>> in a slow motion version. >> which is worse. >> death by a thousands cuts or one big stab. >> i think there's something we can look back to. >> thanks to all of you for watching. we'll see you tomorrow. "power lunch" begins right now. . >> and we begin with breaking news. let's go to mary thompson. >> ge confirming it is moving its headquarters to boston. the company saying that as a result, it is going to be selling its headquarters in fairfield, connecticut, as well as its offices at 30 rock in new york city. the company says this will have no material impact on the firm's financials. keep in mind it was last summer that ge started talking about leaving connecticut after the state decided to -- proposed imposing new taxes on corporations that were headquartered there. no word yet as to how many of the 800 people who currently work at the fairfield headquarters will be impacted by the move.

but it does make some sense for general electric as it has a number of other businesses that are headquartered or at least have operations in the boston area, including jet engines in lynn, massachusetts, life sciences in marlboro, massachusetts, along with current a lighting business they have haeadquartered in boston. ge again saying it will be moving its headquarters to boston. it was one of several locations the company was considering, including texas, south carolina, indiana, a number of these states making a pitch for their business. the firm saying it will be selling the fairfield headquarters along with the offices at 30 rock in new york city in order to reduce the cost of that move. tyler, back to you. >> can i ask you a couple questions? obviously, the attraction here apart from whatever financial incentives have been extended by the state and city -- >> which we don't know yet. >> is the proximity to major universities like m.i.t., harvard, and so many more.

number two, do we have any information on where they may locate? what is the piece of land that they're going to be on? do we know? >> as of right now, i'm just looking through -- i haven't had a chance to look through the press release yet so at my hands i don't have that right now, but as you mentioned, tyler, certainly, you know, ge is transforming itself into this digital infrastructure company. as you say, proximity to some of the best research institutions for universities in the united states and, indeed, the world, would be an attraction for ge along with any tax incentives they might be granted by the state, and, of course, access to an airport that has, you know, that's an international airport as well. all of it makes sense as the company decides to leave connecticut for boston, massachusetts, but, again, any further details we get, we will certainly have them for you. >> and to your question there, ty, i do believe the boston globe article said they could be focused on the seaport area. >> mary knows boston so she will

figure it out. and cape cod. going to help the real estate prices in cape cod. a move like this could have major ramifications. joining us is steve odland. this is all, steve, about economic development i suppose. tell us the thought process that goes behind a major move like this. how does it sort of germinate within the board room. what are the constituencies? take us through the thinking. >> first of all, this is the shot that should be heard around the country in every state house and in every governor's office around the country because, you know, connecticut worked with ge and with businesses, and they kept saying, well, we're not going to deal with our structural deficits, we don't have a spending problem, we have a revenue problem, and all we need to do is raise taxes on businesses, and so what worked out is ge and other businesses in connecticut kept talking to the state saying you can't do this, seriously, you're going to

damage business, we're going to have to move. you know, we can't just simply put ourselves in harm's way and reduce our profitability. our owners, our shareholders won't allow that, and they weren't taken seriously. ge is moving to a state, massachusetts, which used to be derided as tax-achusetts but they have got their act toget r together. but this is a shot that will resonate and be talked about for some time as these states need to get their structural deficits in check because you can't just simply continue to raise taxes on businesses and vinds. >> this is mary. i want to give a couple more details about the move -- >> please, please. >> it is going to be located in the seaport area of boston. the company will be moving to a temporary headquarters this summer, and then the final move will be made in 2018. ge is actually going to hold a call or a meeting with boston

area leaders on february 18th to discuss this, but also to give you a sense of how this will also reflect changes in the ge structure as well, the company says the firm will have roughly 800 people at the new headquarters. 200 from corporate staff and 600 digital industrial product managers, designers, and developers split between ge digital current, which is the lighting business, robotics, and life sciences which also has prices in marlborough, massachusetts. you can see it's not going to be the centralized structure as it was in fairfield. it will be a more decentralized structure when the company completes the move to boston. >> thank you very much for that, mary. please do jump in if you have any further details on this. it's a fascinating story, and getting back to you, steve, what does the move of an hq by a major company such as ge to a city like boston mean for the city and its people in terms of jobs, real estate prices, everything that you can imagine? >> well, you know, these moves are not taken lightly.

first of all, you have to get all your constituents involved and the board. it's a big board decision and it's very costly to do, and as a result, i think a lot of states and localities figure, you know, we've got them. they're stuck here, they're not going to move, but, in fact, you know, in this case i think ge has demonstrated that, yes, we will, in fact move, but it's a big deal because you're uprooting people's homes and families. you risk losing some of your key people in the moves or having people commute for long periods of time, which is not great for a corporate environment. but these are really drastic end-of-the-line moves only when you cannot negotiate something that -- a tax structure or a situation better for the company. which just shows how tone deaf connecticut has been. >> you raise an interesting point, the irony, and it is rich, that the company would be moving to the state known as

tax-achusetts. i see where it's good for the company. i assume over the long run it will be good for the state of massachusetts because of revenues they're going to collect, but if i'm recalling correctly connecticut didn't have or has a very small income tax. >> in terms of income tax, yes -- >> and massachusetts does not. >> from a property tax perspective on at least a percentage basis, it's not as high as some other places in the tristate area, new jersey specifically where we are right now, but overall -- >> i'm sure for employees who are moving from low income tax connecticut to higher income tax boston, this is going to change their budgets and the real estate price is higher. >> just to put mr. odland's comments in perspective, as a resident of the state of connecticut, i kind of have been going through this whole saga and it's been a huge talking point for a lot of news the state. the idea that you will have a tax base -- it's not exactly

minute, what general electric krkts contributes to the overcall scheme but you have to make up for the revenues somehow. i'm worried about whether or not income taxes go higher because of that or whether property taxes for city locations goes up because of that. in essence in order to close budget gaps or get people into a fiscal position they want to be in, they have to make up the money somehow and i'm worried for myself as a resident where it's going to show up on my tax bill. >> it's all about dom. it's all about dom. it always is. mary? >> i also want to point out again to what i was saying before hand that the headquarters will be made of 200 from the corporate staff, so those are probably some of the better paid employees at ge and 600 from some of the other digital industrial managers. we don't know what other areas they're coming from, but, of course, life sciences and current are already located in massachusetts, so keep that in mind. also keep in mind that connecticut does have one of the highest corporate tax rates at 9%. massachusetts is slightly below that at 8%, so, yes, that is something to consider, but this

is good news for massachusetts. it doesn't bring in a lot of new people but last year it was one of the states that i believe it was united van lines actually saw an ex doeodus, more people moving out than in. >> we're going to wrap. we're going to close it off there. steve odland, thanks very much. mary, appreciate it as well. we have a news alert in the bond market with 10-year notes up for auction. what's demand like for this one, ricky? >> demand was strong. obviously like the longer end. and this is even after the yield has slipped from its 2.27 close at the end of last year. so we have 9 year 10 month notes because this is the second reopening. 21 billion. yield at auction, 2.09. lower than the one issue trading on my screen. that's a good sign. 2.77 bid to cover. solid. 71% indirects. best since valentine's day 2011.

solid read on directs at 11.3. this is an "a" as in apple. tomorrow, of course, will be the 30-year after a second reopening. that will be 13 billion. back to you. >> thank you very much. an "a" for that auction grade from professor rick santelli. let's bring up the board and show you what treasuries are doing. 2-year below 1%. the 10-year note yield, yesterday it was higher than where it is right now. 2.11%. now at 2.091%. and the 30-year at 2.876%. as for what's happening in the stock market, a triple digit drop in the dow. we are rallying for the first 40 minutes of trade as crude was also rallying. crude took a dip on inventories. stocks have gone lower as well. what's going on, bob? a volatile session. >> look at the s&p 500 for the last few days. we can't hold a rally. we opened up every day and sell right into it in the middle of the day.

