the markets, as we are continuing to watch them. energy socks are close to session-lows, so we have seen a deterioration on the equity side of the oil trade going into the final hour of trading today. >> one more day left in the year. one more day and an hour left. thanks for watching "power lunch." "closing bell" starts right now. welcome to "the closing bell." i'm syrara eisen in for kelly. >> and i'm bill griffeth. we're going to talk about the selloff's impact on the middle east, the global economy, state economies, the ruble. >> oh, yes. ruble coming up. >> meantime, this is a fascinating part of this story. alaska now considering an income tax for the first time in 35 years to make up for lost oil revenue. the governor will join us coming up to explain the story, bill

walker, looking forward to that interview in about 20 minutes. >> a new report says regional banks could become an activist target next year, and more m&a could be in store. >> a lot of consolidation expected for the regionals. buffett's bad year. we'll tell you why billionaire warren buffett is having his worst year in the markets since 2009 and whether next year will be any better. >> forget next year, how about the next 50 years? millennials are looking for the new long-term investments. we've got two stock pickers with names they say are the new blue chip stocks and they're not exactly names you'd think of. >> no, they're not. >> we'll start with that move in oil and what the oil collapse is doing. jackie deahas the story. >> good afternoon, syrara and bill. the saudi oil minister saying the kingdom will not change

their production policy, but the budget was out this week. they're looking at 36 billion in spending cuts next year as well. the budget is based on $29 oil. oil prices at their current levels are down 30% year to date. if brent goes to 29, we're talking about another 20% leg lower. so what's the plan to raise revenue in saudi arabia? raise prices on things like fuel, electricity, and water. these are effectively taxes on a population, remember, that has been living off of subsidies. difficult to believe that this is going to be received very well, and the worry, of course, is the potential for unrest in the region. also consider the rest of the area. if the saudis set the stage like this, it's believed other big gulf producers might implement similar reforms. this is all leading some to believe that the saudi strategy

might backfire, and even if it doesn't want to lose market share, it may be forced to act on production. guys? >> all right, jackie, thank you very much. the oil collapse has sent the russian ruble, for one, to its lowest level of the year against the dollar. right in your wheelhouse. >> yes. this has been an ugly year for the russian ruble, taking a beating. let me show you this chart. it is stunning. the currency got crushed. down 20%. there you're looking at the stronger u.s. dollar, marching higher as we speak. it's a triple whammy for russia. russia is a key producer with energy making up about half of russia's revenues. so the collapse of oil prices has hit russia's economy particularly hard, especially looking at brent the international benchmark. not helping western sanctions to punish russia for its handling of ukraine. and like all emerging markets, there's that threat that money

will keep getting yanked out in favor of the u.s. the dollar as the fed starts to lift interest rates for the first time in years. you may think a weak currency is good for growth and exports. they fight over weak currencies. not this week. russia is slowing down and the plunge makes inflation a bigger problem. also makes it hard for the central bank to cut interest rates to boost growth. russia's economy set to shrink 4% this year. and this is the tenth biggest economy in the world. it's also a problem because this is sort of what's happening in brazil. in south africa. in any emerging market right now. the fortunes are tied to commodities. >> as i said yesterday, name me an oil producer who is not suffering right now. for the currency, is there a key level that you watch against the dollar, per se? >> there is. a lot of people say 75 is a key number for the russian ruble.

but they do say it's all going to depend on the price of oil. with the forecast coming out, more pressure on the price of oil, you will see it reach this level. it will continue to inflict pain. it was just getting too expensive. >> much like china doing the same thing. >> absolutely. >> meantime, imf chief christine lagarde today sounded the alarm about the slower growth. around the whole globe. she said the financial sector still has weakness, and in emerging markets, the financial risks are increasing. all of that means global growth will be disappointing and uneven in 2016. a lot to talk about in our "closing bell" exchange. we have keith bliss at post nine today. and rick santelli checks in from chicago once again. the u.s. equity market, there are times when there's an

inverse relationship with the price of oil. and there are days when it is closely tied to oil. this seems to be one of those times right now. >> that's been the case for the last several weeks. it's trading right in that $30 channel. and every time it looks off, the equities go along with it. every time it comes off, equities trade along with it. a couple things are happening because of that. number one, it's a very thin trading session. remarkably, we've seen really improving internals of the market right now. especially in the overall market. we actually got one of our best momentum indicators turning on last night. so we would expect the equity markets to lift here a little bit.

we think we're going to see an earnings decline for the fourth quarter. certainly the month of january is going to be a little sketchy. and one thing we learned from this recovery, and this multi--year bull market is stock markets can rally. even in the face of sluggish global growth. the growth is driving slower economic growth. and the other one is we do have this fragility that exists in the overall economic system due to the debts that we're built up prior to '08678 some of those

emerging markets are dealing with those debt growth problems. we're still in a fragile environment. having said that, we're still in a growth environment. >> rick, in your view, cause and effect, is oil lower because of the strong dollar, or is the dollar strong as people rush to the currency because of the effects of the slower -- the slowdown in demand for oil? >> i think the commodity, being the dollar, many dollar-based commodities is going to have an effect, especially in other

countries that have big moves against the dollar. but all in all, when did all of this start happening? the fed put all the liquidity in the system. maybe it's the one bright spot at least in my view. in the end, it's still a positive. i remember when electronic trade first started to hit at the end of the 1990s. one of the first companies to make a brilliant platform couldn't make any money with it. they went bankrupt. the people that bought it for them on 30 cents on the dollar went bankrupt. ultimately, the third and fourth and fifth companies that literally bought the technology for pennies on the dollar made a

lot of money. i think there is a bright spot there. if you don't have a diversified economy, that's the problem. you have a one-trick pony. in terms of the dollar, my final comment. sara, once again, i give you credit. season it great to buy more with less dollars? there is a silver lining here. where are this very much is the story. the ripple effect. whether it's russia or the credit market.

some of these other countries. middle east, alaska. with all the pain we're seeing, do you think we will see much more of this fallout in the new year? >> i do. especially when it comes to the energy complex. if you take -- and i think this is a real problem for 2016. there's a couple of points i want to make. that's very long in the tooth as both of those go. of course, that makes sense to me, where it's going to go. i think that's a longer-term problem for the economy. so i think 2016 is going to start out bumpy and proceed that way throughout the year. >> thank you all for your comments and happy new year, if we don't see you later.

