that stock is up 3%. tesla another gainer also up more than 3% this after the "wall street journal" reported the company is looking to add thousands of employees in the coming year as the fight for tech talent continues in the auto industry and keeping with tech, another name we have been mentioning t amazon coming off a big holiday weekend with 3 million new prime subscribers for the third week in december that stock also up nearly 3%. back over to you. kate rogers with a look at some of the movers at the nasdaq. let's show you where we stand on the major indices. in terms of s&p groups that are showing strength it is technology, healthcare and

consumer discretionary. bill, utilities are faring the worst of the bunch, still higher but with those yields sharply higher, especially the two year you don't see the strength in utilities. >> a lot of money managers have been coming over here telling us how they love european stocks, this he love japan. up next we will hear from one who thinks that the best opportunities are still right here in the u.s. and he will name some names when we come back.

all right. ten minutes to go here with the dow up 190 points, joining us phil blancano. we were just saying how how many people come through these days saying i don't know about the u.s. market but i love japan or i love europe. you're sticking with the u.s. market right here. >> to me 2015 was an anomaly, i know we have heard so many people in the last couple weeks say this is what we expected or maybe we missed a couple markets. let's be honest many of us including myself were not exactly right. we had an expectation of 5 to 8% this year. it didn't happen. it wasn't that the consumer is not healthy, the consumer is very healthy, in fact, i would argue the last few months are the best representative of how healthy the consumer s you're paying $1.85 a gallon versus 28

months ago. that aside, whether the fed, limited qe effect in europe or the lack of impact of all the other dynamics in our economy, the gasoline didn't really matter yet, the pent up savings by the consumer, so my belief is that we're simply 2015 was the year where we waited for everything to change and it didn't. so the question for everybody on this is are we in a fundamentally new investment environment where low energy is a bad thing, strong consumer is a bad thing or are we in the cusp of seeing it come to reality snow how do you invest on that thesis, consumer discretionary was up more than 10% in year. >> it was a telltale sign where you have to put your money. healthcare is a must in a portfolio. you have a 5.5% savings rate, that's pent up demand, you have employment rapidly increasing, we are almost at full employment, wages are going up -- >> pent up demand or extreme caution in the economy. >> that's the question. where are we at? 5.5 used to be a telltale signs

things are getting better or are you right that we are in a new investing paradigm and because of that we have aging in savings. i'm not going to go with that yet. i'm not going to believe that, this new hypothesis is a new normal, i'm going to say it's a matter of waiting for the shoe to drop. >> rates are going to go up next year, financials should do well. we thought that that was going to happen this year. >> did not. is that moved to next year? >> back to what i would invest in, healthcare, financials, consumer. i'm a little worried about tech. i'd say away i from tech, there has been too much euphoria around it. >> energy. >> energy. i love the energy space, i have not been right about the mlp space, i look at the lack of dividends cuts, income on earnings. for knows speculative investors that want income go there, but it's too soon to tell. at some point next year the energy trade will be the best trade. >> what's going to turn the tied tide for financials?

>> fed rates go up, let them start to earn money on their cash, the game changes. >> shouldn't that be getting priced in now? >> it should be. are people still not there yet. remember, consumer confidence today 96. that's a sign -- >> pretty high. >> it's a matter of time. >> it doesn't jive with the retail sales numbers that well. >> look at cyber monday, the best ever, look at the christmas eve sales up. it's coming, it's just taking longer than they expected. >> phil on the u.s. >> one last thing, you've got to east lentils on christmas eve, it bringser good luck. >> you mean new year's eve. >> new year's eve. after midnight eat lintel soup. >> there you are. suddenly becoming david darst with a new idea. >> happy new year. >> happy new year. >> bob pisani and i remember coming back with the closing countdown, your favorite segment. >> it is. after the bell the catalyst that

could boost biotechs in the new year. don't miss meg tirrell's special report. you're watching consumer first in business worldwide. they wor. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this.

all right. about three and a half minutes left in the trading session, pretty good rally although on light volume bob pisani is going to be mentioning here. let's show you how we're doing so far today. the rally for the dow just started in the morning and just continued to build into the

afternoon. we're coming off the highs right now. oil also rallied, so once again, equities and oil have been in correlation and that wti up 2.8% today, bob pisani, we are at $37.85. i know you will look at oil stocks in a moment here. another feature today this jump in yields along the treasury. i'm showing the five-year note because rick santelli called that the full crumb of the yield curve right now, up 7 basis points to 1.79%, the two-year yield hit a five-year high today, as a matter of fact. where it was. that's where the five-year note. and then for sara eisen, a present, the dollar yen which she says as long as that can continue higher the u.s. stock market continues higher as well. >> you don't want to have that imbalance get out of whack. here is what's important -- >> light volume, though, today. but does that matter? >> it was the lightest volume day of the year.