admittedly, we get a little bit of a turnaround late in the day but the midday selloffs are souring a lot of people on any potential bounce right now. the last few days take a look at the sectors moving. consumer discretionary. energy is down a little bit. oil is flat after some disappointing inventory numbers. just want to show you high/low volatility numbers here. it's they're selling the high beta names, biotech, oil, and transport names. talk about that more next hour. back to you. >> bob, thank you very much. stick around as we bring in ron in insana and dom chu. the fed planning more interest rate hikes despite a sluggish economy, despite the absence of inflation. do you have any perspectives? >> i think if you look at the message of the markets combined,

you have a commodity crash, you have a stock market that can't rally. you have transports which are in a full-blown bear market and often times an economic indicator of the vigor of the economy, the yield curve is flattening. that's an indication of slower growth and the rest of the world largely speaking in recession. that's a lot of headwinds for the u.s. economy if the fed is intent on raising rates four times, as stanley fischer told steve liesman. >> what's the counteroffer? >> the counteroffer -- >> is there one? >> the fed needs to stop raising rates and possibly reverse course. i still think we're going negative on rates later this year and you need some fiscal stimul stimulus. we have the capacity, just not the political will. >> we have big picture concerns, but all of a sudden we have a window for the next four or five weeks about what the health of corporate america really is. if you look at expectations, the idea is we're going to have maybe what could be an earnings recession -- there are a lot of measures. a lot of people have estimates on where the numbers come in here. but according to thompson reuters eye business which a lot

of people follow, given what we have seen early in earnings season, we could see a 4.7% decline in earnings for s&p 500 companies and north of 3% decline for sales. now, it's important because those same thompson reuters ibis numbers have also said last quarter was the first time we saw that decline in overall earnings for s&p 500, so if we get a negative one, that becomes two consecutive quarters. there's your earnings recession and that's going to be the big deal. >> take it anywhere you want, but ron mentioned the transports. here are the transports, usually a very economically sensitive sector that usually does very, very well when fuel prices are down. fuel prices are down. it's, you know, it's not doing very well. what does that tell you? >> it tells us we are in a global economic slowdown. i'm not so worried about the earnings recession.

i am more worried about the top line recession that we're having. i will give you an example. 23 companies have reported fourth quarter earnings already. we're in earnings season. about 5% of the s&p. 75% of them beat on earnings, but 19 of the 23 have missed on the top line, and these are big consumer names, nike, bed, bath, & beyond. they've all missed. this implies to me that we're seeing a global slowdown in activity, and to me that's a little more worrisome and i think it goes along with ron's thesis here. i'm not sure about a recession, but we are definitely seeing some slowdown. >> ron, often do we hear the remain we're seeing a global economic slow down but we're okay in our domestic economy. why our domestic economy is so strong, why is the russell 2,000 also in bear market territory? >> if you look at the risks that have accumulated just in the last six months alone, not just the economic risks but the geopolitical risks, the fed risks and when you listen to the

policy statements of potential presidential nominees, they are hardly pro-growth. regulation is tilting toward the more stringent side. we don't have a combination of factors that would typically support and underpin both the economy and the markets, so i think we're in for some rough sledding here, and i think the warning is that a recession is possible, maybe probable, but it does need a policy response. >> we could be in for rough sledding if we could even get some snow. >> we don't even have that. >> one thing to leave you here, if you exclude energy because people like to talk about the hypotheticals if you lived in a world where the s&p didn't have energy companies, weed actually see north of 1% earnings and sales gains. >> that ain't much. >> high income jobs that were formed in the fracking communities are disappearing and whacking consumer spending. >> and real estate goes down with. >> thank you very much ron, dom, bob. >> three-letter words, all of

them. >> take a look at this chart. talking of energy prices. crude and brent down more than 30% in this past one year. we know energy companies are dealing with shock, a lot of oil dependent countries are hurting as well. which ones in particular feeling the most pain? you're watching cnbc, first in business worldwide. turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache.

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welcome back to "power

lunch." you just heard about it before the break but we want to say the dow index, dow jones down by 146, 147 points at this point. the nasdaq is down by 69. the s&p 500 down by 19 points. the nasdaq pacing the declines overall for the stock market. so keep an eye on what's happening with this as we take a dip towards the afternoon part of the trading day. the dow transport stocks also, we mentioned it before the break here, they're right now at their lowest levels of the day. down by nearly 3%. they're hitting a fresh two-year low for that dow jones transportation index. nearly all 20 components here are negative for the overall index. leading to the downside you have csx on the heels of that earning report, norfolk southern, avis budget on the car rental side down 6%. the index remains in something called bear market territory, more than 25% below its most recent 52-week highs, so tyler, transportation stocks very much a focus still in trading today. back over to you. >> thank you very much. and it is not just energy

companies, of course, feeling the plunge in oil prices. oil dependent countries are also taking a hit. look at their currencies and that is what michelle caruso-cabrera has been doing. what is feeling the most pain here? >> anybody who is reliant on exports of commodities. really hard hit. >> not just oil. >> not just oil. if you invest in a country and you know they're reliant on exports and they're going very badly, you're probably going to take your money out. what does it mean you have to do? you have to sell the currency to get your dollars or your euros back. the capital flight in nigeria has been astounding. look how volatile it got. sheer and utter collapse. it had been fixed for a while. that's why it looked so steady and then the central bank there just cried uncle and said we're not going to defend this thing anymore. it was just brutal. the russian ruble as well has been sliding and sliding and sliding. remember what's odd about the curren scy markets. at the top you see the price. at the bottom, that's the

dollar. we've charted the dollar versus the currency so the dollar is getting stronger and stronger -- >> used to take 62 rubles to buy a dollar. now it takes 76. >> exactly, exactly. take a look at the south african rand. you're good at reading those charts. >> i have to think about it every time. >> currency charts are tough. with the south african rand, they're not an oil producer -- >> but a commodity producer. >> big-time commodity. gold has held on okay, but they do a lot of cold, brutal diamonds and they have not been selling well. let's move to the western hemisphe hemisphere. mexico, mexico doesn't export all that much oil. they'd like to produce more but even that currency has gotten hammered and that has usually held on pretty well against the dollar. even that relationship is breaking down. o canada. one lune will get you 70 cents.

it used to cost 70 cents. next they think it will cost 59 cents. finally the brazilian real. brazil is such a strange place. it is an oil producer but because they have such a weird economy, when oil prices go down, it actually helps them because they import gasoline. it's a real mess there. doesn't matter. they've had all kinds of other issues and their currency has been getting weaker and weaker. it's not just companies. it's countries. >> it's whole countries. michelle, thank you very much. >> did you purposely leave out the australian dollar? >> you're absolutely right. and its relationship with china is even tougher. >> absolutely. major commodity exporter and, yeah, we've been -- our currency has been decimated as well. big brother is watching.

why the u.s. is now tracking luxury home buyers. a fascinating story that you do need to hear. plus -- >> coming up, a startup that lets you put your money where your mouth is. >> 50 million tons of plastic go into the landfill each and every year in toothbrushes alone and we're here to ching ange it. >> will the panel find a cavity. >> this is pretty pricey, how do you justify the numbers? >> what is unique about your offering? >> stay tuned to find out. how's it on your end dave? oh, the numbers look so good. dave, dave's on it.