>> we have a little less than 50 minutes to go before the closing bell. looking at declines. the dow is down 63 points. the s&p 500 down .4%. notable because it's still in the black. we'll see what happens over the next hour and into tomorrow's trading day. which by the way, is a full session. >> yes, we will be here for a full satisfying day tomorrow. coming up, alaska governor bill walker. imagine his dilemma. he's going to talk about his call for the state's first income tax in 35 years. and the revenue they're not getting as a result. the big question is what happens to that tax if oil starts recovering? >> that is a question. there are many more. >> up next, regional banks could be primed for mergers and acquisitions in the new year. leading bank analysts have a list of potential targets you might want to buy. you're watching cnbc, first in business worldwide. announcer: it's time to make room

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their eye on the sector and it could lead to a wave of murders and acquisitions. >> which tends to go in waves in that sector. which companies could be in play in 2016? let's ask chris from kbw. it tends to go in waves. in good times and in bad. will these be defensive mergers or will they be for growth purposes? what do you think? >> i think, first off, thanks for having me, and happy holidays. i think today, if you describe the m&a environment, it's healthy, it's active, but i also think it's a bit underappreciated by the market. if you look at the number of bank deals that we've seen in each of the past two years, we've had 300 bank deals this year. we had 300 bank deals last year. for historical context, those numbers were three, three and a half. i think you could go back a couple years, post-financial crisis, those were a lot lower.

at this point of the cycle, the m&a environment we believe is healthy and likely to evolve in '16. >> so give us a list of targets that you'd be watching for takeouts if you expect this to continue in 2016. >> sure, absolutely. i think one of the things we've seen in 2015 that we didn't see in the prior two years was the evolution of a larger bank deal. i think tea we recommend an investment approach, two-pronged. those would be fundamentally, you want to own banks that do things a bit different. this is a very commodititized industry. there's 6,500 banks in the country. i think fundamentally, you want to own banks that are growing better. one name particular, and i think a basket approach is the way to play it. one name i follow is boston private. we've been on the show in the past talking about why we've liked it from a fundamental

perspective. this is a turnaround story post-financial crisis, new management, which we believe is top of the, turned the bank around. they're at a point in their cycle where we believe a strategic partnership makes sense. not necessarily today. we think this is something back half of the year. but that's a company that differentiates itself from most of the regional banks. >> way before the financial crisis, there were a wave of regional bank mergers that eventually led to the behemoth that we know today as the bank of america. but in this age of too big to fail, criticisms of that strategy right now, do you see these banks eventually wanting to just reach a cap and not go any further because of potential regulations down the road? >> i think what we need to talk about is the bigger bapgs today, their participation in m&a last time led to some of the problems.

i think if you go to the next tier of banks, the banks between 50 and call it 250, we're starting to see the reemergence of these banks coming back to the cycle. bb&t for example did three deals. we saw key corps get back into the deal. so i think this really speaks to the evolution of the m&a environment. i think we are going to see some more consolidation going into the next year. >> i don't know if you would characterize it this way. that the big banks are still being pressured to slim down and get less complex, while the regional banks may be not pressured, but encouraged by the regulators in the forever to get bigger. more super regional banks, fewer ginormous banks. is that right? >> i think that's fair. i think the term regional champion might be used. i think what we're going to see is a few select well-proven buyers emerge as the winners this time around. i think this is not only the

banks between 50 and 250, but i think there's a lot of regional winners below the 10 billion in the asset level. i think that's another critical consideration for m&a, is that $10 billion line was drawn in the sand. i think with that amendment, i think it's going to promote more consolidation. >> no doubt. chris mcgratti, thanks for joining us. >> happy holidays. >> kayla tausche has a few predictions for banks in 2016. >> banks have watched innovation change their products dramatically. in 2016, they'll up the ante to make sure their longtime customers and investors don't flee to competitors. here are some predictions. shareholders will see more capital returns. the fed kept the lid on buybacks and dividends after the financial crisis, but they're getting a better handle on the so-called stress tests and lobbying the fed for adjustments that would let them give more

back to investors. as earnings look for payout ratios to rise, too. banks will instead start buying other companies. northwestern mutual bought learnvest to gain a foothold in millennial investing. and as wall street realizes its products are out of vogue, expect lending club square and even paypal to be in play. blockchain, the code that made bitcoin possible, is going mainstream. the number of companies exploring payments that bypass both consumer and central banks is growing exponentially and becoming more than just a fascination. by the end of next year, blockchain could become a major way to pay bills or settle trades. blockchain in particular has a really big urgency for these banks. it's currently being discussed at the board level of major institutions. these companies want to figure out whether this is technology that could disrupt them, how

they can incorporate it into their existing platform, but because these are such heavily regulated companies, any type of innovation that they might seek out will come at a very glacial pace. >> we just talked about the impact it's going to have on mergers. same impact on innovation. the fear is that they just become giant utilities. >> that is the fear. if they aren't already there. i think they envy a lot of these products like paypal and square that have been able to develop products in a sort of unregulated gray area without the overhang, the burden of regulation, and so that's why a lot of analysts believe they might have to become inquisitive on the payment side and on the technology side, because they're having a harder time developing that. >> may i just say stocks are flat, oil's down, gold is down. bitcoin, what did it do this year? up 37% against the u.s. seller. >> incredible. >> people are really interested if this. >> yes, indeed. >> kayla, thanks. 40 minutes left in the

trading session with the down down just 53 points and very, very light volume today. up next, alaska governor bill walker speaks with us exclusively here on "closing bell." find out if he would rescind a controversial proposed income tax if oil prices do recover. also ahead, is the oracle of omaha losing his touch? a special report on warren buffett's berkshire hathaway heading for its worst year since 2009, coming up.

quick history lesson. back in 1980 when the then new trans-alaska pipeline was producing 1.5 million barrels a day of oil, alaska did away with its income tax. fast forward to 2015, oil prices are tanking, and pipeline production is down by 2/3 to only half a million barrels, hurting state government operations, which has depended primarily on petroleum revenues. >> so to offset the fiscal short falls, alaska governor bill walker is advocating a revival of the income tax, and governor walker joins us now in an exclusive interview from anchorage. welcome, governor walker. >> welcome, governor. >> thank you very much. >> so just lay out your plan for us. how bad is the damage to alaska's fiscal position, and what are you exactly proposing to do about it? >> well, we have a $3.5 billion deficit. that works out to about $400,000

about an hour deficit in our current budget. so that's unsustainable, obviously. alaska doesn't have a wealth problem. we have a cash flow problem. so we need to look differently at how we deal with our wealth. we have a sovereign wealth fund. so we need to use those earnings differently than we have in the past. not be so dependent upon oil. you're absolutely correct that it was 2.1 million barrels a day in '88, and now it's 500,000 barrels a day today. so we're way down on that as well. so the combination of the flow, as well as the price of oil coming out of the cause. the income tax is one slice. >> governor, if i may, alaska famously has been paying its citizens a dividend every year from the oil revenues. it's up to $2,000 a person right now. you've talked about adjusting that dividend to help cover the deficit. why not just eliminate it completely before you institute an income tax? or am i oversimplifying there? >> no, you're not. that's been suggested as well.

