little off the lows, really? we're still down 2.5%. still down. >> exactly. well, thanks, everybody, for watching. >> "closing bell" starts right now with a big hour of trading. thanks for watching. hi, everybody, welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. it's happened again, stocks shot higher on the open, the dow was up 192 points at the peak this morning only to be dragged lower by another oil selloff. oil as you probably have heard by now broke below $30 a barrel briefly intraday first time we have seen that since 2003. so we keep setting new benchmarks. we have more on oil's decline and the fallout coming up. >> now the bears are out in full force it seems on wall street. jpmorgan with a new note saying forget buying the dips, start

selling any rallies, rbs saying sell everything. we have money managers who do see opportunity and they will tell you exactly where. the ceo behind the $32 billion biotech deal that was announced yesterday, shire, their ceo will join us in a cnbc flew sieve coming up. there is a big of a tax break involved in that. >> issues there for sure. tax inversions, we will ask a number of people about that. starbucks ceo howard schultz is on the ground in china and he says the gloom and doom is over done. he will join us in an exclusive interview coming up to tell us what he sees in china that so many others are apparently missing. >> they will be opening a bunch of starbucks over there. >> yes, hiring in a significant way, helping to pay for housing, doing a whole bunch of interesting things. >> do they make a frappuccino tea, though. >> we will see if tea expands there, if people will drink coffee or more importantly whether there is spending power in this country.

>> let's start with oil stealing today's early gains, dominic chu is playing the part of bob pisani today on the floor of the new york stock exchange and the clear impact that oil is having on stocks today's. >> it's not just today, it's been the last few weeks. maybe the last couple of mohs. this correlation, this trading relationship between oil and stocks overall and it's playing out again today. if you take a look at the intraday chart of the s&p 500 overall versus what's happening with wti, crude oil prices, you can see them kind of moving around in lockstep. the degree of the moves obviously much smaller for the stock market in comparison to what's happening with oil, but still, the general -- the directions, the severities, the moves, the trajectories, very, again, in place, the trading relationship between crude oil and the stock market overall. if you take a look of course over the past year about some of these oil-related themes that we're talking about, the trend is very much been lower, we know that is correct we hit that below $30 level today, first time since 2003 that we've seen

some of those levels as well. now, if you take the way that that moves into the overall energy sector, we know that the energy sector by far the worst performing sector in the s&p 500 last year, it's also taken that down side leadership position with materials this year to date so far. if you look at, though, some of the bright spots, there are, again, some of the bright spots. today exxonmobil here actually getting a bit of a bounce with the rest of the market, we are here at post 8, barclays where they make the prices for exxonmobil up by about a percent. we have seen a bid come out for these oil names as well. also refining stocks have held up very well. if you look at the number of stocks right now, at least as of maybe an hour ago, about 90% of the stocks in the s&p 500 energy sector overall were in bear market territory, only four of them were not in bear market territory, three of those guys were refiners. so you look at fill flips 66, also tesoro or valero have

pulled back but not to the degree some of these others have, valero only 5, 6% away from their highs we have seen recently. we will see if the oil trade, correlation, trading relationship between the two continues into the closing bell and of course into the coming weeks. it's been that way for a while, we will see if that trend continues. >> we shall, dom, thank you. jeff gun lock saying a couple years ago he believes today marks a near term bottom for oil. joining us is cnbc contributor helema croft from rbc. is this a surprising one to you? >> i think we could potentially move into the 20s and stay in the 20s for a period. i'm not sure this is the bottom yet because we have iranian barrels about to hit the market pretty soon, that is a fundamental change we will be looking at. if you look at between october and now, we have a lot of additional barrels on the market, no real signs of that much softening demand. iron coming back is something we have to watch. we don't see a really bullish catalyst out there right now in

the near term. >> that's the thing i keep asking people about, what would bring the price back? you just don't see it. nobody wants to cut production right now, in a meaningful way, and the saudis are in the midst of a price undercutting when iran does come on board. >> right. >> in europe. >> and they have just announced an austerity budget, pulling back subsidies, talking about big privatization, they are basically preparing for lower for longer. there's nothing to indicate right now the saudis are prepared to do what they did in '08 and '09. opec said we will take 4 million barrels off the market, no signs they will provide any safety net right now. >> you say prices could be in the 20s for an extended period. how long of a period? >> we believe you will start to see a stock draw in qc, we think that prices will trend higher in q4. so we don't think this is going to be the story of the year, but for this quarter certainly and the next quarter, we're struggling to find what is the story that's going to move us significantly higher.

>> there were rumors of a possible opec meeting, denied, the next meeting is scheduled for june. >> a long way to go. >> do you think they would cut then or what has to happen for them to do that? >> by june at that point at least they will know the iranian barrels. i was at the december meeting they said we can't cut now, we don't know what russian production and u.s. and iranian numbers. at least that will all be known by june. i'm not betting they will pull the barrels at this point. >> they kind of walked away from the idea of controlling the supply at this way. who does that leave as the choke point for the supply -- >> non-opec producers to balance the market. they basically said we have no ceiling this point on our production. >> yeah. at least the u.s. maybe and they just keep trying to pump as well. got to service those debts. >> somebody has to kapt late. >> or blink. >> yes. >> not happening. helema good to see you. two of the worlds largest banks out with some pretty bearish calls today, jpmorgan says in contrast to the past be

seven years when we advocated using the dips as buying opportunities, jpmorgan saying we believe the regime has transitioned to one of selling any rally. then there's royal bank of scotland, calling for a cataclysmic 2016 saying, quote, sell everything except high quality bonds. this is about return of capital, not return on capital in a crowded hall exit doors are small. all that a remarkable document from rbs. let's talk about that, among other things in our "closing bell" exchange today, greg sarian, alan valdez here on the floor of the new york stock exchange and jack a rouge yan. you taught everybody's attention late last year when you were making -- you raised that yellow flag for the first time in quite a while about the u.s. stock market and now people are jumping on board here. >> yeah, bill. when you see warning signals you

have to let people know and that's exactly what we saw, a combination of what i felt were contracting earnings, a multiple that was expanding in kwha called a stealth manner but more importantly it was this flow of funds and what was happening in oil. ever since we took out $40 on the way down you have seen selling coming in, these sovereign wealth funds and i have said it time and time again totaled trillions of dollars. we didn't say anything when they were buying our market and taking uls up to these lofty levels, now they're selling what they can, not what they want and this is one of the reasons this is liquidation. we are not seeing the rotation, money going into bonds, the bid in gold. this is pure and simple liquidation, money that needs to be repatriated back home. >> as we look at the biotech carnage, it's been overdone and swept up in something here that's not fundamental? we will be talking a lot to companies today just about this topic, so what kind of context would you add? what opportunity would you see in the biotech space?

>> biotech had a great mere in 2014, a record year, 2015 the deal flow was equal as the 2014 but the deals were bigger. i just believe, kelly, that this is going to be a year of heightened volatility, immediate returns in the equity market across all sectors. i think it's important for investors to take this opportunity as our guests were saying before and rebalance portfolios. even with the carnage of the last few weeks. growth stocks are jouft per o forg value stocks. investors should be taking those gains and deploying that capital to municipal bonds and dividend tank stocks. portfolio location is going to be really important in 2016 for people to make money from a tax perspective. looking at muted returns, where are we going to keep what we earn, look at your tax deferred accounts, money goes into 401(k)s, iras. that's where we should place things that generate ordinary income, k-1, short term capital gains.