. it's time for today's power

pitch where one entrepreneur gets 60 seconds to convince a panel of experts that his toothbrush is the next big thing. >> i'm patrick triato, the ceo and founder of the goodwill company. we make smart, sustainable, and subscription based oral care products for the home. we empower people to make a positive impact on the environment and their health bisomething that you hopefullily use twice a day, a toothbrush. 50 million tons of plastic go into the landfill each and every year in toothbrushes alone and we're here to change that. at first glance this is a really good looking toothbrush but there's so much more. this is actually a recycled aluminum handle and guaranteed for life. this attachment part is 100% biodegradable and the bristles are made out of an activated charcoal which helps fight bad breath. like dollar shave club, we're filling a huge gap in the

market. in the eight months we've on the market woe've sold close to $100,000 in product. >> you just saw patrick's pitch. now, let's meet the panel. on set venture capitalist nir who founded uprise ventures. the focus is early stage lifestyle brands. and alicia syrett. she advises and invests in over two dozen startups and from boston venture capitalist kent bennett from bessemer ventures. they have a fund that goes after tech-enabled consumer services. he also serves on the board of blue apron. welcome, everybody, to the show. patrick, you are in the hot seat. nir, would you like to throw out the first question. >> you talkeded about your marketing strategy and how you plan to build a larger brand in a cost efficient way. >> that is one thing we are going to focus on for q1 and q2

of next year. so far we've done pretty much zero marketing and we've gotten this far. >> at $45 a toothbrush kit, this is pretty pricey. how do you justify the numbers? >> right now 95% of the product gets made in portland, and, you know, it's economies of scale. as soon as we have the demand for more, our price goes down and the consumer price will go down. >> kent? >> are you aware of whether or not your existing customers are telling their friends and spreading the products virally in that way? >> we get people tagging us in photos and sharing us and that's something we actually didn't foresee happening. like people sharing images of themselves brushing their teeth, but it's happening and it's definitely helping our bottom line. >> nir? >> if i'm a natural consumer looking for sustainable oral care products i can go to my local whole foods or other natural grossers and see a set of sustainable products. what is unique about your offering that's going to get me

to convert to your online oub description. >> making a trip dedicated for a toothbrush is unlikely. we make it as simple as possible. >> who exactly are you targeting with this product? >> there's three demographics we have found that really love our product. designers. they just love it for the look of it and people that are ecoconscious. they love the sustainability story. and then we have people that love the tech and subscription model. >> we all heard what patrick had to say. now is the panel in or out? >> i have tried your products. they look great, they feel great, and i think this market is really ripe for disruption. i'm concerned it's going to require a lot of capital to build the brand and i don't think consumers are going to convert that easily. so for now i'm out. >> okay. what about you? >> it is a pricey product and i think i'd really like to see this niche following be

extremely zealous and love the product. i think they need that in order to compete against the big marketing spend. i hope they'll get there but i don't think they're there yet. so for now, unfortunately, i'm out. >> i think the fact you sold $100,000 worth of toothbrushes tells you you have something here. but the breakout companies in these categories are the ones that are really amazing products that people want to tell their friends about. you know, blue apron, some of these innovative models that are really great products and get spread in an aggressive way. i don't think you're there yet and until you solve that exponential spread through social media and the backyard barbecue, i would be out. >> what's your reaction? >> we made it this far and i thank you for your time and anybody that's interested in trying out our products, we have a discount code power pitch. >> greeat. >> for 20% off. >> that's a fantastic idea. people should try it. thank you, patrick.

and to our panelists, and that is today's power pitch. what about you? are you in or out on the goodwell company. tweet us your thoughts at power pitch.cnbc.com or to me at mandy cnbc. and go to our site powerlunch.cnbc.com. >> mandy, let's take a look at stocks, and they are accelerating their losses. the dow down right now about 172 points. we are all over this sell-off today as we have been all over the sell-offs basically since the first trading day of the year. stay with us. we'll be right back. this bale of hay cannot be controlled. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast.

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hello, everyone. i'm sue herera. general electric announcing it is moving its corporate headquarters to boston from fairfield, connecticut. it will employ about 800 people in the seaport district of boston and will sell its offices in fairfield and 30 rockefeller plaza in new york. joaquin el chapo guzman has been returned to the prison he

broke out of last year. this time around mexican authorities say the drug lord has already been moved around between cells eight times. turkey's prime minister says turkish security forces have detained four people in connection with the suicide bombing in instan beautiful yesterday which killed ten tourists, most of them german. the suicide bomber entered turkey as a syrian refugee. in his weekly address, pope francis asked those in attendance to pray for the victims of the istanbul attack. he called for eternal peace to the deceased and also the relatives and to convert the hearts of the violent. and that is the cnbc news update at this hour. back to you, ty. >> thank you very much, sue. to the bond market we go and rick santelli. he's tracking the action, as usual, at the cme. hi, rick. >> hi, tyler. well, you could call it global anxiety, but something certainly enticed investors to jump over the 10-year auction. solid, terrific auction. look at a one and two day charts.

yields moving lower, partially weakness in equities and partially good auction events. 10/27 of last year, last time we were closing at these yields. look at an intraday of the 10-year minus the 2-year. briefly traded under 117. haven't closed under 117 since the middle of july 2012. mandy, back to you. >> thank you very much, rick. as we've been watching, stocks losing steam after a rally in the first 40 minutes of trade this morning. the dow was down almost 200 points. the nasdaq is down by 1.7%. that's a drop of 81 points, folks. let's get to our guests, michael congeni and francine li. great to see you both. mike, why do you think there are so many sellers who are always ready to hit the sell button on the rallierallies? is it going to let up any time soon? >> well, we really haven't seen a rally this year except for

maybe a trading day or two. i think it's a continuation of what we've seen this year. there's a reason energy stocks are selling off and the market is selling off. concerns about economic growth in the states. d dat that has be data has been mixed. you have the unease in china expect to the stock market. emerging markets don't look very good. >> do you think the selling is justified? >> i would given some of these factors, which u.s. investors for the first time really haven't focused on. last year everything was about the fed, when, how much, how quickly, what impact is it going to have? that decision, at least the initial one, is behind us. we still have those questions going forward for the new year, but investors are now starting to turn towards more quarterly earnings, to the global environment around them, and how is the u.s. economy going to do all this -- doing all this and then layer in an election year where you have a lot of policy discussion and possibilities depending who gets elected. throws a lot of uncertainty into

the market this year and hence volatility. >> it feels like we've always got uncertainty of some kind, right, francine? what's your view of the market and your investment strategy for this year on? >> we've seen a lot of volatility, but when we look at the fundamentals and looking at the u.s. economy, we think the u.s. economy is doing just fine. now, we have low unemployment rate, about 5% which is considered full employment. we added 293,000 jobs in december, so things are moving along, and in regards to the fed's raising interest rates, we think they're going to have a tough time in 2016 raising it a little bit more and we think the mark has already priced in 25, 50 basis point increase. >> when you say the economy is doing just fine, it doesn't bother you the ism is suggesting a contraction in that area. doesn't bother you the dow transports are in bear territory. doesn't bother you the commodity deflation, those indicators don't bother you? >> that is absolutely something to look at, but when we're investing in companies, so for us we like large company caps that are domestic focus.

so there are sector that is will do well when oil doesn't do well or when these commodities don't do well. so that's the areas we like to focus. so it's all about having proper asset allocation and looking at your portfolio and buying good, solid company, some of which pay dividends which helps. >> you have ultra whiyou wilult 45%. that's a good lipstick indicator. you also have lockheed martin and apple as well which we all know has not had a great past 12 months but you like the dividend and it's compelling. thank you for joining us. you can go to powerlunch.cnbc.com to see michael's outlook for the banks this year. that is powerlunch.cnbc.com. tyler? >> well, mandy, the government is going to start tracking the buyers of high-end real estate in a couple cities in this country. robert frank joins us now with more. is this driven by concerns over terrorism or something else? >> driven over concerns of money

laundering. it could be another headwind for the luxury real estate market. the treasury department issuing rules that would require foreign real estate buyers in mooi and manhattan to disclose their true identity. it would only apply to buyers paying all cash and they have to reveal the troou, quote, beneficial owner behind an llc or shell company that is buying that property. this comes after "the new york times" found out some properties purchased by anonymous shell companies in manhattan were being bought by criminals, corrupt government officials. it will run from march to august as a test. brokers telling me this afternoon, it will not affect our market, not a big deal, but 15% of buyers in manhattan are from overseas. when you look at new condo developments, that's 30% to 40%. and more than a third of those buyers are from overseas. when you look at how much they bought last year, more than $100

billion in real estate was purchased by overseas buyers in the u.s. with the chinese being the biggest. tyler, to your point, maybe they're just a small number of true criminals, but privacy is really important to the wealthy. if they think they're going to wind up on some treasury list because they bought an apartment, that could chill the market. >> it applies only to cash deals. >> only all cash. >> thank you very much. robert frank. >> you have to question when someone shows up with a few suitcases full of cash, right? the sell-off picking up steam. the dow is down by over 200 points. coming up, a noted bull explains why he is staying bullish despite the recent volatility. stick around. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart

