leibovitz. >> he's not supposed to have other non-sponsored advertisements. >> this is what you've been raving about? >> looks better now, you're right. doesn't look as good there. come on, melissa! >> all right, all right, all right. nice shot. thank you for watching. "closing bell" starts right now. welcome to the "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. trading in an extremely tight range again with so much uncertainty about the future fed hike if that's what the market is trading on and walmart is rallying after did report better than expected earnings and coming up we'll hear from one analyst who is hiking his price target on walmart stock and we'll find out what walmart is doing right now but rivals like target are struggling with at the moment. >> yeah. for sure this week. oil a winner today rallying

nearly 3% hitting $48 a barrel again, first time in two weeks. we'll debate whether you should buy oil stocks on this crude comeback. justice department announcing plans to end the use of private prisons and shares of the two largest private prison operators just getting crushed today on the news understandably. we have the latest details on that story and whether that industry can survive. >> i mean, the shares down almost 40%. they're losing almost half their market value on news just out this afternoon. >> exactly. tesla model s in flames in the test drive in france. nobody was hurt. pretty amazing images there. but the news is raising a new round of questions about the car's safety. we'll tell you what tesla is saying and impacting the stock. starting with walmart's earnings. an eye opening beat. courtney reagan, wow quarter for the world's largest retailer. yes? >> yes. investors weren't sure what to

expect from the world's largest retailer and walmart did beat on earnings. walmart's revenues beat, comp parable sales the strongest in three years. target fell for the first time in two years. walmart raises the full year forecast and target lowers the guidance. in-store shopper traffic is the difference. walmart said on a media call that performance was steady. food or general merchandise. as traffic rose for the seventh straight quarter for walmart. grocery drives foot traffic and a halo effect to lift sales of other categories. 56% of walmart sales from grocery. compared to 20% for target. both working hard to improve the food offerings, particularly organic, local products and competitive prices on those goods. walmart is expanding the program

and says it's been well received by shoppers. so grocery really, really does make a difference. and those traffic numbers were completely opposite of each other for walmart and target and so basically were the rest of the results. >> exactly. courtney, thank you. what more is walmart doing right? joining us is the investor upgrading to a strong buy from a buy and raising a price target. but a lot of good news already now seems to have moved the stock so what's the next leg for walmart here, joe? what are they executing right now here? >> i think they have earnings earnings and sales mo moan tum going forward. doug mcmillen has strategies including employees on the floor from back room. speeding up checkout. and this is leading to an improved consumer experience and making the stores more appealing to customers. >> do you think it's as simple

as happy merry workers raised waenlgs and improved the hours and things like that? >> i think getting the employees out on the floor from the back room makes them more available to help customers, help them find the things they're looking for in the store, by improving in-stock positions, they're able to purchase items not on the shelves in prior years and both in-stock positions and having an employee there to find those products they're looking for helped them grow sales. >> is it about the core store experience? anything to do with the investments walmart is mablging in dotcom and the new innovations of pick-up and other types of categories that are expected to bear fruit? >> well, pickup and online are certainly going to be long-term drivers of growth and the current quarter not so much so. we were pleased to see sales accelera accelerate. decelerating over the prior year and a good term for the online

business but in-store is where this quarter was at and why they beat on the quarter. again, i think speeding up checkout, better in-stock positions and having better customer service is improving the customer experience in the store stores, longer term, we look online to drive earnings. >> before we let you go, any headwinds still? what are they? >> headwinds, you have the macro economy, pressures on lower income customers which could be a problem. food deflation is a near term issue. 60-base point impact and expect it to be alleviated as the year progresses and into next year. >> all right. very good, joe. thanks. >> thank you. >> joe agnese from s &p capital iq markets i think. joining the "closing bell" exchange today, we have jeff carbone, kenny polcari is at post nine and rick santelli

checks in from chicago, as well. kenny p., you have been on the floor for a while. have you seen a market stayed in the -- stuck in the narrow range this length of time? it is summertime but still a very narrowly traded market here for a while? >> it's been a narrow market for almost feels like two and a half months now, right? very tight, tight range and this last month a really tight range as we built up to the fed minutes, what did they say in july? anyone find anything new about it? jackson hole in a week. so the market is really stuck. now that i don't think there's anymore interest rate confusion and put to bed last night. i certainly don't think as much as they tell you they're going up in september, they're not. forget october, november because of the election. maybe it's december and i'm not sure it happens but the market continues to just drag through the end of the month until we get through labor day and no other catalyst or the market movers to really create any volatility in the market that i

can see. >> jeff, bonds here for a second, as part of what kenny's saying, eliot management today saying that you don't go near them. you basically are better off incinerating your money. how dangerous do you think fixed income is here looking at extraordinarily low rates? >> you look at just like we previously said, we have a market in search of a direction, the bond market or the stock market. you know, it is like the scare crow from "the izard of oz" which way do i go? which way do i go? you have the fed reserve, just mentioned, in the position to raise rates, they want to, but september, certainly doesn't seem like it's going to happen. december is a possibility. but we need a lot of more economic data to show that. when you have germany negative, japan negative, when's the fed to do? 1.5% rate on the 10-year treasury right now, to get back to just where we started at the beginning of the year, we need a 50% rise. not sure if we see it.

we're stuck in a slow-growth economy right now. >> might be an odd question for you. you're a student of market sentiment and impact on the markets. a report out of a lot of insider selling in the stock market right now. do you take -- does that worry a bull right now or does a contrarian take comfort in that as an indicator? what do you think? >> you know, in the old days, when logic prevailed and the rules of the road, everybody stopped at red lights and went at green lights, i would say yes. in the world we live in, i would say, who knows? i like the analogy with the scare crow. so if we play that game, i think i would pick the lion because i don't think the fed has any courage at all. how many guests? today alone four said, you know, a quarter point, no big deal. if it's no big deal, why is the fed biting off their fingernails every time they think they may have to do it? it doesn't add up. both our guests are smart guys.

i think jeff even mentioned treasuries. but, boy, how many times do you see there's been 14 trading days in august so far and every single one a 10-year note settled in the 150s. that's very unusual. things can change. look at portugal. they're one rating agency away from not qualifying for the rigged program of quantitative easing. the yields are popping and probably find a way to, you know, make sure that that agency probably doesn't do what they probably should have done a long time ago, just think how they treated s&p in this country taking the aaa away. we never know what forces are out there and black swans are out there and the markets are really coiled. >> we could extend the analogy to the fed speak that we have had. it seemed like we had dudley and lockhart and the guys lining up to say one or two rate hikes could happen and then jeff bullard today saying, no, no. one is possible in the next two years. >> next two years. i think that was what the amazing thing was because on

tuesday, you know, you had the three stooges, right? say no, no, no. it's september. it's december maybe at the latest. and then, boullard no arard say not happen until 2018. >> he'll say something different next week. >> jeff, how do you make sense of that? you have to figure out maybe we don't have more information than the fed does but what do you do with that as an investor? >> depends on the bond side or the equity side. bond side, some point we are going to get interest rates to start moving. what do you do? you look at ways of shorting the treasury market or in vehicles that are going to go to benefit you while interest rates are rising. from the market, look at utilities, con surmer staples, very high. when interest rates move on up again, we see those positions start to sell down. take advantage of where valuations are low.