>> alan, clearly the psychology in the market has changed, jpmorgan just pointing out correctly that you are not buying dips these days, you're selling rallies, that's exactly what's been happening here. what do you see going on and if oil does head into the $20 range what happens to stocks, do you think? >> i think it's pretty obvious, stocks are just going to follow oil. we've gn seeing it all along. you're right, traders aren't buying on the dips anymore, they're sitting back and watching it. you know, today is the perfect example, i mean, here we had a great day up 120 -- 192 points and it still comes in. i think we've got a long way before this settles, the dust settles and we will see what happens, but right now they're sitting on the sidelines. >> i wonder as we go back and look at some of the rhetoric here that story out of rbc, jack bouroudjian was picked up worldwide, this warning for people to get out of stocks and only hold high quality bonds, even in that note they appear to say they see declines of 10 to 20% coming. so it's not exactly catastrophic unless you are a professional

money manager or somebody who needs that money in the very near term. do you think at this point people are projecting forward the period we have been through? how bad an outlook do you see here? >> kelly, i was saying to you i think it was at the end of last year i see 10 to 30%, somewhere in that neighborhood, 20 to 30. one of the questions you asked me what does the average investor do and i said you probably wait and get in at the right time, you probably have a good chance to buy stocks on sale during the course of this year. i do not think that what rbs said is the right thing to do. i don't think liquidation and getting out of everything is the right thing. remember what rbs went through, they almost went out of business in '08. every time a market goes down they start to see this vision and nightmare scenario. but i do tend to agree with what jpmorgan said, i think that this is the time that we are selling rallies, i've been saying that now for the last few weeks, but there is going to be a time and it could be very quickly, it could be within the next couple of months where we see real value in stocks. and that could be just like it was in '98, within a six-week

time frame and we have to be ready to pull the trigger when that happens. >> greg syrian, even the most defensive investors out there feel like you should still at least look at maybe those companies that have a good balance sheet and are still raising their dividend even in this volatile climate. is that a place you look at wz? >> i do agree and i think those types of high quality, high dividend paying companies have weathered storms like this. that's where you want to use any advances that we get in this first part of the year. we're seeing pretty good economic data and given how companies have lowered their q4 estimates i think you're going to see an earnings season be a catalyst, but any advances you should be moving into higher quality companies like that to weather what could be a more challenging back end of 2016. >> alan valdez, you want to venture any levels you will keep an eye on here? we've been blowing through a lot of them here recently. >> that's the problem. unlike the past, say, eight years where bad news on main street was good news for wall

street. bad news now is just bad news. >> all right, guys, thank you very much. appreciate your thoughts today on the market. thank you. >> 45 minutes to go here. the dow has been like yesterday up, down, back up again. that's where we stand at the moment. the dow is up 28 points, the s&p adding three, the nasdaq doing a little better today, it's up 16. >> in biotech the knicks-month chase is over. shire's ceo discusses the $32 billion acquisition of ax al at that. >> and later bullish on china, it's starbucks ceo howard schultz giving us an exclusive interview on the company's push to open 500 new stores in china this year alone. stay tuned. those new glasses?

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the open this morning, now up just 33. the s&p is up 4, the nasdaq up 17 points. oil hitting $29 plus a barrel today, first time since 2003. aetna and anthem have been spiking along with the companies that they are acquiring, that would be cigna and human in a, anthem and aetna say they expect profits to rise this year. anthem adding it enrolled more members than anticipated in 2015. >> even united health the nice performer on the dow today. some big merger news in the pharma space, shire buying baxalta creating the biggest rare disease drug maker.

meg tirrell is at the jpmorgan health conference in san francisco. she joins us exclusively with slier's ceo dr. fleming or not skof. >> fleming, thank you for joining us. >> thanks for having me. >> out of all this huge news at this conference your $32 billion deal announced yesterday was probably the biggest. initially your reaction from investors was a negative one. baxalta's stock fell. how are you communicating to them and how has the communication been back from this deal? >> i came out of a lot of meetings with investors. our long-term investors totally understand this. it's a good deal and creates significant value for shareholders and a unique platform that is going to be the world's leading rare disease company by a wide margin. our shareholders are behind t it takes a little explanation but i think they are absolutely supportive. >> it sounds like one of the things you had to work out was the tax free status of the deal. but you had to change some of the terms of the deal.

but you're saying you're confident that you will preserve that in the way the deal is structured here. >> yes, some people said it took a long time, it took us six months. we did significant diligence and one of the areas was tech. we had the world's expert looking at this and we got the highest opinion that this is a tax free spend. we are confident in that and we looked at all other areas of diligence of course. i meet a lot of the employers and i was impressed. great people, great cultural fit. i think we are off to a good start. >> one thing that folks pointed out about the baxalta business, it is big in hemophilia, changing the paradigm of treating that potentially with gene therapy. trying to cure hemophilia. how do you look at the i don't think jeft of that franchise. >> we did significant diligence and interviewed physicians, patients and payers, i managed one of those businesses before. i think it's obvious that baxalta is a leader, they know this business very well, they have a number of new innovative products coming to market they

are launching a longer acting dynovase. all areas have competition but they are as well positioned as anyone. they even go gene therapy. i'm confident about this business and their longevity. >> bill and kelly. >> just a question as we look at the business that you are building here, it sounds like it's going to be a huge one. how much will it rely on the orphan drug laws that exist, the ones that give special encouragement for these rare drugs but that a lot of people are starting to say are they too generous? if there's some provisions of that that are rolled back down the road how would that change the commission of this deal or your plans? >> no, i don't think anything will change. the rare segment is one of the most attractive segments of healthcare, there is a lot of significant ultimate need, 7,000 rare diseases many of which have no treatment, there's significant opportunities in this marketplace, we've grown strongly and created the

undisputed leader in rare diseases. this is an attractive sector to be in. >> i'm interested in the overlap between what you're doing the and the orphan drugs that allow for faster fda approval and other kinds of economic benefits it's been successful. if those are pulled back on in the years ahead as some analysts and politicians suggested could happen how does that affect the ability -- how does that affect your pipeline? >> the company we have and the company we're creating together with backs an at that is a patient focused culture. i think as long as there's need and as long as you develop medicines that are differentiated you will get them to market whether they are orphan or not, there are more opportunities in the orphan or rare disease area than any other area of healthcare. >> bill griffeth here. from what i read the tax rate, the effective tax rate for the combined entity after you have merngd with baxalta would be 16 to 17%.

baxalta's is currently 23%. you had to walk away from the deal with abvi a couple years ago because the president obama administration was against the tax inversions that had been so popular at that time. do you think you will have a problem with u.s. regulators in this deal as a result of this drop in the tax rate again? >> this is a very different situation. this is not about inversion. this is not about tax. this is about growth and creating a leader in rare diseases. we are an irish company so we have a different tax rate, but this is not about inversion. this is about growth, innovation and building a great company in rare diseases. >> i have to ask you -- >> the irs -- >> i'm sorry. he was asking have you heard from the irs? >> what you do in this particular situation, you go to the wealth experts that assess the situation, you get a opinion, we got one of those, this is an uneek volunteer can a cal opinion so i'm very

confident in the tax free nature. >> i think that's all the time we have. thank you for joining us. >> thanks for having me. >> bill and kelly, back over to you. please do stay tuned for the next hour of "closing bell," we have a very interesting discussion focused specifically on drug pricing. please say tuned for that. back over to you. >> appreciate it, meg. thank you. >> thanks, meg. >> where are we going? >> oil settles -- >> okay. oil prices settling moments ago. he said. jackie deangelis, why did prices settle much later than usual today? >> it was a little bit unusual, about a 45-minute delay for the settlement price here. what we know about how they calculate the settle at the cme, it's a computer-run program, a weighted average of the last two minutes. that's why a bell goes off at 2:28 to indicate from 2:28 to 2:30 that's what's happening. i think it probably was just the volatility at the end of the day did put a call into the cme, they haven't gotten back to me

just yet. it doesn't happen a lot, but we've certainly so en it happen before. that said the settling price was $30.44. guys, this was a very volatile day. there were four different runs at that $30 mark before we crossed that level and hit the intraday loan of $29.93. i'm not surprised we would have this kind of delay. if we have more information as to what happened, if there was some sort of a glitch we will bring it to you but it's not really alarming. obviously a big day for oil rises. i want to point out a lot of these big calls on oil right now adding to the pressure. standard charter take making a call for $10 oil saying that the sly -- demand equilibrium is off balance and you have all these other factors impacting us now, currency and the equity markets and other asset classes. traders on the floor will tell me crude oil prices turn when the equity markets turn and i know the equity guys say it's the other way around, but either way a tough day. back to you. >> jackie, thank you very much. i really am having déjà vu

today. it was at this time yesterday that we had to show you a chart of the dow jones industrial average because it started to rally and here we go again. >> i wonder as mike santoli suggested we will ask him next hour, too, is it a coincidence that once you finally get oil settling there is a little bit of a levitation here in the equity space. >> well, whatever. we are at the highs of the session right now. we have a news alert on congress' audit of the fed bill. sue herrera has details on that for us. >> i do. the audit the fed bill has been defeated. the senate defeated the audit the fed bill. the count was 53-44, 60 votes were required for passage. that bill would have opened up fed monetary policy to gao audits but it has been defeated. back to you guys. >> thank you very much, sue. appreciate it. on a day when we will probably hear a lot more from president obama's state of the union later about various approaches to regulating this economy. 35 minutes to go and look at this, the dow up 108 points, we

will see if it can hold, s&p up 13, even the transports are positive today, the vix is lower and the nasdaq up 40. >> what time karner plans to do with the jewel in its crown, that would be hbo. julia boorstin has been working the phones and she will have the latest coming up. later the starbucks ceo speaks with us live from china. we will discuss the coffee giant's big plans for big red. os more of a control... enthusiast. mmm, a perfect 177-degrees. and that's why this road warrior rents from national. i can bypass the counter and go straight to my car. and i don't have to talk to any humans, unless i want to. and i don't. and national lets me choose any car in the aisle. control. it's so, what's the word?... sexy. go national. go like a pro.