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call today at see car insurance in a whole new light. liberty mutual insurance. the overarching story as it has been almost all year is the sell-off in the stock market, and look at it continuing today. accelerating in just the past few minutes.

now down 225 points or thereabouts at 16,291 on the dow. there is the s&p 500 at 1910, off roughly a percentage point and a half, and nasdaq sliding 2%, more than that, at 4585, and 2.5% for the russell, in bear market territory. those small company more domestically aligned shares bearing the brunt of the sell-off. the sell-off doesn't seem to bother our next guest who remains firmly bullish. neil hennessy, president of hennessy funds. welcome back. what would it take to get you concerned if you're not concerned? >> i guess a terrorist attack would be the only thing that would get me concerned, but, tyler, let's just face it, last year was a very volatile year. we started this year in a volatile market, and that scares the investors. in fact, last year the dow jones traveled 31,000 points on the

close, and we essentially closed even or down 1%. so far this year we're down close to 6%, including the numbers that you just said. but the bottom line here, tyler, is look at the dow jones is selling at 14 times earnings. the price to sales ratio on the dow jones is 1.6. we look for deep value at 1.5 or less. so it's not much over what i'm looking for deep value. in the yield, 2.75% versus a 10-year treasury at 2%. it's not rocket science to figure out that, yes, the investors are nervous and scared, but the bottom line is they're still sitting in fixed income which is just crazy, in my opinion. $3.5 trillion sitting in fixed income mutual funds. that's just crazy. here is an opportunity -- >> are you arguing -- forgive me for interrupting, but are you -- not necessarily arguing, but making the case then that eventually because of these

factors, money will start to flow back into the stock market? they will be attracted by the low prices, attracted by the high yields? >> look at worldwide. the story hasn't changed in the last 15 months, and that is it's all about china, it's about the fed raising interest rates, but companies are continuing to make a tremendous am of money and their cash flow is even higher. look where gasoline is. it's $2 a gallon. yes, i know people in the sector, energy sector, are losing some jobs, but in the u.s. today, there's 5 million job openings, tyler. people are going to start to get more work as we go forward. but i look at it that people are just nervous because of the volatility, and they're not looking at the numbers, and i remember, i think this quote is correct from yogi berra where he once said, investing is 90% mental and the other half is numbers. i'm not sure he was quoted like that, but essentially people aren't looking at the numbers

and making an intelligent decision of where we're going to go. worldwide, some of that money is going to come to the u.s. >> neil, always great to see you. >> we're all over the sell-off. we're really accelerating to the downside. the dow is down 230 points now, and we've also got some potentially market moving news coming up at the top of the hour. so brian sullivan, what's on the menu for the second hour of "power." >> we'll see if the markets can move on that news. the markets are sinking once again. we're going to kick things off with the fed's latest read on the health of the american economy. they call it the beige book but that can be a lot more exciting than that. that's out at 2:00. bill richardson is with us. we'll ask if he thinks the u.s. should really be selling oil in a couple years. why not buy it right now? and we have $1.5 billion worth of advice coming your way today. some dos and some don'ts if you hit the powerball don't. all of that and more when "power

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stocks losing steam with the dow plunging more than 230 points sitting at session lows. consumer discretionary, industrials, and energy leading the declines. williams companies, consol

energy, and borg warner are the biggest s&p 500 losers. let's get to dominic chu. >> the flip side of the coin, shares of chipotle bucking the market trend as a presentation is going on in orlando. chipotle has just started presenting. the ceo taking the stage speaking a little bit about the food safety issue that is have plagued the company over the past few months. the stock dropped below $400 yesterday for first time since august of 2013. the shares have lost about 40% of value since mid-october when the burrito chain came under fire over the outbreaks of food born illness. shares are now over 5% higher. keep an eye on chipotle. "power lunch," more after the break. ...reimagined. style... ...reinvented. sophistication... ...redefined. introducing the all-new lexus rx and rx hybrid. yesterday for first time since

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welcome back to "power lunch." the sellers are out in force. we had a 40-minerally at the beginning of trade. clearly not the case with the dow down by 220. the nasdaq and the s&p are also sharply lower. look at the nasdaq, it's down by over 2%. both the dow and the s&p are now down about 6% for 2016 so far. the sectors that we're watching here, consumer discretionary the biggest loser along with industrials, energy, and

financials. so a very red day out there. let's get to dominic chu for a market flash. >> we're watching also an industry group, specifically the nasdaq biotech. it's ibb, near it's worst levels after opening in positive territory. among the laggards, down 11% to 14%. small cap biotechs in this etf. back over to you. >> thank you very much. tonight's big powerball drawing, someone could win a record-breaking $1.5 billion. it says here $150 billion. >> i said -- h >> hey, man. i wanted to know how this whole thing actually works and, eric chemi is here with us. he's on location at a convenience store i assume over across the river. mike santoli is here. gentlemen, thank you, you are my answer men. first question, jump ball, who

runs this doggone thing? who is the ceo and who appoints them? is it chris christie? who? >> it's the multistate lottery association. 44 states as well as u.s. virgin islan islands, d.c., puerto rico. it's a pooling of state lotteries. just a couple dozen people based in iowa. >> based in iowa. >> all they do is run the power ball and mega millions. >> they're in a place in iowa. >> and, eric, you're at the convenience store. i bet they're pretty excited as well because don't they get a 5% to 6% cut if they sell the winning ticket? >> well, they get a 5% cut of every ticket they sell. so every time someone has come in here, they're making money. think about it, if you buy $100 worth of tickets, they're getting $5. they have been doing great business today. just a second ago we had ten people in line buying their tickets. it's been very busy. >> now, when there is no jackpot paid out, i assume the money rolls over to the next drawing, to the next drawing, and so

forth. so question number two on the big wall is how much revenue was collected since the last big jackpot payout? who has ghot that one? >> it's about $3 billion. roughly speaking half of all the money taken in ticket sales is paid out but that jackpot has continued to roll. so we haven't had a big jackpot -- it's been building since november and so that's why we have such a large pot. >> so then i assume, eric chemi, that every time even after they pay out their jackpot, they're making money, powerball is, right? >> that's right. they always make money because 50% of the total money goes into prizes, so if we see a $1.5 billion prize, that means they've accumulated since november $3 billion in ticket sales. maybe in the last week it's been about $1 billion, but $3 billion in total. so they never lose money even on today's basis maybe they lose money today, but they've been accumulating it for the last two months before they paid it all

out. >> so the house always wins. >> exactly. >> yeah, the house always wins. didn't we always know that with gambling anyway. >> question number four is how much of the proceeds after the payouts do the states get back? >> well, they get most of what they don't pay out in the jackpot. eric mentioned 5% to 6% goes to retailers as a commission. they also have some administrative costs, but then it gets allocated among the states based on how many tickets were sold in those states. it's kind of proportional. there you go. >> that's the revenue that came back to new york in 2014, i guess the latest year for which we have numbers available. so then which are the biggest, eric chemi, states in terms of getting money back? and we know that money goes to education and other such causes. who gets the most back? >> so if you look at spenders, obviously massachusetts, they spend a lot on a per person basis, over $600 per person, but every state has their own percentages. you look at oregon, they have

got a very high percentage, closer to 50%. other states smaller, like 11% going into prize money. so that's why it's a multistate association that mike talked about at the beginning. they all get together to give away this powerball game, but each state has their own rules. if you're in california, your tax situation is different. you don't make as much if you win this prize living in california. every state is going to get their extra little cut to figure out how they want to spend the money. >> what's your question number five, ty? >> that was question number five, actually. >> sorry. >> how is it divided among the states, basically divided by the states that buy the most tickets per person. so new york, massachusetts, would get as a percentage back the most money. fascinating stuff. very democratic. eric chemi, thank you very much. we'll be checking in with you later in the day. and we've got a special tonight at 7:00 on "pawer ball." everybody is talking about it. jackpot, the richeth lst lotter ever, 7:00 p.m. on cnbc hosted