and that could be something where we end up. but, you know, that dividend, it's a royalty. we own the resources. so it's the same as a landowner in texas or any place else. the state of alaska. we cannot sell the mineral rights in the ground. so alaskans own that resource. so that's a royalty share. a lot of -- and we have the highest cost energy in the nation in alaska in our rural areas. so a lot of the rural areas depend upon that for the cost of energy, for the cost of living itself is much higher. so that's become sort of a mainstay of our economy. so to completely eliminate it, we think it would be somewhat unfair to those that are in those situations, the lower income folks as well. so there's a number of leverages we're looking at bringing in. the income tax itself brings in $200 million for a $3.5 billion problem. it's not the biggest lever we're pulling at all. it's one of many that we're looking at making some adjustments. >> but aren't you worried that

by raising the income tax, you could -- this could be a vicious cycle where you detract new business, new projects, and reduce alaska's competitiveness? >> we have the lowest -- alaska has the lowest personal tax rate in the nation. and if all these proposals go through that we're proposing, we'll still be among the lowest in the nation on tax rates. so i don't believe our instituting, doing what other states have done at a very low level is about 1% impact on the growth revenues of an individual, it's going to drove anybody out of the state or keep anybody coming in the state. we'll start to look more like other states in some respects. >> assuming you implement some sort of an income tax, what price does the -- does oil need to get back to to make you whole again? in other words, you get past your paying point. and if it gets there, would you take back an incomes tax? would you suspend it? >> well, the break even point

for us is oil will have to get back to probably $110 a barrel for it to be sort of in a sustainable basis. part of the problem is it's a through-put is the problems i mentioned. so we need to get away from the cycle of the price of oil, sort of driving our economy, and move over the earnings of the permanent fund. which is what we're talking about doing. so that certainly could change. the legislature certainly could change that and bring it back down to -- there's a fair amount of discussion back when it was eliminated, saying it should have been brought down to zero or lowered the income tax rather than completely eliminating it. i'll look forward to that discussion. i'll look forward to that day when the price of oil has come up to warrant that discussion. >> i'm wondering about the political ramifications of this move, governor. you interestingly were elected on a unity ticket. you have a republican legislator to contend with. are you expecting an uphill battle for those republicans that will say hang on, there's got to be more budget cuts you

can do before raising taxes? >> well, we've had about a billion dollars last year. we'll continue to cut more. but if we laid off every state employee, we couldn't come close to closing the gap. cuts alone will not do that. this is not a popular thing to do. but i'm not looking for the most politically popular thing to do. i was elected as the nonpartisan, so i'm not leaning towards one particular party solution or another party's solution. just doing what's best for alaska. it's not politically popular. i don't pretend to be a perfect politician. i ran to do the job. so i'm doing the job. >> governor, before we let you go, i'm struck by that break even price that you mentioned. $110 a barrel. we haven't been there forever. so have you been running a deficit that long? are we likely to get back to that price, do you think? even the saudis are saying it's not going to get back to $95 for another 20, 25 years.

>> that's exactly right. we have been in a deficit for quite some time. we were at a $1.6 billion deficit when i ran. it was not acceptable. the difference then is we weren't talking about it. now we're all talking about the deficit. that's the good news. so no, we cannot solve this by waiting for the price of oil to rise. i can't take that risk. i'm not willing to take that risk for this state. so that's why we need to resolve this ourselves. to self-heal, if you will. we certainly need more access to our resources. that's a major issue. >> it's an unenviable position for any official to start talking about implementing an income tax. thanks for joining us. happy new year. >> you as well. thank you. it is time now for a cnbc news update for sue herera. busy afternoon. >> it certainly has been. here's what's happening at this hour. bill cosby is free after posting a $1 million bail. the actor was arraigned earlier today in pennsylvania on charges

of aggravated indecent assault. cosby has repeatedly denied all those allegations. he is expected back in court on january 14th for his preliminary arraignment. concerns over a terror attack forcing officials in brussels to cancel that city's new year's eve fireworks. just yesterday, city police arrested two men on suspicion of terror activity after a search of their apartment turned up military uniforms and isis propaganda. get used to this crazy weather, because nasa says the current el nino will only get worse. new satellite images taken of earth shows the current weather system looks a lot like the worst el nino on record, back from 1997. and organizers of the times square new year's eve party are gearing up for the big night. the waterford crystal ball taking a test run today to make sure that tomorrow's drop goes off without a hitch. and that is the cnbc news update at this hour. back to you guys. and temperatures are going to be warmer than they have been in

years for those who brave the elements in times square. >> as you know, you're not going to get any complaints from me about that. >> not from me either, bill. it's like a california christmas, right? and new years. >> thank you, sue. after el nino comes? >> la nina. utilities are the only sector that are positive. energy bringing up the rear again with the oil prices. the dow jones is now down almost 100 points. >> we're going to have a leading trader joining us to tell us what he's watching into the close on this second to the last session of the year. >> two stock pickers name some must-have stocks for the next 50 years, and you may be surprised by their picks.

going into the last half-hour, sara was talking about that next leg down that we've been seeing here. moments ago, the dow was down 120 points. a little more than that. it's come back just a little bit now. we're at the 17,613. joining me on the floor here. the dow and the s&p are

struggling to finish the year positive, if only by just a point of some kind. but this selloff is going to make it more difficult. >> yeah, i think this is just the dow catching up to the s&p. the s&p has been the leader all day. santa claus rally may be ending on steam. >> they are just numbers, where we closed last year at this time. but how psychologically important are they to be able to close above or below for the year? >> it will be hard. you're probably a little late to the game, so i don't really know what they're going to mean this year. but next year, it's obviously a positive if this market can close higher. it bodes well for what we expect next year, for the economic horizon. we know europe may be a little farther behind than us, so u.s. equities may be ahead, and that may be somewhere that we can take another leg higher. >> is oil the catalyst here? is that what you watch first? >> absolutely. it's the first thing you do when you walk in in the morning. saying what's oil doing. again, we're on these technical levels. we haven't approached the bottom yet. if we can hold these levels

here, that's probably some pretty good support. >> what are you watching on the s&p then? last year's close? >> yeah. for tomorrow, you're going to follow anything that has some volume. maybe you get a trade out of that to start your new year. >> thanks, matt. see you later. >> as you just mentioned, we're almost ready to close out what was essentially a flat year for stocks, but we're asking, where should millennial investors say the next 50 years will be looking to invest right now? joining us with their picks are steve dudash and francine lie. state your methodology for why this is a good one for the long run. >> okay. so basically we're look at what sectors are going to be around for a long time. what big name companies can we put our money in and kind of forget about for decades in this example. we're looking at growth oriented companies, and then also on the other side, maybe a dividend oriented value company. so to start with, let's say on

the value side, energy, it's going to be forever. i know oil right now is the big talk and it's not doing very well. but it's not going away. with all the talk of alternatives and whatnot. oil still king of the castle in the energy sector right now. and will be for decades and decades. >> which company in the oil patch? >> bp. you can get into it with a very nice dividend. you can get into it with a low valuation. and you can put it in your portfolio, leave it there for decades and know it's going to be there strong, and not worry about day-to-day fluctuations or minute-to-minute fluctuations in oil price. >> francine, you're picking facebook and netflix for the next 50 years. why? >> i mean, if you're talking about a millennial investor who has the next 50 years to own this company, these are exciting companies. i mean, millennials like to buy companies that they know. companies that they're familiar with, that they use their products. so for -- i mean, facebook, i know we talked about it a ton.