no. >> with trading these days volume -- >> you can do well on low volume. >> of course. >> the important thing about today is it was a broad rally, the market wants to rally going into the end of the year, you had oil up, you got a gap up in europe and if you can't rally on that you've got a problem. here is my only little complaint. you would want a little bit more of a rally in the big oil and material names and we really didn't get t we got some small moves up in pioneer and console, some of the production ends, put up two day of exxon, we fwapd up on exxon. do you see that gap up there, that line in the middle, that's a gap up, we were lk at $80 on exxon right at the open and they sold right into it. >> they completely covered that gap. >> right into it, they covered the gap, exactly. essentially we move sideways. it's up today a half a percentage point. this is what a lot of the big oil charts looked like, chevron had essentially the same thing. what this kind of tells you is they are not going to just be buying big energy names just

because they've been beaten up and all these are down 20% in some cases, they are going to be very, very selective about moving forward. now, we all know this time last year the consensus was oil was going to rebound sometime in the middle of the year, everybody was on that side of the trade and everybody kept trying to buy oil stocks and they all failed. so everyone has been badly burned. >> right. >> i understand why they are not going after energy stock, but now it's on the other side. the whole consensus is a very crowded trade on the oil is not going to rally for the first half of the year and don't look for any big move up in energy stocks. now i'm a little concerned that the opposite is going to happen. u.s. production has come down, we were close to, what, 10 million barrels a day, i think we are at 9.1 million barrels a day now, that's a significant decline. >> right. >> iranian production is coming on in january but we've got that covered already, those u.s. production is down significantly. all i'm saying is the consensus is very, very far on the other side, nothing is going to happen in oil and that worries me a

little bit. >> see you later. going out with a pretty good gain on this tuesday. sotheby's international realty is ringing the bell at the big board, at the nasdaq angle wish celebrities its sixth anniversa anniversary. stay tuned for more on the "closing bell." welcome to the "closing bell" i'm sara eisen in today for kelly evans. bill will be rejoining us in just a moment. let's see how we're finishing the day on wall street. the dow eking out a gain of nearly 200 points, 192 it looks like, the s&p 500 up firmly over 1%. that puts it back into the green for 2015. and the nasdaq doing the best of the group up 1.3%. technology led us higher, but all ten s&p industry groups closed in the black. joining today's panel we have our own mike santoli back and

"fast money" trader dan nathan joins us with more on today's market action. mike, santa claus rally came a little late perhaps. >> now we can call it the santa claus rally, right? >> i think it has to continue into next week to be there. let's get some context here. this is exactly where we finished november. >> right. >> we were 10 points higher on the s&p 500 december 29th of 2014. essentially extrapolating any of these short term trends has been treachero treacherous. it's been a lot of chopping around, but today was reasonably inclusive, it wasn't just about the big growth stocks that have been moving higher all year. yes, you had the energy, commodity stuff bounce a little bit but the equal weight versus the s&p also did fairly well. i think it was okay. bill, you hit on it with bob, that bond trade was interesting. you saw treasury yields a pretty significant lift and high grade corporate bonds also did have higher yields, lower prices whereas young bonds, high yield bonds did well.

that's an unusual trade, may be some kind of a riyal case. >> dan naten are you part of the dash for trash or are you going with some of those strong companies, amazon hitting an all time high today? what are you doing with this market? >> it's interesting what mike was talking about, the weighted s&p index is doing well and i think that's speaking to the fact that you're having a little bit of this dash or trash in the year-end, we know how concentrated the s&p 500, the nasdaq composite is with some of these big growth stocks that are performed well this year. to me i think if you believe in the fact that the market is going to go higher in 2016 you are going to need to see broader participation across multiple sectors that just haven't been performing in 2015. but it's going to have to be built on something other than speculation in my opinion because what really what i take away from the price action of 2015 and i don't really care that we've rallied a few percent in the last week to me that's more window dressing more than anything else, is you're really gd to need to see the market broaden out a bit.

you are going to have to see energy stocks stabilize, you are going to have to see a lot of stocks in technology really start to do better and catch up with some of those large cap peers and you will see big bank stocks participate and we know they are down a lot from the 2015 highs. i don't really take a whole heck of a lot away from what's happened in the last couple days. >> mike, the question is how do you know whether energy stocks have stabilized and the price of oil has stabilized? yes, we bounced today, up almost 3%, but we've been in this pattern where we get very oversold and bounce and then energy stocks do better. they are some of the best s&p performers on the day but as bob said it wasn't totally convincing. >> no, it wasn't. you really will only know in retrospect and that's because so many of the stocks, especially ones that are very leveraged to things like the price of crude or natural gas has been beaten down so much that a 10% move higher is really not the end of a down trend. i do think you're going to have to wait and see if really you have a couple of weeks or months put together where it looks like they put some distance between those prices and the recent