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i'm just going to point out, you know, oil finally settled, stocks finally move a little higher, the dow is up 121 points, the s&p having a pretty nice session all of a sudden, up 14. we were negative by almost 100 points an hour ago, bill. >> yes, we were, kelly. >> another turn around. >> okay. let's take a look at shares of time warner up seven out of the last eight trading days amid some mergers and acquisitions activity and activist chatter. julia boorstin joins us with some of the details. what's going on there? >> well, bill, time warner ceo came out here for the golden globes and has been meeting with major investors on the west coast as he always does this time of year. i haven't heard what went on in those meetings but according to a source time warner does not plan to sell or spin off hbo. as for the potential to sell the company outright, my source tells me at the right price any company of course including time warner is for sale, but it's not a path that buick cass is currently pursuing.

he just renewed his contract through the year 2020 and has talked extensively about the value in hbo and in turning it into a direct to consumer brand in addition to being part of the tv bundle. it is worth noting that hbo gives time warner negotiating leverage for its other cable assets including tnt and tbs. since fox made a bid for time warner in 2014 the company has been the focus of much m&a speculation, seems like that is not ending anytime soon. bill. >> all right. julia, thanks very much. julia boorstin with the latest. time for a cnbc news update with sue herrera. >> here is what's happening this hour. california air quality regulators rejecting volkswagen's recall plan to fix vehicles that were programmed to trick government emissions test, they say the plan did not meet its standards. volkswagen saying it continues to work with regulators. chelsea clinton making her first public appearances of the 2016 presidential campaign on behalf of her mother, hillary.

she had three stops scheduled in new hampshire today beginning at an early childhood forum in concord. the cdc says two states are reporting widespread dplu activity, maryland and north carolina. cases also increasing in connecticut, iowa, massachusetts, new hampshire, pennsylvania and virginia. flu season typically peaks in february. and the william and sue gross family foundation donating $40 million to the university of california irvine to establish a nursing school. it is the largest single gift ever to the university. overall that foundation has donated nearly $800 million to various causes. you're up to date, guys. they are the largest single donor to doctors without borders, which i didn't know. >> me, neither. i'm wondering if i still have time to get my flu shot. >> i'm sure most doctors would say you do. >> i'm sure. >> one of the local drugstores they will do it. >> i tried the other day but we switched healthcare providers and then i was going to pay the $40 but that felt silly.

>> first world problem. >> bill doesn't believe in flu shots, either. >> that's correct. as long as she gets it i'm covered. >> protection from the herd does not work, bill. >> it's how i roll, sue, as you know. >> thank you, sue. >> 30 minutes to go here. i'm going to get some lie sole down here going. the dow is up 83 points now, the s&p 10, the nasdaq up 32. >> up next a leading trader, he is already talking it up here, give us his take on how we could close out this shaky session. look, a special friend is with us as well. also ahead the national economic council director will tell us whether china or oil ranks higher on the white house worry list at the moment. stay tuned. ill? ill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions

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that's why i switched from u-verse to xfinity. now i can download my dvr recordings and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. these markets fluctuating in the last hour. the dow is up 85 points, the s&p 11, the nasdaq 35. we're keeping a close eye on oil, all sorts of commodities hitting multi-year lows but some optimism coming to the floor with 25 minutes to go. >> another crazy day in this market. we are sitting up about 90 points on the industrial average. joining me on the floor is kenny polcari. i mean, it's just a clear --

>> it's been -- >> a repeat of yesterdays trade. >> it's all about oil, it's been an interesting trade, we started off strong this morning which a lot of people thought was going to be one of those days it would be a rip your face off rally and if quickly failed once we hit 1950. i think we will close higher as the day goes into the bell. >> actress jane lynch is right behind you, don't look, don't turn around. >> okay. sue sylvester from glee. >> i know who she is. >> and what is she doing here? >> she has a new series on cbs called angel from hell. >> how are you doing, guys? i just noticed the vix is down. that's a good sign. >> is that a good thing? >> oil broke 30. >> you saw what happened to oil. >> where do you see oil bottoming? >> i don't know. no math questions, please. >> tell us about angel from hell. >> it is on cbs, cbs is up, too, which is a great thing. i play a guardian angel with maggie lawson, i'm a crazy

person, someone who sleeps in her car, we don't know. half hour comedy and it's fast. >> i'm a crazy person. >> like you. >> as you found. >> you're my guardian angel. you're my crazy guardian angel. >> are you a sue sylvester type of angel. >> i'm much kinder. she does put her foot in her mouth a lot and destroys things -- it's kind of like the phoenix rising from the ashes, she destroys everything before it gets better for allison. >> we are thrilled to have you here today. >> i'm thrilled to be here. >> i'm tell -- you get that energy, that buzz when a real star shows up on the floor. >> bless you. i'm going to do that closing bell. >> you're going to ring the closing bell today. >> thank you so much. >> thank you, jane. jane lynch joining us, will be ringing the cloez today. where were we? >> i think they're going to buy them into the bell. >> okay. >> i get this sense i think the market wants to close on the high. oil broke 30 the market did not break and they were waiting for that to happen and it didn't

happen. i think that's a signal at least today we will close up high. >> do you know who i see no you? >> who. >>? i'm kidding. see you later. >> and the vix is down 2 points. very nice. oil is also falling sharply again today, it's down nearly 20% since the start of this year. more than 40% over the past six months. here to discuss the potential impact on the global economy, live from the white house in a cnbc exclusive is jeff dplie i don't know, director of the natial economic council. great to see you. i just wonder what kind of conversations and concerns the white house has about the drops in oil, what's happening with china's economy. where is most of the focus and concern at the moment right now? >> thank you, kelly. today is a good day to be talking because it's the state of the union, the president will be addressing the nation tonight so it's a good time to take stock and if you think about how far we've come in this economy, 70 straight months of job creation, 14 million jobs, in terms of the impact of oil,

that's very good for consumers. in fact, it's the equivalent of a $750 tax cut for consumers and we're seeing that in consumer spending, which is one of the strong parts of our economy. >> sure, but -- i was just going to say in houston, though, united airlines just told us, you know, that's a big hub for them, they're not seeing quite the traffic and revenue they were hoping for, their shares are hurt today and you guys know well that that part of the economy that was supported by the high oil price is now reeling. >> clearly such a steep decline as you described a few minutes ago can be disruptive and we're monitoring that situation. at the same time, you know, overall the net impact on the economy is very positive, as i said, a $750 equivalent tax cut for americans and you're seeing that impact on consumer spending which is one of the bright spots in the economy. >> this will be the president's

last state of the union and we get the sense that he doesn't have as ambitious an agenda for the coming year as he has had in the past for clear reasons. what is expected to get done, though, for the president and congress this year? do you get -- i hate to use the terms gun control measure, but, you know, that's been a clear initiative of the president early in 2016. is that on the agenda? do you think you will be able to pull that off before the end of the year? >> i want to be very clear here, bill. the president has his foot on the gas, the president and his whole team all the way through to the very last day of his term doing everything we can to help the american people. tonight you will hear the president talk about the future, not just the next year, but the next generation, and his optimism about the future of america and the future of american businesses and american workers, you know, that said, as i just said, we will continue to push very hard. we believe there's an opportunity to work with

