leithuser a vote of 86-14. the u.s. trade representative has been confirmed. thank you for watching power lunch. closing bell starts right now. hi, everybody, welcome to the closing bell, i'm kelly evans at the new york stock exchange. >> i'm bill griffeth, snap gets slammed. high ipo profile months ago attracted many at the time, could today's huge selloff scare them away from not only the stock, but the whole market? talking about that coming up with the stock down 21% right now. >> also watching walmart. look out, because the german grocer has a massive expansion planned in the u.s. i just, by the way, thought that was us doeing the snapchat. >> i remember, yeah.

>> we'll see. >> i think people were talking about that at the time. yes. we'll do aldi versus walmart. and trade secretary mnuchin in italy to find a way of trillions of dollars in foreign earnings to be brought back to the united states. we have it live from the g7 summit. we begin with macy's crushed on weaker than expected earnings. courtney reagan with more. once again, courtney, retail in a reluctant spotlight today. >> i know, isn't that the truth. there's no signs of a turn-around for department stores today. almost across the board, macy's shares down 115%. the disappointing results were in line with the expectations. on the call, the cfo said she only expected the first quarter to be the weakest. despite its ninth straight quarter of misses, she is reiterating the full year

forecast. she acknowledges the challenges, but financials will improve the rest of the year because the benefits of store closures. the full roll yacht of new shoe and fine jewelry category, and new marketing coming targeting their most loyal customers, and also some further digital improvements, like buy online, pick up in store. the profit beat the street handedly, but revenue short, and same-store sales slid more than expected, down for the fifth straight quarter. kohl's marketedly improved, athy are going after sales and markets where competitors are closing stores. nordstrom after the bell, investors price in disappointment with shares down 6% today. matt boss saying on "power lunch," 91% of what they sell, you can buy elsewhere. he doesn't think things go well after the bell for them either.

>> that's the point, courtney, not so much department stores versus others. it's the fact they don't carry and sell exclusively their own brands, so at this point, anything you get somewhere else online like amazon, that's the issue, right? >> exactly. >> not to mention convenience from online or whatever. >> and -- >> pricing is another issue for them. >> two of the most important things for shoppers are value and convenience. right now, amazon is hard to beat with convenience, even macy's, a strong onli online offering, and when you talk about value, it's hard to price those away from t.j. maxx or outlet malls. macy's tries to grab them with their price concept and stage concepts, but it takes time. they are expanding. they think it's working so far, but not enough to move the needle. >> but here's the question i have, we're going to talk more about this later this hour.

where does this go? what's the end game? we showed four of the five department stores, stocked crushed overall for several months. do they go away? what's the final end result? >> courtney, here's my theory. heritage, that's the sears real estate spinoff that now was highlighted the other day, but taking real estate, redeveloped, leasing out to stores and other things. what's macy's following suit. >> key points there. reali real estate in retail needs to be re-examined. it's being re-examined. estimates said somewhere between 25 to 50% of the stores in the united states need to close. there's too many stores, and you just cannot keep up with online with that amount of product. it doesn't make sense. there's value in the real estate if you own it like sears did, and in some cases, macy's, trying to redevelop properties, that's not the case with everyone. so then you have leases for

stores that are just under performing, and it makes more sense to close them. so i think we're -- >> not everybody owns it. >> exactly. not everyone owns it. that's the difference. >> that's a problem for them. >> that's the dilemma faced. thank you. >> thank you. >> see you later p. closing bell exchange, what a day. the dow down 144 points. >> am i allowed -- i woke up with a cold. >> i'm aware. i'm trying to keep my back to you so we -- >> oh, go this way. >> cant afford to have that. >> oh, stop. >> the market has come back today like kelly from the lows of the session, down 31 points. joining us at post nine today, oliver porsche, and cnbc market analyst steve grasso, and rick santelli who is comfortably ensconced in chicago away from kelly's germs. >> away from the spray. >> at the cme. oliver, what about retail? how are you playing right now?

>> so, we like the consumer discretionary space as a whole, but we don't like apparel. >> so amazon? >> well, amazon, but home depot. there's a number of different -- there's a number of companies in segments in there. to your conversation before, retail the whole landscape and business model changed, and so the old world leaders such as macy's, we just dislike that business model, and we don't see how they are going to win in the new landscape. >> back to the question i asked then. >> yeah. >> meaning every single department store goes out of business? something's got to survive. you you'd think. >> i'm sure. >> you're not going to try to pick it. >> i don't know which one. we'll stay away. there's better values in other areas within the consumer discretionary space where we know there's winners and where the momentum and business model fundamentally is more sound. >> home depot, by the way, steve, another under the radar story, oil up 5% in six days. >> yesterday, we had our

inventory numbers, most bullish draw we got in the inventory since january, but it's not out of its own way. this, to me, as i said, a contrived bet on oil with the saudi deal. >> what do you mean? >> the opec meetings, production cuts, supporting it, then a bunch of self-die banks, they want a piece of the 5% deal, and they don't know they are doing it, but maybe they give out rose colored glasses with the direction of oil. for me, i think you have to look at supply-demand. we know there's going to be an overproduction in the united states of oil. we know that is coming down. there's a glut of oil. it tells us something about global demand, about global growth, and i think the path of least resistance is much lower on oil. the head fakes, blitz up, selling opportunities.

>> okay. >> eventually, drags the market down, but right now, the overall market is hanging on the face of that. >> meanwhile, rick, 30 year treasury option like the three and ten earlier this week, is soft. clearly, investors reluctant to step in at these levels expecting the fed to raise next month again, right? >> yeah, no. when you really think about it, it's pretty amazing, we've had a real snapback in the -- not viewed as an opportunity that the yields would ease back a bit. seems as though investors shunned it as you pointed out completely. this, at a time, when the equity markets have plenty of room, go to lower, they do, but don't stay low. i think the data today was exceptionally important, and mild cti at all with the today's ppi, i think that maybe the market's maybe taking more notice. let's not lose sight of the fact today and the last couple days, ten-year at 240, yields not

closed at since the very end of march, and, you know, there's plenty of reasons, you know, just think of the drama seen now this washington, the hunt for red november, and it still can't get the markets higher up. i continue to think that the market looking past this is not anything small, and it needs to be considered. i'm not sure exactly how anyone would like to read it, but i know one thing of four decades watching markets, markets don't watch bad news as a result go sideways. >> rick, are you talking about the ppi number still in that regard? you mean the fact -- it's interesting. >> the political land scape, but -- >> oh, got it. >> i was talking about what's going on in politics more, but i think that if we turn our, you know, gauge away from that for a minute, the data is starting to heat up. >> and, steve, what do you think of that? so, you have the producer price ind index, import prices coming in strong, consumer prices, you know, that's there too.

the wage number was not great in the jobs report, but, again, it's not really reflected in the bond market right now. >> i think to rick's appointment, the market is trading off macro. yesterday, there was the comey news break, and then the market dipped a little bit, and then they ran off those invenn story numbers where they just grabbed ahold, oh, oil is rallying. that means that there's an all-clear, and the market just rejected the lows and just ran higher, but if you look at -- to rick's point, if you look at the market, it's been digesting everything, waiting on these pro growth policies. whether they pass, just the event of having a friendly administration after the last eight years, is deemed as a welcoming mat. >> all right. have to go, guys, thank you, all. appreciate your thoughts on today's market, and another interesting day here on wall street. >> in 50 minutes to go until the close, dow down 27 points, steadily moving from the lows. that's the pattern as of late. start weak, make it up as we go

here. the s&p down six points today as well as the nasdaq, down a quarter of 1% and russell down half percent. >> buy the dippers other than a company like snap, tumbling to the lowest bubble since going public in march. when we come back, whether millennials who piled into the stock in the early days regret that decision now, and what that may do to the thoughts about investing in the future. also ahead, attention shoppers and investors, a european grocery giant is ramping up plans to beat walmart at its own game on u.s. turf no less. you're watching cnbc, first in business worldwide. >> have a tissue. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures.

