23 there is, quote, a subsidy from the postal service to amazon, how big is it? and if am sdmron had to pay full price, what would the dent to amazon's business be or would they just shift their business more quickly >> i have spent more time learning about the post office finance. and they really stink. >> the finances do thanks for watching "power lunch". >> "closing bell" starts right now. ♪ i love this song hi, everybody, live from the new york stock exchange. welcome to the "closing bell." i'm kelly evans. >> aund i'm wilfred frost the last couple of days it's been a disappointing song. my apologies for having chose it the last couple of days. sharp selloff at the dow, 260 points at session high the market's driving forces, we'll be discussing that coming

up. >> the big story of the day, spotify doing this unusual direct listing the reference price was $132 it opened at $165.90 on the first day of trading at the exchange we'll get a look at how the stock trades into the close. we begin with bob pisani to walk us through all the action. >> good news is markets up, rebounding the bad news, there's a tentative feel to the whole thing. let me put up amazon market up, all the f.a.n.g. names opened up nicely around 10:00 president trump put out a tweet complaining about amazon and again referencing the post office. here's the big problem with this the market immediately turned around on that sounds remarkable, but it did. amazon immediately went from positive to negative territory frankly, from there, dragged the rest of the market down. there was a recovery, but if you look at amazon, you can see it went into the red after 10:00 a.m. s&p moved to the downside. that's the issue, this

tentativeness of the market. why would the whole market move on that? the problems is the buyers come out and cancel the bids. they don't say, i don't want to just buy amazon. they say, let's just hold back and the market tends to drop we've been talking about this whole issue about the trump premiums and whether the trade is reversing i don't look at it that way. the market likes hearing certain words. the market goes up when it hears these magic words. things like global growth, number one number two, higher earnings. number three, tax cuts these words move the markets up. at the end of the last quarter, the fourth quarter, beginning of this first quarter of this year, people were talking about those terms, the market moved up on that now the trade that's -- the discussion, the conversation has changed. now we're talking about trade wars and tariffs now we're talking about higher deficits now the president is attacking amazon there are some concerns about tech uncertainty, whether tesla or semiconductors or facebook.

so, when you have the market conversation change from global growth, higher earnings and tax cuts, and everyone likes it, to more negative terms or terms the market doesn't like hearing, that's when you start having these problems and gyrations that are very difficult to explain. the key is to understand the tone has changed finally, i want to know what's going on here. spotify, big morning for them. again, opening at $165.90. traded in very narrow range until about an hour ago. now it's at $151 the key point here is it opened at $165.90, trading just below that given how 91% of the shares were available to trade, guys, i know that sounds like a big range, but this could have gone all over the place trading has been very, very orderly. back to you. >> thank you for that. we'll discuss spotify a bit in a moment we have keep saying, taxcuts, tax cuts, positive words, market goes up. we're at 270, high of the day. up about 1.25% for the dow.

>> we have breaking news on auto sales. phil, this isn't the one where gm is going to stop reporting. that's the other -- anyway, tell us, what was the number. phil lebeau in chicago. >> we'll be back with specific details on automakers but sales rate for the industry last month, much better than anyone expected coming in at 17.48 million vehicles the estimate for a point of reference was about 16.7 million vehicles for a sales rate. the march sales rate, much higher than expected at 17.48 million vehicles we'll be back in a bit to talk more about general motors, ford, the big movers in terms of monthly sales and also about tesla, which is getting a nice pop today following the report of first quarter production and deliveries back to you. >> what did you say the estimate was, 16-something million? >> 16.7, 16.7 million was the sales rate came in basically 17.5 million. >> wow >> phil was saying those stocks jump up and probably a driving

factor behind the dow up almost 300 points and markets more broadly at highs of the day. let's turn to the big tech story, music story spotify shares began trading this afternoon using an unusual tactic called the direct listing. david faber joins us at post nine with more >> we don't usually see a direct listing, as bob pisani has detailed throughout the day. it's been an interesting day in terms of getting the stock opened, but opened, it has as bob point out, there were 178 million shares outstanding but 106 million were available to be sold the minute they established a price at which they had enough buyers and sellers to feel like there was stability. the stock has been all over the map if it was an ipo to be fair, given it's a direct listing, it hasn't moved too much off that $132 so-called reference price people are using that was established not by its