by the man who will take over in a few seconds, brian sullivan. >> we're going to hand it over to you now, brian. big day for you. >> it's going to be a big day and a fun night. we're coming up on 2:00 p.m. on wall street. before we get to more on the markets and the powerball jackpot, here is hampton pearson. >> from the beige book, the federal reserve, it's 12th district saying economic activity has expanded in 9 of the 12 districts since the last report being described as the growth as moderate to modest. exceptions, new york and kansas city where growth is described as flat. consumer spending increased in most districts from slight to moderate. manufacturing, however, displayed weakened activity with the exception of motor vehicles and aerospace. several districts reporting the strong dollar's impact on demand, especially exports. others noting lower energy prices having that similar effect. residential and commercial real

estate activity improved. most places saw price increases, most districts that is. most districts reporting loan demand grew, credit quality improved and loan delinquencies continued to fall. seven districts reporting an increase in employment. four saw the job market actually tightening in their districts. however at the same time we're seeing little overall change in wages or any real price pressures. back to a little more anecdotal evidence on consumer spending. while, yes, there was some growth during the holidays, minneapolis, it was strong. new york, richmond, and dallas described it as sluggish with the unseasonably warm weather playing a major factor. in san francisco, brick and mortar stores failed to meet expectations. and this anecdote from the world of advertising in boston, quote, contacts are generally bullish on the macro economic conditions though some concerns are being

raised over the elections. brian? >> all right, hampton pearson in washington, d.c. let's get now the beige book reaction with steve liesman who joins us on set. and a reminder, stocks now are at session lows. steve? >> a couple thing struck my attention here. the idea of weather was prominently mentioned, 26 times in the beige book from what i could tell. hindering skiing in some districts and dampening apparel sales in some areas. a little bit on wage pressure. absolutely hampton is right that wage pressure overall was seen as modest but you did see a wage pressure from minimum wage hikes in six districts and labor shortages for low-skilled workers. a little bit -- i think the fed was looking at that as part of the idea of why they want to take some pre-emptive hikes out there, that 25 basis points that was out there. >> you mentioned wage inflation. >> wage pressures. >> wage pressures because a

tightening labor market for low-skilled workers. we've been waiting for wage inflation in the united states. >> we have been. >> it sounds like the beige bbs -- >> getting a little bit of it. >> getting a little more pay. >> and spend it on powerball. >> do all conversations today have to wrap back to -- >> yes, because i'm hosting a special at 7:00. >> i'm looking forward to your powerball special. >> it's reflecting what we know about the economy. consumers seem to be doing okay but the manufacturing sector is dragging things down and you're not going it see the great auto numbers we had in the past. >> where is this great manufacturing resurgence we have been hearing about from, a, low gasoline prices, b, low natural gas prices, c, currency instability especially with the chinese yuan. shouldn't those drive manufacturing back to the united states? >> i was hoping somebody would ask alcoa and dow that question.

you have reduced commodity inputs. you have the ability to strike long-term low natural gas rates. i don't know why that hasn't helped them out more. you're right in terms of what we thought was going to happen. it has not appeared. what we know is that the dollar has gotten to be more expensive. that's hurt experts. global economies have weakened. so you have this very bifurcated economy. talking about the two isms. you have the ism manufacturing index at 48 and contracting and the ism services at 55 and you have this big bifurcation going on. i'm going to ask you to opine. how much do you think china is on the fed's radar? >> i think it's on the fed's rad radar. i think they were fooled once in the summertime and they maybe overreacted, and i think that they're very -- they're looking very carefully at what's happening with the market's reaction today saying i can't flinch here but you have to know one thing what's going on, brian, which is that almost all

the meaningful interest rates in the economy except for the one, the fed funds rate, are lower now than they were before the fed hiked. so they're not cooperating. i'm beginning to talk with some folks out there, there are some curious things going on in the fixed income market right now. >> but the new boss is the same as the old boss because they won't get fooled again. >> that's right. >> that's what you're saying. >> looking forward to your power ball special. >> 7:00 p.m. eastern. >> you're hosting that, right? >> melissa? >> he is hosting it. we want to take a check on where we stand in the markets. we have been taking a leg lower in the past half hour. we were sitting pretty much at session lows. the nasdaq down by 2.5% or 117 points. the s&p 500 is down by 1.7%. what is notable about today's session is that you see the momentum stocks really being used as a source of funds in today's session. take a look at the likes of the f.a.n.g. stocks, facebook, amazon, netflix, as well as alphabet. all of them are sharply lower today.

we're seeing a bid lower in the energy sect yosh, the xle, the etf that tracks energy stocks. that's down by just about 2% right now. 2.2%, although we have one bright spot and that would be exxonmobil up 1%, and out of all of this we are seeing a continuing bid for safety where we do see green arrows. gld is higher and tlt is at session highs right now. it is up by 0.7%. the story of the year we're tracking, the story today is oil. it is down by more than 17% so far this year. briefly fell below 30 bucks a barrel in yesterday's session. it is right now slightly lower. a slew of analysts slashing their 2016 forecasts for wti. you see barclays with one of the most bearish calls at $37. michael cohen is at barclays and he joins us here. >> thanks for having me. >> this was a dramatic decrease since your previous forecast was 56 bucks a barrel here. at this point as we hang around

the $30 a barrel level, do you see the risk to your forecast to the downside? >> well, i think in the first quarter there are further risks to the downside. i think the market is beginning to understand really the magnitude of what's going on in china. we have continued dollar strengthening that we can expect. the other big issue that we saw in the fourth quarter, which we believe is going to continue throughout the rest of this year is that opec supply is much higher than anyone in the market had expected, and as part of that, iranian supply is going to start coming on a little bit sooner than many had expected as well. so many had not believed that sanctions would be removed anytime before q2, but it's looking like according to secretary kerry, like those sanctions could begin to be removed within, quote, unquote, days, so that will lead to more and more oil getting onto the market. so i think there is a lot of downside risk in the first quarter to prices. i think i would argue that the balance of risks in the second half of the year and into the medium term are skewed to the

upside just as we see capital expenditures cut in a big way last year and we're going to see it again this year. >> michael, how do you get your arms around china in your model at this point? we have so many data points. the manufacturing data that has come out of china has been decidedly weak but we get data points out of the likes of yum and nike and starbucks that the consumer is still strong. how do you assess what the actual demand will be in china in the months going forward? >> it's a very complicated picture. we have to look at what china is importin importing, how much their refineries are running, we have to square all that with how much more stocks they're adding to their strategic reserve. all of that is playing a role. i think the biggest problem for us is there's no really good data. the product demand -- the petroleum product demand data is just not good enough. what we've done is we've pared our estimates for chinese demand slightly, and overall for global demand we've pared it from 1.2

million barrels a day growth and that leads us -- it's one of the things that leads us to the lower price level. >> michael, what's the odds that opec comes together, surprises everybody, and cuts production? >> i think it's very, very slim, and arguably the new diplomatic tension that we're seeing between saudi arabia and iran makes it even less likely, except, you know, the like likelilihood was already very low before. they're sticking to their guns. they're going to be producing at as high a rate as they can and the saundis will be defending their market share. that's their primary goal, watching out for national security and that market share in this low price environment. >> michael, thank you for joining us. >> thank you. with oil prices crashing, why is the american government still set to sell oil from our strategic petroleum reserves? shouldn't uncle sam maybe be a buyer of oil? top off at these prices?

let's talk about this with bill richardson and john kilduff. that's coming up right after the break. we're back right after this.