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twitter upping its game in live football now. the social networking giant and national football league inked a deal for twitter to broadcast official nfl content year round. now, for the last couple seasons, twitter broadcast select thursday night games. this new deal includes live 30-minute shows that air on twitter five days a week during the season. it also, then, includes live pregame coverage and officially

licensed video content. >> i get it during the season, but year round? >> what? yeah. have to be a real fan. also, golf? then i would pay attention. >> because you're a real fan. zb exa >> exactly. >> maybe that's next. i suggest that with you at the hel helm. >> i have a day job. speaking of which, let's do more of it. snapchat down following disappointing numbers. the investing app, core demographic is mill len yenials 18-24. retail investors took the opportunity to buy into the dip that we saw. that -- >> the buy to sell ratio is six times more buying than selling it on the dip. >> crazy. >> wow. well, continued stock drop,

joining us now is edge wealth management, along with michael santolli. welcome to both of you. people buy this dip in snap? anybodimey menwant to believe t break the ipo price or stay down? >> it's early for snap, first ipo, visibility not as frequent, reporter, now, the market's getting, you know, bit more from management, so i think as we seen structure shift from sourcing for the social media space, just not uniquely positioned, user face, looking at, you know, a third of the user face not on facebook, 45% is nonoctober instagram, i think you add overflow to snap chat. often times, see how the manager scales up the business, and marketers follow suit. >> the data team put this together, i don't know if we have a graphic on this, but the first full day of trading after

the first earnings report after they became public, there's facebook, which fell 11.7% the next day. twitter fell 24% the next day. gopro fell 14.5% the next day. the performances right there, folks, are the day after they reported first earnings report after going public, and now we see snap down 21%. >> consistency across the companies is not so much unproven business models, but metrics nobody was quite sure how they would be judged. how the companies would be judged. how they report. what metrics to emphasize, and whether, in fact, they transition to a public company was going to come along with a willingness and ability to please investors on a three-month basis. i think that maybe you can take comfort from that. i'm not particularly surprised that those robin hood numbers in terms of the ratio, here's why. if you are presumably relatively new to stock investing, there's

loss aversion. there's some resistance to booking a loss. you're more likely to say i hope it coming back if i already own it, and, therefore, not sell, and maybe you think it's a discount you didn't already own, do some buying. >> i know you like the stock. i quote james here, who also likes it, but said, what we didn't want to see was the material drop in back-to-backdrop in aggregate revenue. that's what happened. do you expect it to reaccelerate from here? >> yeah, the key to the story is revenue per user. >> by the way, down 14%. >> down quarter on quarter, but also seems better, so that the key is how much it monetizes the business over time, and with the revenue, it's between $6, 70% year and year, through 18, and over time, reaches 20 over time. i think that's key how the ad

dollar employees the business, and this is an active light business. it's not just using google platforms, i think that key to the story. there's another energy and tea company. >> i know after facebook came out initially, they had everybody saying, you got to go mobile, guys, missing the boat there. twitter, find a way to monetize and raise revenue. snap, they are facing this onslaught from facebook where facebook uses some of the strategies that snap has on instagram. >> sure. >> and they are beating them at their own game here. >> that is the challenge. i think over time what happens is snap has to be able to turn to advertisers and stay, there's something fundamentally different about how our product is used, and the distinction might be that it's actually built for this kind of distracted fleeting way that people absorb information with social media. i still think facebook is built on the premise of, hey, we -- people absorb themselves in this

stream, in this content, spend a lot of time there in one sitting. go to advertisers, say, look, you can haved video contenter, other messages built for this kind of quick back and forth,ic that's something you make something out of. thing is -- >> but also -- >> over time. >> what if that is not the strategy they follow? they are looking more and more like a traditional media platform instead of the site that they -- that was a phenomena. >> it doesn't have to be the content at its root, but it basically has to be something that's built for people who are just kind of, like, checking in all the time. zr rig >> right. >> how much time to turn it around? is evan the guy to do it? >> i think he is. he has the patience to take the company forward. give the company time. i would give it four, five years, and then we'll -- four to five years, we have -- >> we'll know in that much time? >> how much time do they have, mike? >> they probably have another

two, three quarters before people sort of write -- look, look at gopro, you can see, that's a bad product, that's the worst case scenario, which shot up to 90 and collapsed. >> yeah. >> basically people said, it doesn't work. i'm not saying that's where it's going, but you have quarters before people give up. >> thank you. good to see you. >> thank you. >> mike, next hour. >> closing with 40 minutes left in the trading session, dow down, 44 points. s&p, nasdaq, russell, all lower as well. >> and nasdaq after a record close yesterday. >> right. up next, european giant chasing walmart down the aisle, but who gets crushed? later, modern medicine, mit computer scientist uses her skills in big data to battle cancer. that's still to come.

aldi takes on u.s. giant, walmart, they want to beat wall mat at its own game of low prices, right? the company specializes in private label brands that account for about 90% of the 1300 items' inventory carried. there are currently 1600 aldi stores throughout the united states. company's looking to expand that number by 400 stores, mostly in florida, texas, and on both

coasts, and it wants to add more private label goods to appeal to price conscious consumers, which is pretty much everybody right now. walmart has over 5,000 stores by comparison. by the way, not many may know this, but aldi is the parent company of trader joe's as well. >> i was just looking at that. aldi brand stores or -- >> i think they are. i think they are. >> i did not realize they had that many u.s. locations. >> aldi has 1.5% of the u.s. grocery market, growing by 15% a year, whereas walmart controls 22%s of the grocery market, and it's growing 2% a year. the law of numbers caught up with them there. aldi is a fast growing company. >> one in connecticut people go to, and inventory turns over quickly. it's not just grocery but other stuff. >> they want to expand products. the ceo says they want to be the only place people go for the groceries. now they just have private labels. >> they did that in europe.

in u.k., same debate happened with the established supermarkets and low cost guys. >> listen to us, we're talking about another growth in groceries, in retail, this happens to be groceries, but at a time when department stores are imploding and other retail outlets go out of business, grocery is growing now. >> well, then there's whole foods. the question is, what's the future of their business? is it for prepared foods? can the grocery chains -- look back in ten years, why do we have so many chains when there's meal kits at home? >> i just received an e-mail from our colleague, yes, i'm reading your e-mails, will, he say, the company has killed in the u.k. since the financial crisis because they are insanely cheap. they bring low prices, something they want to go after walmart on as well. remember, heard it first here. aldi. and, thank you, will, for the contribution. 34 minutes left in the trading session. here, the dow is down 36 points. when we return, you'll hear what the president told nbc news's

lester holt about firing james comey as fbi director. later, the college public investment club beating out vard and columbia. there's live pictures. more about this coming up.