but they're exciting and they're growing. we think this is the blue chip company of the future. and it's not just facebook. since facebook started, when i was in college, i've been using it ever since. but also, the acquisition of other companies such as instagram, visual generation, and they start to monetize instagram. i have an instagram profile for my puppy. i use it daily. and also what's app, they are reaching globally. occulus is a company they bought last year and virtual reality is huge. this industry is growing and we think it will continue to grow. >> let me push back a little bit here. i mean, social media is just getting started basically in the scheme of things, in the history of the word. and the same goes for streaming, with netflix. i mean, those are -- there's a distinct possibility those are just transitional industries right now that will be gone in

five years. so are these really companies that you believe will be around for 50 years? >> yeah. i don't think they're going anywhere. if anything, they're gaining traction. my company, kids, they're growing up on netflix. they don't watch cable tv. you know, we're in an age now where people want to be able to watch shows, when they want to watch them. if i want to binge watch five episodes of "orange is the new black", which i'm definitely guilty of doing, i'm able to do that. the subscription model we really like. it's a steady stream of revenue. and we don't think this is going -- i think if anything, cable is dying and this is here to stay. >> so when thinking of the next 50 years, i would think of a solid balance sheet, a history of proven leadership. i mean, yeah, it's good to get on the trends that have staying power. strong balance sheets. i think boring companies. do you agree with francine that maybe we can find that in technology? >> i want boring companies, too. if our premise is what we're

doing for 50 years -- i've got no problems with facebook. good trading type stocks, that's fine. but we're trying to talk about something for the next couple decades. i can't look you in the eye and tell you facebook's going to be here in 20 years. >> but you're also talking about management. mark zuckerberg and sheryl sandberg are amazing. >> what's more likely to be here in 20 years, oil or facebook? i mean, honestly. >> i don't think facebook is going anywhere. i think if anything, they're gaining users. they have different businesses that they've acquired. so they're diversified. and i think this is -- when you're talk about millennials, this is our generation. me being a millennial and me being an investor, i think it goes hand in hand. >> i know this is going to get heated up. we always have to break it up. >> thank you for joining us. >> we can talk about it again. we've got 50 years. >> we will gather again in 50 years and see how it worked out.

>> 17 minutes left in the trading session. the dow is off those lows moments ago in what was a rather interesting selloff, about 15 minutes ago. the dow is down 97 minutes right now. >> coming up, apple reaching a tax settlement with italy today. could more tax issues be ahead? but first, warren buffett. he's going to be happy to say goodbye to 2015. his berkshire hathaway conglomerate having its worst year since 2009. we'll look at reasons why the oracle of omaha is ready to say good riddance, coming up. cemberr sales event is here. lease the 2015 gs350 with complimentary navigation system for these terms. see your lexus dealer.

is billionaire investor warren buffett losing his touch? shares of his berkshire hathaway conglomerate are lagging the s&p 500 this year, and having their worst year since 2009 on a relative basis. mike santoli joins us with more on this story. the reason why? >> buffett has had these dry spells before, but the broad reach of warren buffett's exposure to some of the hardest hit stocks in the dow placed berkshire hathaway in harm's way. the santa fe division was caught

in a downturn along with the energy markets. the dow jones railroad index is down some 30% year to date, representing the unit. the stock holdings such as american express, ibm, and wal-mart were big losers in 2015, of course. value investors such as buffett have suffered in this market. a small group of expensive groelt sto growth stocks dominated. even berkshire's top performing geico car insurance business had some hiccups this year. auto policies rose as americans logged more road miles as accident rates climbed, possibly due to more texting behind the wheel. perhaps more than any other ceo or investor, buffett is able to shrug off the bad performance, given his amazing wealth creation of over more than half a century. as a result of this tough year, berkshire stock is sure to appear attractively valued once again to those buffett followers. it now trades at one of the lower multiples to berkshire's book value of the past few

years. berkshire has a history of coming back strong, so 2016 will be the test of that resilience. >> i can remember when we were asking this very same question in the '90s and even he was questioning. he admits he doesn't understand anything about technology. >> even though now he kind of has a toe in the water with microsoft and ibm, he didn't exactly pick a winner. >> this time it is a little bit different. a different era that we're in right now. >> the fact that he really is an industrial power, he has great exposure to energy. the big question over here aside from who comes after warren is how he's going to put that capital stream to use. he's brought precision cash parts this year. once again doubling down. and put heinz kraft together as well. >> ibm was a loser. am ex was a loser.

it's those investments that are part of the problem. >> he owns a lot of these tired blue chips. coca-cola. they did relatively better, but they were only flat. he really didn't have any big winners. >> i think he's sleeping well at night. we'll see you next hour. and you're welcome, dougie cass, for that shoutout there. ten minutes to go here before the closing bell. it's been a crazy last few minutes. we're off the lows that we saw. the dow is down 89 points. watching this one very closely. barely in the green for 2015. but just barely. >> it will be a squeaker tomorrow, that's for sure. why betting on biotech could be good for the new year. something to think about, when

we come back.

seven minutes left in the trading session, with the dow heading lower. joining us is mike sorrentino. we're trying to look for ideas

for next year, and you want to go back to biotech. you think that's a place to look for profits next year. why? >> no question. this is a sector i'd argue probably the most exciting growth sector on the market for the past five or six years. i don't see why the fundamentals are changing. we've got hillary clinton tweeting. some concerns about pricing. i think these are way overblown, though. i think this is a great opportunity to get into a sector -- we're talking about long-term fundamental growth here. ignore the volatility. >> so i think the question is how do you get into it? do you buy from the individual players? do you buy a basket? meg was telling us this could be a story of winners and losers instead of what we've seen in the bull market, where as a group, they outperformed. >> no question. i would say if you have the expertise to dig into the single stocks stories, by all means, go ahead. me, i've got an irrational fear of needles.

i never went to med school. i can't understand the data that comes out on these companies. i so i like to own the company. and think longer than a year. if you're investing in biotech for a year, you have to be really knowledgeable on the single stories. >> and stay away from anything that hates higher interest rates. >> not really a fan of those right now. i think that some of the volatility we saw last year regarding the hike, i think it's not going to be as bad going forward, but you never know. they don't always make the right call. >> so we've heard. mike sorrentino, good to see you. thanks for joining us. we'll come back with the closing countdown. there might even be a currency chart in that segment. >> and the dow is now down 100 points. we're watching that into the close. after the bell, messages come and go on snapchat. but it looks like an ipo may be coming in 2016 for the social media app. we'll look at why, when, and what might be worse. straight ahead. you're watching cnbc first in business worldwide.

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we are just inside the two-minute mark for the day. the question we're going to be asking for tomorrow is can we finish positive or negative for the dow and the s&p for this year? here's a one-year chart of the dow. it's been almost a round turn for the industrial average and for the year, bob pisani. the industrial average is down 1.2%.

let me finish this very quickly here. oil for the year. this is what will decide it. as matt pointed out, when traders come in, the first thing they ask is how is oil doing? so if we look at wti crude for the past year, as we run out of time -- >> about 30%. >> if we had had time, we would show you one of the casualties of oil, the ruble at a year low against the dollar. >> you're hanging out with sara way too much. i'm starting to worry about you, bill. could you put up the spider? >> i don't think we can put anything up. spider, spy. we had a big air gap drop. for once we can't blame it on oil. the dollar didn't move. this is a classic air gap. normally, the spider will do 125 million shares. all of a sudden you go long and sometimes there's just not an equilibrium between bids and

offers. i know that's not a very satisfying explanation. just not enough bids in the market. >> sometimes those things happen. thanks, bob. see you a little bit later. in the meantime, the women's bond club is ringing the bell here at the new york stock exchange. stay tuned. much more coming up on the second hour of "the closing bell," sara. yes, bill. welcome to "the closing bell." i am sara eisen in today for kelly evans. bill will be rejoining us in just a moment. let's take a look at how we're finishing the day on wall street. the dow today got another leg lower in the final hour of trading. the dow jones industrial average closing down almost 118 points. s&p 500 down .7 of a percent. look at the level -- this is very key. 2063, which means it is still positive for the year, just barely. the level you want to watch going into tomorrow is 2058.9.