health care, technology. seeing certainly better opportunities in those sectors than the consumer staples. >> i'm curious on the thoughts of the insiders selling. when we saw that was june of last year just before we hit a new high in the market. interestingly. so now here we are again. we're already at highs. >> listen. we talk about this and new highs beget new highs, i think at this time there's nervousness in the market and a lot of people expect that there's got to be a pullback because the macro data is not making sense of where the market is. you have them raising stock and diversifying away makes perfect sense to me. >> very good, guys. thank you. appreciate your thoughts on today's market action. >> and we have a dow up six points and with 50 minutes left into the close, the s&p up 3. nasdaq up 11. we have said it before but it bears repeating as the adage goes, never short a dull market. it creeps ever higher here.

one thing lower is the u.s. dollar, down half a point again today. it's down near 94. >> maybe that's why oil's been going up. in fact, a leading oil analyst making the case for $65 oil as soon as next year and list the oil stocks to go along for the ride, as well. also the bear case in a debate on energy coming up here. and earnings parade after the bell. the gap, ross stores and app materials are up today. we'll bring you the results on the tape. keep it right here. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state

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welcome back. valaent pharmaceuticals sinking today. giant t.j. rowe price is suing quaeting the fraudulent scheme cost it and others billions of dollars. lawsuit calls out the use of mail-order pharmacy fill a door and the pricing and accounting prices. value yenaent wiped out about 1

the high. jackie deangelis with the latest of the nymex. jay i can? >> closing at $48.22 just off the session highs. so why the oil rally today? a couple of reasons. first, most important one, probably the dollar weakness that came after the fed minutes yesterday. that is very supportive of crude prices right now and other circumstances, as well. you know, this time traders are really believing that opec will take some action in terms of a production freeze in september but this time is potentially different than all the other times in the past. meantime, there is some optimism we're working through some of the supply problems we have seen, as well. department of energy data yesterday did confirm that, at least for the week. so how do you play it? well, let's talk about this. kensho sta tisings show us oil gain 15% in 20 day's time like we have now, in the week after, oil prices down about 83% of the time. that makes sense, right? after you see a bump-up, you see

selling, as well. a month after you'll see prices up more than 5% about 83% of the time and indicating longer term oil prices could have the potential to break through the $50-mark and legs to go higher from here, guys. >> exactly. thank you so much. oil stocks have been a big beneficiary of the rise of in oil prices and why bank of america upgraded. predicting the price of oil to jump 50% to $69 a barrel by next june. >> so let's talk about it. is this the time to buy those oil names finally? >> let's bring in david cast who says, yes. d.r. bar on tton who says, no, yet. you're the value guy finding value in energy stocks right now, are you? >> we are finding value there. part of the investment thesis is based on the fact oil trades up

to the $60 to $65 level. we think we are in a band right now of $40 to $55. if oil trends higher, we think there's opportunities in the oil stocks. a good yield at a number of companies. cheap relative to the earnings and very cheap relative to the price to book value and longer term basis, you want to own the stocks and waiting for $65 the stocks will have moved a lot. >> d.r. why are you cautious? you don't think price of oil is going up or do you think the companies wouldn't be the best investment? >> no. i agree with david on the valuations of the stocks. i'm more of a sector call. i think that oil we just got a bunch of good numbers. we are up. i think right now is not a good time to put new money to work in these names. i think that we are going to get another pullback, another substantial pullback because, you know, we said it could be

different for opec this time and think about what would happen if they did freeze. saudi had a highest production month ever. so they're freezing it right at the top of the production levels and i don't see new demand coming along. actually the opposite over next six to 12 months and help prices to get higher. we are getting more rigs coming on week to week a little bit by little bit and a lot more supply upside than demand right now. >> which i guess, david, you would say gives you time to pick these guys before the price does move higher. who do you like here? what's the reasoning behind who you like? >> basically we are playing the better businesses a little bit lower volatility and doing better in a better environment. so a company of exxon or a royal dutch petroleum are low risk. paying up to 7% yield. occidental petroleum is very well run. you're getting about a 4% yield and to be more speculative,

conoco has done pretty poorly this year relative to the overall energy group because they lowered the dividend in early february. the earnings is worth a lot and going to have some good catch up to the group. >> all right. very good. david, thank you. d.c. good to see you as well. thank you for today. okay. we have new developments on the investigation into ryan lochte. andrew ross sorkin joins us. what are they saying now, andrew? >> reporter: guys, police holding a press conference moments ago. headlines for you. the police saying that there were a series of contradictions from the beginning in the u.s. swimmers' account of last weekend. police saying there was no robbery as described by the swimmers. that's the important part because it is a complicated situation. brazil police saying they haven't confirmed what or if

crimes they might be charged with or what will happen. however, they did say there was acts of vandalism and then the question, of course, whether they lied in these signed statement that is they made to police. i should say, those could -- if they were found to lie and they were prosecute, between one and three years you could be jailed for. worth noting that. as we're starting to get a real better sense of what happened here. it looks like -- we showed you video earlier today, the gentlemen were at a gas station. tried to go to the bathroom. some sort of van dammism took place in the bathroom. unclear. it looks like they tried to leave that gas station. then, clearly, the security came to them. they still tried to leave. they tried to pay the security folks to leave. they wanted them to stay until the police came. and then it looks a little unclear what happened. here's the most important piece i want to mention. given that there's been questions about whether guns

were drawn. rio police are saying that the gas station security guard did pull out a firearm because what he says was one of the u.s. swimmers was acting erratically. if you looked closely at the video of the day you did see some of those swimmers hands go up at one point and now starting to get a little better sense of what took place. clearly the original story told is not exactly what happened and clearly moving into a different place. we are going to bring you more as we get it. and we should also note that police saying they'll continue this conversation. they're still looking and trying to search for details, guys. >> andrew, you mentioned how punitive this could be if they would have to go through a trial process if they're found guilty of what you mentioned facing a couple years in -- ryan lockte is back in this country. >> reporter: well, there's a couple of questions here. first the question of the vandalism, whether they prosecute that at all. two, then you should know

there's three athletes who are here. one of them definitely signed the original statement with ryan. the two others unclear. whether they would try to extradite ryan lochte from the u.s. is more complicated. the ioc spokesman seemed sympathetic to these guys. and you have to imagine that they're part of this conversation, as well. so, we will see where this all goes. of course, the worst part about this is this is the headline. this is what we're talking about. rather than the athletics and the competition and people spent so long training to be here and we're not really talking about when's going on there. we'll try to bring you highlights over the next day but a lot has happened here in this sports world beyond this story. >> how about the 4 x 100 relay? >> they get a do over. >> they have to beat the time. i think by the chi naez or

something. >> very, very cool. we'll let you get back to the other new there is in rio. thank you. >> please do keep us posted. >> reporter: it is an important story and an economic story here, too, given the security issues and the reputation issue. >> because the incident -- >> superior. >> this is emblematic of the folks having it in brazil and this is an anecdote and now it's an aneck of a different type. >> a trip to the men's room went horribly bad. thank you. >> thank you. 36 minutes left in the trading session here with the dow up 8 points. another narrowly traded day again. coming up, a tesla model s catching fire in france. what it could mean for the automaker and stock. key players are worried that donald trump's poll numbers and campaign moves could hurt gop contenders down the ballot. we've got john harwood with a

special report you do not want to miss coming up.