there's a look at the average, about one to three advancers today, led by exxon, mentioning surge in oil. still, only 1% gain marked behind them on the aprover, bottom line, laggards are microsoft and home depot, one of the most well-performing stocks. everybody for the major averages still in the red as we speak, bill, but the dow down, oh oh, .17%. we'll see. >> yep. 30 minutes left in the trading session for this thursday, and joining me on the floor of the new york stock exchange is matt, and here we go again. yesterday, down 90 points on the down, snapped back, today, declining 144 points on the industrial average, and snapped back. who is buying, do you think? >> i hate to say buy the dippers, but individual stocks

are taking scrutiny after earnings. yesterday, we saw disney, obviously, the leader, and boeing was midday, and after that -- >> macy's today. >> and snap today. snap i thought would have more follow-through than it did. saw it in the morning. snap has not seen the rally, but the market has. i think there's underlying good to the market. we're not really taking into account what's going on in d.c. and circuits there. that's good. the market's focused on what it should be focused on, earnings and fundamentals. >> oil, where does that fit in the priorities of catalysts? >> oil is the most unloved sector, most upside potential. there's big components in the dow, some of the s&p, and they are oil-related. so that could be very strong as we go forward, and that could be something oil breaks out, i'm not certain it does, this is a one-off inventory, you know, blip. >> event. right. >> i'm not sure that's it. look if it breaks through, 48, maybe 50, but i'm not sure.

>> has not done that right now. >> no. >> thanks, matt. >> kelly? >> thank you, guys. >> time now for the cnbc news update with sue. >> here's what's happening at this hour, everyone. the acting fbi director, andrew mccay, testifying before a panel this morning, a panel that's former director james comey was scheduled to attend until being fired two days ago. mccabe disputing the assertion he did not have fbi employees. >> we have a diversity of opinions about many things. i can confidently tell you that the majority, the vast majority of employees enjoyed a deep and positive connection to director comey. >> the trial against a white police officer who fatalal shot an unarmed black man comets today. the jury heard from several witnesses who said they did not

observe threatening behavior. a new study by the cdc shows one in three high school students drank alcohol in 2015 and more than half drinking were binge drinkers, consuming eight more or drinks in a row. many say they got the alcohol from other people. that's the news update for this hour, kelly, back downtown to you. >> all right. see you next hour, sue. thank you so much. president trump speaking exclusively with nbc news lester holt a short time ago, and eamon is here to recap that and fallout. there's always fallout. >> always. kelly, that's absolutely right. what we've seen over the days here is an evolving series of criticism of former fbi director james comey from the white house and evolving explanations for his firing, but in an interview today, the president made a new charge, simply one against his personal style. here's what the president had to say.

>> look, he's a show boat, a grand stander, the fbi in turmo turmoil, everybody knows that. look at the fbi a year ago, it was in turmoil, less than a year ago. it's not recovered from that. >> the other comment that the president made that's going to be skrcrutinized and picked apa in hours and days, in fact, had three conversations with director comey in which the director told the president that he was not under investigation. according to the president, those involved one dinner and two phone conversations, and at one appointment, the president said he asked director comey whether or not he, the president, was under investigation. the president said director comey at the time assured him he was not personally under investigation as part of the broad russia probe into russian meddling in the 2016 elections, so that was something that the standards, the white house

spokeswoman was under pressure to defend as appropriate behavior in the white house briefing awhile ago saying it was legal and appropriate for the president to ask the fbi director if he was under investigation, in no way meddling in the ongoing investigation. the white house coming under criticism because president trump last year as a candidate very harshly criticized the meeting between the then attorney general and former president of the united states bill clinton saying that was horrible and terrible. the white house wrote today saying, it was entirely appropriate for the president to call the fbi director and ask him if he was, in fact, under investigation. a lot of new material here to go over. all of it being analyzed here, kelly. >> i will point out, our keith williams in washington where you are was telling lester holt after the interview aired he talked to a number of legal officials who said it's not illegal for the president to

call up the fbi director and ask questions like that. it's, obviously, controversial, you know, but it's not illegal to have that done. >> right. yes. he made that appointment. absolutely thee most important point to make about this, but there's questions of why the president would have asked that question, what impact that had on the investigation, and at the time, the way the president described this meeting, it was a dinner meeting. the president said the fbi director was coming there to see if he could remain on as fbi director, that the president was considering firing him at the time, and so these two conversations, apparently, according to this version of the events, happened at the same time. the president asking, am i under investigation, and comey saying, can i stay on as fbi director? that got people's attention. they were asked if that was a conflict of interest in the briefing room today, and she said, no, it wasn't. >> all right. before we lot you go, can you confirm for us the heritage of your last name?

>> my last name? yes. my first name is irish, and my last name, javers, is -- i think that side of the family gave up mentioning they were german after world war i. they are usation. >> i would have lost that. >> i thought french. >> thank you. >> thank you. >> by the way, cannot wait to see the rest of lester's full interview with the president tonight on "nightly news" on your local station on nbc. looking forward to that very much. heading to the close -- >> i'm still thinking about aldi. >> more on aldi coming up. something to correct. 23 minutes left in the trading session with the dow down 29 points, treasury secretary mnuchin in italy for the first g7 meeting, live report from there coming up. also still ahead, sears in a

tail spin for years now, and you know who the ceo says is to blame? a familiar whipping voice. you can guess it. we'll reveal it later this hour. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.

all right. we need to clarify something. if you're just joining us, boy, you missed a conversation awhile ago about this european grocer called aldi, which is -- it's got 1500 stores in the united states, but going after walmart with lower prices. now we mentioned also that aldi owns tr trader joe's. right, but not right. there's two different aldi's. there's aldi foods, a german company, the one that owns the grocery stores here in the u.s., aldi stores. they don't own trader joe's. >> aldi nord broke off. are you following this?

they broke up years ago, and they own trader joe's. so there's two different aldis. north and south. south owns the grocery chain. north owns trader joe's. >> all we'll say is they are doing well in the u.s. right now. >> yes. all about the prices there. there you are. let's look at other movers in today's market action, shall we? pharmaceuticals lower with quarterly profit falling less than street forecast, but quarterly revenue missed interim ceo also raised the cost reduction goal to 1.5 billion this year, and they announced plans to sell the global women's health and european cancer and pain treatment units in order to cut debt. the stock, though, is now up 2.1%, trading low eri, interest. merck approved use of therapy in combination with chemotherapy to

treat lung cancer. that stock up a fraction. that's a story we've been following for quite a while now. >> yeah. one of the leaders in the dow today. the treasury secretary is in germany, and he's there with a mission, and cnbc's ylan is traveling with him. what's he looking to accomplish, ylan? >> reporter: kelly, one of the big fears among officials here is the united states might implement a border adjustment tax raising cost of foreign goods, but a treasury official told me today that a border adjusted tax in the current form does not work. that is some of the strongest language we've heard out of the treasury department on this issue, and it should be a relief to officials here as they convene for the g7 finance minister's meeting, but it does not solve the bigger frustrations that many countries have over u.s. companies, particularly in the tech sector, shifting profits to low tax

jurisdictions. italy has been one of the countries that's been cracking down on this issue. they settled with google recently for $334 million in back taxes. they did the same with apple just a few years ago. meanwhile, france is now charging air bnb to collect tourist taxes, and apple is locked in a court battle with the european union over $13 billion in taxes that the eu says is owed. as a post country of the g7 meeting, italy decides the aj agen agenda, and tax reform is a top priority, kelly, bill, we'll keep you posted about the meeting. >> remember the good ol' days, all they did was get together and complain about the other's currency levels. >> currency wars. >> so much more complicated these days, wh. >> one area they agree this time, agree that currency volatility leads to financial

instability, bad for the economy, so it's one area they agreed on early on. >> where is barre, italy? near rome? another part of the country? >> reporter: it is in southern italy. it's a poor town, nice and mild here, lovely springtime breeze over here. wish you could be here, guys. >> oh, i'm sure you do. >> thank you, ylan. see you later. >> you could be in vegas. >> we -- you -- everybody will want to stay tuned for more on what's coming out of vegas in a little while. >> you will. >> 15 minutes to go, dow down, nasdaq down, and russell as well. >> e-tail overtaking retail, department stores look like dinosaurs, but we found a bull that said not so fast. bull and bear debate on department stocks coming up.