it's doing the best when it comes to year-to-date gains. we've got mike santoli, and also with us for more on the day's action, "fast money" trader david seaver. >> look, sara, as you know, it's incredibly quiet. we're right in front of the nooenew year's holiday. there really isn't a rhyme or reason. the institutional involvement on the street, hedge funds, was incredibly quiet. so i look to it and just say year end positioning to some extent, but nothing really driving the market much lower. >> not a lot of momentum going into the new year, with the game we're playing right now, or whether we can finish positive or negative for the year. >> just not a lot of outright demand. i don't know if it has to do with anything going on today, but month end has been very weak. you really have seen the sense

that people are more willing to offer stock than at month end. maybe it's a victory thrown at the market. but really it's appropriate that we're just chopping around, alternating up and down days, trading along with oil and staying along the flat line. that's basically been the story. >> also, if you look at the dow action today, where we ended up, wal-mart was the only dow stock to end higher in today's session. the biggest loser was nike. that's a complete reversal of what we've seen. wal-mart the biggest loser. obviously that's the year end impact. >> no question. and you look at a name like nike, you say to yourself, there's a name. that's a company you want to own. it's really the only name within the retail space that you can hide out in right now. they put up great numbers. there's a stock that's doing all the right things for their shareholders. they've got pricing power. so i look at nike as a very unique space or stock. the rest of the retail space, they've played by inventories in

currency concerns. so you really can't step in by pretty much any other name that's out there right now. >> how are we going to open the year? i guess it will depend on oil. >> one thing about the first quarter, i worry a little bit about the first quarter. maybe even the first half of the year. we've got a lot of these energy companies are beginning to have their borrowing bases pulled in. you'll see a lot more bankruptcies emerge. i think that's ultimately a good thing. i think it actually sends a bid at some point into a lot of these energy equities and are completely oversold. but the knee jerk reaction is going to be really almost complete risking and taking a lot of these stocks down to another level. so i worry about that from a market perspective and the impact it's going to have on the overall market. >> that's definitely something in the next few months that's going to be a feature of this market. but i do think right into next year, into the coming weeks, you really do already have very muted investor sentiment right

now. really in contrast to a year ago. year ago, people really thought we were going to accelerate economically. we had that growth scare in the first part of the year. i also think you're going to have a little bit of a tail wind in the first quarter. weather being better this year. statistical adjustments. i do think you might actually have an excuse for why people get more optimistic relative to very low expectations right now. >> see, i'm looking at some of these energy names. energy was the worst performing group in the s&p again today. companies like chesapeake, which is tied to guess, down 77.5% for the year. consul energy, south western energy, these are companies that have lost more than 70% of their value in 2015. what do you do with a stock like that? >> it's still too early to buy a lot of these. it's too early to jump in and buy these stocks. you're going to see

bankruptcies. at that point in time, the higher quality companies, they're not super invested in the really high quality u.s. assets. better off staying short on the debt here. at some point, get on it and cover and potentially take your spots within the enp space. >> you wonder what the consumer is going to do. >> decent indications. >> i think people have maybe just capitulated on the fact that we're going to get big spin-through, whether it's health insurance, cell phones. people are trying to explain why we haven't seen it. to me, it's interesting. if you're a broad, diversified investor, maybe take heart given what david said and the fact that energy is now a far smaller percentage than your s&p 500 index, and you're fund and

everything else. >> but it still moves the entire market. >> it does. the rest of the market is key. >> because of all the lengths with financials and the credit and everything else. >> let's introduce a new topic. facebook and twitter are close competitors, but their share prices this year in 2015 have been on totally different tracks. seema modi has details for us. >> that's right. we're calling it a tale of two social media stocks. facebook up 37% in 2015. while twitter is down 37%. so why have we seen such different stocks stories? let's start with facebook. shares have been outperforming thanks to better than expected earnings. talking about desk top, platform, plus internationally as well. twitter, on the other hand, has been posting disappointing earnings as it continues to face challenges on the ad front. while also going through this major leadership change.

bringing jack dorsey in. for facebook, analysts say focus will be on top and bottom line growth, finding ways to monetize instagram as well as its two other key acquisition, what's app in the messaging space, and occulus in the virtual reality space. when it comes to twitter, ubs says clarity will be needed for potential to be achieved. so improving its user interface in an effort to make it more mainstream, updating its advertising strategy, and putting money to work, perhaps making some key acquisitions. >> thanks. stay right there. up 37%, down 37%, a mathematical anomaly, or is there really a story to be told there? >> i think the magnitude of the gains and losses are pretty much coincidental. 37% added to facebook is vastly more market cap than twitter even has. i think it's in a sense a false

comparison. it might be a winner take all category, but i think facebook, when it comes to the advertising pool, it's really not going head-to-head with twitter. it's trying to gobble up television ad pie. google and all the rest of it. to me, that's what the market's been telling us, as well as the dysfunction. >> which one looks like the better bet to you? obviously they're different size companies and they deserve different valuations, but which one is a buy? >> facebook is still a buy. good management and horrible management. we talked about facebook when it was 80 bucks a share on this show. i think twitter can be a $15 stock. i think it's going to be much lower than where it was right now. they're not growing them. they don't have a plan in place to do it. they've got a ceo that's basically not even going to the

office. that was some sort of news wire that was reporting that recently. but they don't have a plan to shift gears there fast enough. the rest of the mark's going to catch up and eat their lunch. facebook's got multiple buckets to grow their user base, and investors are willing to pay a premium multiple for that. they always will. facebook's a company you want to own long-term. >> well, i was going to ask you, would you buy it for 50 years? >> i definitely would buy it. i'd buy this stock and i'd hold on to it for the long term. the near term risk in the story is growth margin impact. so that's been i think a concern over the last couple quarters. we're talking about it again going into this quarter. i don't think it's going to derail the stock. that's your only real near-term risk here. when you think about instagram, you've got advertisers that are tripping over themselves wanting to advertise. it's powerful. >> what could go right for twitter in 2016? there is a bull case out there, isn't there? >> for one thing, there is asset

value. there's strategic value. it's a very unique product. even if people haven't really cheered the way they've run it, it has some kind of value and it's getting back down to those levels where somebody could be interested in it. i thought it was premature to talk about m&a, but at some point it becomes relevant. just the fact that you want to have this other outlet for a different type of engagement, if you're an advertiser, if you're somebody who wants to reach people, facebook can't be all things to everyone. and it's hard to make a valuation case right now. because they're just underearning the a tremendous degree. >> we're going to continue this little game of diverging stock picks. you're also looking at two names in the fast-food space moving in a completely different direction. >> exactly, sara. the price action in these two stocks couldn't be more different. talking about mcdonald's up 28% in 2015, while chipotle, as you can see right here, down 29% this year. now, analysts are attributing the move to its menu update, making breakfast available all daying and its continued growth