welcome back. twitter shares dropping today in the wake of the downgrade to sell from hold for the social media giant. those shares down 5.5% on a day when the market is otherwise kind of flat. the analyst says he sees more risk than reward. that's the big one, everybody's watching. meantime, worries continue

to rise among some established members of the republican party that donald trump's latest poll numbers and campaign management moves could hurt gop candidates in other races or down ballot as they say. john harwood has the story. john? >> reporter: bill, republicans have been concerned all year about donald trump because of the things that he says and the potential for alienating voters but now they're really concerned because the poll numbers declined. well behind hillary clinton and republicans worry that the majorities could get pulled under the water as a consequence of that. let's look at the senate situation first of all. republicans have a 54-seat majority. democrats need to win at least four to take over the senate. but they have got ten competitive seats that are targets, ten republican-held seats. democrats have one seat they hold that's a target. if you look at the members fighting the trump tide, we are talking about people like ayotte

in new hampshire, toomey in pennsylvania, you have got richard burr in north carolina. then you go on to other states that are thought to have been more safe for republicans. mccain, rubio. they're not all behind but they have got some difficulties to withstand the undertow. on the house side, republicans have more of a cushion. they have 247 seetds now. democrats need to gain 30 to take control. that's not easy because there's only about 31 republican seats that are competitive. democrats have a much smaller number there. the challenge, though, is that if donald trump's situation should erode further, the number of those competitive seats could open up and that's more and more republicans who are unsettled by the recent move to put the breitbart news manager as the head of the campaign, they're talking about accelerating the encouragement of republican donors to support house and senate candidates but not the

top of the ticket, guys. >> i guess, john, it seems like this is a difference from the tea party wave of eight years ago or four years ago when the people who are vulnerable are actually ones where it seems like the impetus is just to kind of turn out the traditional republican voters, maybe even win over some independents s. that right? not the kind of year where it's more important to appeal to more conservative base? >> that's right. and, you know, republicans have done better lately in off year elections because the people who turn out in off year elections tend to be older, tend to be somewhat whiter than the presidential audience. in presidential years, a bigger, broader turnout in a diverse country is advantageous to the democrats. republicans did extremely well in 2010. they had a big backlash against president obama. they did very well in 2014. but obama won in '08, '12 and hillary clinton is favored to win now and it's less congenial

landscape for them. >> daryl issa being one of those where he could be facing some trouble. >> he has a challenge, too. >> thank you, john. time now for a cnbc news update. sue? >> here's what's happening at this hour. the justice department will end its use of private prisons. officials concluded the facilities are less safe and less effective at providing correctional facilities than those run by the government. there are 13 privately run facilities in the prison system. all of the contracts reportedly come up for renewal over the next five years. twitter announced today that it has shut down 360,000 accounts for threatening or promoting terrorist acts over the past year. the company says daily suspensions of terrorism-linked accounts jumped 80% since last year. uber will begin testing a fleet of self-driving volvos in pittsburgh in a couple of weeks. the company says customers will be able to opt into the program

and the rides will be free. they will also come with a driver just in case. mcdonald's is pulling its new activity trackers from their happy meals. the company says some kids experienced skin irritations while wearing them. the device counted steps and blinked according to how quickly or slowly the person wearing it moved. kind of a kid's version of fitbit. that's the news update this hour. back the you. bill, you love your fitbit. >> oh, yeah. >> wears it all the time. >> leave it right where it is. there it is. in the drawer at home. lonely fitbit. >> you open and shut the door enough you might rack up steps. >> wonder if the battery works? >> considering you didn't use it much probably so. >> thank you, sue. >> you are welcome. >> see you later. >> a nice desk drawer shot. could have been in a magazine. >> you keep it on hand at all times? do you know -- yeah. they have it just in case the

word fitbit comes up, you bring the photo of bill's from his desk drawer at home again. so we're up 5 points heading towards the close. a leading trader will tell us what he's watching going into the close coming up here. mobile phone wars are heatling up thanks to t-mobile and ath's latest price cuts. s p. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. perfect driving record. until one of you clips a food truck. then your rates go through the roof. perfect.

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25 minutes left in the trading session with the dow up 5 points. joining us, gor dan charles. we're grateful he's here and just back from lunch. i don't know what time it started but -- >> i was actually by the kelly evans spot. >> that's a nice plaque where you shine it up there. >> very proud of that. >> what is going to pull us out of the doldrums here in this market? i mean -- >> bill, your negativity is wearing me out. >> you can say you never short a dull market. >> i used that cliche last week. into the most half hour of the day -- >> yes, we are. >> leaning to the buy side here again. only up 5 or 6 on the dow. this market is much stronger

than the dow is indicating. a lot of guys, though, are loving this market. the market makers, guys we are talking to, you can get alpha out of something. this is where you're outperforming the funds. so, all of the things are making sense for guys. that are looking to trade to improve performance. keep from getting the redemptions and keep their customers happy. so i think that this is a good market, a positive market. and you should improve your disposition a little bit. >> i would never. i would never say something negative about that. you couldn't look me in the eye, could you? >> you don't miss the water until the well runs dry. i want to share that with you. >> i'm going to use that tonight. i guarantee you. thank you so much, gordon. a pleasure. >> i don't know what that means. mobile phone users have reasons to cheer. jon fortt joins us to run through the offers. >> you can call them price cuts and they are for most people and some strings attached.

sprint and t-mobile call them unlimited and they are because there's no cap on the data to consume but the limits of how quickly to consume the data. not streaming any hd video under the plans, stuck at 480p and not tethering or sharing a high speed connection from the phone to the pc or tablet. can't stream the highest resolution music on sprint's plan and if you want a fast gaming connection, t-mobile will let you pay extra. here's how much it all costs. sprint is $60 first line. $40 for the second and then $30 after that. t-mobile's 70 for the first line, 50 for the second and then 20 bucks for any additional lines after that. bottom line, the plans make the most sense playing for other people's phone lines and don't so much care about streaming quality. kids, for example, who like to hog data or play pokemon go. they make less sense if you know how much data you use and like

to stream high quality on the run, guys. >> jon, yeah. are these price cuts or hikes? i felt like price hikes kind of an inflection point starting to see with a lot of mobile plans. >> it depends. if you don't use a lot of data and you like higher quality and on a nice low budget plan, this is a hike for you. and you probably not interested in unlimited anyway. but if you have a family of three, four, five and up and have trouble figuring out month to month how much data is used, paying overage charges and don't care about streaming quality, video or music, these could be a big price cut for you. >> all right. >> interesting. thanks, jon. see you later. jon fortt on the price wars in the cell phones. now we very rarely do that segment together. >> every day. >> jack benny and george burns could not look at each other without cracking up. that's what we go through. >> we're heading into the close

with 20 minutes to go. markets are higher today. small gains but still the dow there trying to hang on to a gain of 4 points. coming up, a tesla model s test drive gone horribly wrong. the video says it all. no one was hurt. good news. we'll have tesla's response and discuss the latest incident for the electric automaker's stock. up next, new data shows netflix insiders doing more buying than selling of company's shares. we'll discuss whether now is a good time to follow their lead.

shares of net app popping to up almost 17%. jp morgan raised the rating on the stock to neutral from underweight. and ses hanna cited confidence in the ability to deliver on revenue growth projections. late yesterday reported better than expected earnings thanks in part to cost cutting. reports have shown there's a lot of corporate insiders taking profits as surged to record highs. we were talking about this earlier. >> yep. >> there's a company seeing insider buying and it's netflix. >> shares down over 15% this

year. is this buying a sign of better times to come? best performer in the s&p last year. ross gerber is joining us and the cautious barton crockett of fbr xap markets. thank you for joining us. more to come here, ross? i mean, why is it -- just a pullback last year because of last year's outperformance? >> absolutely. you see it all the time. short-term performance, when you have 150% year, of course, you're going to take a little time to consolidate here before you move to a new level and we have seen it hold the $95 range solidly after earnings hit it down. i like the stock here. >> barton, you don't, though. why? well, i should say you don't but you have a buy target on it. >> neutral rating, right? >> yeah, yeah. look. i have a market performing rating. a $90 price rating. i think they're a brilliant management team.