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art stopped by, saying the market on close order show imbalance of $500 million to the

buy side, almost as much as we saw yesterday, and the dow is down 22 points right now. the s&p down 4.75%. right now, no records for the major averages today. >> few points below the levels. >> department store stocks lower, macy's, kohl's sinking on reports of earnings. >> nordstrom's taking a hit, down -- look at that, 7.5%, reporting earnings after the bell today. more on if the dip is a buying opportunity for the department stores, bringing in liz, and david, bullish. interesting to hear a bull case for the department stores, asking earlier, i guess, them bought is one, but it's a near term play, isn't it? what are other reasons there are value in the spaces right now?

>> well, i think the opportunity is, look at walmart and what they did with investing and buying platforms online. the one thing good of department stores with cash, there's opportunities out there. i was at a board meeting today when i heard from you guys, a company called frame bridge. they do online custom framing. i mean, it's a great way to connect with customers. there's a lot of companies out there that can leverage that connection. i mean, the thing of facebook and google, all of those guys bought a loft of the research and development, there's an opportunity system in the companies with the cash to buy research and development. >> what do you think? clearly, the current business model is not working for the current department stores. change or die? what are you seeing? >> they have to change. it's not a good opportunity for investors. to david's point, if they throw capital around at new business models in hopes of salvaging what they have, that's challenging. the business is clearly broken.

retail, you know, organized around a lot of different themes. department stores, express, and that's not something that they can really accomplish in the stores at this point. >> question from earlier this hour, do all department stores go away, then? just the model itself that's bro broken, or some unfairly painted with the same brush? >> they don't all go away. i think there still will be department stores. they don't make investments right now. we have fewer of them. companies are not overstored, so nordstrom is not overstored. they are experiencing challenges and i don't think they are going to go away, and i don't think ma macy's or kohl's goes away, just smaller companies. >> would nordstrom rack and other brands save their parent chains? become a way to get that t.j. max demographic that's holding up well? >> i think so. it's bigger than that. they have to rethink businesses

entirely. look what's out there, the opportunities to buy innovation and customer relationships. it takes money, but stocks trade as if they are going to die. there's opportunities out there if they listen. i mean, when i talk to all the startup companies out there who have -- some of them are, you know, different sizes, there's a lot of energy out there and a lot to bring to the bigger companies. it's a matter of the companies of accessing that and being willing to listen to it. >> david, just as simple as reducing the footprint, the number of stores out there, and building a robust online presence in order to compete in today's market place? >> yeah. i mean, just for today's example, whole foods, one that's up when others are down. look what they did, talking about 365, millennial new brand. look who they brought on to their board today, ron, both

digital people, both understand digital commerce. look what was done at panera, and look what sharon did with williams sonoma and best buy. making the best, we're going to make changes, and they made a bold statement about it today. >> liz, shaking your head. presented that question to david. you don't think it works? reduce footprint, go online more. >> working for the survival, but to the a more profitable model. less profitable, going to generate less returns, and so that's what we look at with department stores, generating smaller returns on invested capital and center margins. that's just the reality we have to look forward to in order to survive. >> all right. thank you, both, very interesting, liz, david, appreciate your thoughts on retail, and we have -- what did you say, nordstrom after the bell. >> after the bell. down 7% today. >> dow down 27 points, back with the closing count doup in a

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some of this inflation data this morning, the macy's report, the snapchat earnings, you know, all of that is -- the market chose to respond to, and we went lower on open this morning, but then it came back again, and the selloff did not last long. we are finishing with about a 30 point decline on the industrial average. we had three treasury option stocks, three-year note on tuesday, ten-year yesterday, and 30-year bond auctions today, and all three of them were very soft. not much demand, yields a little higher, as you can see, down on the 30 since then, but the point is you're seeing reluctant bidders right now because they feel like maybe they'll get higher yields down the road after the fed starts raising rates in earnest and maybe as early as next month.

don't know, but that's what seems to be going on in the treasury market right now. crude oil after a huge rally yesterday, you did not see a pullback from that, so it is holding its own right now, a gain of almost 1% today on top of yesterday's big rally, but, still, as steve pointed out at the top of the hour, still stuck in the range, get up to $50 maybe, they pull through the range, but right now, still at $47.75. now, bob, we get to retail earnings. we got nordstrom after the close tonight, and then jcpenney's tomorrow. retail very much in the spotlight today. the problems facing macy's, kohl's, and all the others. >> same store sales down 2-5% overall. generally weak, can't compete against walmart as well as amazon. that trend is clear. if there ever was a day to be down 250 points, this was it. we were headed straight down for 250 points, then just stopped,

just completely turned around. it was a good day for a selloff. >> it was not like, usually there's a change in the tenor of the market when europe closes at 11:30. this was before. >> 10:30, wells fargo had an investor todday today, and the market turned around. there was billions in additional cuts in the market, market liked that, but the banks turned around, wells turned around, and the overall market lifted. i'm not blaming the fact it did not go down because of wells fargo, but turn around at that moment. the point is, the amazing resilient market. >> very much so. >> a lot of uncertainty in washington, not sure about trump agenda, and it didn't happen. all the concern. the volume here, just, again, normal, not heavy selling at all. oil has been big support, a lot of relief, finally, we find support for oil around $47, and closed below $45, oil up a little bit, but it's not big

moves. they didn't drag all the oil stocks up with them. the overall market stability. >> thank you, bob. kbr ringing the closing bell at the new york stock exchange. national meningitis association over at the nasdaq with the dow down 23 points. stay tuned for the earnings from nordstrom and more on the second hour of "closing bell" with kelly evans. i'll see you tomorrow, kelly. feel better. ♪ >> thank you, bill. welcome to "closing bell", everybody, i'm kelly evans. a dip on wall street today, look how we finished up here with the dow jones industrial average closing lower by 40-some points last check. down a tenth of 1%, down 23 points to 20920. s&p lower by five, 2394. nasdaq, a record close yesterday, dropped a quarter percent today, and russell, small caps, the worst