underwriter but its vadviser on this direct listing. spotify is a very fast-growing business, both with subscription service, it has 72 million subs and 90-plus million, somewhere in that range, nonpaying subscribers who listen to the free service and listen to ads and, of course, provide a lot of data that can be then be used by spotify and sold by spotify to some of the artists as well. speaking to a couple of people who are positive on the stock after this opened a few hours ago, they point out, listen, when you average out the multiple to sales, the likes of snap, twitter, netflix and roku you get 6.1 times. this trading at about 3.3 times expected sales, or 12 times gross profit for next year again, well below netflix. netflix is a name, of course, the bulls would like to compare it to given the enormous multiples that company gets on

whether its earnings or sales. but it is a bit of a different model. spotify doesn't control the content the way netflix does now, but didn't always the labels control the content, but they have a very beneficial relationship so far with the providers of the music. >> also, david, i guess that multiple versus sales, you could argue is a little misleading given it's making a much bigger loss in terms of an earning ratio because it's a loss. >> it is losing money on the bottom line. it's free cash flow. your point is a good one they say, that's why we look at a multiple to gross profit because we're spending an enormous amount of money to gain subscribers. but for each subscriber we gain, it's 2.7-fold improvement overall for us in other words, it's very profitable down the road to be spending the money now to gain the subscribers who will present that profitability for us for years to come. >> do you think we see more

direct listings going forward versus the full ipo and all that comes with it? >> i think it will depend on the company. in this case they had a lot of selling shareholders but not a need to raids capital. i would think there is usually going to be desire on those that go public to raise money as a part of the problem. >> on the investment banks, goldman sachs, still going to make a lot of money out of this on advisory fees instead of a percentage of money raised. >> they're not getting aid percentage of the overall underwriting because they didn't take the risk. >> but they're not walking away - >> you would know better than i in terms of the advisory fees. i wasn't aware. >> we haven't been told what they are, spefktsically, but i understand it's -- it ses essentially cost spotify the same amount of money either way. >> they're a low-key company, though stoke hom stockholm-based company.

the owner didn't show up or barry mccarthy, the cfo. they kept it quiet we can talk about spotify whenever we want that's nice. >> we always could. >> now we can cite a stock price. >> exactly thank you for that. >> if streaming was a reality tv show, spotify would be a survivor you have the likes of pandora, apple music, amazon and google clamoring for headphones and wallets. all the players know not all can survive. >> joining us is gene munster from oup ventures. >> hello. >> you say you love using the service but you don't like the stock. >> yeah, i can attest, spotify is a wonderful service for listening to music they do a great job of these playlists and they have some unique artist content. as you said, don't think this is going to be a wonderful stock.

two reasons. one is the content costs are very high. i can explain more about the exact numbers. separately, competition, like you talked about, too. so, maybe putting a slightly different way is the music business is historically a really tough business to make profits. i think that will foreshadow how this stock will do. >> at people have said the case against netflix for years has been their content cost or content spend is too high. what makes it different for spotify? >> i think their content costs are also too high. the cost they spend is 79% it's also high for netflix i think the big difference here is this. is when netflix spends on their content, whether it's through a catalog or through their original content, the original content piece really atracks and allows them to maintain users. that's critically important here even if some of the margin profiles can be similar between the two companies, just the mere

fact that video has more of an original content opportunity, i think allows netflix to retain customers. that's the key metric investors will look at, that 71 million paid subs. i think that's one of the fundamental differences here between spotify and netflix. >> gene, clearly music publishers have an incentive to make as much money as possible that's obviously a cost for the likes of spotify overall, don't they welcome the presence of spotify in this business market relative to the likes of google or amazon or apple, the goliaths, as it were, that otherwise might be able to control them a little more, like they did in the early stage of the ipod when apple had a big influence on pricing and got the pricing so low for the music industry >> the industry does welcome spotify. 71 million subs, as we talked about. the overall paid sub global market is probably somewhere

between 120 and 140 million subs while they welcome somebody that's not a large tech company, it's important to note that about half of the global market share around paid subs does come through spotify. sothy have a lot of pull with some of these artists. i think at the end of the day the record labels welcome, as you mentioned, more competition. ultimately, i think they probably aren't going to have near the same pull that apple did back in its hey day around music. >> and i like how they have tech in the name, just to underscore their case spotify tech up nicely gene, thanks for joining us. >> thank you take a look at shares of amazon, which are spiking. the dow is tracking that, too, even though amazon is not a member up 3% with the dow up nearly 400 points the president continued his fight today with that km and moved it from twitter to the tv cameras. e-mail eamon javers has more.