but i think brilliance can't overcome basic facts that the numbers indicate of a saturation issue in the u.s. you have well over half of all broadband subscribers in the u.s. of netflix and similar satch wags marks and netflix for a couple of years and kind of seeing a company of decelerating subscriber growth and a company of drinking the kool-aid internally and spending more on content and then that environment i think there's risk that they over -- they get overly ambitious and spend more based on anticipation of growth they're not able to get because the market is saturated. in my mind, there's a risky place for netflix's equity at 90 times ebb at the and i want to consolidate and mature and not chase it right here. >> ross, you have a lot to work with there. >> premise is that 80 million people is most amount of people

to watch netflix? >> i think there's billions of potential customers. i think they're at the beginning. the world is a huge place and looking at china and the rest of the world, it's zooming. it's booming. it's amazing. so, it's like, netflix is just, just scratching at an enormous market and you have to have bigger vision to see it. >> okay. i mean, you know, it's nice to say you have to have bigger vision but the numbers tell you they're decelerating. in the u.s. -- >> the u.s. is full. that's not a debate. >> the u.s. and internationally they've slowed. they have already hit the biggest subscriber growth in the launch quarters internationally. data there i think is somewhat cautionary. there's a lot of other things to consu consume. netflix is a compliment to pay tv. it doesn't have sports. it's i think for that reason to argue everyone's getting netflix is ambitious and the numbers tell you that it is something

that's a popular service but that you got to not assume that everyone in the world is going to get it based on the trajectory of today. >> do you have kids? >> i have kids. >> do they watch netflix? >> of course they watch netflix but the question to you is -- >> is it the first channel they go to? >> do you know anyone who doesn't have netflix? >> everybody has netflix and everybody in the world's going to get netflix and so if you have the -- >> i don't have netflix. >> who doesn't? >> kelly. i don't have netflix. >> kelly? you don't have netflix? >> no. >> someone in the u.s. who hasn't already subscribed. >> this is a woman that gave up on social media, too. >> i saw that. i saw that, too. that i get and not having netflix i don't get. >> just another tv station i'm not interested in the shows. >> try it out. try it out. >> i did. i had it for 24 hours a month ago and canceled because there weren't any movies to watch. >> not movies. it's the shows. the shows are great. >> martin, go ahead.

finish this up. >> how will you find someone that's not subscribed. >> i just found somebody. sign her up! >> yeah. she's telling you she won't subscribe. >> she's difficult. >> people in the developed world. developing countries you have other options out there and i think a long time horizon. to argue you're going to get valuation support of netflix own deceleration subscriber growth and any time to invest in today, you know, i think is a very aggressive stance and not on the side today. >> we have to go. always fun, good conversation. thank you both. ross and martin. >> thank you, guys. >> beleaguered martin crockett. markets hanging on to gains. the dow up 7 points. walmart by the way one of the better performers after the earnings this morning. s&p up and nasdaq up 8. >> she reads paper newspapers. up next, oliver will tell us why he likes exxonmobil, at&t

and johnson & johnson. familiar names after this.

about 8:30 left in the trading session. joining us on the floor of the

new york stock exchange oliver porsche. we mentioned three companies you like. bluest of the blue, really. so you like quality. do you consider that a cyclical play or a defensive play right now? >> defensive play right now. you know, there's been a disconnect of fundamentals and valuations. you've seen earnings come down in general. and prices continue to rise. some point or another that spread adjusts. it's almost a win, win for investors to buy high quality stocks here. if there is a correction to the quality and the dividend will buffer that down play and continuing to melt up and things rise, and let's say there's an expansion of the multiples, then those stocks benefit as well. you see a turn around in the dollar today. the dollar's weakening. that's impacting oil prices. you are seeing crude trade above $50. having a positive impact on oil stocks so that's exxon's been a long-time holding for ours. comes down to quality, balance street strength. not trying to time the market

but more and more defensive over a few weeks seeing the disconnect. >> it's almost sounds like a bond proxy in a way. i mean, it is not like you're expecting appreciation. fully valued kind of names. >> everything is somewhat fully valued right now. tough to find a company that's not broken or doesn't have something truly wrong with it. that is undervalued at this stage. right? so that's the issue. so you want to stick with quality. i don't know if i necessarily go bond proxy but a 3% or 4% dividend yield beats a 1.5% 10-year treasury yield. and i think it's hard to make the case that these stocks are going to be lower ten years from now compared to, you know, buying a bond. >> you wouldn't think so. what happens to them, though, when rates start to rise? especially if it -- if, for example, the long end of the yield curve goes up. >> all likelihood will happen so that's why you want to pay very

close attention to companies that have strong free cash flow. good operating earnings, aren't leveraged and lift their dividends over time. so that in essence they move in unison as interest rates rise, as well. @has a strong history of raising their dividend. exxonmobil, apart from the oil correction of the last 24 months. has a strong history. johnson & johnson, you know, raises its dividend almost every year and those dividend aristocrats are great portfolio core holdings. >> making this argument, why not just hold the index and an option on growth and maybe if i got the specific names a little bit wrong, i mean, the argument you're making could apply broadly. >> we're very much in the camp you have to be disciplined and specific in the investment approach. having a small group of core holdings, say 15 names is going to give you much less correlation to the broader market, meaning much less downside potential and if you've

tunnel it right you can still have almost all of the upside and minimize the downside. if you have done it right. we think we have but that's always a question. that's what we're sfoezed to think. >> exactly. good to see you. >> great to see you guys. i forgot to mention art cashin mentioning the market on close orders, 200 million to sell today. so i think we already saw that. i mean, we almost went neutral here on the dow but now up 8. we have earnings coming up after the bell. we'll get you instant analysis and reaction to gap's numbers among others. keep it right here. what if a company that didn't make cars made plastics that make them lighter? the lubricants that improved fuel economy. even technology to make engines more efficient.

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two minutes left in the trading session. little bit more than that. some of the gordon surrogates out on twitter today. when i -- >> that would be me. >> not bob pisani. taking me to task for using the word doldrums. what i meant was -- look at the chart of the dow. stuck in the trading range for an a long time. you go back to the june 24th lull of the brexit low, if you will, we regained altitude again and cruising since that time. that's what i'm talking about. >> exactly. i think the important thing is moving sideways, there's been changes in the market leadership. we have seen cyclicals come to the fore. energy doing better recently and old defensive plays move back a little bit. >> same time frame.

how about the dollar and what it's done in that time? a lot of volatility. and it continues to move lower. so what goes higher about energy, oil, wti? we have moved up since the dollar has moved down. this, again, same time frame. clear inverse relationship there. so we established this. >> i think the key thing is today with oil moving up aggressively today, all of the energy names moving up aggressive, double digit gains this week in the exploration companies. september 26th is the opec meeting. >> so you were telling me. >> and yet, all they have to do is drop hints that somewhere maybe we might have a production cut. you get short covering in the oil business. things move up aggressively. we know how this ends, right? with the talk of production cuts and things like that. let's see some more fundamental command drivers. that would be interesting. but right now, kind of amazing, oil. energy's the new leader. >> all right. very good, bob.