performers, results didn't help yesterday, but in this case, 2% drop to 1390, and speaking of earnings, it's been a rough day for retail today. macy's reported disappointing results this morning with the stock down 17% on the bell, dropping $5. that's about a five-year low for macy's. look at kohl's, which has results, too, not nearly as bad, but down 8%, and in ordnordstro down 7.5%, but results from nordstrom are not even out yet, due any moment now. interesting read on the consumer, state of department stores, so much more coming up. joining me for all of that is senior market commentator, and with us to kick it off, tiaa investments, and kevin o'leery. it's been awhile. did great to be here. >> i think you are not a snapchat guy. >> absolutely. when i saw that down 20%, i went on snapchat and learned to use

it. snapping like a bangi all day long. >> shares down 20% and thought i have to use it, didn't think i have to buy it? >> no, i did not buy it. i'm like everybody else. perplexed and amazed what happened there. that's -- the ratio of that many bidding of market cap instun ne great lesson. snap a platform or teach? >> right. >> that's what mike said, is it gopro, a one-trick pony or a twitter or facebook where there's longer term platform. >> has to prove itself. last night we talked, kelly, there's a question, i think, a reluctant public company. it was from the beginning. it did not court wall street. >> was it a hurried public company? in other words, did they realize if the numbers are slowing so much, we have to get out now. >> well, it was an earlier phase on the business side than most of the companies had been, but, you know, the report last night did show you they are not really built or tuned into try to

please the street in the short term basis. >> this is not -- impression they were there trying to walk the walk and talk the walk. no. i mean, their whole brand is the counter culture brand, not part of the establishment. >> when you have an ipo and miss out of the gate, that is a d-rating right away. that is a -- i have no confidence as a portfolio manager to even step up, especially when you look at the metri metrics. most importantly, revenues, daus, the high cost, lack of profitability, all of that combined, you say, you know, i don't have to sell my facebook to buy snap. i want to hold on to the facebook, and i might add to it because they have a better platform and better business model. >> and, by the way, there's just, of course, cult of jeff bezos, and the fact from day one, i'm not doing anything to please wall street or short term earnings. you look back, that was the right way. there's a sense of how unlikely the past from 0-450 billion

market cap that amazon was. >> also, exercising, we're focused on the absolute level of free cash flow generated. you're not hearing snap put that -- >> and customers -- the customer -- >> how important is user growth going to be in the next quarter? that slammed them. >> incredibly important. >> bring home the bacon on user growth and time this platform used by all the users, 30 minutes, 40 minutes a day. this will be single digit. >>. [ inaudible ] you got 30% of the float coming out. >> how quickly does that happen? >> quite soon. so you have that as a big overhang in addition to the fundamental questions, and just naivety of the management team to get on the conference call and not comprehend what they just did. >> the lock effect expiration was the moment to buy facebook looking back. who thought it would be a deluge of stock down below the ipo price. >> always concerns.

kevin, briefly mentioned amazon. we talk about the big winners this year. you know, there was a period of time last year, last year was the income play, dividend play, stocks doing well, now back to 2015 where apple and amazon and these are the companies sucking all the oxygen from the room. what's your strategy in the market? >> i've watched the vix go to the lows again down below 10. more money offshore into europe where you had more excitement with the french both bringing down valuations and pas. it felt like she was going to lose, and now we got new italian votes coming. buy stock at 17 to 18 p forward basis, and same sectors pay 20% more stateside. i put more money in europe, boy, rewarded, up 14% this year. >> nordstrom -- we don't have the full results just yet, but the stock down so much today, before we get into that, though, what do you do about consumer discretionary about retail right now, i mean, as sort of

conservative -- do you have to take that stuff out of the portfolio entirely, or what happened. >> this is a secular problem for the department stores, and one thing you can't do to extrapolate what happened at the department stores as meaning a whole bag of consumers. there's goods going on. >> this is an important point. >> you can -- all kinds of places, and our reports did it last hour, talking about companies like home depot reporting next week, areas of investment nothing to do with apparel. >> it goes back to more jobs created, wages are not great, but they are headed in the right direction, and you have some spending on homes and home values are actually more, so it's -- they really are just choosey where they spend. that's the theme for the last year and a half, so i don't think you necessarily have to sort of buy any of the departments, or maybe you trade them if they get oversold, but in terms of investments, i have way better areas as to where to buy. >> you think about what's doing well this year, it's arguably apple, amazon, netflix, consumer

plays. not like people buy apparel at macy's, therefore, the u.s. is in recession. >> exactly. hotels, home builders, they are all in consumer discretionary. airlines are not technically. >> our favorite under the radar -- >> consumer platforms are not to shop. >> nordstrom's results, courtney reagan with the full numbers. it's a beat? >> yeah. we saw the shares bounce around after hours in response so for nordstrom's first quarter, reported earnings of 43 cents a share adjusted, beating analysts' estimates handedly, and revenues coming in slightly stronger than expected at 3.35 billion. comparable store sales, key metric at retail all the time, down 0.8%, that is worse than what the street was looking for, and if you break out that comp sales number, remember, two components for nordstrom, the full line, regular full price stores, and then the nordstrom rack in the online component.

the nordstrom rack comp sales up 8.7%, but the nordstrom full line stores down 2.8%. the stock is now lower as you can see. we saw that initial reaction higher and then adjustment and now lower. kelly, back over to you. >> to clarify, you said nordstrom kind of own stores down 2%, but the nordstrom rack was up 8.7%? >> that's right. nordstrom rack, both stores and nordstromrack.com component, those comp sales up 8.7%, and then nordstrom full line stores and website down 2.8% for the comp sales. again, you see that consumer really moving towards those outlets, offpricing names in retail. >> that is for sure. courtney, thank you for the time. nordstrom down 2% after hours. >> full line comp basically in line. the rack much better, double expectations. definitely encouraging.

if you have an excuse to buy t.j., ross, burlington, this is it, showing where people are going for sure. expectations were higher. all the stocks hit so hard, but because they had a different distribution platform, meaning offprice and regular and spending so much on omni channel and e-commerce, it's a bigger business and people thought it would be a bigger number. it's not a disaster relative, but not quite a hit. >> if i ran nordstrom, we're turning everything into nordstrom rack tomorrow. >> it's difficult. you're stuck with the real estate you're stuck with, right? that's your store base. you're actually on a net basis in high quality malls. one of the other reasons that maybe nordstrom gets benefit of the doubt is less than half as many stores as macy's, 350 in fewer dying malls. you make lemonade into legacy

and put capital in the part that's growing like nordstrom rack. >> kevin, do you like the idea, talking about the sears strategy, spinoff real estate and lease to other companies. that's what they do with heritage. is that the type of thing people need to think about if they do own this real estate in the department store space, whether you're in order stronordstrom? >> you're not getting diversity away from the basic problem of retail. just because you spin into a reit and offer me -- >> what if the tenant changes? >> that's a delicate ballet. look at the numbers and impressed with stability to control inventory and cost. these are not horrible numbers. it's a tough environment, and they delivered pretty good numbers here on cost control side, so they are probably one of the best of the worst sect s sectors, but never going to have a good run here because everybody hates the sector. >> what were you going to add? >> truly is. of the houses in the neighborhood in a bad

neighborhood, it's the best one, but it's a challenging environment. when i i could go elsewhere as a consumer, apple, for example, and i know you like apple as well, easier story to understand and grasp, but there's so many stories. there's experiences. it is technology. it is a lot of the themes that will continue to work. i just don't see that changing any time soon. >> shares down 5% after hours. add that to the session today, down 12%. that is a huge -- i mean, it's -- that is a big move. >> it is. obviously, they are losing -- again, it's weird -- >> just a sympathy vote, isn't it? not an operation one. >> stock up 17% since last quarter. >> built in this slight relative premium. just looking at the exact same market cap as macy's, half of the number of stores, the enterprise value including that is three quarters of macy's. there's more money attached to each store and same amount per sale. basically, there's a premium in there. >> by the way, nordstrom down 6%