>> reporter: a headline from bloomberg. bloomberg suggesting there are no ongoing white house talks about action on amazon they're citing sources on that report i can tell you that i just spoke to a white house official about that report. and the official was under the impression that was an old comment from last week there's a lot of confusion here inside the white house about whether or not the president plans on taking any action at all on am sdmron if there's any policy heft behind the president's tweets we've seen today i've asked a number of officials throughout the day i haven't gotten any specific example of any specific action the president wants to take here nonetheless, he renewed that fight with amazon today on camera in the cabinet room during a meeting with the baltic states in which he took a question on amazon here's what he said. >> the post office is losing billions of dollars and the taxpayers are paying for that money because it delivers packages for amazon at a very below cost

and that's not fair to the united states. that's not fair to our taxpayers. >> the president with protectionist impulse, talking about main street stores going out of business because of amazon we know the president has a political problem with jeff bezos, the ceo of amazon, who independently owns "the washington post" newspaper the president thinks that newspaper has been unfairly critical of him. there's politics in this as well the question is whether there's any policy in it we've been trying to find out an answer on that all day so far no indication there's anything the white house is going to do. we continue to ask and maybe we'll find out more details later in the day >> the speculation continues. >> indeed. eamon, thank you for that. could be classic art of the deal tactics. amazon not just facing criticism surrounding its relationship with the post office, some say it's squeezing players in other industries as well. >> in a report for the yale law journal, lena khan writes

amazon's dominance may test anti-trust laws. thank you for being here your article has been cited a lot as some people prepare grounds for going after amazon your court case, which is kind of interesting is that they aren't profitable and, therefore, the government should be going after them. >> so, that's not exactly my case my argument is that amazon is challenging the current paradigm in anti-trust, which looks at consumer prices as a metric for whether markets are competitive. i think am sdmrazon on the consr side of things has generally kept prices low. if you look at the company structurally and look at the position it enjoys in certain markets, look at how vertically integrated it is, how it leverages the market to other lines of business, these are all factors that structurally pose

anti-competitive concerns. that are under the current paradigm not necessarily being registered >> i guess some people could just frame that as saying that's classic old american competition, american innovation if that means they're undercutting other companies and the result is lower prices for the consumer, that's a good thing. it should be encouraged. >> consumer prices is traditional aly only one factorw look at. key here is recognizing amazon is a 21st century railroad 100 years ago if you were an independent producer or merchant and you wanted to get your goods to market, you have to ride the rail roads today if you're in the same position, you have to ride amazon's rails the railroads used their pow er over this network monopoly in competitive ways amazon has achieved control over this critical artery of commerce and i think the way it's using that control really invites some

closer scrutiny. >> how do you -- let's just stick on that for a moment how do you define control? because amazon has about 40% of the -- i belief about 40% share of the e-commerce market not 100% >> sure. 50% of all online shopping begins on amazon's platform. it's a dominant entity if you talk to independent retailers that try to reach skurmsz, they have to be on amazon if you're not on amazon, you don't exist. i think 60% of all u.s. households are now prime members. less than 1% of prime members actually engage in any kind of serious price comparison we see how the prime engine is a key way for amazon to lock people in. i think the other key issue with amazon is there's a core conflict of interest baked into its business model it's a platform on which all these other businesses depend in order to get to market, but amazon also competes with all -- with many of these businesses on

its platform by virtue of being so integrated. amazon uses this conflict of interest in its favor. if you're an independent retailer and bring it to market, amazon can use that insight, produce a replica with its private label. there's a -- amazon is able to swoop in, take that insight and reap the reward. these are not the fundamentals for a healthy, open competitive marketplace. there's a parasitic dynamic we're seeing now. >> overall, do you think the president is right, therefore, to be going after amazon, whether or not it's specifically focusing on the post office, do they need to be chased after >> i think the president's tweets are deeply troubling. any action or investigation really needs to be bound on the merits the idea that the president would be looking to use

anti-trust as a way to punish individuals or companies he doesn't like, i think that's deeping troubling and threatens the rule of law in a very serious way. but i think this is actually much bigger than about just the president's tweets there's actually growing consensus in both parties that amazon poses a threat or, you know, at least a significant concern for competition. people from -- ranging from elizabeth warren to senator kennedy to mark rubio to bernie sanders to keith ellison, i mean, you know, these are members of congress who are also voicing some concerns about amazon so, i think it's -- it would be misguided to reduce this to just a trump tweet issue. >> no, it's a huge deal, especially to suggest regulating them like a public utility and restoring a different framework. thank you for joining us. >> good to be with you. we have just over 40 minutes to go. right near the session highs the dow is up about 1.5% or a full 355 points. the dow and s&p -- i'm sorry,

nasdaq and s&p just behind that. nasdaq is up 1%. >> we'll keep an eye on amazon shares which may explain the spike over the last hour or so the "closing bell" is just getting under way. >> announcer: next up, tesla gm, ford and beyond release auto sales numbers. see what they sold and how it's moving the stocks. plus, spotify in the spotlight the stock is now open for trading and it's on the move the "closing bell" with kelly evans and wilfred frost live from the new york stock exchange returns in two minutes you know what's awesome? gig-speed internet.