>> all right. don't get me started on the opec meetings. >> i wouldn't think of it. up 19 on the close. by the way, earnings coming out. gap, ross stores and plied materials in a moment here as we get under way with the second 0 hour of the "closing bell" with kelly evans and company. i'll see you tomorrow, kelly. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. stocks finished with a fill-up on the bell. the dow adding 21. s&p up 4 and nasdaq up 11. douby the way powered by walmart to some degree after it had an earnings beat this morning and we have a pair of big earnings this watch this hour. courtney reagan with gap numbers when they cross and seema mody on applied materials for us. joining today's panel, we have senior markets commentator

mike santoli here and contributor stephanie link. welcome, guys. for more, jeff sood of raymond james joins the fray with tim seymour. doing lots of work for us this week which we appreciate. mike, first of all, we ended up going out near the highs of the day a. quiet one and grinding higher. >> i think before the final little flour initial at the end, stronger below the surface. 65% of all volume in rising stock. equal weighted index upmost of the day. smaller caps up and seemed like there was sort of net buying but it's been so quiet. people look at the vix, at 11.5 right now and say that seems low and actually is high relative to how calm the actual market has been and one of the things that it's just august and even though last august was very stormy, we're not having it here. it seems like after the fed minutes, no catalyst before the

weekend. >> stephanie? >> we are at the tail end of earnings and going back to the macro. i think we are all trying to digest what the fed said yesterday. what it means for interest rates. what it means in general. and so, now jackson hole is extremely important and all kind of waiting for that and those data points from there on and i thought earnings pretty good. some pretty good things are happening and ending on a high note, if you will. what i think is really interesting that maybe is under the surface is that oil's up $10 from the low. and that's a big, big deal. people thought that oil going back to $30 a couple of weeks ago and now here you are almost near 50 and propelling a big group, energy sector, of a nice run with cyclicals of techs and financials. >> jeff, seems like things are working in this market right now and throwing in some better growth numbers, jobless claims this morning quite low. is that actually reason to think, hey, you know, how much better can it get from here?

>> i think it can get a lot better. i think the markets transitioning from an interest rate driven secular bull market to an earnings driven bull market and more apparent in the third and fourth quarter earnings reports of this year compared to last year. we think the profits recession ended in the fourth quarter of last year and things get better going forward. >> all right. tim seymour, what say you? >> well, i mean, look what's outperforming. small caps. em equities at one-year highs and i think it continues. everyone that was screaming that the dollar had to go higher failing to recognize just fundamental dynamics in japan and europe. the reality of the fed that every time they've been given a chance to do something they have not and the trades go on. look at the financials. i think the yield curve bot med in terms of the slope at 75 bips and it's slowly grinding higher. i think the rotation is

undeniable by long only accounts. you can see this and i think it will continue. >> we'll come back to that in a moment. the results of applied materials are out. seema? >> reporting earnings here, kelly. 50 cents adjusted which is 2 cents higher than the street consensus of 48 cents. revenue slightly missing expectations at $2.82 billion and perhaps more important is guidance for the fourth quarter. very strong here on earnings and revenue. in that the third quarter i would point out. new orders at $3.6 billion up 6% sequentially and up 26% year over year. the ceo dickerson saying we are in the early stages of large, multi-year industry inflections. we have volatility in the space. kelly, this is one of the bright spots up 45% year to date and up 60% over the past 12 months. >> 5% on top of that rally already this year? what do you make of that? >> semiconductors have done well

and lamb research really kind of a two that have done really, really well an they'll continue to do well with demand and some very powerful secular changes within their end markets so they're also still pretty cheap. you know, trading at like 12, 13 times forward estimates with estimates higher. >> is that good read? people look at to the index for a markets and the economy. do we still think that? >> i think you think it. it's not a clear bellweather it used to be. this is basically the top of the 15-year range. okay? basically a long time at this industry had to convalesce and consolidate and get better and it is working now and i think it's net positive. arguably semis are like the new industrials or the new kind of leading edge of industrial production in this economy. >> that's where the end markets are. industrials, auto, different secular things and kind of a variety of end markets and the

valuations are pretty reasonable compared to the high growth tech names. >> the dividend yielders that everybody's chasing so much. >> the dividend trade remained a hot one as interest rates stay low. eric chimi is here to warn you. they're not what they seem? >> no. many investors gone after high dividend stocks reaching for a yield and here's the thing. they're often the least reliable. and you could make a lot less than you'd expect. new data of shows it in the past 20 years, companies offering at least a 10% dividend yield actually paid out only about 3% in the next 12 months. these high yielding stocks often the worst performers in the market and high risk of cutting the did i have did he understand. williams companies, doing exactly that. cutting from 10% to 3% this month. mellon says it comes from companies offering 6% to 7% yields. higher than 7% was where you

actually saw payouts drop significantly. there are 17 companies in the s&p 1500 right now yielding over 7%. can you trust them? big names like frontier, seagate and centurylink could struggle to pay in 12 months so instead of reaching too far investors could be better off with lower yielding stock that is will actually pay out 100%. of course, mellon capital says that fundamentals are more important than the headline number. >> exactly. but still i wonder if 7% is a warning sign if you will. thank you. jeff, what do you think? >> i think more money has been lost reaching for yield than the point of a gun. and i would point out to you that some of the best performing stocks over the past 50 years have been the ones that have grown their dividend by 10% a year and they have been absolutely phenomenal over the long cycle. >> so growing their dividends 10% a year opposed to looking

for that yield per se. is that the distinction to draw? >> that's exactly right. some yield 3% and 4% and grow that distribution of 10% or more a year. >> this is important one, obviously. it's about not just the valuations gotten too high but trust what you are getting at these levels. >> that's why balance sheet, fundamentals are so very important when you're looking at yields and i totally agree that you're looking for dividend growth, looking at companies payouts low to go higher and pay out distributions over time. and then that compounds for sure. >> i would also argue that the threshold for where you have to start to maybe be concerned is these days lower than 7%. this study over a longer period of time and generates higher. right now, the dividend is so picked over that if you're much above 5%, i think usually is a flag that either they have credit problems at the company or something is suspect.

unless it eels a pure yield vehicle like limited partnership. >> do you have a warning level yourself, tim? >> i do in the energy sector. eric rattled off a bunch of names and wounded balance sheets and too good to be true it is too good to be true and mike pointed out interesting things and stephanie. the reality is you never chase a stock and so did jeff. you don't chase a stock on the dividend. you can lose it, and advantage in an hour. you can watch this thing pulls back 2%, 3%. you're not trading hour to hour but i think investors have to be careful. general mills, kellogg's, coca-cola. i'm long and not chasing them, as well. these are places where dividends are nice and at a place of the argument to make here about the market is we may be seeing an inflection point of yields are and these stocks overvalued, look at the valuation of the company. that's really what it comes down to for me. >> jeff, could you get specific about places in the market you

do like here? >> i continue to like tech. i think tech's trading as a price to estimated growth of about 1.4 or 1.5 and utilities trading at 3.4 or 3.5 times their expected growth rates so i continue to like tech. >> what about you guys? >> i like tech. >> makes sense. >> i like tech. i think that some of the valuations are very attractive but i like bar bell approach. i like the dividend rich stories and i think that technology and growing and being in an end market that's growing is very, very important. especially at those valuations. >> the handful of mega cap tech that's extremely cheap like apple, for example, it does weigh down the overall pe of the group and seems like it's all about, you know, just cash flow and yield and the rest of it. some of that's there and the rest of it, the growth is probably a little bit more interesting in this environment. >> fair enough. jeff, tim, thank you so much for joining us.

appreciate it, guys. gap ready to report any moment now. the retailer is red hot rallying 50% in the past quarter. up next, find out if the run rate continues after the results. plus walmart easily beating wall street's estimates this morning and up next we'll tell you which stocks benefit when walmart delivers strong earnings. tesla model s bursting into flames in a test drive in france. what could have happened and if it's more trouble for tesla. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim.