overseas. chipotle's e. coli outbreak affecting a number of customers. it's estimating it will cost between $6 million and $8 million. it could get worse. so what happens next year? analysts say mcdonald's needs to continue to get creative with its menu, embracing digital, and also put its cash to use by hiking its dividends. for chipotle, it's really all about restoring its brand. getting to the bottom of the e. coli outbreak. making changes to its supply chain while also focusing on reopening stores and improving its overall earnings story. it seems tough, but we have seen comeback stories out there. >> all right, seema. thank you very much. here we go again. who knew that breakfast all day would be such a big hit for the company, right? >> i agree with that. it's been great from a public image perspective. i don't think mcdonald's has been performing this way because of the fundamentals, because of

the com sales or anything else. i think there's a certain class of stocks that are viewed as quasi-corporate bonds. it's a blue chip. it's stable. that chart of mcdonald's looks like kroger. it looks like kelloggs. i don't think it's necessarily the business of mcdonald's. as for chipotle, it's not cheap yet. it's getting cheaper. i think if you go two months without a new case of e. coli or any of the other noise, i think earnings estimates can start to bottom, and then you figure out what the right price is. >> on that point about not being cheap, as chipotle has come down and mcdonald's has run up, your valuations are now almost the same. i'm looking at price to earnings. >> almost the same. i think chipotle is based somewhere around 25. so we're getting relatively close. i look at chipotle and say mike's 100% right. you've got to wait this out a little bit. you don't know what's around the corner for them. so i think there's a lot of inherent risk there to really be

aware of. i think as far as mcdonald's is concerned, look, mcdonald's is a story -- i think the stock is priced to where it's kind of -- this is a financial engineering story. less about their breakfast all day and the fact that they're going to probably put up a great same store sales comp number in january, but the street is expecting that. so the stocks trade at the high end of its forward multiple. i think that this is a name that you probably want to wait to see get a pullback before you jump in. >> i'm going to push back a little bit on this. your theory about mcdonald's being a quasi-bond. it's had its tough times here. >> it absolutely has. >> where other companies were eating their lunch, so to speak. right? can we attribute a lot of this gain now to the fact that people are buying it for the dividend? >> once the fundamentals stabilize a little bit, you have a new ceo. the stock did not have a horrible run. it just kind of sat out for a year of two.

it didn't really tank. i do think we have strong handed ownership of certain stocks like this. and they do have a high payout ratio. therefore the dividend is very important. and unlike exxon and chevron, where you might otherwise look for the dividend, it's pretty safe. >> it's like hormel. goes up every single day. you've got a little bit of divergence shaping up in under armour and nike, ones that i follow. nike we talk about as the best performer. dow jones, year to day. it used to be that a rising tide lifted both of these, and that was everyone was buying athletic apparel even though they weren't buying regular apparel. under armour has taken a sharp leg lower. just in the past fall or so. and these two have gone in opposite directions. obviously nike is a lot bigger than under armour. >> do you think it's also because under armour has much less global exposure? i mean, one of the stories with nike is the non-u.s. consumer -- i don't know if that accounts for any of the difference.

a lot of the problem is under armour is exposed to the cold weather. it's also exposed to finish line. it's also been promotional. >> last quick word to you, david. >> i think gross margin fluctuations are what investors are considering are going to happen. very clearly. and they're concerned about that. that's why under armour isn't necessarily getting the kind of bid that nike would get. nike's also got massive hiking power. forwards, they were off the book. i think like 35%, something like that. way above estimates and expectations. under armour, it's gross margin concern, fluctuations on that. nike, i think people just love the brand. >> we have a news alert. this ought to be interesting. >> steve cohen's fund has taken a passive stake of 5.3% in chimerix, a small cap biotech.

chimerix lost about 80% of its value on monday. something to keep in mind. we are looking at those shares of chimerix higher after hours by around 6%. disclosing a 5.3% stake in the company. back to you. >> thank you. stevie cohen taking a position there. what do you make of that? >> i know meg was on "fast money," you know, earlier when that news broke. and she was mentioning that. i believe it's in february, there's a very slim chance, but there's a chance, call it a 10% chance that there is data that allows whatever this product was for to be approved for a certain class. revenue opportunity of $150 million versus 500-plus revenue opportunity. so i think maybe there could be a bet on that. that's all i could think of here. >> wild week for this one. >> we'd love that too as well.

david, thanks. we'll see you next hour. >> thank you. >> be sure to stick around and catch david and the rest of the "fast money" crew at 5:00 p.m. eastern time. someone says there is a secret signal in the market right now that says stocks are about to rip higher in the new year. you will definitely want to stay tuned for that coming up next hour. meantime apple losing its luster amid reports of weak iphone sales. today the company announcing its settlement with italy didn't do much for the stock. could more tax issues be on the way for apple? that's next. also, new york, one of the most expensive cities on the planet. that's not news. it's not just residents who are feeling the pinch, though. companies are also under pressure, and we'll tell you which ones are getting hurt by manhattan's rising rent, coming up. hit it frank.

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here's what he said. >> it's total political crap. there's no truth behind it. apple pays every tax dollar we owe. >> don, clearly this is a sore subject for tim cook. and they still have a looming european commission investigation into their tax practices in ireland. is this really a headwind for investors, the way apple handles its taxes? >> i think investors have to take a look at this seriously. the european commission is looking into ways like countries are looking into apple. for years, apple has been using ireland as a destination to filter all of its european revenue through and to lower its tax bill. now they've gotten wise. and they're beginning to look at

this tax practices everywhere. so these companies might definitely have some more bills to pay. >> tim cook made the point, they pay every tax that they are due. but the phrase he left out was within the law. what they're doing is legal, but it's a loophole. >> within the law and in the jurisdictions where they choose to recognize their revenue. >> which is all very legal. >> tim cook said look, we have most of our businesses overseas. that's where the profits reside. but they do have diskrugs as to where to recognize that revenue. that's i think what's getting looked at here. >> that's going to have to change. >> tim cook has definitely tried to frame the issue. here in the united states where he's come under criticism, apple has $180 billion sitting offshore. they haven't brought back. and tim cook says look, we're

following the law. if you and congress want to change the law and change how you treat these profits, we'll bring some of the money back. but it's on you, legislators, to deal with this issue. >> i wonder how much apple is a political punching bag when it comes to taxes. the european commission is looking into other companies as well. but apple does really become a poster child for some of these problems. >> it's a giant corporation. one of the world's most valuable publicly traded companies. i think that's why it gets a lot of scrutiny. it has a great brand. and there are other companies that have engaged in this practice. one advocate said there's something like $2 trillion in offshore revenue. so clearly apple is not the only one engaging in this practice, which, of course is illegal. it's taking advantage of tax loopholes that exist.

but other companies have also been found to engaged in this, including starbucks and amazon. >> one of the other elements in this is that apple has borrowed very heavily to buy back a lot of stock when it could have repatriated the overseas cash. >> that's why god created cfos and those are the decisions they have to make. >> the other thing is that tim cook did say 2/3 of their profits are coming from overseas. so it makes sense to hold the cash there. >> dawn, we've got to go. thank you for joining us. good to see you. >> thanks so much. >> you bet. and just a note, nbc news group is a minority stake holder in recode, which signs dawn's checks. we have a partnership with them. meantime, private tech companies are now thinking twice before going public. after this year's slew of offerings. but one major social media player is showing signs it may be getting ready for an ipo. we'll tell you which one, coming up. but first, deadly floods

ravaging missouri. we'll go there live for the latest on the ground. closing bell back in two minutes.