congress to get the trans-pacific partnership passed into law and that's the equivalent of 18,000 tax cuts for american businesses. it's good for american workers, companies that export in america on average pay 18% more. so it will be a top legislative priority to work with congress to get the trans-pacific partnership passed in 2016. >> jeff, do you guys support americans buying powerball tickets? >> i'm sorry? >> do you support americans buying powerball lottery tickets for the drawing tomorrow? >> as the president's economic adviser i think i will stick to advising on economic policy. >> if the president asked you should i buy a powerball lottery ticket what would you tell him? what would your advice be? >> my advice is to focus on the economy and to have a great state of the union tonight which we are all looking forward to and everybody should tune in at 9:00. >> well done, jeff. thanks for joining us. >> thank you for having me. >> jeff zientz at the white

house. >> a guy who knows a thing or two about where we are here today new york stock exchange. >> nice try on that one, too. >> listen, it is getting a little out of hand. >> it is way out of hand. they better hope that there are multiple winners for this lottery tomorrow night, it's going to be above $1.5 billion. that's just ridiculous. did you ever enter sh? >> no. >> me, neither. dow is up 86, s&p is up 11, nasdaq is up 36 points. >> apple is rising on an upgrade by bank of america. we have the details and a round up of the other big tech movers today. that will be straight ahead. >> also ahead tears about china's economy and it's currency aren't worrying the starbucks ceo. he will join us live from that country to tell us why he is so bullish on china. that's later on the "closing bell."

the dow is up 123, but one of its former components, alcoa, down 9% today on the disappointing quarterly revenue that you reported on last night in the "closing bell," kelly. analysts say that they are concerned about aluminum pricing and the sustained oversupply. what a familiar story we're hearing in a lot of commodities around the world right now.

>> even alcoa shares were higher when the report hit but not the case today. bertha coombs is over rounding up the big movers for us. >> it's been quite the session, apple has held up throughout. started the session above $100 a share, moving back above there. bank of america upgrading it to a buy from a neutral. they give it $130 price target. they see 30% appreciation over the next year. they cite their own survey that shows apple still topped in china and people in china actually upgrade their phones it appears much more frequently than we do, more quickly. so they think that is a plus. take a look at the nasdaq today, though, it has been quite the reversal. we were up, it's been 100 point move on the day, at one point it looked like we were headed back toward a record 9-day losing streak, once again, but we have come back off as apple has raised and the fang stocks have regained a bit of momentum here, you know, the folks over at

monster ringing the closing bell it seems as though some of these stocks have gotten a little bit of that juice from some caffeine. the biggest reversal of the day, take a look at the ibb, that's the etf for biotechs. biotechs started strong, then started to crater in the middle of the day. they are still some of the worst performers here, really not getting that boost out of jpmorgan that they normally do, but nonetheless it looks like biotechs are going to end up on the upside of the day. back to you. >> all right. anything could happen. still 12 minutes to go. thank you, bertha. >> we've seen just because of the kind of activity in the last couple sessions we've seen 50, 100 point moves in a short period of time. for now the dow is at pretty much the highs of the afternoon, up about 126 points, the nasdaq is up 50 and the s&p 17. >> up next, the case for investing in europe despite increasing pressure based by german chancellor angela merkel

over the migrant crisis and that economic slow down as well. stay tuned.

all right. just inside ten minutes to go, the dow up 110 points, art cashin just stopped by, this time $200 million to sell going into the close, a minor

imbalance to the sell side here. >> yeah. keeping an eye on oil price, many people are here from the next wiggles in this market. >> joining us is david mark us from ever more global advisors, you are here to pound the table for europe. do you like europe because you don't like the u.s.? >> i like the u.s. it's just that i like europe a lot more. i think it's a lot cheaper. after years of underperforming just a lot of cheap stocks there and they are going through radical changes. you have breakups, restructuring, spinoffs. so in this environment of low growth, companies have buying growth, you're seeing m&a activity exploding. actually, you're getting a convergence now of the bottom up, which is the cheap stocks and the top down, cheap oil, cheap interest rates. it's the combination of the two together i think is powerful. investors aren't focused on it. >> you have a number of specific companies here, vendi. marine harvest which is a salmon play, ck much son, company

people there. going back to the big picture for a second, the wrap on europe now is that 10% of its sales are to asia pacific and the u.s. is only 5% so why wouldn't you stay in the u.s. if you're concerned about china? >> the reality is the u.s. still the largest market on earth for almost every product and the europe is coming off such a low base they're still coming up. okay. we'll grow a little slower but the growth is actually picking up. they haven't had any. if it's a little less than it would have been otherwise that's okay. the valuation has more than factored that in. vivendi are going through restructures, that's universal music. >> are you unsettled by the seeming leadership crisis facing angela merkel right now that ratcheted up over the weekend here. there are people who are wondering if she will be able to remain in office. >> sure. look, she's really spearheaded this movement of europe forward. >> right. >> really saved europe single hand idly.

of course, it would be a concern if she was not in office. i don't think that would be the case. i'm not here to make market calls that way -- >> but it is something you have to keep in mind as you make those calls, though, right? >> absolutely and we're tracking that. but the fact s again, the companies are so cheap and i think that it's a chance to be a buyer. today you had jpmorgan coming out telling people to tell, rbs saying sell when you can. these are the chicken littles. they're calling for the sky to fall and there's bargains lying around all over the place. merkel it is a concern but it doesn't mean the game has changed at all. >> very good. >> all right. david, good to see you. thank you. >> thank you. >> david mark us joining us on europe today. we are coming back with the closing countdown with another crazy day on wall street. speaking of china ceo howard schultz says forget all the fwloom and doom, he will join us live to explain why he sees a ton of potential there still. you're watching cnbc, first in

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all right. into the last three minutes of trade here for this crazy tuesday. the dow up 123 points right now, i will just show you -- i mean, if we laid yesterdays trade on today's trade, they would be very, very similar. the industrial average up 192 points on the open this morning and then lost all that and more after oil began its slide. we were moving higher this afternoon. pretty much unlike yesterday,

but we are up, what, 124 points right now. there is crude oil which as we've mentioned at least once today dipped below $30 a barrel, $ $29.93 i think was the low of the session going bhan to 2003. we haven't shown you the ten year recently, but the ten year hit a low of 210 for a period today. that is the low going all the way back to october of last year. not too far, but at least we are still seeing a slight decline in the yields along the treasury curve there. >> absolutely. so the one thing that's interesting about this whole move as we talk about -- the idea, first of all, up volume and down volume just about equal today yet we are seeing that 125 point gain. one of the things we want to take a look at is this idea about the dynamics of the market, the small cap under

performance. if you look at ruggel -- we just showed you the dow up 125 points, the s&p up about percentage terms the same amount. the russell 2,000 index not up nearly that much. five minutes ago it was flat, we will see right now -- >> any moment now -- there it is. >> it's up about a quarter to a third of a percent right now. just eeked positive, but still underperforming large caps, that's been a theme we have been seeing for a while. the question is whether or not -- something has got to give, either those stocks and the large caps fall down towards the small caps or we rise back up again as the whole market. you don't see that just as of yet. >> how unusual to have the big houses coming out with calls like they had today -- >> bearish. >> one of them said sell everything. >> except government bonds. >> when was the last you heard that kind of a call. >> not just that, too, but ubs, jpmorgan, citi group. it's almost become the consensus view for wall street at least

with the current market is very bearish. all of these people are saying we're due for some bear market event, earnings momentum is slowing, jpmorgan saying the buy the dips strategy is no longer going to work, maybe now it's about selling rallies, all of that playing into the discussion about what's going to happen with the market. >> i didn't ask in the booth for this, but if you have time if you can show us a one-year chart or six-month chart of the vix as jane lynch pointed out it's trading lower today. we are not even close to where we were last august on the volatility index when we -- the last time we were obsessed with china and the problems they are having there. >> you can see that. we've got that 45 level on an intraday. >> that was the day we were down 1,000 points on the open. >> we got up above 50 on the vix at one point. it's a measure of volatility right now we will see if it starts to come back a little bit. that will be a big key in the next coming weeks whether stability is in the market. >> thanks, dom. we're going out with a gain of about 124 points on the