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walmart shares higher, nearly 2% after beating earnings estimates. history says it's not walmart to keep an eye on. deidra, who is it? >> that's right, kelly. well, as you said walmart beat and not just good news for them. they're seen as a barometer for the u.s. consumer so when it does well, chances are other retailers in a similar space are doing well, too. history backs that up. we used a tool to crunch the action to look at how other stocks did after walmart beats

estimation. we looked over the last five years. a week later, here are the names select discount retailers, dollar tree and dollar general tending to outperform the broader market but one month later, take a look at the stocks, even more compelling for the dollar stores, on average, dollar general gained 8% and dollar tree nearly 7.5%. walmart itself hasn't had that strong of a record after exceeding forecasts. do note that big lots returns not held in this longer time frame and either time frame focus on the dollar stores so if history is a guide those are a few ways to play the strong results today not only that, kelly, but thanks to walmart retail earnings as a groel projected to grow in the second quarter and check out cnbc pro for a way to play an industry-wide retail comeback. back to you. >> thank you. turned the sector positive on earnings. we have a negative stretch here for earnings and that's a

welcome sign. >> when walmart has that share of gdp it moves. on the dollar stores, to me it is the lower income consumer doing better that is the tail wind for walmart and obviously helps for dollar general. not because walmart is doing something so brilliant in the category. >> probably benefiting of low gas prices, better wages. that sort of thing and common theme for all of the players in the particular space and dollar general and dollar tree, their valuations are more expensive than walmarts and make sure where you're putting that money at the appropriate times. >> and then probably were through most of the year. >> absolutely. >> true. interesting because walmart did well in the grocery aisle. we know a lot of people go to the dollar stores for that, milk, some food items in the week but perhaps that's an area of the correlation works? >> it could. dollar general with more on the consumable side and a mix shift

going on there. you're right. that point, people looking for a bargain, an easy, convenience. this sort of thing. >> by the way, bill dudley, the new york fed president today had interesting remarks pertinent here and talking about the lower wage consumer and a positive trend. i said for the first time in gains middle wage jobs outnumber gains of lower and higher wage jobs nationwide. i'm not sure that's the dollar store demo and seens signs of traction, you know, for the middle consumer. >> i think he is trying to draw a distinction between the common snipe at the employment numbers is that, well, just a lot of restaurant and retail and ent entry-level jobs and now seeing that middle tier is coming through an high end very unemployment for the cycle. so i think he's more or less saying we're maybe in an encouraging phase. courtney? >> gap shares after hours down

about 5% or so. on these earnings. gap reporting adjusted earnings per share of 60 cents compared to 59 cents. we knew revenue and comps. revenue just about a percent time lower than last year compared to estimates of 3.9 billion. comps down 2% for the quarter. again, we knew that from earlier this month. and then if you take a look at the full-year earnings guidance, gap is looking $1.87. that's a little bit light and interesting quote of ceo peck says while i remain unsatisfied with the pace of improvement i'm encouraged by the progress in q2 as demonstrated by merchandise margins. our management teams shares my urgency of change that will drive long-term performance. and then if we can bring you raw shares really quickly and pull that up to see where they're moving and see higher about 2.6% after hours.

after ross actually had a pretty decent quarter. beating estimates by 4 cents for the bottom line. revenues also beating. now, mixed guidance with a weak third quarter guidance and actually full-year guidance slightly better than what analysts are looking for and comps up 4% compared to expectations for comps increasing 2.1%. so again, some strength out of that off price sector. ross and tjx are two names to look at there most often. kelly? >> thank you. let's get reaction of liz dunn. liz, the stock reacting negatively. what do you think, though? there's improvement in the margin it sounds like. >> i think the quarter was good and the reaction looks to be primarily about the guidance which was a little light of what people were expecting but if you think about the quarter, we saw improvement in the 2-year comp stack at every division. bah in that looks to be a disaster and real improvement out old navy and important. i think, you know, if you look

at the inventory position and the fact that they did guide above expectations, sort of interquarter after they reported the july comps, i think it was a really solid quarter and maybe the stock got a little bit ahead of itself into this earnings report as we're looking at the full-year guidance. >> gap has done better but is this a name to own now? >> i think it is hard and limited visibility in this particular name. there's so many other retailers hit recently in the last couple of weeks that i think you can probably get better earnings growth and just, again, better visibility. i think banana has problems and that's going to take a very long time to fix. old navy they're fixing and i bet margins are not great giving that stuff away. >> tj maxx suffered. >> i'm sorry. i think that tj, like price to perfection. it was a very good quarter and that is where you still want to be. but maybe that trade, the

reversion trade on the department stores is more attractive into the end of the year and maybe it is one to hold for a while. ross you can, as well. i think it's a known theme within retail. >> yeah. ross did raise guidance and tj did not and people think tjx is conservative on the guidance and a ceo transition coming and i don't think it's hitting the stock and another issue. in terms of gap, i mean, it is amazing that the clothing levered old retail names trade the same place. five times cash flow. macy's, cheap, cheap, cheap. been that way for a while. nobody can see how they get out of their own way. >> liz, is that a reason to hold them? what do you think? >> i think for gap, you know, it looks to be an inflection point and too soon to tell. the comps were really volatile within the quarter and, you know, you have a revolving door in the merchant organization. a lot of problems that they don't seem to have answers as how to fix and restructuring and looking at next year, they can probably handily beat the

consensus expectations and trading less than 12 times that and talking about valuation and, you know, a lot of names being priced to perfection. gap might be one of those that you could plug your nose and perhaps buy here. >> all right. we have do go. when's the last time you shopped bat nana republic, mike? >> probably more than most. i just wonder if investors just want to see them do something radical about the brand portfolio. >> spin them off? >> radically shrink it or make it bear more of the brunt of the store closures. >> interesting. tesla model s catching on fire in a test drive in france. nobody was harmed. could it harm tesla's stock? we'll hear from an analyst straight ahead. and olympic swimming superstar michael phelps is one of underarmour's most profitable and visible athletes. why is the apparel maker not

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welcome back. take a look at these prison stocks. privately held ones, publicly traded, tumbling down 35% and 39% from the biggest ones respectively on a report today that the justice department will end the use of private prisons. scott cohen has more of the story. scott? >> kelly, we have been talking

about this for quite sometime. latest in a backlash reported on in five years ago. many groups including organized labor say the private prisons are more dangerous with low staffing levels. others talk about the conflict of the prisons needing revenue and society needing people back in society and inspector general's report said they're not cost effective and a statement of u.s. deputy attorney general largely addresses that portion of it setting aside the social concerns saying that these prisons, facilities, are no longer cost effective as private prison populations decline. you have seen the big drop in the private prison stocks. corrections corporation of america and geo group down sharply on the news but the analysts say this is overblown. >> the reality is that they have to keep the prisoners in prison some place and the quaflts just don't exist to put them somewhere away from the

for-profit providers. >> and the federal bureau of prisons only a portion of the company's revenues, a material portion. 11% for c ca and 16% for the geo group but they will also still be getting federal business of immigration detention. that won't change and re-entry facilities and u.s. marshal facilities and of course all the states. kelly? >> reminds you in turkey letting 40,000 people out of prison to make room for the so-called coup plotters. is this by the way, as more information was becoming clear, not like they rebounded. they closed the day on the lows. what do you make of it? >> obviously, i think the portfolio manager response or investor response not wait around and see how long it lasts and the calculation now is does it mean the tide is turned against for-profit prisons and municipalities and other governments re-evaluating these?