you no doubt have seen the pictures, thousands of homes underwater in the midwest as widespread record flooding continues in missouri. nbc's morgan radford is in

eureka, missouri, with the very latest. morgan? >> bill, a state of emergency has been issued here in missouri, and the governor held a press conference at 1:30 p.m. central time. he updated the number of fatalities to 21. 14 people have died since this flooding began here in missouri, and seven have died in illinois. as you can see, the flood waters have continued to rise since i've been here, since early, early this morning. you can even see here along the bank here. this is the heart of eureka, missouri. and these businesses that are the center of this entertainment center here in the city have put sandbags alongside the windows and the doors and that's to keep the water from coming in. we've seen cars that have become completely submerged, almost completely underwater. that's just trying to cross these treacherous roads that have been completely inundated. it's also a trying time here.

the community members have come out to see what exactly is happening, because as you can see, there's no rain here, but the waters keep rising. that has to do with the levies. since those 1993 floods that were devastating. that's something that a lot of the residents here remember very clearly. since then, more levies, some waters even overflowing into areas that never even saw water before. people are being asked here to be careful to avoid travel, and to especially avoid roads that look like this. bill, sara? >> mississippi not expected to crest until tomorrow night. so this story is not over. morgan radford there in eureka, missouri. time now for a cnbc news update with sue herera. >> here's what's happening at this hour. authorities in pennsylvania releasing a mugshot of bill cosby. the entertainer is free on $1 million bond after being arraigned on charges of aggravated indecent assault.

cosby has repeatedly denied the allegations. he is expected to be back in court on january 14th. embattled chicago mayor rahm emanuel announcing changes to the city's police force. all patrol cars will now be given tasers and officers will be trained in how to use them. the move follows weeks of protests after several deadly police involved shootings. u.s. marshals now say it could be two months before affluenza teen ethan couch and his mother are back on u.s. soil. the pair have won a stay against their deportation from mexico. the couches fled the country after that video surfaced of ethan possibly violating his probation. couch killed four people while drunk driving in 2013. california's four-year drought may finally be easing. today's reading of the sierra nevada snow pack shows that it has grown deeper than it has been in years. california gets 30% of its water from that snow pack. that's the cnbc news update this hour. back to you.

and they say they want to see some steady snow in the sierra nevadas until april before they'll declare the drought over. but it's a good start. >> it's a great start. i know everybody is rejoicing. got that snow pack up there. >> see you guys later. >> all right, blood testing disrupter theranos under fire for reportedly deleting data and altering test results to make their devices appear more accurate. >> up next, we sit down with "the wall street journal" reporter who broke the story. "closing bell" coming back in two minutes. you pay your car insurance premium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay

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now when someone says... show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. stocks lower and pretty much weakened throughout the day, closed right near their lows. s&p 500 closing down 15, .72 points. it is just barely positive. the nasdaq firmly in the green for 2015. did close the lowest of the group, down .8%. energy, of course, was the culprit, again. >> the decider, too. it may be the decider tomorrow depending on how oil does. >> another 3% lower in crude oil and pressure. >> we told you earlier how

stevie cohen's .72 fund disclosed a 5.3% stake in biotech company chimerix. >> the stock that lost 80% of its value on monday after it surprisingly reported a late stage study that failed to meet its primary goal. this is an anti-viral drug which the company was testing to prevent infections in stem cell transplants. unfortunately it just fell in the study. the shares were trading around cash, about $380 million as of the end of q3. analysts have completely wiped out this education from their models. basically $800 million in peak annual revenue. it's very curious to see this big step being taken by .72. it will be interesting to know just what the plans there are

and what the expectations are for a path forward for this drug. some analysts say the stock is trading like there was no hope for this drug. we could glean some more information there about whether there is hope for this drug at all. >> after the selloff, this 80% selloff on monday, whether now stevie cohen suddenly found himself with this 5.7% stake in the company, as a result of that selloff, or he bought it after the selloff. we just don't know at this point. >> his percentage owners probably shouldn't have changed necessarily. but, you know, you have to wonder. >> a decline in the stock? >> we still don't know when he bought it. >> we don't know. to me, it's just a typical family office. >> any hope for this one?

what are the analysts saying about the next catalyst? >> well, most of the analysts are saying it wipes out this biggest opportunity for the drug. it still has potential applications in different kinds of viruses. so those are thought to be much smaller economic opportunities. we will see in february the full data set here, and whether there are specific sub populations of patient where is this drug is thought to work and whether there is a path forward. but certainly, with some estimates as high as a billion dollars, those are wiped out after this result. >> got it. >> thanks, meg. >> now to another controversial health care company. "the wall street journal" out with a new report this morning claiming the privately held company valued at $9 billion and claims to use just a few drops of blood for diagnostic tests may have been deleting data and ignoring inaccuracy in patient tests to make them look more accurate. >> we heard from theranos.

they responded. here's what the spokesperson said in that statement to us. theranos is working to bring low cost, accessible testing to everyone to realize prevention and early detection in health care. we know that fighting for change in health care is disruptive. we invite all reporters, including cnbc and medical leaders to come see own our data, technologies, price transparency, and get a briefing on our regulatory work, and the regulatory model that we're building firsthand. we are absolutely confident, he goes on to say, in technology and our business. stay tuned and happy new year from theranos. >> let's bring in the man behind the investigative reports. john, good to have you here again. >> thanks for having me. >> first, just elaborate a little bit further on what you found this latest damning report on theranos. >> well, there's always been the question with this story of

whether investors in silicon valley that put money into this company, did their due diligence. whether they looked beneath the surface of the claims, the scientific claims that were made. but then there's another aspect of this, which is whether theranos exploited a regulatory loophole in the laboratory space. there are two regulators and a lot of space between the two regulators. there's the fda, which vets and improves diagnostic equipment. and then there's the regulator of laboratories. they oversea laboratories and inspect them once every two years and make sure that they do their tests accurately. theranos is unique in that it

developed its own equipment not to sell it to laboratories as companies like dickenson and seeman's do. as a result, fell a little bit in the middle point, the spot between those two regulators. and was able to operate its proprietary machines for the past two-plus years without having them really look that closely or vetted by either of those two regulators. >> what do you say to the company when they say your sources are disgruntled former employees who would have an axe to grind, and they're inviting all of us reporters to come and watch the technology in action? >> well, i would say can i come too? >> you say you've been invited? >> i saw cnbc, but i'm hoping i will be included and i will absolutely join, you know, the group of reporters and

scientists who descend on the company whenever the doors open. i'd like to be part of that. my sourcing is ironclad. i'm a very serious reporter. and i work on stories for a long time before i publish them. and in fact, i have a team of -- we had a team at the newspaper of editors and lawyers who have been doing this for a long time and who vet my stories very closely. you can rest assured that the sourcing is good. as for theranos's responses about my sources and characterizing them as -- >> disgruntled. >> or malcontent. for the sources that are confidential sources, they have no idea what the identities of those sources are. so either they're speculating, but they don't really know. so i don't really know how they can say that.