lows. >> i want to take this conversation global now because with just three -- well, now two after today days left in the trading year it turns out european stocks are having their worst december in 13 years while china recently posted its worst day in a month. some trouble overseas. seema mody joins us with a look at the global stock picture. >> that's right. it has been a tough month for global stocks, europe, the stock 600 index down 4% in december as ecb president mario draghi failed to excite investors with the launch of qe 2, but europe still on track to outperform the u.s. this year, up 6%, feels like gains in italy and germany, ireland has also been a big winner up 29% this year, currently the fostest growing economy in europe. the biggest gainer is out east in hungry, in fact, the best global market, best performing global market so far this year up 41% thanks to strict measures implemented by the government to

stimulate its economy. what about asia? that's been more of a mixed bag, the fed rate hike fears and concerns over the health of china's economy has sent stocks in indonesia and malaysia down this year. malaysia down 5%, indonesia down 13%. but the big surprise has been india, it's widely been seen as the last standing brick but valuation concerns and the lack of reforms from muslim mody has sent the bond basin decks down 5%. there are bright spots, now, japan thanks not extension of abe-nomics and depreciation in the yen, up 37% so far in year. despite that roller coaster ride in the chinese stock market and surprise valuation of the yuan in august up 10% in 2015 so one of the better performing global markets so far this year. >> after all of those crazy swings china closing up 10%.

dan naten, everybody that comes through here lately tells us how they love europe and japan especially. it's already a crowded trade it feels like, doesn't it? >> i think it's really interesting what seema just said. we have the nike up 10%, shanghai up 10%, dax up 10%. we know that all three of those regions or countries are easing or weakening their currency. what do we have right here? we have a dollar that's firmed up a whole heck of a lot since the end of qe last year. to me i think on a relative basis, yeah, if you like that playbook of not fighting the fed then you stick with what's easing. we just saw what draghi did a few weeks ago that easing in europe may be sort of unclear. if they take their pedal off the metal then i suspect europe kind of hits a bit of a speed bump here. to me i think 2016 is going to be a much more difficult year as it comes to picking stocks by region and i actually think that it's going to be a difficult return year in general and so i think we are going to have a

whole heck of a lot of uncertainty. generally i think we are probably going to see global stocks lower in 2016 than where they are right now. >> what you're saying is it matters what happens with their currencies. that's the whole thing, what happens with their central banks and currencies which dictate their stock market. the only thing i would add is that china, japan, u.s., these are oil importers and some of the losers overseas in the big stock markets are those that have exposure to commodities, whether it's metals and mining or energy producers. that's also been a telltale sign of how economies are going to react probably next year, right? >> yeah, and it's a demand thing and also related to, you know, our dollar strength here. to me i think at some point just -- let's just say this, we know there's oversupply, we know there is a lot of geopolitical things going on affecting the price of oil but industrial commodities are really in the tank right here. at some point probably in the first half of 2016 there will be a contrarian trade to buy em, to buy industrial commodities, to buy oil based on the fact that

sentiment is so poor like bill said it's been a one-way trade in 2015 but i think we will need to see a little pain in the first half of 2016 before that becomes a palatable trade. >> it seems so easy earlier or simple if they're easing you buy them, if they are not easing anymore like we aren't you don't buy them. wouldn't that be the reason you go to europe and japan right now? >> i think that playbook still has some kind of merit, the real bulls on europe are saying it's a three-pronged bullish case, yes, they're easing, the currency is weakening but valuations are cheaper than the u.s. and we actually might see some growth. but the question is the ecb only going to be maximum ez if you do have flagging growth. you may never have all those three things working for you at once. the entire advantage of japan and europe over stock. since then it's been chopping back and forth. >> definitely front loaded that's for sure. i mentioned earlier amazon stock haditying that all time high

today, surger more than 35,000 percent since going public in may of 19197. >> that would be a nice return. >> courtney reagan joins us with what's behind today's more when it was not up 35,000 percent. >> inversers are quite generous when it comes to buying shares of amazon, continuing to push higher through -- though it's profitability continues so stay low. amazon shares up 3% today, behind only netflix for the biggest gainer in the s&p 500 this year. amazon has a market cap of $325 billion, soaring past walmart at $197 billion, though the discounter still the world's largest retailer by revenue. the on line behemoth, amazon, hasn't given any exact sales figures for the holiday season though it did release its stats monday, enough command hooks to hang a stocking for every person in orlando florida, along with shipping twice the number of

prime eligible items and twice the number of amazon devices this holiday season compared to last year. while the street doesn't have exact results from amazon it is fair to presume it does continue to grow shares. they forecast amazon will be responsible for more than half the growth on online shopping in 2015. ax i don't know capital upped its price target from $797 from 737 soind yesterday morning. >> there is a lot of love for amazon. >> i actually think it's a problem for the market as a whole that there's no other clear and obvious way to play the secular growth in e-commerce than amazon. yes, you have ebay, but it's such the consensus way and putting on a lot more market cap than is being lost in traditional retail and everything else. i don't think it's necessarily today or tomorrow's problem but amazon has gone through long stretches since 1997 when it