the buildings won't go away but are -- is the pricing going to change? >> scott, how much of this depends on the next administration? >> well, that's certainly could change things but, you know, kelly, there's been a bipartisan move away from prisons and pronounced on the democratic side for sure but even states, conservative states like texas have been moving away from building prisons realizing it's not working and so that's why there's focus on re-entry facilities. that's not going toy awatt the federal level or the state level and so, you know, it's -- there's some political concerns, for sure. but there's also some bipartisan effort here. >> all right. scott, thank you. really tough day for those stocks. scott cohm. we have a news alert on stooen cohen. >> taking a stake in square worth around $80 million, the

digital payments company. a company that went public last year around $9. trading above the ipo price and still down though about 10% year to date. interesting investment. >> thank you. they had a decent quarter. remember, this kind of turned the tide in terms of jack dorsey's two companies if we shall. square was a standout on the latest results. >> very mixed, right? such an early on company in terms of the technology, impressive technology but a long way ahead for the guys to grow consisten consistency. interesting to see someone take a big stake in it. i don't think the company is out of the woods. the competitive situation is a big deal and obviously something there that they see. >> i also don't know if point72, the new rit ration, if we know what to infer from the positions. >> not activist? >> value? activist? very opportunistic?

something else going on? where it's -- we don't know. >> arbitrage, sure. >> although it's also could be a bargain hunting thing and well off its highs, square. >> point72 with a 5.2% stake on square. tesla making headlines. the vehicle was owned by tesla. luckily was no one was hurt. this is the response. they said nobody was harmed. the vehicle provided warning and passengers were able to safely exit the vehicle. we are undertaking a full investigation and will share our fund, as soon as possible. what does it mean for the company? let's bring in david. thanks for joining us again. >> good to be here. >> as tesla said, look, people were warned. they got out of the vehicle. is that an innovation? does that quiet concerns people have from the otherwise disturbing footage? >> yeah, no.

the footage is disturbing. i wouldn't be too concerned. tesla owner or potential owner or investor, cars catch fire. 164,000 car fires in the u.s. last year. it goes with the territory. the images look very square but cars burn very quickly. they're made from combustible materials. there's fluids in there. and that's regardless of what is powering the car, battery, electric or a hybrid car or a gas-powered vehicle. i really wouldn't be too concerned as you think that investors should be concerned about whether they hit the production targets. does anything about this fire -- their comment that we report of tesla more than sort of the historically, you know, longstanding guys. but is there any reason to think that supplier problems which have been reported or described coming to producing the vehicles as they ramp that up, any reason to think it might be something like that that's unique to tesla, a problem here?

>> no. i would say, i mean, they have been building the model s for a number of years now. this is the first fire that publicly well-known publicized fire in the model s we have heard of since 2013. i wouldn't be concerned this is a supplier issue but issues they resolved by now. >> "wall street journal" had a report of employees concerned with the production. thank you for joining us. >> thank you for having me. time now for a cnbc news update with sue. >> hi, kelly. here's what's happening a. little bit of good news to report on the wildfire burning in san bernardino. the 15 freeway through the ka hon pass is reopened but more than 30,000 acres have been burned. the fire is now reportedly bigger than the city of san francisco. wind and heat are making it difficult for firefighters to battle that blaze and only about 4% contained. former nfl star darren

sharper is sentenced to more than 18 years in prison following his guilty pleas in a plot to drug and rape women. sharper was shackled and wore a jump suit in court saying he has apologized to his victims 1,000 times. and doesn't know why he took this path. a new study links gal stoebs with developing heart disease. researchers at tulane university found people with a history of gal stone disease increased the risk of coronary heart disease by 23%. finally, it was the trip of a lifetime for one woman on a recent flight from dubai to mali that. four hours in, she went into labor five weeks early. two nurses were also on the plane and helped to safely deliver her little girl. the airline's ceo gifted the baby 1 million points of tn rewards program with no expiration date and those points can be shared with her family. that's the news update this

hour. nice to end on a happy note. right? >> i'm afraid people say a million points? pretty attractive. >> so's giving birth at 30,000 feet. >> yeah. not exactly. >> did she get to choose what country she is a citizen of? >> yeah. how do they establish the rights? i'm sure there's a formula for doing so. >> i think there is. she was -- i don't know what country she was over but it will be interesting to see. >> i don't think it's that one. >> dual citizenship. >> anyway, they will have a lot of miles to draw on wherever that citizenship is. sue, thank you. >> sure. the fight for the air waves is on as the fcc puts wireless spectrum on the auction block. verizon and at&t leading the charge so far for licenses for tv wave lengths. looking at the potential winners and losers and what their plans are next. [ clock ticking ]

time. you only have so much. that's why we want to make sure you won't have to wait on hold. and you won't have to guess when we'll turn up. because after all we should fit into your life. not the other way around. welcome back. we finished higher again on wall street. dow up 23. the s&p up nearly 5. nasdaq up 11. we have a news alert. another one on that u.s. cash payment to iran earlier this year.

amo eamon jaefrs has the latest. >> the controversy of whether or not it was a ransom. john kirby talking to reporters here in washington and he said this, he said in terms of the timing of the payment and the release of the prisoners, with concerns that iran may renege on the prisoner release, we wanted maximum leverage until after american citizens were released. the reaction is from many quarters that suggests there's a connection here of the payment and the prisoner release. president obama on august 4th said we do not pay ransom for hostages and said that the ability to clear accounts on a number of different issues with the iranians converged at that same time. kirby also saying that this was a whole bunch of issues with the iranians that were being negotiated at the same time coming together at that single moment where the payment was released and the prisoners were also released, kelly. >> that is convenient. we'll hear more when these hearings start.

thank you so much. >> you bet. $86 billion is total price tag, 62 betwecompanies being to. opening the wallets and bidding on air waves that the government reclaimed from television broadcasters, the first of the kind process is spectrum auction and the fcc denied a request to suspend it an award licenses from mobile broadband and cnbc's parent company comcast is one of the 62 bidders. joining us with more on how this process is going is dennis hoffman. thank you for joining us. that is big story, tough to wrap your head around. but as this auction plays out, what are we learning? we'll ask the professor again in a moment. we want to check his sound as we call it. just ask you guys before we do

that, there's a lot of money at stake. a lot of local broadcasters by the way gotten a windfall and turn over the spectrum. the bigger question is, when people paying up for it and access to this spectrum, how's that going to manifest itself in a couple of years? >> first of all, it's going to be a constant. i mean, these companies, at least many of them, if they don't own spectrum, it is like every single round, tough acquire more and an interesting thing this time is it's demand is falling short of expectations so it's not clear that this one is going the way many thought they would. also, there's public companies that own spectrum and considered to be a large portion of the value embedded in the companies and might be affected by what people think that the auction is holding. >> i wonder the larger cap companies to your point, mike, and the companies with stronger balance sheets to win and the smaller players really do lose and you will see this noticeable difference and therefore what happens to the consumer at the end of the day? i think the process will take a

couple of years i believe so we have time to see how it all kind of shakes out and the initial read isn't necessarily what happens at the end of the day. so again, i think a lot will happen over a couple of quarters. >> is it laying groundwork for just the explosion of data plans and all of the -- i mean, is that what this is really all about? >> i think so. i mean, you know, taking us to the next generation. right? so i think we want that. as a consumer. and also for these companies to grow. and i think a lot of, by the way, a lot of this holding back the valuation work from a stock point of view because we don't know how it will play out and how many do they pay? paying up or get a good deal? >> professor hoffman i believe joins us now. what we have learned in this process, what do you think the impact is going to be once the spectrum is allocated? >> well, you know, let's keep in mind a couple of basic things. this is a demand auction. not a price auction. the fcc sets the price. the fcc has the option to adjust