industrial average on another volatile day. our new friend, jane lynch, promoting her new series angel from hell on cbs, she's ringing the closing bell at the big board. over at the nasdaq it's monster beverage. stay tuned, much more on the second hour of the "closing bell" with kelly evans and company. i will see you tomorrow. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. another roller coaster ride here on wall street. we are finishing with the dow up 118 points today. not actually the highs of the session, but, remember, we are in the red pretty significantly just a couple hours ago. we will talk more about what's been going on here in just a moment. the s&p finished up 15 points, the nasdaq up better than 1% today, up 48 as those biotechs actually helped. they contributed to that rebound in the late session as well. we will have more on this wild trading day in just a moment. plus, don't miss an exclusive interview with starbucks chairman and ceo howard schultz live from china on the coffee

giant's aggressive expansion plans in that country even as concerns about china's growth rate persists. now let's get very much more on today's market swing. joining today's panel we have mike santoli along with rob cox. welcome. for more on today's market "fast money" trader guy adami joins us as well. let's get straight over to the nymex with a look at the action in oil today. it went below 30 bucks a barrel, jackie deangelis. amazingly enough stocks finished in the green. >> it certainly did. it was a rough day for oil. remember, oil has closed down every day, every trading day, this year. so certainly getting off to a rocky start here. the fact that we broke through $30 was very significant today. the intraday low $29.93. really interesting, a couple of different points that really break down why this happened today. the first is obviously the supply and demand story. we're seeing that supplies are going to continue to go higher and the eia said we're keeping our 2016 demand forecast flat.

that's one piece of the story. the other is these bold calls that are coming out on wall street. standard charter just the latest one to come out this morning and say it expects crude oil to touch potentially $10 citing factors like currency issues and volatility in other asset classes as well. then uh-oh peck coming out and saying we are not going to have an emergency meeting even though some have asked for t the only time opec would meet, emergency or not, is if it was actually ready to cut production. the next meeting is scheduled to be in june. a lot of reasons that oil prices could continue to go lower here, guys. >> great point, jackie. thank you so much. on the back of that turning, guys, just looking -- we should mention we have csx earnings due out here any moment from the railroad giant. but broadly speaking this isn't even just about oil. commodities of all sorts are still getting hit, mike. are you surprised the market was able to finish positive with all of that going on? >> on one level, no, because almost all the upside in the stock market was after the nymex

close of oil. it was almost as if the minute we didn't have to watch oil go down anymore exihe caequities c rally. that being said you're absolutely right to point to the industrial metals, the stocks related to that commodity super cycle. there is a deflationary scare moving through the market. the market does not like things that feel like deflation whether it's devaluation of china's currency or the further commodity weakness. >> and coal being a prime example. it hits on the business of csx. look at joy global today, that stock was trading at 45 and now it's at 7.50 because of the exposure there. where does it end? >> to mike's point there is a deflation. i'm not sure it's reached into that 70% of economy that is the consumer. i don't think a sense that the consumer is coming back in the standard typical deflationary environment you have like japan you had for two decades. you do have this broad based crash of the commodity -- i

don't know if you would call it complex. csx is a great microcosm of that. they have an idiosyncratic problem, which is their second largest car load happens to be coal. >> right. >> so they also ship stuff like toys and everything else that you want around the country which might be fine when you've got growth of 2, 3% in the economy, but when you have such a reliance on something like that it just feeds right through you. >> one of the worst performers in the s&p 500, alcoa, aluminum not skpused from what's happening with commodities. >> did not we have this conversation -- i'm going to be happy today, because i'm a happy person, but we had the conversation yesterday. we talked about claus's interview with you and jim and talked about he hasn't seen a quarter he hasn't liked in the last three years and should probably fade the move. respectfully i think he has done everything he can but these are declining businesses. on a positive note, however, this is the first two days we have seen declining oil but the

s&p sort of bucked the trend. great day yesterday, the fact that it held 1900 and closed somewhat positively and again today. do you know what, it had every reason to continue to go down, it didn't, it reversed, closed higher, we said on our show yesterday i think 1970 the s&p is achievable over the next couple days and then we will see what happens from there. >> okay. that would still be a nice move. just sticking with the theme here in commodities so people know it's not just about oil today. freeport mcmoran. how much has it lost in the last couple trading sessions, down another 10% today. >> the arch coal bankruptcy has reminded people these are levered businesses, if you look at credit defaults swap market they're raising the likelihood a lot of these companies will either be forced to restructure or opt for bankruptcy. i think that's what you're seeing wash through a lot of these companies, cliffs narls, it was a boom stock not that go ago and now it's under 2 bucks and going south still. >> on that note we have earnings

from railroad operator csx. mary thompson has the numbers for us. >> for the fourth quarter the company's earnings coming in slightly ahead of tagss at 48 cents a share, analysts were looking for 46 cents a share. a decline from the piracy's fourth quarter. revenues coming in below expectations at $2.78 billion. analysts were looking for $2.86 billion. the company also providing guidance for 2016. it dpekts its operating earnings to be below levels that they were in 2015. the company citing the impact of continued low commodity prices, a strong u.s. dollar and an energy market transition, all of that expected to pose further challenges in 2016 for the nation's third largest railroad operator. once again earnings coming in ahead of expectations, still down from the prior year, revenues were light and the company giving disappointing guidance for 2016 expecting earnings to be below 2015 levels. kelly, back to you. >> mary, thank you. rob, what do you do with the csx here? >> with all of these companies you've got the problem that mike

just mentioned, you've got too much debt, you've got a problem market, but you have to ask yourself do you have competent management? i mean, competent management may see you through some of these things, something like a glencore, csx, what mary just said is that they were 2 cents above where their expectations, that may have been a sandbagging mechanism or it might be that these guys actually can manage through the cycle, they aren't going to have the kinds of problems others have. this is what makes this an incredible right to right about and invest in, easier to write about, for sure, you really are going to separate wheat from chaff and good management and good plans sheets. a crafty balance sheet there's no way you can manage through it. >> something the railroads are dealing with is increased competition from trucks. mike, as those fuel costs fall for trucks and as the type of thing they're carrying may be different from, say, a coal suddenly that looks like a more viable option. >> right. the transport average down 24%. so none of this really comes as a surprise to the markets and

yet it still working its way through and we are still having the estimates have to come down if you believe csx's guidance right now. all these things -- the theme is just not enough to go around. there's not enough to go around for the infrastructure we put in place. >> i think she mentioned it's a euphemism, energy market transition. coal is going away. it's not just trucks, you can put in a pipeline it's cleaner more efficient. >> plit cat reasons for that. >> that's a real problem. >> the csx shares are down on the report after hours 2.5 to 3%. we have breaking news to get to from the middle east. let's get straight to sue herrera. >> u.s. officials telling nbc news specific that irn yan military sources have seize the ten american sailers and are holding them on an iron island in the middle of a persian gulf. it's unclear whether the americans who were aboard two small navy boats strayed into iranian territory, international

territory waters before they were captured. this happened about noon eastern time. the ten americans were on a training mission, their boat experienced mechanical difficulties and it most likely difficulted into the iranian-claimed waters. they were then seized by the iranian coast guard. secretary of state john kerry has been on the phone with iranian officials in tehran attempt to go gain their release. one senior official told nbc news that the iranians do understand it was a mistake and have agreed to release the americans in international waters within hours. so it's a still developing story, but once again, apparently the pentagon telling nbc news and jim la she have ski that the -- the iranians have captured about ten americans who were on a training mission in the persian gulf area and they strayed into iranian waters. it will be interesting to see whether or not this ends up affecting oil in the session tomorrow. kelly, back to you. >> sue, that's a point. just quickly could you repeat

what you said towards the end of that about iran's commentary on whether this was a mistake on what was going to happen? >> apparently secretary of state john kerry has been on the phone with iranian officials, he made a call to tehran attempt to go gain the release of the navy personnel. a senior official tells nbc news that the iranians understand it was apparently a mistake and they have agreed to release the americans in international waters possibly within hours. that's according to officials talking to nbc news. so secretary of state kerry is working right now to gain the release of the americans, possibly within hours, and if it happens sooner than that we will bet let you know. >> okay. sue. thank you. obviously, guy, this comes at a time of heightened anxiety about iranian intentions. there is some concern that the hardliners have been emboldened by the nuclear deal last month. there was a missile i think at the end of last month that ended 1500 yards from an american