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to take us near session highs, amazon jumping a bit and also auto names doing well. and the automakers are on the move as sales from march came well above expectations one major manufacturer says it's going to change the way it reports numbers going forward. phil lebeau rejoins us gm, they're getting rid of the monthly? >> yeah, they're going the way the retailers have gone to do quarterly reports. we'll talk more about that in a bit. when you look at march, you had high fleet sales and you also had richer incentives which may explain why we saw better than expected numbers from the automakers listen to these numbers from last month gm up 15.7%. fiat chrysler up 15.6% both 10% higher. ford beat estimates with an

increase of 3.4% shares of general motor, this could have been any of the auto stocks today it got a nice pop following these strong numbers by the way, its crossover utility vehicle sales, up 41%. as you mentioned, general motors has decided this is the last monthly sales report it will be releasing here in the united states it is going to be doing a quarterly report so, in the first couple of days after each quarter, we'll get gm's numbers we wouldn't be surprised to see other automakers do the same thing. one automaker that does do a quarterly report is tesla. it releases its quarterly deliveries and production numbers, today what they did for the first quarter. this pushed the stock lower over the last couple of days. speculation these would be bad and they would have to push up any ramp-up in production. not the case as you take a look at auto sales. let's move on to tesla first quarter model 3 production numbers, really model 3 is what we want to be focused on because

this is what's driving the stock more than anything else. 9,766 were produced. that's not the number people were focused on. it's the next two. last week they manufactured just over 2,000 of them and they expect that to be the pace this week as well more importantly, tesla says the summer production target of 5,000 per week still holds, which is why when you take a look at shares of tesla, which are now back over $260 a share, the reason is because the company also announced today it does not expect to need to raise capital later this year because the cash flow will be improving as it ramps up model 3 production and, therefore, rafrs up deliveries of the model 3 overall, when you look at the auto stocks right now, big day big day in terms of the traditional as well as with tesla. >> tesla shares up nearly 7% musk tweeted, i'm back to sleeping, car biz as hell. jamie will join us, senior

analyst at consumer edge research and collin rush, senior research analyst at oppenheimer. welcome to you both. jamie, first of all to you, i know we talk -- we talk about tesla, but what do you think about gm doing away with monthly reporting? >> good afternoon. it's a good thing. there's too much volatility month to month the stocks, particularly in a period where it looks like we'll be in a plateau to slight decline if anything, stocks can be very frenetic between month -- a strong month like march versus a week month in april. not knowing what retail versus fleet is until a few days later. i do like the move to move to quarterly. >> collin, let's talk about the tesla sales update, production update, sorry. can you believe management when they say they can still hit that 5,000 number by the summer

>> you know, we have a great deal of skepticism around the targets they put out at this point, you know, i think they can probably make an internal plausible argument around hitting those arguments but we just saw them miss a target that was a push out originally on the model 3. i don't see any reason to suggest that they're out of the woods here, making 2,000 vehicles last week is a great accomplishment and guiding for that the next week is also a good accomplishment if they're able to do it. we think there are some persistent issues that will make this more challenging. we think there's issues around the sell production for the battery packs as well as automation for the model 3 assembly even if they're able to cobble together a couple of good weeks that doesn't mean that's -- those are the numbers we want to get into with these guys. >> jamie, they need to hit that 5,000 a week to avoid raising capital this year, right how are they -- they're going to need money, aren't they?