after hours. kevin, saks is rolling out advertisements in the paper today, this new -- word for it, wellness, basically, center within the store. there's athlete leisure -- a golf sauna, all of these different things, which is just trying to get out what is working for the consumer now. men, too. there's an idea that's where the dollars are going, and it's -- might look different. >> if you offer services like that, you capture the custom for a longer period of time to shop aisles. think about that. they draw you in the store for 70 minutes, better than running in and buying makeup. i think at some point in the next quarter or two, this sector will become a buy because it's getting the living stuffing knocked out of it. >> is it -- i -- i hate to use that phrase, the dead cat -- but can you buy it for a couple quarters and hang on to it or what? >> better operators to give store experience, because i

don't believe you will ever, ever go into a department store again -- >> well, saturday -- i went shopping for clothes this weekend because i walked around looking like i'm in high school most of the time, and i went to athleta and j. crew and made, you know, which was interesting, i i made some purchases -- >> i rest my case, your honor. i hope they are value plays and better operators are going to get attention. >> in the meantime, nike sales up mid single digits at kohl's, not a bad place to be. home at kohl's, not a bad place to be. offprices we talked about before. there's better stories out there right now. i don't disagree that maybe at some point nordstrom is interesting. i don't think macy's, they have a way to go to fix their problems, but, again, too many places to put your money. as a portfolio manager, i have a lot of names, why do something to speculate a situation. >> absolutely. can you do some kind of deal

making that consolidates or transforms space? >> the thing missing in the entire cycle is buy out firms, private equity, putting in valuation tools. in past cycles, this was rich hunting ground for them. >> exit at this point? >> had a deal that somehow just puts -- even if it's a distressed situation that you can work off of the rest of the cycle, you know. gap stores on paper should work. you have this family control, but all the rest of it -- that's been the case for a decade and it's not gone. >> the next is the reits that own these outlets and malls. that's the thing to look for next. >> the weaker performers. all right, guys, thank you so much. i like this. we have to do this again. thank you for joining us here, and, again, it's a really tough after hours session for nordstrom on top of a difficult trading period today. the shares of ford, meanwhile, grind to a halt, closing in on their lowest levels since 2012.

what the ceo thinks it takes to jump start the stock. aetna officially out of obamacare by next year. find out whether other insurers follow its lead and what it means for states left without insurance options. you're watching cnbc, first in business worldwide. ation to pri, dramatically increasing print security with enterprise printers by hp. which is great, unless you're a corporate spy. unsecured printing makes your network vulnerable. enterprise printers by hp help prevent costly security breaches that can compromise your network and reputation. so i'm stuck spying the old fashioned way. hey. i'm not spying. secure printing by hp. i.t. orchestration by cdw.

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welcome back. ford shares are down 37% since ceo mark fields took over. what is fields telling holders after the stock? let's ask phil lebeau with the headlights. stocks did not perk up, bill. >> no. we listened to annual meetings, a web cast opposed to other annual meetings where you're there in person, and here's the questions heard from investors, basically comes down to this. look at the chart here, see what ford stock did since the ceo took over relative to the big three competitors, gm and fiat-chrysler, since july 2014. the company heard questions from people saying, well, what are you doing about the stock price? they are investing heavily in the future and believe not only they run the business of today as profitably as possible and second most profitable year ever last year, but investing in autonomous drive vehicles,

electric models, and mobility solutions. they believe the future will pay off at some point, probably starting at 2020, 2021. here's mark fields talking about the era of transition ford is in right now. >> we're going through the transition. we are embracing it. you'll see exciting news on this in times to come. >> we want to show you shares of ford and what's it's done over the last year. we put up this, that the ford chairman is frustrated. built ford was very point blank in saying, guys, i know you're not happy. i'm not happy either. the ford family fortune are tied into ford stock, so we feel it as much as you do, we want to get the stock higher. the question, kelly, is, when will that happen? >> right. phil, did he make the choice at any time about what happens with, you know, turning over the ceo? >> well, he has a big say in that. i don't think that he has lost confidence in mark fields, no sense of that talking with people inside the company, nor do i think the board of

directors have lost faith in mark fields. that said, at some point, you have to ask, okay, how much are we investing in the future and when does the payoff come out? >> yeah, i know. by the way, since we have you here, phil, what are you hearing about the possibility they ban tablets and laptops? i talked to one from the middle east, and he said flights were empty because they hate this, feeling they couldn't travel. it's impossible. >> i question whether or not the laptop ban is the reason you have empty flights from the middle east, i think there's other factors like the travel ban the trump administration proposed. this has been rumored for some time this laptop ban, right now coming from the middle east and united states that it would be extended to europe. if that happens, there's huge implications talking about flights now that are operated by delta, american, united, as well as lutanza, other european

carriers as well. could have a huge impact in terms whether or not we see less travel to and from europe because it increases the hassle factor. asking people to sit on a plane for six, seven, eight hours, okay, bring a book. you can't have a laptop with you or ipod with you. that's going to make people, perhaps, think twice when they travel. >> i know. a book, like a physical book, but i get it, when you're dealing with kids, if you can't have that option -- >> right. >> i don't know what you do. bothers everybody else too. safety comes first. we'll see where they draw the line on this one. phil, thank you. >> you bet. >> have a great weekend. phil lebeau. hedge fund manager announced a merging of sears and k-mart back in november of 2004. the stock of sears plunged 86% since then. you'll never guess who he blames for the retailer's problems. phil tells you next. how a computer scientist and

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>> welcome back. first up, going on a rant, blaming fake news for sear's woes, saying coverage of the ailing chain has been, quote, irresponsible for too darn long. mike, are we to blame? >> certainly not "we," no. obviously not, it's not the whole story. it's possible for both things to be true that sears has a decline

more rapidly than most of the other department store industries. the strategies about disinve disinvestidisinves disinvesting from the retail chains and the rest of it. i noticed there's a strand of brands decline that goes around out there. when i was at yahoo! anything like this store chain is near death -- radio shack is a good example. >> spent the bulk of the 90 minute appearance talking about the news. >> could have spent time better. >> next up, social media is causing historic drop in volatility seen as of late. yes, he said, quote, ironically, it's having a combing effect on social media, and all confusing information, you don't know which is true and false, you say, to heck with it, i won't do anything. is he right? >> i'm having a hard time, you know, following that chain of logic, to be honest, really, we're -- we have low volatility at all time highs, and at very

small valuations. in other words, if you -- if you don't know information was new, you say, i'm going to keep more and get rich and not sell? >> that's true. also no evidence that markets are moving on new information. >> true. >> firing of james comey comes out, i didn't get the sense people reacted. i don't know if that's true or not. >> exactly. >> not in the grand scale p things. >> the project of, look, there's periods in the past, past two cycles, when we have volatility this low. increase social media. do we have to reach for explanations? >> finally, the bidding war for a tiny company. verizon paying 3.1 billion because they want the spectrum for the 5g, do you know how many that is? >> nine. >> less than ten. >> nine. >> nine. >> 334 million a person. that was in october. >> clearly, it's an asset, right? it's kind of, you know, the steal company, the old days, had to buy the iron ore field, the raw material, that's what this

is now. kind of a veracious appetite, has to continue, more options. >> instagram, only had x employees, nine employees. >> amazing. >> bidding war. >> exactly. up eight times over the last seven months, the valuation of the company. >> president trump and congressional republicans said obamacare is failing. now, aetna says they exit obamacare next year. up next, how that impacts the insurance industry. move over, harvard, yale, a public college here in new york city has thee best student trading clubs, and we are going live to the trading floor to learn the secret to their success. what's her problem? apparently, i kept her up all night. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition. no more sleepless nights. - we're going to be friends! - i'm sorry about this. don't be embarrassed of me, jim. i'm getting excited about this!