pg&e is committed to clean energy and part of that commitment is our partnership with habitat for humanity. our mission is to build homes, community and hope. our homeowners are low-income families, so the ability for them to have lower energy cost is wonderful. we have been able to provide about 600 families with solar on their homes. that's over nine and a half million dollars of investment by pg&e, and that allows us to provide clean energy for everyone here. it's been a great partnership. together, we're building a better california. right now there is something happening in the deep oceans in the atlantic that's not happened in 40 years. two oil tankers carrying thousands of barrels of american oil each are cruising toward europe. it is the first time america has exported oil since the 1970s. congress lifted a 40-year ban on oil exports late last year as

part of a sweeping budget deal, but also as part of that budget deal, the government has agreed to sell 8% of the oil in the strategic petroleum reserve from the years 2018 to 2025. let's bring in eamon javers with more on this. >> it's not just that the department of energy has gotten the okay here to start selling oil out of the strategic petroleum reserve, but it's actually mandated by law as a result of two law that is congress passed toward the end of the year to begin selling as early as 2018. here is the background on the two law that is congress passed. the first one, as you mentioned, is the budget act. under that law mandatory strategic petroleum sales will begin in 2018. the transportation bill, under that law sales will begin in 2023 at 16 million barrels per year and in the out years all those elements will change and potentially increase. the department of energy, however, believes it has the discretionary authority to begin sales this year. i asked them about that, and

they said we are studying whether or not to conduct sales in 2016. a lot of analysts, as you know, brian, say with oil as low as it is now it would be a big mistake for the federal government to start selling that oil right now, but clearly congress is not interested in trying to time the oil market here. they were trying to raise money to pay for the other spending in these other bills. that's why those measures were in those bills and that's why the department of energy will now go down this process of figuring out when they should begin this sales process, brian. >> eamon, thank you very much. let's dive a little deeper into this with former democratic governor from new mexico, bill richardson. also the former secretary of energy. and with us cnbc contributor john kilduff. governor richardson, i understand it's a couple years off and the numbers are fairly small, but shouldn't the government maybe step in here and say, you know what? if prices are going to be higher when we sell a couple years from now, why not buy some oil and, by the way, maybe help an industry that is on its heels

right now? >> well, i would be very cautious for the department of energy to go ahead and move forward and try to sell some oil right now. i think that's a bad idea. you use the strategic petroleum reserve in emergencies, when there's a national security emergency, when there's a supply emergency, not when you want to affect prices. now, we used it -- when i was secretary, it was $10 a barrel, and in the year 2000 we triggered the strategic petroleum reserve because there was a shortage of home heating oil in the northeast and the price had gone up to $28. that's a historically perspective. but i think what the congress did at the end of the session, by the way, the oil export ban makes a lot of sense because it's good for us for strategic reasons, geopolitical reasons, not let the russians have the markets in europe, poland, et cetera, and then, secondly, it also allowed the tax incentives

for solar and wind to happen, to be extended. so that was good. but on the strategic petroleum reserve, i would slow down a bit. i would cool it. this market condition, there's an oil glut out there. i think that opec is going to be under a lot of pressure to cut production. i don't think it will, but i think it's important that we do find ways, and i know john has written about this, that we not just be totally political and say, we're not going to help the shale guys, the energy industry, the workers there, because, you know, this could get a lot worse. >> by the way -- john, sit tight. a little headline crossing at the bottom of the screen. al jazeera america saying it will cease operation by the end of april. that is primarily funded by the qatari government. maybe we're seeing the impact of the low price of oil and gas trickle through to the u.s. media because they were backing that as well. let's get to this point.

the idea is this, if the market knows a seller is coming on in a couple years, it's small, 5 million barrels or whatever it is is about one-fourth of daily use. why not come in here and say, if you're the department of energy, you know what, oil is cheap, let's buy it. let's top up the spr to not only preserve a little national security but maybe also help the oil industry? >> well, top it up? i think we should double it. >> fill it up as much as you can. you don't want it spilling out on the ground. >> this is what the chinese are doing. they're taking advantage of market conditions to get themselves insulation against the inevitable. and the conditions we're experiencing right now are not going to last forever, and the way things are going for the industry, we could easily find ourselves in a vulnerable position once again just like we were just a few years ago when we were importing two-thirds of our requirement, forget about exporting anything. >> we're not saying, governor, listen the government should come in and help the oil business. i understand in this administration that wouldn't be viewed quite so favorably, but

you've got an industry, a booming oil industry, in southeastern new mexico where there's too much oil. this is not -- this is a good time to come in because it's cheap. top the spr off and, listen, if you happen to do some good for the oil business, that's not your goal, but it wouldn't hurt. >> that's right. i would buy some oil. i think that makes sense. you want to have that strategic petroleum reserve always ready for a national emergency, and it's also good industry for louisiana. there's a lot of jobs there. and, look, we have an oil patch in new mexico. we have an oil patch in colorado, in texas. you know, those people are hurting. so i'm not saying you have a bailout of shale. what i'm saying is that we watch the situation. you know, and when i was in the clinton administration, i went to the white house when the price of oil was $10 a barrel, and i asked for some tax

incentives for drilling. now, i almost got laughed outside of there, but i think we've got to recognize there are a lot of people in the oil patch, in the energy industry, in shale, a lot of good jobs, and i think the good thing that has happened recently is this oil export ban because we're going to be able to create some jobs, some lng terminals, and geopolitically help ourselves, especially in europe and eastern europe where the russians play natural gas as a political weapon. so there's good and bad to the situation right now. >> i think we should be throwing all kingeds of support at this industry. the saudis in particular and opec try to wreak economic havoc on us whenever it suits their purposes. this is an important industry. this is beyond anything else and the industry is a great industry, should be supported because i don't want -- i live my whole life over the barrel here with these guys and i'm sick of it. >> i hope the government learns to buy low and sell high. >> absolutely. >> john kilduff, governor bill

richardson, thank you very much. >> to mary thompson now with breaking news. >> more on general electric's decision to move its headquarters to boston. in a press release the governor of massachusetts, charlie baker, saying the commonwealth of massachusetts did offer incentives of up to $120 million in programs and other grants to general electric along with $25 million in property tax relief from the city of boston. in the statement governor baker saying bringing ge's prices to the seaport district will cement the company as an anchor in the city's innovation industry. governor malloy expressing his doument th disappointment. he said that connecticut has to do a number of things in order to make the state more attractive to businesses, including investing more in its transportation infrastructure. keep in mind one of the reasons ge is moving to boston is

because of its accessibility to an international airport, that being logan, and also governor malloy saying in connecticut they need to continue to invest in their talent pool, most notably in the universities they have there. once again ge receiving $120 million in grants and other programs from the state of massachusetts and $25 million in property tax relief from the city of boston to move its headquarters to that city. back to you, brian. >> mary, just a quick comment as well. i had breakfast about a month and a half ago with somebody close to this situation, and they work for ge. basically the complaint they kept hearing from employees is what you just said. they love ge, they liked connecticut. the problem was they were always on the road and it was usually a multistop flight because they had to connect from hartford or schlep down to laguardia. maybe logan played a bigger role than we think. >> or jfk. keep in mind they just completed their acquisition of alston. ge is an international company. we know that. so they have to have access to an international airport and as we all know, anyone who has been

truck on traffic on the 95 corridor, it can be a frustrating and time expensive trip -- >> time consuming. >> that's the word i was looking for, time consuming. >> a lot of cars and not a lot of road. >> thank you, mary thompson. i want to point out the s&p 500 is flirting with the 1900 level. this would be a fresh intraday session low. right now we're at 1901. what is notable is the move lower in financials. take a look at the xlf. it's the etf that tracks financials. that is down by 2%. that does not tell the full story because you look at some of the components and that's where the story is. citi, goldman sachs, morgan stanley at fresh 52-week lows in today's session. morgan stanley for one is down 5.5%, and then, of course, there's netflix weighing on the nasdaq. netflix right now is at session lows down by 8%. >> and the russell 2,000, the small cap names falling deeper into bear market. that index is down over 20% from its highs of july of last year

despite the fact these companies are supposed to be immune to the global chaos that we are seeing and maybe more beneficiary of the low gas price movement in the united states. some of that market move i don't want to say doesn't make sense because the market moves are what they are but you agree, there are things happening which even if you put the puzzle pieces together, wouldn't come out looking like a clear picture. >> i would agree with that, brian. the turn in the russell 2,000 has been going on for months, we've seen the weakness there, and that could be a verdict or a reflection of what traders and investors think about the u.s. economy, sort of meh growth. we're going at it. it may not get worse, it may not get much better here, but we are in a market at least for 2016 where any perceived momentum names, any of the names that have done well, those are the first to go in any sort of market sell-off. you see the f.a.n.g. names go. >> i think the "g"," google,

could be bigger than apple. we are just minutes away for the oil close for the day. where will oil settle? possibly below 30 bucks a barrel? we're close. you're going to find out but only if you keep it here on cnbc.