ship. do you take this at face value in terms of this being a mistake or how unusual and worrisome to you is it? >> look, i'm not a geopolitical expert here, but there are no mistakes. to me it's not coincidental that it happened seven hours or so or eight hours before tonight's state of the union because i don't believe in coincidence. with that said, you made the point you think it could move oil and, yeah, it could absolutely move oil. one of the points i've made over the last couple months is when we talk about geopolitical we automatically assume that means the underlying commodity needs to be higher. i would submit and i will continue to do so that the geopolitical aspects are forcing crude lower and will continue to do so because that hurts the most amount of people which has been the goal the entire time. >> we heard from helema croft last hour she sees oil down in the 20s, you have to wait for those iranian barrels to come online. as you say, the way that they and others need to raise funds right now the intentions of the

saudis who have cut off diplomatic ties with iran would probably be happy to see that price go lower. >> 100%. again, to a certain extent you could link all this crude move back to russian hostilities in crimea, overlay it and within a couple weeks or so crude started going down as things started to escalate there and it's all being pear shape since. real quick on freeport mcmoran, i think it's fascinating here is a stock that conditions to get eviscerated but you have heard nothing from carl icahn over the last couple months since his last foray in august. either he has to double down here or there's something really, really wrong. i think it's the latter, but we will see what happens over the next couple weeks. >> just one final, final comment, guy, on csx. what do you think about the results? >> we just talked about it. mike just said t you think everything is priced in until you see results like this and then realize it's a lot worse for these guys and gals than the

stocks indicate. i think there will absolutely be a point where you have to buy csx, but i don't think it's $23. i think it could briend lower. valuations are reasonable but you're talking about declining businesses right now. so to me i'd rather buy it on the way up than try to figure it out on the way down. >> we will leave it there, guy. that's guy adami and there's much more coming up with him and the "fast money" crew at 5:00 p.m., including some energy names they say could see massive dividend cuts this year. you won't want to miss that. oil prices plunging today, wti went below $30 a barrel for the first time since 2003. so why are airline stocks still struggling? shouldn't they be doing better? we will talk about that next. starbucks chairman and ceo howard schultz joins us to explain why he's making such an ambitious expansion bet on china amid fears of that country's economic outlook. you're watching cnbc, first in business worldwide. ♪

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we begin with seema mody and a quick market flash. >> shares of tractor supply moving lower as the company has cut its full year guidance. outlook is also below estimates. fourth quarter same store sales decreasing by 1.4%, primarily driven by weakness in the key

cold weather seasonal categories of heating. sales according to the company were impacted by softness in seasonal big ticket items such as snow blowers, log splitters and generators. the weakness in seasonal categories was partially upset. we're looking at shares coming off of lows after hours but still down better than 3%. kelly, for now back to you. >> that's why i love tractor supply, the only time we get to hear about snow blowers and log splitters. now, oil continued its decline today dipping briefly below $30 a barrel for the first time since 2003. you would think airlines would be a big winner here but think again. major u.s. carriers have been suffering since the start of the year, united continental down about 12%. joining us with his views on what's happening here is mike boyd from boyd international group. hi, to you, mike. this seems to be demand concerns on the part of the airlines. what's happening? where is it weakening? >> i don't know. right now fuel prices are dropping, there aren't any squirrels running around the

airline industry right now to cause disruption. i don't quite understand this. i think a lot of it is emotional because the airline industry has never been stronger in the united states. >> if we look at united it seems like they had some softness because of the strong dollar in their overseas operations, maybe some lightness in volumes because of people's concerns about terrorism and those threats and back home even at its houston hub perhaps some softness there, right? >> there could be some softness, united has been the most aggressive in controlling capacity. they are not adding any capacity. the industry itself this coming year will have less than 2% more flights. a little bit more capacity because airplanes are changing. united has been disciplined in terms of its capacity. >> to that point that's been the bull case for years on the airline, no capacity growth, but therefore doesn't all growth come from pricing and are they having a heart time finding top line growth in this environment? >> no question about that. we have frontiers that are nibbling at the edges and they

are concerned about that as well, but overall the real issue is they just raised fares again. i think they have more room to move, their flights are full and they have plenty of demand right now. i think some of it just may be pricing issues where they are a little concerned. >> rob, what would you say about the space? >> well, i mean, i look at the big picture on this. today we had ten people killed in a tourist location in the center of istanbul. we have -- a lot of this goes back to what happened in december with paris. you have to have a question -- although it's really cheap for americans to travel aboard, it's expensive for foreigners to come here. you've got all of these kinds of issues all happening -- that kind of counter act each other. right? even though it should be a great time to get on a plane and in fact full disclosure i was thinking about taking my family to istanbul in march and this thing happened -- >> are you going no you? >> we're going to italy. a little less -- >> you still need planes. >> still there is this concern that i think is across the board and it's going to just slow

people's desire to get out and move around. >> fair enough. mike, thanks for joining us with your perspective. >> thank you. >> mike boyd from boyd international group as we look at the airlines. starbucks is brewing up a huge expansion in china. coming up ceo howard schultz will tell us why he's still bullish on that country while so many investors are worried about that faw tour. first we will be joined by dominoes pizza ceo patrick doyle. it soon grew from a luxury to a necessity. so at&t built a network just for you. one that connects your entertainment, friends, family, devices and homes. we grow as you grow. always evolving to work for you how and where you need it. this is your network. the network of at&t.

welcome back. the state of retail and the consumer. many of the nations top ceos are meeting to discuss that very topic. morgan brennan joins us from orlando and she's joined by patrick doyle. >> thanks, kelly. thanks for joining us today. >> absolutely. thanks. >> let's talk about same store sales growth. for the first nine months of 2015 you posted solid numbers to the point where analysts are saying that you face tough comps in 2016. >> right. >> are you on track for the same type of growth or could it really be tough comps? >> it was double digit four quarters in a row through the third quarter of last year now and so certainly, you know, double digit comps are tough to lap but we feel good about where we are. we think about ourselves as a work in progress. we're constantly trying to figure out how do we get better, how do we do something that's going to make the experience better for the customer.

i can't get into forward looking statements, but certainly we feel good about where the brand is. >> you've been doubling down on technology, one of the things as an investor and analyst meeting later this week. >> right. >> should investors expect for you to be increasing your spending again this year? >> oh, sure. i mean, look, digital technology is incredibly important to us. our customers, it's now the majority of our business and so we're going to continue to invest there. we're going to continue to drive customers there. they like doing business with us better that way and as the brand is growing overall that means we are going to have more ad dollars to spend to continue to get people interested in the brand. >> and i believe mike santoli has a question for you as well. mike. >> i just wonder you operate in an industry that seems to constantly race to the bottom in terms of business counting, in terms of giving consumers better deals for the money. is that something that is a pressure, obviously it's a head

wind toward comps, but how are you navigating that environment where everyone seems to have a cheaper deal? >> food commodities are pretty benign right now so there's not a lot of cost pressure from that side. maybe a little bit on the -- on the wage side, but, you know, honestly everybody has got to find their own way to bring value to the consumer, to the customer, you know, we rolled out a loyalty program now three or four months ago, we feel good about that. so, you know, there's always going to be some price noise out there, but we think if we're delivering consistent value to the customer, continuing to improve their experience that we are going to do well over time. >> one of the things that's been in focus here has been the drive for -- i guess the growth we're seeing in fast casual pizza. blaze pizza been a topic of discussion in this conference. do you see that design it yourself customization pizza trend becoming a threat for dominoes or something you adopt.