the price at every round. we've just completed five rounds. we've got about $10 billion in revenue and seeking $86 billion. the upshot of this is first of all this is much lower than expected. much lower than planned. much lower than the fcc even intended and it's a far lower valuation than we saw at the -- with the aws3 wireless auction at about $49 billion last time around. so i think that the big guys will do just fine. you have excess demand in the major markets throughout the country. the question will be, i think the real success of this auction will turn on whether that demand can expand in broader markets outside the major markets, major partial economic markets. >> where it's needed. >> thank you for joining us. we'll see how the rest of the

auction plays out. >> thank you. the u.s. is leading the medal count. the americans buzzing about swimmer ryan lochte's tale of being robbed at gun point. now they say they're lying about the incident and they were not r robbed. california has started the process of implementing a $15 an hour minimum wage starting in los angeles. will it help or hurt the state's economy? we'll debate the pros and cons of raising the starting wage later. we are working on the prototype to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think.

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the drama surrounding ryan lochte's and three other swimmers' account of being robbed at gun point is complicated. andrew ross sorkin is in rio with the latest twists. andrew? >> reporter: thanks for that. rio police finishing a press conference saying that in theory they could charge the four u.s. swimmers with giving false testimony and vandalism over an incident at a gas station in rio de janeiro last weekend. now, as you know by now, ryan lochte and three teammates said they were robled by gunmen impersonating police. we know that's not true. police say there was no robber. and at least one of the swimmers vandalized the gas station. according to police, the swimmers offered to pay for the damages. rio police chief say that is a gas station security guard did pull out a firearm contending

one of them was acting erratically and the justification for the firearm coming out. police say it's far from over and that it will be up to a judge to decide when passports of the three swimmers that are remaining in brazil will be returned. entire situation is played on people's fears here, the biggest feerls of violence in rio and security as numerous robberies have been reported. one of the big questions we have been asking here all week is how do athletes feel about this, the security issues, so we went to the athletes' village for perspective on security around rio. >> i wouldn't go out by myself. i would always go out in a group and applies in many places in the world. >> day-to-day basis we'll still go out into ipanema, copacabana, have a few drinks. >> i know of four people with incidents and you get nervous, obviously. but the people are great here. it is just that i think this is a country to be cautious.

>> reporter: and the controversy with lochte and the teammates is not the only controversy here. issues and raising eye brous, eyebrows raised today. take a look at this, guys. cover of this week's "sported illustrated." looks normal, right? look closely and see a nike swoosh on the leg of michael phelps. he is a spokesperson for under armour. nike is official outfitter of team usa. so this is causing some commotion. let's not forget there is also some great competition, though, left to the olympic games. tonight women's basketball semifinals and team usa taking on france. this team, this cnbc team hoping to see some of that in a little bit. men's beach volleyball, italy facing the home team brazil. and that happens i believe starting at 10:00 p.m. local time. >> we'll see if the u.s. women's relay team makes another go of it. move ahead to tomorrow after dropping the baton.

andrew, there's so many things here and first of all, the rules of athletes can and can't wear and the phelps "sported illustrated" thing they have to check with how many people to know what to put on in the morning? lawyers? their own -- how do you know? if there's the things of 90 days before competition and who's wearing -- do you think this is a case of people should maybe blame for having gotten it wrong or how complicated the rules have bomb? >> an indication of the complicated rules. nike issues these sort of memorandums explain what you can and cannot do. the u.s.ioc does the same and the ioc and most of the players know, not that they don't know and been told and if you talk to them about it, they know i can do this and blah. blackout certain logos and certain instances and we have seen that repeatedly. this i think is perhaps a mistake. there has been some justification for it. in fact, because nike is a

sponsor of the team and, in fact, he did wear those pants and the rest of the garb. up on the medal stand there. >> and the lochte thing, another story. appreciate you bringing -- >>

there is a bill board looking down on sunset bill board with celebrities known for the feuding. the ad suggests that duelling

music stars west and swift are of the same mind coming to california's $15 minimum wage saying they don't like it because it's putting the young fans out of work. joining us is michael saltsman and kendall fells. welcome to you both. michael, have you heard from swift's lawyers yet? they're quick to crack down when they feel like someone's misappropriating their likeness or something here. >> in this case, we are not implying they're for or against it and using the photos in an editorial context and intended to be funny. this is a rift on the bad blood of taylor and kanye and i think the broader point we are trying to make is that the $15 minimum wage is going to be devastating to the young fans of people like taylor and kanye. i mean, in california we have collected dozens of stories of small businesss that have had to close because of these high min numb wage levels and if

policymakers are looking for a takean i wi, you can't say shake it off to small businesses talking about a wage mandate of this scale. >> you were behind the bieber bill board three years ago with the same theme. kendall, is this light hearted to you? >> i don't think the workers are the general public think that's funny at all. just a couple of facts. fast food jobs some of the fastest growing in the u.s. economy. looking at mcdonald's, and you look at a city like new york, fast food jobs increased more than 50,000 more than 2000 and ten times more than any other industry. the average age of a fast food worker is 29 years old. two thirds women, the average age for a woman in fast food 33 years old. 70% of them over the age of 20 and over a quarter of them are parents that are trying to raise their kids. these are working adults, not teenagers. that are trying to figure out how to get a living age to support themselves and their families and by the way, about

52% of these fast food workers with families on public assistance compared to about 25% of the american workers so taxpayers are picking up a billion of about $7 billion a year nationally. $1 billion goes straight to mcdonald's employees if you drill down on the state like california, $717 million a year taxpayers are paying to subsidize a $200 billion industry and companies like mcdonald's who's going home with $5 billion to $6 billion a year. >> nearly three quarters of labor economists nationwide oppose a broad $15 wage mandate. in the reason they do is same reason that even in places like cleveland where the democratic city council recently gave almost a unanimous thumbs down to a $15 minimum wage because people realize it's extreme and unreasonable and an average of $7.40 an hour going back to 1938, when you talk about

doubling that, it doesn't just force businesses to adjust at the margin, it forces them to close down altogether. and so the people that kendall fells is talking about are the exact people who end up getting hurt in scenarios like this. this is happening in california. we have collected dozens of these stories at a website called faces of 15. that's the point of the bill board. i hope that policymakers don't have to wait too long in other states to see more and more businesses close before they learn the lesson that kendall fells' ideas are bad ideas. >> we have to go but a quick response there. >> i mean, i think the facts speak for themselves. we won $15 in the state of california after winning in multiple cities and new york state after fast food workers, medical center voluntarily went to 15 and facebook went to 15. etna went to 15. nationwide insurance volley went to 15. d.c. went to 15. not because it's a bad idea. because it's good for business. good for the workers and good for the economy and that's

clear. >> kendall, michael, thank you both. >> thanks. we l the market rally push into tomorrow? what to watch for in the trading session next. ke healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives. ♪

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markets rally continue tomorrow? what do we think? >> market drift. >> estee lauder reports in the morning. i want to hear about the consumer. >> i love you guys. 2016 olympics from rio is next she is a 4'8" giant and they're going to play the star spangled banner again. day 13 of a memorable rio olympics that has seen many thrilling finishes. as we arrive at the business end of week two of the games we have several games at stake. belgium and argentina squared off for this sport in either nation. neither have won