just completely sat out a bullish market or gave back a lot of the gains. >> i wonder if it's not just retailers, it's also a way to play some of the pain in the shippers like fedex and ups. >> the cloud. >> some of the tech names. >> it's eating the world along with software. >> that has been jeff bezos' strategy all along. i'm no genius, but for years i've been saying to skeptics on amazon, jeff bezos is the smartest guy in the room and his strategy has been to go aftermarket share, we will worry about profitability down the road. >> hey, bill, i think you kind of got bailed out with aws. no doubt about it, they spent a lot of money and developed this suite of cloud services but it's important to remember that the margins on this less than 10% of their total sales, $107 billion in sales in 2015 are going to come from aws, they have about 25% operating margins, that's what's helping their profitability this year. it's growing 100% a year.

the stock has gained more than $150 billion in market cap in the last year. i think it's more than discounts the growth of aws. you have to think about what their core business s they told us the other day in one week, the third week of december they gained 3 million amazon prime subscribers. well, they probably lose money on a lot of those. to me i think at some point in 2016, again, amazon has been a maniac, look at wall street sentiment, investor sentiment. it is eating the world but not to a profit level one small part of their business is growing fast and i do not think that justifies buying the stock up 123% for the year at all time highs. >> when we show that longer term chart we all know a parabolic curve when we see one, mike santoli. >> it looks like it. apple, all these stocks that have had these moves that seem like how could you bet against it they do take a break fimt from time to time. it doesn't mean it's not going up another thousand percent over time, but obviously it's one of

these things that at the end of a year you might look for some kind of mean reversion going into the next year. >> microsoft today traded at levels not seen since march 2000, google or flebts trading at all time highs back to 2004 ipo so really we did see broad tech strength today. we have to leave it there. thank you. be sure to stick around and catch dan naten and the rest of the crew on "fast money," 5:00 p.m. eastern, they will be talking to michael yee about why biotech might not be your best bet in 2016. find out why he is not so hot on it, 5:00 p.m. >> does meg tirrell know about that? >> i don't know. we will find out, she's coming up on "closing bell." >> she is. >>. also tesla is pointing out the help wanted sign as they try to fend off competition from apple, google. is it a sign of trouble for tesla? that's next. plus biotech stocks down sharply since mid-july. coming up the aforementioned meg tirrell will break down the

catalyst that could help biotech open the new year with a bang. >> you're watching cnbc, first in business worldwide.

if you are, quote, a hard

core software engineer then tesla is looking for you. see that? the electric car company wants to add thousands of new jobs in the next few years as it attempts to fend off a growing list of competitors that includes of course apple, google and a bunch of chinese startups. >> but will tesla be able to attract the best of the best? now that the space is becoming increasingly crowded. joining us to discuss george bucci matches up a lot of silicon valley firms. it is getting competitor out there. does tesla have an edge because of elon musk? >> i think they certainly have -- i think they have something great going on. they do have a great leader, they've got a great technical challenge in front of them as far as trying to solve a very technical challenge and that's really what engineers are looking for. quite frankly tesla has a great brand. you see them all over the bay area. they are gorgeous to look at and gorgeous to drive. it's an interesting project. >> who are they competing with

for this talent? we already know that, what, google has accused them of cherry-picking some of their best talent, but who are we talking about tesla competing with for these engineers? >> the engineers that they are looking for is it's a subset of a larger engineering community. so there isn't a lot of engineers that have the skills that they're looking for. they're looking for everyone that has skill sets in everything from deep learning to natural language processing to everything else that encompasses various ai. and they are competing with everybody from google for that talent and it's -- but that said there is several ways to groom and grow that talent, which is what i think elon musk may want to -- may be thinking about doing that as he is hiring a lot of people. >> you know, you mentioned that they may have an advantage, but even with all this attention on elon musk's help wanted ad or whatever this was we are only talking about a relatively small

number of individuals that they need to hire. how many potential qualified people would there be for these guys? is it a direct head to head competition for every single one of these individuals or is there ample supply of people who could do this work? >> i don't think it's -- i don't think they need to have everyone in the industry. what i think they need to do is i think they need to find a few key individuals that have proven themselves in the space, get a couple of them on board and then build out a team around those individuals and i think that's how they can -- how they can compete with google and apple and find a place within the market. >> so, tesla has 1,600 openly positions, mike, to your point. obviously there is a lot of demand for talented software engineers in silicon valley and musk said himself you don't have to have experience with cars required once the code sample. how much demand is there for software engineers and are there enough software engineers to

fill that demand? >> there is a lot of demand for software engineers. software is currently powering everything from cars to medicine to energy these days and it's the types of engineers because there is a lot of different types of engineers and to build the software that elon needs to build for the software of these cars it is a much smaller market. i think that it requires a certain amount of creativity to get the engineers to do it but i do think it requires a certain amount of, hey, let's get a few key people and let's build teams around them and that's -- that's really what i think it comes down to. i think that's how you combat the demand really. >> all right. we will see how this works out. musk has said he will have an autonomous car on the market in two years. we will see if that can wore out. thor bucci thanks for joining us today. >> thank you. >> at a beautiful location. >> that was lovely. i think that was real, too. >> i think so.