the market has tengsd xtends losses. the s&p 500 down almost a full 2%. we are flirting with that 1900 level on an intraday basis but we are right now at 1901 and the nasdaq composite is the worst of the three major indices down by 2.75%. it was the f.a.n.g. stocks that are really feeling the pressure. netflix is down by 8%, but overall it is the momentum names and the names that have been doing well over the past year or few years. in fact, take a look at biotech stocks. biotech started the day in the green. looked like it was going to try to move higher but we are seeing a break here of the ibb, the biotech etf. down by 4.4%. right now in transports, this is a new two-year low on the transports. feeling no tailwind from the low price of oil. we are seeing brent right now

flirt with that 30 bucks a barrel level. let's get more on today's market slide. bob pisani is on the floor of the new york stock exchange. >> you cannot keep the rally. this is the thing everybody is talking about down here. i will show you a two-day of the s&p 500. but it's going on for three or four days. you see here. you gap up slightly and then they sell right into it and in the middle of the day you hit a low. in the last couple days we've had a rally right about now. so we'll see what happens, but overall we're sitting on the lows for the day. in terms of sectors, autos are notably weak. this is a whole take down of the overall market we've been seeing for a while. everything is down 2% or so right across the whole market here. what is very interesting is high volatility versus low volatility names. so there's an etf for this. there's a high beta etf that's down 3.5% today. that's the power shares. and there's a low volatility etf. you see how little that's down? only 0.8%. this has been happening all year. what do i mean when i say high

beta? i'm talking about -- melissa just mentioned it. i'm talking about biotech stocks, for example, high beta stocks, oil and gas exploration. that's the xop. that's high beta. regional banks, the kre. that's a high beta stock. transports, any of the iyt is one of the etfs for the transports. these tend to bounce around a lot on an intraday basis. we're seeing that. look what's been going on for this year. low volatility names, these are a lot of consumer names, only down 3.6%. those high beta names i just showed you, they're down 13%. so there's a very clear pattern here, melissa, that's going on here. they are taking down the names that had some of the biggest moves last year. melissa? >> bob, in terms of the low volatility/high volatility, is that relative? does that get reshuffled constantly if it's found that one of the higher beta sectors turns out to be low beta?

>> they do reweight it, but the important thing is you're essentially dealing with the four sector that is i was talking about. you're dealing with the regional banks, in this particular iteration you're dealing with the regional banks, the transports, oil and gas exploration and biotech overall, and that's very, very clear pattern. you really get that differential between the high volatility and low volatility. >> bob, everything you guys were talking about is spot on, but help us understand what people are talking about down there. i get it, the financials are -- you know, they're at the whim of the federal reserve. i get the energy companies and some of the other companies are at the whim of the price of oil. biotechs? they're not interest-rate sensitive. they don't care about the price of -- >> but they've had a bull run over the past few years. a huge run up. and in a market like this, people are selling the winners. you have to take a broader view of what the winners are over the span of years. >> that's an important point. isn't this a market now where we

can try to explain it, oh, it's oil, oh, it's interest rates. no, no, no. melissa kind of said it, it's sell what you can. that's the market we're in right now. >> the way traders would describe it would be degreesios. energy is down today because oil is down. the whole market is down 2%. this is what -- these are people just taking their exposure down to the markets. you're going to blame this all on oil? yes. it doesn't help oil keeps bouncing around. that's a real problem for us for days and days, but this is not somebody saying i don't like the energy sector. these are professional traders saying, you know what. i'm just going to take some exposure off of the market right now and that's what we're facing right now. we have delineated the reasons. my primary concern -- this is first day i've started watching earns. we have 23 companies that have reported fourth quarter earnings so far. three-quarters have beat on the bottom line. 19 of the 23 though, guys, have

missed on the top line, and this -- these are big companies like nike and bed, bath & beyond and general mills. consumer names. this is kind of telling me we're seeing some kind of global slowdown overall in business, and i think that's starting to -- >> i'm going to coin this -- if you have seen the movie "apocalypse now" i will call it the colonel kurtz market. sell the house, sell the car, sell the kids, i'm never coming home. >> you do see what i'm talking about degrossing, take down the entire market. >> the oil market set to close for the day. jackie deangelis, will we close below $30? >> this was not a session for the faint of heart. bouncing back and forth. we actually closed at $30.48. so positive on the day. up for the first day in eight here. this is a major shift for the oil markets which have started the year down in every trading day that we've seen so far. we were only up marginally and we hit a session low of $30.10,

but it shows that maybe as you mentioned before and yesterday, that maybe this is washing out. this was a market that was conflicted today part of it wanted to move higher on the technicals. at the same time the data from the department of energy was clearly bearish and pushed us lower. we had nearly 4% gains on the session this morning and those were wiped out to end up basically flat. it's anyone's guess where oil prices will go. what was interesting is the action we saw in brent. $29.96 is the session low, the lowest since april of 2004. >> jackie deangelis. thank you very much. and just to alert our viewers and listeners, we are now down 300 points on the dow jones industrial average. we are seeing the nasdaq lose nearly 3%. the nasdaq now down i believe 9 of the past 10 sessions. despite oil's pain there are only two companies in the dow that are higher. one is coca-cola -- coca-cola

just turned flat. one company that's higher, and that is exxonmobil. up 1%. the only dow stock up with the biggest oil company in the world. not saying the market has found a bottom in exxon but at least we're seeing buyers come in on a negative day. often people will take that as a good sign. let's get with mike kelly with seaport global securities and he joins us. thank you very much for joining us. listen, it's been tough for you, tough for everybody out there trying to call this market. you're kind of calling a region. you say if you want to invest in anything in oil, because a lot of people still do. people are thinking it will turn around, we're still a hydrocarbon world. why is the permian basin the only place you have your eye on. >> thanks for having me on. i think the tried and true philosophy of investing in oil companies over the long term is to back the low-cost producer, and the permian is just that. it's the best rock in the u.s.,

kind of shale patch here. we think you get on average a 50% better rate of return out of the permian versus any or play in the u.s. we cover 54 of these emps and we forecast out to 2020 we think you see two to three times growth out of these permian names. a couple guys have come out and done equity, pioneer and d diamondback today and the market is fine with that. they are making positive rates of return. >> we interviewed the ceo of diamondback, travis stice, never done tv before. everybody says love diamondback. one of the takeaways from the korchs was bigger is not safer. that's not the case. if we look at what the credit default swap market is calling on companies like marathon oil

and hess, it's higher than the diamondbacks of the world. is bigger safer or the midmajors here or smaller companies that are better positioned from a balance sheet perspective than the big daddies of the world. >> yeah. the big daddies of the world, there's a lot of inefficiencies there and they're in a lot of places that are just mediocre. travis stice is an absolute stud and they're a focused company. they have the best acreage in the best basin and you can just look at the growth rate there. they're going to lap all those much bigger companies in terms of their growth. >> is there any other names besides -- listen, everything, mike, has been going down. i'm looking at my screens, 20%, 30%, 40%, 50% losses in the past year. is there anything you're looking at saying i have a high level of conviction that it may not turn around and boom tomorrow but hopefully it's close to going down or finding a bottom? >> yeah. you know, i think that in terms of calling the bottom, it's tough. you've had a number of guests on

today that have told you we have a number of hurdles to stoill overcome. iranian barrels coming out. we put out a 100-page strategy piece. we see the market its coming ba to equip lib br-- equilibrium t the end of the year. we're back in the permian names that we think are dynamite if it's 30 bucks or 60 bucks a barrel. >> mike kelly, it's a tough market out there, man. stay safe. thanks for joining us. >> thanks, brian. >> all right. we are seeing the markets deteriorate a bit. the dow is down 324 points. the s&p 500 sliced decisively through the 1900 level hitting 1890, then bouncing higher but we're still down right now by just about 2.3%. a loss of 44.5 points. take a look at the bid to safety. we're talking about the tlt, the etf that measures the bond market.

we're sitting, no surprise, at session highs. it spiked higher in the last hour or so. it's up by 1.25%. "power lunch" is back in two minutes with much more on this market sell-off.