>> the food quality, the environment that the customer is in, those things are all important, fast casual has been kind of driving against that, but we like where we are. we like what we're doing with our customers. we're taking our direction from what our customers want and, you know, people do it well, they will have an opportunity. >> patrick, thank you for joining us. >> morgan brennan, thank you so much. really appreciate it. >> we've got some breaking news to get to. let's begin with sue herrera. >> the company has declared a supplemental cash dividend of 25 cents per share. basically the company has declared a $1 billion supplemental cash dividends which works out to that 25 cents per share. ford says it experts record 2015 pretax profits, 2016 will be equal to or higher than 2015 and as a result of that ford as you can see is now down on the trading session but they are expecting record profits. 25 cents per share supplemental

cash dividends. back to you. >> any ideas why the shares would be reacting the way they are? >> that's odd. if you look at the valuations of auto companies people are just not expecting this to last. >> true. >> and so this must be another -- gives people some sort of cat nip that -- >> this is it. >> even the auto asset market is not moving right now, it doesn't feel like it's flush. >> those shares down about 2.4% on that news. we also have breaking news to get on met life. mary thompson has that story. >> met life shares trading up 10% in the after hours session. the company says it's going to pursue a sale, a spinoff or separation of parts of its u.s. retail business. the reason it says is a strategic review of the company but also importantly the regulatory environment. met life has been designated a systemically important financial institution. in a statement the company's ceo saying the risk of increased capital requirements contributed to our decision to pursue this

separation of this business. now, this business would account for about 20% of met life's operating earnings and would have about $240 billion in assets. it's going to be led by met life executive vice president eric steerwalt. the separation will be subject to sec approval as well as market conditions. so met life one of the companies, again, that has been designated as a systemically important financial institution meaning it is subject to regulatory oversight from the federal reserve is separating its u.s. retail business in charge part because of concerns about the higher capital requirements this might have on this business. you might recall, kelly, of course, a number of people have been waiting to see how these capital requirements will actually lead -- or whether or not they might lead to some companies breaking up. it seems that met life will be the first to do so. back to you. >> exactly. mary, thank you. mike, those shares up nearly 9% on the news. >> it's a complete relief. there was a lot of controversy that life insurance companies

whether they should really be -- >> met life has legal action saying that they should not be designate that had way. basically just the math is direct. if it's not a siffe returning can be higher. tremendous pressure on the life insurance general in and this is one bit of relief. >> we will watch and see if there's an ipo coming down the pike. >> we have a news alert on disney. >> ratings of espn's monday night telecast of the college football playoffs national championship declined 13% from last year, the inaugural year of these playoffs, the numbers were slightly better including espn 2 and espnu simulcast. espn says there are other factors at play, including the fact other teams have fans as well as a lower rated blow out semi-finals on new year's eve. espn pointing out it is still the most watched cable telecast since last year's gain.

dow jones is reporting disney will open its first theme park in mainland china. shanghai disney on june 16th. we finally have a launch date after five years of construction. >> those shares not moving too much. rob, there is some concern about when exactly they were going to get this thing open, the theme park? >> people knew it was sometime this year and i don't think the date really matters. i would have thought that the espn stuff, that's the thing that's giving people jitters. >> the overnight ratings were known to be pretty poor. it's a big concern because part of the bull case for disney and the cable business was the sec network, they were doubling down on college football and sports and maybe it doesn't seem like the market is that excited about it. >> on a day when people are more optimistic about media shares those only fractionally lower. >> it is a busy day. yum! brands reporting same store sales in china, the china division, december same store sales grew by 1% year over year.

that includes a 5% jump at kfc, but a decline of 11% at pizza hut. you can see at this point investors like what they have to hear, 1% jump in same store sales in china, the stock up 3.4% on this news after hours. that's yum! brands, kelly. we're going to get more in just a moment on what's happening in china. would you put yum! after having bun through a lot of its difficulties in china back into the positive side of the ledger with regard to, hey, a starbucks at least it's a play on consumer and spending power might still be there. >> i think so. >> i think the market wants to view this that way again, they want to have nor plays like that but they have to have basically a clear story as to whether they are past position. >> the issue -- the idiosyncratic problems where you had these scares, i don't think that's so much the problem. people will look at their growth strategy and say they have already grown a lot. this is not starbucks which is opened in second tier cities, they are already opening in

third and fourth tier cities in china so the growth story is not as robust. our rising drug prices benefiting pharmaceutical companies at the expense of hospitals. we will hear from both sides of that debate next. plus we will speak to the starbucks chairman and ceo about the coffee giant's massive chinese expansion plans.

i'm a customer relationship i'm roy gmanager.ith pg&e. anderson valley brewing company is definitely a leader in the adoption of energy efficiency. pg&e is a strong supporter of solar energy. we focus on helping our customers understand it and be able to apply it in the best way possible. not only is it good for the environment, it's good for the businesses' bottom line. these are our neighbors. these are the people that we work with. that matters to me. i have three children that are going to grow up here and i want them to be able to enjoy all the things that i was able to enjoy. together, we're building a better california.

let's take a look at how we if you know initialed the day on wall street. it was quite a volatile one towards the end. the s&p added 15, the nasdaq finished up about 48 points. although crude oil, this, again, was sort of the trouble with the market, especially at the lows of the session which was only 90 minutes before we closed. in any case it breached the $30 mark, traded below there briefly and is down 2.5% on the session today. pharmaceutical companies are under pressure as drug prices continue to skyrocket. this capturing national attention among consumers and congressional lawmakers. presidential candidate bernie sanders tweeting today, quote, when millions of americans cannot afford the drugs they need we need a leader at the fda who is prepared to stand up to the drug companies. meg tirrell joins us with along

with dr. ron cohen, dr. peter bott and, ivitsa molinski. kick it off, meg. >> thank you so much. thank you guys all for joining us here. >> pleasure. >> maybe we can start with you, you can kind of help us put into context where we are in the discussion on healthcare costs and drug pricing specifically right now. why is this such a focus at this conference? >> well, it's been a focus in washington for over a year i would say, costs overall in pharma pricing. ron was saying earlier it's been brought up at every single session. it's not just brand prices it's generic prices. so i think there's really going to be a spotlight over the next few years regardless of who takes the white house. i would really argue that the landscape has already changed. we've seen some policies passed pertaining to bio similars and generic price hikes that never would have passed the last test

before and last year, 2015, those were able to pass and see the light of day. so i would argue that things have already shifted. >> ron, i want to ask you both as the ceo of acorda and chair of bio, so speaking on behalf of the biotech industry, how are you viewing this industry and the pressure that's being felt on biotech and pharma companies about the pricing of their drugs. >> there is a tremendous amount of pressure now. every day some major media outlet has one story or more about the issue. so let me just say at the outset there are issues with respect to biopharmaceuticals and how they get developed and pricing and so on. there are clearly issues. what is dismaying and i think counter productive is that the conversation is not focusing on the larger issue and the context for the issue which is that our healthcare costs overall are astronomical in this country. we're spending close to 20% of our gdp on healthcare costs.

drugs are about 10 to 14% of that, hospitals alone are 30% of that and we're not having the right conversation in my view, which is, yes, we need to make sure all patients can get access to the drugs they need and the medicine that they need, but they also need to get access to everything else in the healthcare system and we need to have a systemic discussion where everyone who is part of this system is sitting down in good faith and saying, how can we revise this whole system so that we can give accessible, affordable care to patients who need it, and that's why we exist, but at the same time make sure that we have the investment we need to we get the next therapy out the door for alzheimer's, breast cancer, whatever it is. >> right. peter, i want to bring you in, kelly, i believe, has a question. >> meg, thank you. this one is actually for peter and kind of picking up on that note on that point that was just made. you know, the cost, even though we're focused on drugs, overall has not moved that much in terms

of total drug spend. i wonder there's an example here of how you and other physicians push back on an expensive cancer drug, decided not to offer it to patients and later the drug price was cut in half by the manufacturer. isn't this evidence of the market working? >> well, no. a couple of things, first of all, the spending on drugs in the u.s. is about 20% of the healthcare dollar. in the last three years the fastest rising segment of spending in healthcare has been drugs. so it is an emerging problem and every year it's getting worse. i don't think our rejecting a single drug and getting a price concession for it represents a market working. it was a single drug with about $100 million expected spend or something like that and it was a news worth case because it was so unusual. so if a market were working it would do this across the board and there would be no surprise. >> i just wonder to some extent you can only raise prices so much as people are able to

fundamentally pay them. at some point the system can't handle it, right, peter, and that acts as some sort of check. listen, if you are curing a hep c patient doesn't that ultimately raise the hospital costs for that patient long-term which is the bigger part of healthcare spend anyway? >> well, no. in the hep c case every single analysis shows that the drugs that gid y'all and other people are making costs far more than the savings that those drugs will provide by curing hepatitis c in a few patients. never mind that the treatment doesn't keep patients from getting reinfected. so the term cure should be used cautiously. but no, you know, because of our insurance system and because of out-of-pocket maximums there is no downward check on prices in most cases and that's why, for example, we see with cancer drug prices rates of inflation that are 8% per year above the rates of medical in general. >> i'm disturbed by that comment you just made. you're implying that the hep c drugs are not a medical miracle,