many high profile hedge funds will be happy to see 2015 in the rearview mirror but will 2016 really lead to better returns. we will talk about that coming up. and later a new report watching a warning sign for iphone sales this quarter. we have the details and whether apple investors should be worried? that's coming up on "closing bell."

welcome back. as we were just now chatting during the commercial break white box advisories becomes the latest hedge fund to end its venture into mutual funds. weren't we? >> not exactly talking about that but i do want to know about that. we have kate kelly here to tell us the details. >> all right. well, white box advisories is liquidating its three mutual funds after a combination of investor redumpings and market losses just as investors are grappling more broadly with a flat year in equities. the losses were universal though more pronounced in one particular fund for white box through december 17th the tactical opportunities mutual fund was down 22%, the market neutral equity fund 6% and the tactical advantage fund just about a percentage point. a slue of redemptions late this year meant any remaining investors would have been subjected to too much concentration risk so the funds sold off their positions went to

cash within recent days. before that their holdings ranked from financial stocks like american capital limited and allied financial to herbal life. it's clearly an unfortunate ending for this chapter of the firm but from what i'm told white box mansions $3.85 million for hedge funds so it will live to invest another day. the other thing i heard is that, you know, for the portfolio managers involved and some of the investors these were high conviction positions but it was one of those situations where the declines they were dealing with right now and the redemption requests meant it was too much exposure for those who would have remained. >> i think the combination of the high yield paper as well as the equities that may not have panned out is symptomatic of the market this year. i think it's full. >> also in a mutual fund structure. so you have the ability to have people take their money out in real time. it's an open question if this

whole area of these kind of hedge funds and mutual fund wrappers are a good thing or if they will be the worst of both worlds, you can't use the leverage and take the risk that a hedge fund can but you have the daily liquidity. >> the daily liquidity vehicles have been in vogue for the last few years and a lot of people have touted them as a great alternative to hedge funds, lower fees typically and you can pull out your money whenever you want. white box did. on the other hand there may be -- and this is a debate clearly -- some value to locking the money up longer if only to deal with those more liquid assets. there is an interesting lawsuit you may remember weinstein the head fund manager at saba capital being sued by a canadian hedge fund. long story short, part of his legal argument is, and this is all ongoing, you know, i had such a short period of time to get outs of these positions in order to redeem the money, i wasn't able to get terribly competitive bids, i did the best

i could in the market. so that can be the down side to some of this paper. >> that's what's happened. like all of our reporters at cnbc we asked kate to make predictions for 2016 and here is what kate kelly says could be in store for hedge funds. 2015 was a rough year for hedge funds with the average fund generating almost zero returns for the year as of ms. december. this will be a year of entrenchment with consolidation and closures as well as more predictable stock and bond picks. here are three things to look out for. in september many investors notified hedge funds of their intentions to pull out capital and they will have it back by january 1st. that means a decline in total invest i believe assets for hedge funds which already in q3 saw their biggest down tick since the financial crisis. with regulators bearing down on hedge funds and expectations on performance increasingly tough to meet expect to see some of these funds turn themselves into family offices, managing money

for family and employees only away from the harsh spotlight. big players like george soros and steve cohen have set the trend. don't expect long shot bets like a billion dollar short on herbal life or beaten down stocks in the coal sector. after a brewsing year hedgees will return to what they know, straightforward activism and amountel research driven buy and hold strategies. >> all right. so consolidation and closure, check, i'm already right on that and it's not even 2016 yet. >> the dynamic is occurring, i think we will see that decline in assets very, very likely. as for how people will invest, obviously time will tell. i'm saying phil ackman has said i wouldn't do a billion dollar herbal life short again, it's too problematic, even though i'm right. that will i'm sure continue to evolve in the new year. i think people are going to be a little more risk adverse after

the year they had. console energy, the coal company that david eye horn bought with the middle of the summer thinking the fundamentals were such that it was ready for an uptick and it's been a total disaster. >> i was going to ask you what stocks you think are ripe for activism. i don't want to put you on the spot. >> lucky for you we don't have a whole heck of a lot of time. >> last year i predicted someone would be active on energy companies, it's been carl icahn and he's getting active. he apparently had a role in pushing out the shaneer energy ceo, he is involved in chesapeake and others. i think that may continue. it's worth saying a lot of even activists shy away from commodity-type companies because those price right side so unpredictable. >> thanks, kate. see you later. time for a cnbc news update with sue herrera. >> here is what's happening this hour. security is being stepped up ahead of this year's rose parade