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a look how we finished on wall street, not positive on the close, dow dropping 23 points, well off the lows of the session, down 150. the s&p 500 down five points, a quarter percent drop, same for the nasdaq down about that much after a record day yesterday, and russell, the worst performer. the worst performers today in the retail sector that's continued after hours here. nordstrom down 3.5% after the earnings reports, and disappointing same store sales especially for the nordstrom brand, and they are down 7.5% in

the session today. time now for a cnbc news update with sue. hi, again, sue. >> hi, kelly. senators richard burr and mark warner, chairman and vice chair of the senate intelligence committee, meet privately. afterwards, burr said russia investigations will continue. >> the vice chairman and i still have 100% agreed, regardless of what happens by the justice department or by the fbi, that the investigation that's done by the senate intelligence committee will continue on its current course as aggressively as we're able to. >> the cdc reporting the number of hepatitis c infections hit a 15 year high because of the opioad epidemic. infections in pregnant women double and drug use is the

reason for the transmission. on a lighter note, a solo official visit to luxemburg to celebrate the treaty of london that established independent and neutrality. that is the news update at this hour. kelly, back downtown to you. >> love kate middleton. >> i know. >> she walks around looking like a high schooler. so pulled together. >> so amazing and classy. >> helps to have a team of people to pick things out. >> all that. >> starting small with the tinyist country. >> very important. >> don't scale it up. >> right. >> all right. sue, thank you. >> see you tomorrow. >> aetna announced for 2018 no longer offering individual insurance coverage under obamacare in any state. interestingly enough, shares trading all-time highs today. humana said the same. they were weaker on the session. united health pulled out in

2017. the new repeal and replace health care bill approved by the house, sent to the senate, but it's a long ways from becoming law. what if means for health care and insurancers and the pick, we are joined by paul howard, senior fellow at the manhattan institute, and senior equity analyst at morningstar. guys, thank you for being here. paul, can you just give us a sketch of where things stand where the changes stand across the country today? i read we are down to one or zero plans across some states, asking for a 40% rate hike. what's the state of play? >> it's fragile. obviously, the obamacare network varies by states. states with a lot of providers, pro bust competition where they are profitable in states like new york and california, snurpers stay. other states with rural populations and sicker populations, they pull out. counties with single insurers, few choices, less hospitals, few

physicians in network, and higher cost for taxpayers. with the repeal and replace in the senate now, peopleinsurers. >> we'll come back to that. can you blame companies for pulling back? sounds like they are going to be a losing money or can't get the rate hikes to justify it, so, you know, are they making a p e purely rational decision here? how much more can they continue like this? >> yeah, definitely, they are making rational decisions by far. it's a very tough market to operate in. very low profitability to come by. what's in the public exchange market is older and sicker, and there's restrirkss in terms of their underwriting standards. there's restrictions in terms of growth profit caps, and restrictions in terms of the rate hikes. so it's not a good -- it's not a good mixture for profitability for the company. obviously, they are going to lose money, shouldn't really get involved in the markets at all until they mature. >> obviously, there's plenty of

variation among states depending among their approach in terms of whether obamacare and different provisions have been successful or have failed, there's other obvious ways to alter the law nationwide, whether it's the level of subsidies or loosening some of the restrictions, outside of what the hda is contemplating, that you think could work to keep companies in the markets. >> look, absolutely. the biggest challenge is to get younger, healthier people in the market. they stay out in droves. they wanted 44% of the population to be in the exchanges, now it's 26%. if you lower the cost of the plans plans, make it like true insurance, other approach is high risk pools or reinsurance. take the highest cost, the federal government can pay for some of those costs, making it more profitable for insurers, by also lowering costs for younger healthier people which lowers risk and premiums across the board. >> so, palm, now, you know, kind of bring that together with us for what's happening with the

bill. trying to make its way through congress. you know, some conservatives upset, hey, you're basically leading obamacare in place, right? you can use the exchanges to buy coverage on the individual market. is that the case? would all of this -- these stats we're showing that look so horrible actually look better under this version of the plan? >> look, i think the senate has said they will basically do their own bill, address what the real problems in the market are right now, again, high cost of people who are not getting any federal subsidies, higher costs for younger enrollees. if you bring costs down, best thing to do, again, talk about reinsurance, work on high risk pools, and give them flexibility in how you design insurance coverage, giving them power to run their own markets, hold them accountable for outcomes. that's the right approach to direct both concerns on the left and right, affordable and coverage. >> meantime, charlie over the weekend suggested go to a medicare for all type system,

and medicaid, itself, is at the heart of the negotiations, seeming to pick up a lot of the coverage where current offerings, you know, current offerings leave off, so are either one of the two options, you know, now looking more likely because they are such difficulty in the individual marketplace. >> i don't believe so. i don't believe there's enough capital in the hill, i don't think the current administration wants a medicare-type system. i believe they'd like to see more private, in reality. just takes a lot for us to implement a medicare for all system. if you think back to when the aca was first rolled out, we couldn't roll out a private exchange or a web site for individuals to get insurance properly. >> yeah. >> there's a lot of structure issues. a lot of issues in terms of capital, capital from the hill, and just not happening at the moment. >> paul, same question to you, so, you know, for all that should be done, the failure of the current, you know, exchange marketplace, make it more likely

that we end up with something like medicare for all? >> look, i don't think so. he's right. look at how, aca passed by the skin of the teeth, the vote in the house this time of the house still narrow. senate has its own conclusion. the cost of single payer would be so enormous and disruptive. the approach is, fix this part of the market. it's less than 10% of the u.s. population. getting that right does not need massive changes. >> thank you both, gentlemen. >> thank you. >> thank you. >> and we'll see what continues to happen with the health care bill. harvard and columbia send graduates to wall street, but the best performing student traders club, members are here at the new york stock exchange with ideas coming up. and mammograms have been vital in diagnosing breast cancer, but computers may have the key to detecting the disease earlier. we'll tell you about that next. you are watching cnbc, first in business worldwide. think again.