>> so if there is an invitation, you would come there and watch, you're saying you're in? >> i'd like to be the first to walk through the door. >> are there going to be more stories? this doesn't feel like the end. >> i don't think it is the end. there's a cms audit that's been going on and off since october, i'm told. and the company has acknowledged to me that this audit is taking place, and the outcome isn't known yet. the outcome should be sometime next month, and this is going to be a very, very important milestone in this company's life, whether or not it passes this audit. >> very much at the center of this whole story. john, good to see you again. thank you for joining us. jimmy mcmillan made some waves with his rent is too high political party in new york a few years back. but more companies, especially retailers, are now agrees with him and they are fleeing new york city. we'll have details when we come

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this is the end of an era. >> that's right. you only have about an hour left if you want to get in one last ride on that ferris wheel in the toys 'r' us in times square. the retailer closing the doors for good at 6:00 tonight. you might remember when they closed that fao schwartz location on fifth avenue. rents are just too darn high. at prime locations like fifth avenue, where rents approach as much as $3,400 per square foot, the vacancy remains low because of the high pedestrian traffic. many justify it in part because of marketing expenses. the big apple is really hard to be when it comes to exposure, especially for tourists, even if tourism is down due to the stronger dollar. now, the real estate board of new york says not every area of manhattan is seeing higher average asking rents than a year ago. retail rent is down as much as

6% year over year in some areas, the price per square foot also a little less lofty. the average asking rent for real estate here in times square is up 3% over last year. it's the second highest in manhattan, about $2,390 per square foot, per month. now, we all know that online sales are increasing, often at the expense of traffic and sales in store. and dave baasic, co-retail head at alex partners, says it might be further kpexacerbated for retailers that cater to tourists. just imagine carrying around a big jeffrey giraffe all day long while you're touring the city. it's not exactly convenient, especially when you have the option to order it online and have it delivered straight to home. >> i hadn't thought of that. >> santelli is rushing off the set. >> how many more times can i ride that ferris wheel? >> thank you, courtney. it turns out slaying

vampires may be easier than starting an e-commerce company. >> sarah michelle gellar is about to find out if her tv popularity can help boost her new start-up business. my interview with her coming up next. i asked my dentist if an electric toothbrush was going to clean better than a manual? he said sure. but don't get just any one. get one inspired by dentists. with a round brush head. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque and rotates to sweep it away. and oral-b delivers a clinically proven superior clean versus sonicare diamondclean.

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so, bill. >> yes, sara. >> there is another sara in your life. >> she doesn't call or write. it is already over. >> and she doesn't make you put up currency charts. >> no she doesn't. >> sarah michelle gellar starts her new business called food stir. this is what she had to say to bill. >> i was looking at activities where i could connect and unplug and make memories and enjoy the experiences. and my girlfriend had this idea and we did the research and we realized that baking is a tired brand and someone needs to come in here an disrupt this. >> so i'm buying a kit? >> yes. >> and i could bake something with my kids. that is the whole idea. >> it is deeper than that. it was inspired by our kids. we are trying to brake our memories -- bake our memories. we spent the last year r&d our mixing. mixing the ingredients and where

do they come from, what mills do we come from and is this the best possible sugar and with the kits you have all of the ingredients and the additives to make it the beautiful picture on pintere pinterest. >> and where did this come from. >> someone said being an entrepreneur is similar to being an actor in that sense you are putting on a role and a performance and creating something and making it happen but just in a different landscape. >> i think about kathy ireland who has built an empire. jacqueline smith has done the same thing. and jessica alba is doing the same thing. now sarah michelle gellar. >> and i think we have a voice. and nowadays to disrupt anything and have your brand noticed, it is hard to get through the noise. there is social media and television, newspapers and magazines. so when looking to a product, how do you know what you want to test?

how do you know what you want to buy? it is saturated. for someone, from my audience, i think that i've been honest with them and who i am and this seems like a natural brand extension. >> when i hear sarah michelle gellar what, is the brand? what do you want people to think? >> for sara michelle, i want it to bein twined, the name food stirs came from the idea of i'm a foodie. i love trying new foods and being adventurist and there is a connotation that is elitist and that is not me. and hipster is the modern take on it. and food stirs is where that comes from. and it is okay to get back in the kitchen and slow life down for a moment and have those moments. >> she is not just lending her name but she is very involved. and she is very intelligent. >> she was well-spoken. >> and you sort of look like her. >> a lot of people have said that. i'm flattered. >> she's 38. >> or the h.

and i was never buffy the vampire slayer which is one of the best roles ever. up next, signs that snap chat could go public in the new year. we're talking ipos next on the "closing bell." let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.

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more on the breaking news in thnews. .72 disclosing a stake in biotech firm chimerix. let's send it over to kate kelly with the details. kate, what did you learn. >> the company, .72, is keeping mum on this situation with a spokesperson telling me they don't comment on position. with a little bit of context, point 72 and the hedge fund as it was known before it became a family office, is known and was known for trading very rapidly in and out of positions. and it is not unusual given that they have north of $10 billion in assets for them to hold relatively large positions, especially with a bio firm, a company like this with a relatively small market cap. so we don't exactly know what the thesis is, if any. whether it was just a momentum-type of trade. obviously they may have gotten in, given the timing, the drug trial results and the stock

price. but unclear if they'll hold onto it or not. >> we're losing her. we can't hear you now, kate kelly. >> i was just wrapping up saying we don't know if they are still in the position or not. but they are known for their momentum trading so it is possible they are already out. >> very good. more to come on that story. thanks, kate kelly. snap chat messages go away after a few seconds but the mobile app may have investing staying power. >> it is among the closely-watching tech start-ups that could be heading for an ipo next year. julia boorstin joins us with more. >> the ceo said they know that snap chat has to go public. they didn't say when. but the company seems to be heading toward an ipo by the second half of next year. the content app is growing fast and has massive scale with 100 million daily active snap chatters. in november, the company

reported 6 billion daily videos. tripping in may. it is expected to come in around $70 million this year and double next year. snap chat generates revenues from ads and sponsored content and channels within the discover section and the live section as well as sponsored lens for those communications. now a source tells me the company is burning through a lot of cash on both the growing team and bandwidth so might need more financing. the company has raised $1.2 billion in total. potential challenges for snap chat ipo include scaling the ad format and management turnover. the company has lost a number of top executives within the past year. spiegel's willingness about talking about taking the company public does set them apart from other unicorns, that are distancing themselves from the public markets. but with square and pure storage, neither of those stocks doing much since their ipo.

it seems like spiegel is focused on whether he could maintain the $16 billion valuation in the public market. guys. >> julia, thank you very much. >> could revive that sleepy eye market. >> we're going to be here again tomorrow. we hope you are too. that does it for "closing bell." thanks for joining us, "fast money" coming up next. look at those mobs here in times square. "fast money" starts right now. live from the nasdaq market site overlooking times square. i'm melissa lee. the traders are tim, david, brin kelly and guy adami. tonight on fast, airfares are cheap and we mean really cheap. and the reason why just might surprise you. co-founder of kayak takes us inside the airline wars. and one investor had a losing trade after another. carl icahn, could the activist be losing. and stocks may be down. but we have the top sign that says the market is about to rip higher this year. we'll tell us what