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hello, everyone. i'm sue herera. secretary of state john kerry says isis will be defeated. he made the remark during a speech on u.s. foreign policy at the national defense university in washington. >> daesh is literally the embodiment of evil. psychopaths who murder and rape. criminals in many cases who torture and pillage and call it the will of god. matthias muller meeting privately with epa administrator gina mccarthy in washington regarding the company's emission standal. neither would say exactly what was discussed but mccarthy released a statement saying she appreciated the conversation and will continue to work towards a resolution. a water main break creating a massive geyser sent water into the air in montgomery county, pennsylvania. the water shot up 30 feet in the air but the water instantly

froze on nearby power lines and trees. one of the tv's biggest comedy hits getting a curtain call. the cast of "friends" will reunite for a two-hour special. >> you can have a sitcom with their kids. >> absolutely. right. >> or their grand kids in some cases. >> it will be interesting to see how well it goes over. it was a great show. >> everyone will watch. thank you very much. time now for "trading nation" because traders trade better together and today let us trade alphabet, better known as google. with a $500 billion market cap. could it soon take over apple as the world's most valuable company? got jason helpstein and todd gordon. jason, do you think alphab alphabet/google's stock can keep going up even on a troubled tape?

>> we think so. you have to remember investors are anticipating this earnings call in the next few weeks where the company is expected to disclose their losses on speculative projects, and the market is really waiting for that. so if it wasn't for that, i would say, you know, you might want to be more cautious, but we think that is a very company-specific catalyst coming up. >> and what's going to be the main thing for alphabet investors to watch going forward here? >> well, a few factors. number one, this company now more than half of its revenue comes from outside the u.s. so to the extent there is macroeconomic weakness, do you see signs of that? they do hedge so you have a natural offset against some of the dollar weakness. also, this should be an easy revenue comparison. actually, their easiest this year, and margins have been improving and they announced a buyback. i think you have numerous factor that is help them fundamentally and then you have this kind of one-time event where they should

disclose whether it's $2 billion, $3 billion of losses which make you realize how much more profitable the core business really is. >> all right. todd, you are charting the relationship between apple and goog google. what do you see? >> brian, we're obviously in a high fear environment and when volatilities go up, correlations get tight. we have high degree of correlation everything is dropping. i see apple's loss of market cap leadership set to continue on google. i have done an interesting study for you here, guys. i have divided the price of apple by google. looking at a ratio chart allows you to see the relative strength and weakness of one to the other. just about 2012 apple peaked out relative to its google ratio. we dropped down into 2014 and obviously that next line projects if we maintain this current trajectory of apple loss relative to google, that puts us out to a one to one relationship in 2017. i have made a pretty

controversial call on cnbc.com for $81 in apple. if this continues to go to the point of correlation driving it lower, we'll probably get that one to one comparison. >> it's an interesting take on two very popular stocks. todd gordon, thank you. jason helpstein, thank you. appreciate it. for more "trading nation," head to tradingnation.cnbc.com. melissa? >> we hit fresh intraday session lows. we have the stock market accelerating in the sell-off. the dow jones down by 381 points. s&p 500 down 2.6% and the nasdaq is down by 3.5% or 164 points. take a look at the intraday chart of netflix. one of the f.a.n.g. stocks. quickly losing its shine. it's at session lows with the losses at 10% right now. we should note that netflix is 21% off of its 52. week high so it's in bear market territory with the rest of the

f.a.n.g. complex deeply in correction territory. we have much more on this sell-off when "power lunch" returns. territory. we have much more on this sell-off when "power lunch" returns.

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u.s. stocks in the midst of a sell-off this afternoon. the dow jones industrial average down by 362 points. the s&p 500 just off of session lows but we are at the 1889 level right now, down by 50 points or so. the nasdaq composite is down by 3.4%. with us now is art cashin the director of floor operations with ubs. great to get your insights on this. we can't blame china necessarily. the trade data was better than expected. oil is okay into the oil close. what's behind the sell-off? >> there's a lot of rumors about various kinds of liquidation popping up, and particularly when you see aggressive selling at this time of day, that's going to raise speculation that

margin calls may be involved here, and as i say, there's speculation that there may be some liquidation in funds that were being worned down with the selling in the commodities, and it finally kicked into their equity portions. and the other key thing was the s&p 500 broke below 1,900, and that triggered a trap door effect and the s&p dropped ten points in a minute. does this feel to you like the volatility we saw in august? i guess the extrapolation is if that is the case, should we start rethinking what the fed might consider external forces, world events? >> i think a couple of things. first of all, i was somewhat distressed to see the fed saying that the chinese market shouldn't dictate things. it's not the stock market that china is worried about. it's the chinese currency that they're worried about. and the disruptions have begun

to happen since the fed raised rates. many of us cautioned that they should not. and i have said i think we will see zero again before we see 1%. and that is going to affect their credibility. so i think if this kind of disruption continues across multiple nations, the fed is going to have to rethink its posture. >> great to speak with you. art cashin. >> coming up, the five big applists calls that you need to know about that help power your portfolio. it is called street talk. the dow down over 300 points. you should be on the hunt for opportunities. we've got some for you, coming up. it's hard to find time to keep up on my shows.

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the dow is down 330 points. a reminder that all three major indexes are in correction. some had been. the russell 2000 in bear market, down 20% from its high. the dow down 12% from its highs in may of last year. >> yeah, and it's important to note here, we are off the session lows. the key level is 1890. art cashin mentioned it probably triggered a bunch of sell programs here. this is going to be a real nail biter going into the close here. >> let's do a quick modified three talk. let's get some opportunity here. first stalk, qualcomm. target cut to 53 from 60. but that's still about 15% upside from here. yes, i know far off the $81 stock trading at a year and a half.

they downgraded it a year and a half ago. proved to be a good call. said it's been difficult, but they think the valuation is finally in line with the opportunities of qualcomm, melissa. >> yeah, this isn't the first bullish note that we've heard about in the past few months. maybe the tide is turning here. downgrading to a neutral from an overweight. the price target trimmed to 14 from 1550. the transition will bring headwinds until a new ceo takes the helm. it's got a good balance sheet. on a day on the gdx senior gold miners are doing quite well. this one is a laggered year. >> stocks coverage with a buy says it's taking over in many aspects, and becoming a de facto standard and enterprise business application. the analyst thinks the company is gaining ground, even among the biggest companies. they have a $100 target on crm. >> but again, it is the market force that is really being a

headwind, whether they're upgraded or not. >> yeah, it's going to be a big hour of trading for closing bell. a special 7:00 on the power ball tomorrow night. >> absolutely. we'll all be tuning in. thanks for watching, everybody. >> welcome to "the closing bell", everybody. i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. this crazy year for stocks continues. another big selloff. and we've got consumer discretionary, health care, and technology. some of the biggest losers right now. the market yet again started in the green on the open this morning. failed to hold those gains yet again. and especially -- this is a late day selloff, as art cashin was pointing out a little while ago, which we had yet to see this time of day. >> and y want to know what makes this session different. on the dow jones industrial average, t