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mammograms ra the traditional way to detect breast cancer, but computers may find it earlier now. meg has the story. >> guys, all day today in the series "modern medicine," we talk about artificial intelligence and health care applicatio applications. this is a story with a resear researcher with a personal reason to improve detection. she teaches computers to learn, the work focused on areas like

translation of languages, until a breast cancer diagnosis three years ago. >> going through it, i realized that today we have most sophisticated technology, than to adjust treatment. >> she set out to change that, using her expertise in artificial intelligence and machine learning. in collaboration with doctors at mass general hospital, she train computers to analyze mammograms. the hope? detect signs of cancer earlier than the human eye is capable of. >> and i was wondering, you know, looking back, no human, but was there something in this very complex image that would teach us, the wrong development, human who looks at it, and says a change, but a machine, looking at images, people like me, this

is how they learn. >> she's teaching computers to read health department records to help doctors incorporate all data collected on patients to make personalized treatment decisions and improve the practice of medicine. >> now after seeing a patient, i really very strongly feel that, you know, it's my duty to go and change it. that's what i'm trying to do. >> this is in the early days, but, you know, she was a computer scientist working on translating ancient language, and got the diagnosis and applied that to medicine and health care. >> what is it she does that's different from what they are able to do in the past by looking at the mammograms? >> right now, we hear about radiology that these trained doctors use their eyes and ears of expertise to use an image, that looks like cancer. there's variability in what they look at. they are using the computers to

see images, use deep learning to understand what is and is not cancer and maybe computing power finds something the human eye does not notice and detect earlier. >> pattern recognition. >> exactly. >> they are not in a way teaching the computer what specific elements to look for, it's saying, here are just a flood of images, and we know which were and were not. >> powerful, actually, kelly.

you cannot imagine the lineup we have for you from las vegas, a rare and exclusive entire. first quarter earnings, talking about vegas, how trump impacts business here and what he sees for mccau in china, mark cuban interesting conversation as well, and we are back in twitter, use of artificial intelligence. you cannot believe who has the encore, kelly. found mr. las vegas himself, wayne newton, and he's joining us, and we have a special surprise for you later on. >> woah. >> it is going to be an action-packed fast money tonight.

>> mel, melissa, guy tried to serenade wayne newton years ago. i hope there's a consummation on the show today. putting that out there. >> interesting word you used, kelly, consummation. bring it to fruition. >> oh, lordy. i only mean the full expression of their duet -- nevermind. it's getting worse. >> full expression, yes. keep going, kelly. >> gentlemen, we look forward to it, melissa, and, oh, boy, that's quite a tease." fast money" in ten minutes. it'll be something. thinking of the college clubs, you think of harvard, but it is a public college in new york city. students beat out top business school programs, and believe it or not, most of the students in the trading club didn't have an internship in finance. joining us on set are two of the clubs' members.

along with dan, the coach of the trading club. welcome, everybody. this is a great story. as the reports indicated, you guys playing first, second, and third place at the annual ninth annual trading only, 9th annual trading face-off in the fall. who wants to gin? do you want to explain how you pulled this off, coach? >> well, we have an exceedingly deep pool of talent. i we heard lebron james he up worthed everyone every day. they outwork everyone. they are crazy talented. our job is to feed them the talent and make sure they have great trading opportunities. eventually, kevin, incidentally is working. he is still finishing, taking four courses and he is working every they for group one each on the noor here. >> guys have so putting many eto'o shame. i want to go back to college,

bell, claimed 1st place in the market division in the algorithm trading competition 2016. what is involved with that? tell us what it's like to work on these programs and take them to competition? how did they work? >> so these programs try and like mimic like a trader would see on the floor. so a lot of programing goes into it. >> a lot of computer science? >> yeah. >> you essentially are creating one of these algorithms that will be smart enough to hand him options, which is one of the more challenging areas. have you so many different quotes of all the times and the rest of it. >> one of the things i read in competition, since you guys had so much practice. let's take a classic example of what we see all the time. let's take snapchat, something goes wrong, so to speak, what you guys have learned through experience is stick with the formula, stick with the the

algos, don't change it up. usually it takes a long time to get to that understanding. >> definitely. during the competition we saw examples of that. one thing dan stressed before is stay and we plan for in advance, so the week leading up to the competition, we put in a lot of time and try to figure out strategies we would use during the competition, even though during the competition, we weren't as popular at certain times. we stuck to those strategies, they ended up working in our favor, for all of those rounds, your score is relative. so if you are not doing very well, it's likely that your competitors are not doing very well. few stick to the strategies that you are currently using and you plan for and you prepared for, you are more likely to keep that correct frame of mind rather than panicking. >> so you guys are seniors right now, did you come to this club, did you recruit, how does that happen? did you have an interest in finance before you got involved? do you go to the club because

you we heard about it or how does that work? >> so, we've actually known each other since freshman year, we have taken math classes all throughout. this summer i worked at credit suisse and their program. in the fall, i recruited again. yeah. >> dr. dan, how do you know there will be these bright kids doing math, if they aren't exposed like you were to finance, do you go out and find them? recruit them? >> not by trading. we have been coming to these competitions for a while, we actually had the 2nd placed team as well. it's kind of we had our first spring competition last year. just to put the rest some of the comment out there, the winners or spring competition were two young ladies who i expect we'll see based in this place. >> baruch is not baruch.

>> a famous trader and adviser to six presidents, an influential man. >> it's all coming full circle. congratulations to you and what you achieved on the program as well, everybody will be following along. >> it's all them. >> everybody used two, well change and kevin change and kevin stefanica. it was a short trip with new york city. we're bringing in media chairman john malone has a suggestion how disney should mapping it broadcast business. we'll tell you right after this. whether it's connecting one of the world's most innovative campuses.

or bringing wifi to 65,000 fans. businesses count on communication, and communication counts on centurylink.

welcome barks espn pay tv shrinks at an alarming rate, 700,000 cancelled their subscriptions in q1, they have lost millions over the past five years, they have a suggestion for bob eiger according to an interview, separate espn and abc from dis fi's movie studios and theme parks, michael. >> yeah. obviously, he moves several

moves ahead. assets are moving and where they have a proper home. is there some logic to it? >> verizon, espn, abc business. he sees verizon buying dish. there is a lot of different things in there. cbs and lyon's scape. it's always about distribution plus content one way or another for him. it does make some sense. i think this is more the advice for disney's next ceo for robert eiger's successor. i don't think there will be much in the short term flu is won't dismantle his legacy? >> i don't think in the short term. it will force the hand of the ceo to essentially craft the company past. >> meantime, there is this push ultimately, if you will be verizon, all of a sudden you are competing against the entire industry, who is all in the same space, what is your competitive advantage? it sounds like they are coming to realize the content is that.

>> competeing is not a future really in their view. especially when you are talking about content programing being over the air, if have you 5g, in other words, you don't have to be plugged in potentially down the road. that's the future that people are maneuvering for. >> kudos to the financial times and always good to hear what's on john malone's mind. ceo unilever, pullman weighed in on warren buffet saying it was not a hostile offer. take a listen in the end, our strategy, investing and my returns have been higher in the last eight years tharn warren's returns, so i think it's better if he leaves us with what we know how to do well. >> whoa, my returns have been higher than warren's. >> pretty bold comment. obviously, he has deflected that bid, of course, we can say, we

deserve to be independent. >> one thing to deflect it. it's another to say -- >> personalized and kraft warren, disingenuous as well. >> you can catch the full report on "mad money" at 6:00 p.m. eastern. "fast money" begins right now. ♪ live in the strip in beautiful las vegas, nevada, the encore hotel, a special fast.starts right now! and -- "fast money" starts right now! we are moments awhat from a rare and exclusive interview with ceo steve wynn, mark cuban will be here with the legend, himself, wayne newton and perhaps it's a surprise or two. trust me. you don't want to miss a second of this show. welcome to it. i'm mellissa lee. we are at the