they don't cure because people can get reinfected. the fact is they do really cure, in 12 weeks, over90% cure rates with very few side effects. these are medical miracles. it is also a fact that icer which is one of the academic bodies charged with determining cost effectiveness of drugs published an article in the journal of the american medical association this year showing that even at list price these drugs are cost effective according to their methodology and, by the way, that's another key issue. what most of the public, i think, does not understand is that list price is not the price that the manufacturer gets. that in fact, that list price is supporting the pharmacy benefit managers, the insurance companies, anyone -- in fact, it's even supporting oncologists who infuse the drugs and then get 6% of that as their fee. so this is what i mean when i say it's disingenuous to say

that a drug is not a medical miracle or worth it in this context. what we really need to talk about is how do we systemic clee get access to any kind of medical care including drugs in a way that's affordable. >> it is true that actually those drugs are reduced by about 40%. the pbms, the payers, they are the ones who actually have the power to negotiate using icer, other value framework. they are the ones i really think that are going to be in the driver's seat. >> unfortunately, you know, we've only scratched the surface here but we are running out of time and we have to leave it there. there's so much more to discuss on this issue and we thank all of you guys for joining us at the conference. we will send it back over to you. >> appreciate it. a lot of coverage there. a lot of different themes. not every company is being affected by the slowdown in china. starbucks planning a major expansion and it says it will eventually become its largest market worldwide. up next ceo howard schultz joining "closing bell" with an exclusive interview on his china

growth strategy and what it means for the brand and maybe for the global economy. you're watching cnbc first in business worldwide.

starbucks is making a big bet on china. planning to open 500 new locations a year for the next five years with the goal of having 3,400 operating stores by 2019. chairman and ceo howard schultz is in china promoting this initiative and joins us now on the phone in a cnbc exclusive. welcome, howard. tell us what the scene is like

where you are, store openings and i guess you're trying to hire people. >> thanks, kelly. thanks so much. yeah, i'm sitting in a city that many americans have not heard of with population of over 10 million people and on the ground here what you see is a very dynamic city, a consumer-based economy and a very upbeat market. let me frame the situation for you through the lens of starbucks. we've been in china now for 17 years, we have 2,000 stores now in over 90 cities. we have had ten years of consecutive positive comp store sales, which is pretty stunning in terms of the accomplishment. our traffic over the last couple of years, especially during this turmoil time has remained positive. as a result of the position we're in and the profit we're making, and i think the equity and the trust in the brand, this is an opportunity we feel to invest ahead of the growth curve

and we think we can hire the kind of quality people to support the growth we're talking about, which is about 500 new stores a year. i'm here today in the last couple of days to do something quite unusual and that is every year i come to china and have an annual meeting of parents and families of our employees and i do that to demonstrate the respect that we have for the family of our employees and to really share with them the growth and development of the company and how we're going to do everything we can as responsible employer and yesterday we made a significant announcement and that is many of our young people are traveling great distances to work in our stores and as a result of that we announced yesterday, among other things, a significant housing allowance which i think speaks to the kind of things we've done in the u.s., whether it was college achievement for our employees and really once again, being the kind of employer that is managing the company through the lens of humanity. >> you bring that up, you know,

how starbucks could be an attractive place for these young chinese to work and perhaps trying to make the case to their families as to why it is. but because you have this unique opportunity to talk with a lot of these chinese people right now, what are you hearing them say about the stock market, about the economy. what kinds of anxieties do they have, if any? >> because we've been here so long i have established some unique personal relationship and i probably have traveled to china as much or more than any other public ceo over the last ten years. this is what i see. i think many people are drawing the wrong conclusion and making a mistake. china is clearly in the midst of a period of transition, but it's necessary for the next stage of their development. you've got a middle class of about 300 million people, that's projected to grow to 500 to 600 million people over the next 10, 15 years. so people should not mistake

market moves for economic changes and when i'm talking to the people that i know here and i was with jack maw yesterday who was with me on stage as we talked about the partnership that alibaba and starbucks developed last christmas in which we're now creating social gifting online and it was a huge success for us. >> right. >> but the bottom line is this, economies, whether it's china or the u.s., does go through cyclical changes and during those cyclical changes if you can make strategic big bets that are core to your business, that are in keeping with the way you run your business and that you do the right things by investing in your people and you develop the kind of relationships in which the trust of the brand and experience in our stores over the long run we believe that we've got a significant opportunity to build a great enduring business here and i'm on the ground and i can tell you that all the noise and perhaps some of the propaganda is a big

overdone. i don't think people should draw the kind of conclusion that china is going through some c cataclysmic event because that's not the case. >> the political cycle of noise propaganda, you've been vehement in the past about the need for a servant leader, somebody who is humble and respects the people of this country. and i guess just to turn to the leading proposal from hillary clinton lately, another 4% tax on people making over $5 million. any comment on the policy proposals that you are hearing or the rhetoric of this campaign on both sides. >> i won't comment on what hillary clinton or the republican candidates are proposing at this point. i think obviously there is so much going back and forth right now. we have a long way to go. and i just wish there was much more civility and respect for the american people as opposed to the mudslinging that continues to go on.

it is not helpful. it is not consistent with what the american people want and i think that is one of the major reasons why it is forecasted that 50% of the americans won't vote in the presidential election. >> right. >> because they have lost faith and confidence in the process. >> well maybe a silver lining in the meantime, gasoline prices have plunged. are people using their savings and buying more lattes howard. >> we won't announce our earnings until the 23th of next week but there is a level of disposal income now that i think you could thread back into a level of discretion that is based on the fact that people have more money because gas prices are down. but i'm optimistic about the american consumer. i think it is a bifurcated economy. i think for bricks and mortar retailers, as i said two or three years ago, we were headed

into a seismic change because of e-commerce and people's phones. i think you saw the macy's announcement and i think you'll see more big-box retailers that have a fixed asset in those big stores and a downturn in traffic and there will be a shake-out. and the people that could elevate the core business by integrated themselves in a digital mobile eco-system like starbucks has will be in a position to win. what we've done, we're processing tremendous amount of mobile transactions, over 20% of the tender in the u.s. and that will only grow. and we have significant plans domestically and in china around the world to leverage the eco-system for starbucks in ways that i think will be quite strong and rebust and demonstrate the leadership position around the world. >> when you deliver that coffee-delivering drone let us know. we look forward to it. how you will keep it hot or cold

as the case may be. howard, thank you for joining us. >> thank you for the opportunity. >> howard schultz out of china. a city, 10 million people, they are hiring there and expanding 2500 more locations over the next five years in china. up next, more on the breaking news in the hour that iran has seized two u.s. navy boats. stay tuned.

welcome back. moments ago we learned raun has seize twod u.s. naval boats and said it will return ten sailors within hours. so we find this out on -- with just a couple of hours left to go before the president's state of the union and he's made the relationship with iran a centerpiece of his agenda and his presidency and tomorrow what do people think about in nerms of oil and -- in terms of oil and other impacts on the market. >> it is a misunderstanding, and it will get worked out, but this is a skittish regime, given what has gone on with the friction with saudi arabia and all of the other things happening because of the domestic concerns. so i don't know what the takeaway would therefore be with regard to oil prices, because everything translates into more supply, lower oil prices as opposed to the reverse.

>> dialogue. one of the things we learned in the report is that secretary kerry is on the phone. that is important. that is the kind of thing we hope is a result of these -- the by lateral discussions over the nuclear crisis, whatever it might be. that could be a good sign. let's hope it is. >> we'll leave it on that hopeful note. thank you for joining us on "closing bell." rob cox and mike santoli. so much to watch for after crude oil punched below $30 for the first time in 203. that does it for us. "fast money" begins next. mmm, a perfect 177-degrees. and that's why this road warrior rents from national. i can bypass the counter and go straight to my car. and i don't have to talk to any humans, unless i want to. and i don't. and national lets me choose any car in the aisle. control. it's so, what's the word?... sexy.

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"fast money" starts right now. overlooking times square, i'm melissa lee. our traders are tim, david, karen and guy adami. tonight on "fast," could big oil be facing big dividend cuts. we'll tell you the name of the smart money companies cutting dividends later this year. plus the street has gotten negative on earnings. but that could be a good thing. a special report that could be a ray of sunshine for your portfolio. and later, it is the one thing that has traders petrified. and get this. it is not oil. we'll explain. but first we start off with what was the unthinkable.