rolling the san bernardino terror attacks. the "associated press" reports new security measures such as rapid response teams will be posted all along the parade route. people are taking to the streets in cleveland to protest the grand jury's decision not to indict two police officers. a crowd of about 50 people are peacefully marching downtown. the officers fatally shot 12-year-old tamir rice who was holding a pellet gun. >> rescuers combing a northern oklahoma lake in hopes of finding country singer craig strickland, the singer and a friend had been duck hunting on a boat during bad weather last saturday. the body of strickland's friend was found yesterday and there is his last tweet. russell crow is getting heated over hoverboards, the film star posting a series of angry tweets such as this one after version australia did not allow his son to check the device as luggage, hoverboards have been banned on many airlines baus of their lithium ion batteries. that's the cnbc news update this

hour. back to you. >> what is russell crow thinking, mic? >> wait. let's set this up. let's talk about parents who have bought their children hoverboards for christmas. >> i will confess to being one of those. >> now we know where you're coming from. >> santa brought them, so that's one, you know, caveat, but honestly i don't want to be able to bring them on a plane. they weigh 22 pounds each. i would be the one carrying on to a plane and i understand why airlines would not want them. >> what about the safety issues. >> if you charge them properly i am confident and follow the instructions and don't overcharge the batteries we have fingers crossed they will be okay. >> in defense the hoverboards. >> mike santoli his mantra is always all things in moderation. works out with that, too. >> all right. so could reports of slowing iphone shipments sink apple shares even further? that conversation is coming up next. plus drone sales may be flying high but we will hear from one lawmaker out in

california who says drone regulations are not tough enough. he will join us later on "closing bell."

let's take a look at how we finished the day on wall street.

it was a strong one, broad based strength across sectors, the dow closed up just under 200 points, 193 points, s&p 500 eeked out a gain of 1.06%, enough to put it in the plaque for 2015. the nasdaq finishing the strongest of the group up 1.3% led by the likes of amazon, microsoft, alphabet, also crude oil helped us early on with a bounce from the low, $37.50 is wti, it's up now almost 2%. but then there's apple, the iphone accounts for more than 66% of apple's revenue, that blows away sales of macs and ipads and other devices including the apple watch. >> a new report says iphone shipments for the fourth quarter could come in 5 to 10% below expectations. let's bring in brian white and lou bathanese. brian, were you already counting on weaker shipments or did this report today surprise you?

>> because i like the stock. >> we like the stock. we are looking for 4% growth in thequarter, i'm not as worried about the december quarter as much as the march quarter and what happens to iphone. we have down 3% in the march quarter. i think apple has been growing if you look a year ago in the december quarter and march quarter they grew iphone shipments by over 40%. that was a huge upgrade to iphone 6 and you have to take an advantage between the two. >> they have had such strong numbers which is mysterious to see the stock under so much pressure. it's half of your price target. >> so i just think people are maki making a myopic view. the stock is trading at 8 can times x cash. you buy the sugar water companies and tooth pace companies they trade at 21 times. i think apple's valuation here already reflects a lot of here term softness in iphone. >> what about that, lou?

let's face it the shipments we are talking about it's speculation, guesstimates right now but analysts have been connecting the dots based on what the suppliers have been saying about their own orders at this point. so why are you so skeptical about apple right now? >> i'm not super skeptical i just don't think i'm as rosy as a $200 price target. it's all about the iphone until further notice and i think that's just an investment thesis that doesn't resonate with many people. they want the next big thing and they want it next quarter and that's not realistic. i do think you have two main drivers that are gaining traction in apple pay and apple watch, but apple could do a lot to help itself to change the narrative and accelerate traction with those two products by making acquisitions. i think on the watch side go out and buy fit bit for $6 billion market cap right now, you would own the wearables, smart watch, fitness band on price point from the bottom to the top. on the payment side buy vera phone for $3 billion you would

have the point of sale terminals for mobile payment space and leading solution and then i think you would do yourself a great service if you go out and want to get into internet of things, the smart home, wearables, buy a wireless charging company, there's three startups in the place, one of them is publicly traded, apple for $500 million buy all three of them, they would own the ip, be the dominant, bring the best technology to market and be the only consumer electronics company that could offer devices without a power cord. >> there you are, brian. problem solved. >> strategy for 2016. >> i think apple could stay the course. number one, india is going to start to open up in 2016 for apple and this is going to be a huge growth driver similar to china. in china apple is nowhere in tier 3 through 5 cities which is 85% of the households and i would say the other tier is iphone 7, the rounded releases are uls a the best and i think apple watch killed it in christmas and i think it's going to be getting stronger in 2016.

>> brian, let me ask pick picture on the stock how could there possibly be such a gulf between the way the market views this company and values this company, it's the most widely followed stock in the world, everybody says it's cheap, 85% of the analysts have a buy on it. could it be that the entire world is missing something here? >> i think people have to look at apple through a new lens and that lens is similar to we look at the sugar water companies, coca-cola, pepsi, coal gate, they grow at 7% has been the eight year kegger, they traded 21 times earnings, apple has grown at 44% it trades at 8 times x cash. apple is not going to lose in smart phones. now, that might not have been the case two, three, four years ago when it was a concern, no longer a concern. competitors are falling by the wayside, people should value it appropriately. >> last word to you. can i just point out one thing that apple's market cap is below $600 billion, just below it. google alphabet's market cap is

$531 billion it's not the momentum i wonder if it could watch catch up and become the biggest market cap company. >> or they could just merge. i don't think we could make the argument we should start revaluing apple, it's been a fast growing and it's always had a cheaper valuation, carl icahn has been banging that drum louder than anyone and it hasn't resonated. investors aren't willing to pay up for apple. you have a 25% upside, like brian said they are not going to all of a sudden lose their dominant position in the smartphone market that's just not going to happen. >> good discussion, guys. i appreciate it. brian and lou from disruptive tech research. happy new year. biotech rallying today after taking a beating over the last few months of 2015 but there are a few catalysts in january coming that could change biotech's path. those details with meg tirrell are next. by the way, do you have an

alarm clock now? do you have that set up? >> i have always had an alarm clock, i feel like i'm going to have to get a super powerful one. >> starting monday you can wake up bright and early with sara and her new co-host wilfred frost, it's the new worldwide exchange team debuting monday morning on consumer from 5:00 to 6:00 a.m. eastern time. >> the question is do you have an alarm clock? >> oh, yeah. >> you better be watching then. >> i will be watching.

hymerics is the latest stock to plunge in what's been a rocky second half of the year for biotech. that stock down 80% just this week. as 2015 comes to an end biotech is catching a bid and there are a number of catalysts that could impact the sector come jan. meg tirrell has that story. >> it's interesting because since the beginning of december basically biotech investors have been saying they are ready for this year to end. then of course this week, the last week of the year comes out with this horrible nice from khimeric. january does bring things that could move stocks in both directions. we will start with duchen muscular dystrophy. bio marin should have a decision by the fda in early january, that was expected to be just after christmas and sirefta has

a panel meeting january 22nd. that could have huge stock moving implications for those companies. second week of january we have the jpmorgan in biotech and there's also m&a often announced at this conference. companies like celgene and illumina often have big news and guidance there as well. at the end of the on, january 28th merck is expected to have an fda decision on it's hepatitis c combo. rbc capital markets estimates that this decision for merck's drug to have a 5% stock impact on gilead. what's going to be important to watch there of course we all know hepatitis c price is a big issue. they need to give a business dig count in order to get market share in this competitive space. >> mike, your take? >> it's been amazing to me you go through these periods where

biotech trades as one block, despite the fact that all these different companies with different pros dekts that are red or green. are we in a mode where there's general skepticism toward each of these companies, toward the business model toward pricing? >> there's general skepticism across the industry but individual companies people feel differently about. it has been interesting to see the sentiment shift from, for example, there was a company zak jen, canceled out of conferences, normally in the beginning of year people think they have a big deal or data. the stock plunged just knowing that they scans ld out of presenting at some conferences. it did turn out to be negative information unfortunately and that's kind of how the rest of the year has gone for biotech. >> that's for sure. volatility. that's the story there. meg tirrell, thank you as always. a classic tale of federal versus state government and this final it's a battle over drones. up next a state lawmaker who says the faa's drone regulations aren't strict enough.

he will lay out his plan to regulate the skies on "closing bell."

the faa recently laid out its own plans to regulate drones, but some local and state governments say the rules don't

go far enough. >> the faa is requiring owners to register their drones, those drones that weigh more than 250 grams, but we have someone who says more rules are needed. joining but someone says more rules are needed. joining us is california state senator ted gains from sacramento. thank you for joining us. >> thank you for having me, i really appreciate it. >> what is missing in the new faa regulations for drones? >> i really feel that there has been a threat over and over again in california that has not been addressed by the faa. that primary threat has been with fighting fires. we've had numerous drones, hobbyist drones that have conflicted with our ability to get air support to put out fires. the biggest example is interstate 15 where five drones were in the air at the fire, they had to call off the air support to suppress the fire. the fire went across the freeway and burned up over a dozen cars.

people's lives could have been lost. >> does the faa prohibit localities from imposing stricter regulations on drones? >> well, our legal opinion is that it is unclear. and i just have not seen the faa take action quickly enough and the action that they are taking, i don't think fully addressed the issue. there is a legal issue here, there is also a crime issue. that if you are getting in the way of a firefighter and people's lives are at risk, there ought to be a fine for that. there ought to be a jail sentence for that. >> so maybe the faa isn't tough enough, senator, but the argument against what you are saying is the faa is the top regulator of air space in this country. why not have uniform federal rules and amazon is arguring that the faa be in charge and not states and localities said drones have an interstate nature when it comes to commercial use

so it doesn't make sense to have states go at it alone. >> well, again, i think people's lives are being threatened and i think action needs to be taken. i don't see clarity coming from the faa. i'm more than willing to work with them. but when the threat exists and someone gets injured or killed, tell me what action is the faa taking. i feel that we need laws on the books, similar to when we went from the transition from horses to automobiles, we had to create a whole new set of law for automobiles because of the nature of the risk was much higher. >> i assume you are proposing some of these laws then, right? >> i've got a number of bills, six bills that we're moving forward. the most important in my view is the protection of public safety and lives that may be threatened by a forest fire or even a fire within a municipality. >> would you rather just see drones go away? >> no. i actually -- i like drones.

i think we have tremendous opportunity on that front with that new technology. that is good in a number of different business applications. also i feel that people ought to have the right to use a drone as a hobbyist. we want those individuals to be educated. but we also want to make sure that people understand that you have to follow the law. and if the law is broken, there will be a consequence. >> but first there needs to be a law. >> that is right. >> and that is what you are working on. >> i'm hoping to work with the governor. >> great. california state senator ted gains joining us today from sacramento. >> a market alert on oil inventories. seema mody, how do they look. >> take a look at your screen, bill. crude futures pairing gains after hours, after the american petroleum institute had a surprise inventory build for last week. inventories rising by 2.9 million barrels in the week compared with the analyst expectations for a decrease of 2.5 million barrels. to put this move into context,

crude futures down 1% since the api number came out. you could see right there about 1.5%. back to you. >> a little bit of a surprise there. they were expecting a drawdown like last week toward the end of the week. >> lucy pulls the football away again. honestly, every time you think the crude is trying to carve out a bottom. maybe there is an explanation for this. i'm not an expert on refinery utilization. >> you should become one gib what is happening with the market. >> the week numbers are too volatile. >> we'll get the official numbers tomorrow. >> so what does seattle, boston and portland have in common? we'll tell you next. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement.

there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

it might come as no surprise that the tech boom is driving home prices highers appeal flood into those cities. diana olick joins us with the ten most competitive cities. >> it is tech and pharma and finance driving what red fin determined were this year's top ten most competitive neighborhoods. and they were all in four cities. red fin looked at the percentage of homes sold above asking price and how fast homes went under contract and what percentage of

offers faced bidding wards to determine the list. drum roll please. topping the list, the boston area in cambridge. next seattle's overlake neighborhood in the city of redmond and back to boston for number three, brighton. portland, oregon, with hawthorne at number five. and here is the surprise, san francisco, which we all think of as the most competitive market on the planet, had just one neighborhood in the ten ton, central sunset coming in at number eight. we've been hearing that competition in san francisco housing has pushed companies north to portland and seattle and now we're seeing it in the numbers. boston at number one and three. that is pharma, biotech, finance and of course some tech as well. back to you. >> i cannot recall such a fragmented real estate market. i know all real estate is local, but in the scheme of things, very fragmented. >> where it is working, the tightest market you could see

and supply is still out there and prices haven't budged. >> and we go an idea from kay reed, with the prices rising more than last month. the home builders trade has worked, up 9% beating the over all market but it hasn't been a straight shot higher. >> not at all. it is steady. and there is still the story out there that they are benefitting from the supply-demand advantage they have in certain segments of the market they are playing but they are not going into the starter homes. >> or luxury. and philip rang the "closing bell" today from sotheby's, a luxury company, they have a dirth in inventory right now. and home builders need to have more faith. >> i think it is the matter of fighting the last war. they don't want to be caught in that again. >> and what happens to mortgage rates as rates do climb. today there was a chart put out it is not the short-term rates, but it is the long-term rates

that matter and doesn't see the fed moving any time soon and mortgage rates shouldn't spike up all of a sudden. but that is the way that the fed hikes impact you and i, the mortgages. >> potentially. >> if the market rates go up. >> we have to go. by the way, we're here all week. >> all of us. >> thank you for joining us on "closing bell." we'll see you tomorrow. "fast money" starts right now. live from the nasdaq market place overlooking times square, this is "fast money." i'm melissa lee. your traders on the desk. biotech fuelling the nasdaq higher to the year end but will the run in the hottest stocks come to a screeching halt and what might it mean for the run. and netflix, amazon and activision the top performers this year but are the charts signaling that the love affair may take a turn for the worst. we'll explain. and later, tesla takes off. and wul hear from one tesla