>> well, you asked two questions. if they hit the 5,000, the answer is no i think collin is absolutely right. if they said summer, i would add three months to it look, what they're doing is extraordinarily difficult. what they've also done, which is also unprecedented, is gathered together roughly 400,000 standing orders for a vehicle. no other manufacturer, to the best of my recollection, has come even close to that. we're doing something that's incredibly difficult building the machine that makes the machine accidents o machine, one of the most automated in global. we think 5,000 a week run rate to fulfill -- start to fulfill the vast majority of those orders i'll just point out, quality has been brought up many, many times. we test drove the vehicle back in november. people were talking about panel gaps they have the highest quality

rating of any of their vehicles prior from the customers that received the model 3s. they're producing them at an increasingly rapid rate with quality controls in place. i think this is a very good day for tesla. i think the guidance issue is well known and i think people bake that into their expectations and the whisper number was quite a bit below 2500 units a week. >> quickly to round things off, a side note, how important is the autopilot aspect of tesla? are you concerned about how well that's going >> so, we remain concerned about whether -- especially with nvidia pausing its testing programs i think as we think about the premium on the stock going into the autonomous realm, i think we're just operating in a vacuum of information at this point we know they've been operating on shadow testing, but certainly the ntsb's investigation is going to bring a few things to light with the shift tesla made in terms of making a technology

change as we think about not just electric vehicles but self-driving vehicles over time and the value capture and the fleet opportunity that tesla has been getting credit for in future years, we think that's incredibly important information to have and i think we need to wait and see what comes out over the next 12 months. >> guys, thank you joining us to talk about tesla and the rest of the car space, which we're seeing the shares rally after those nice march numbers. >> all 11 sectors are higher as we speak we're near session highs dow is up almost 400 points, 380, 1.6% in the s&p and nasdaq over a 1%. it's a clear bounce back frommy ed telecom and utilities are the worst performing sectors also sectors are higher. >> and amazon spiking in just the last 30, 40 minutes. it's time for a cnbc news updaet with contessa brewer. >> epa administrator scott pruitt is rolling back obama-era

emission standards >> it is very right for us to be here to recognize that what was done in 2011 and '12 as we evaluate it now is not appropriate going forward and we're going to get it right as we address it this year. so, this is another step, this is another step in the president's regulatory agenda, deregulatory agenda. turkish president erdogan meeting with president putin in ankrah both countries have put aside differences on regional issues to forge closer ties. hundreds of teachers crammed into the oklahoma capitol for a second day to press demands for additional school funding. schools across the state were closed because of the teacher walkout. that's the cnbc news update. i'll send it back to you, wilf >> thank you very much for that. as we just mentioned about 28

minutes to go before the bell and we're near session highs the dow is up 1.5%. still ahead, jeff bezos has seen his net worth shrink by billions of dollars on the president's latest criticism of amazon and the post office we'll break down the nuts and bolts of how that relationship actually works and whether changes are likely or not. and stocks gained back some of the ground lost in yesterday's selloff, we'll look at names that held strong throughouthe t downdraft stick around, the "closing bell" is back in two

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welcome back 25 minutes to go to the close. dow is up 350 points we're seeing broad gains 1.3% gain for the blue chips the nasdaq, the worst relative performer. still up 0.75% after yesterday's selloff. president trump more criticism of amazon. we'll break down how the shipping works [whistling] hello. give me an hour in tanning room 3. cheers! that's confident. but it's not kayak confident. kayak searches hundreds of travel sites to help me plan the best trip. so i'm more than confident.

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technicals now it's picking up some momentum why do you think that is >> a little sloppy i think the tweets are getting a little loud and starting to curtail some investor confidence we were hoping to retrace significantly against what we lost yesterday you see the vix come in, the market goes up what's happening right now looks to me like we're staggering to earning season we just hope nothing comes to preempt it and the tweets and the tariffs are not the kind of headlines that inspire investor confidence >> when we consider the tech sector, which has clearly been crucial in the volatility we've seen over the last couple of weeks, does the listing of spotify reinvigorate people's belief that valuations in that broader sector aren't overstretched? >> i think they are a bit overstretched and that's the space i'm the least interested in investing at the moment

we started out the year with the trump bump then we got into the trump dump. we're in this space of trump mess the areas i think are better to look at are the sectors that are showing significant earnings potential growth for the first quarter. i would probably use the opportunity for the trump dump to begin looking at them, but i'm not excited about investing in the technology space yet. >> any particulars you can give us names you like >> there are a number of areas i do like. i would say that the first s&p 500 quarter earnings are the highest in 22 years. i'm looking forward to a very strong first quarter but the areas i like to be in are in the financials. not just the big money center banks but regional banks i think there's some great opportunities in there for rapid growth also investment banking and broker/dealer, publicly traded companies. there's a tremendous amount of activity and growth going on in that space and a lot of mergers

and acquisitions there's some great opportunities there as well. and payment platforms. being in paypal, in synchrony. >> rick, auto sales came out, 17.4 million versus expectation of about 16.8 million. so, a pretty slid beat can we extrapolate in terms of other economic readings to come or is it a one-off >> i think that's exactly why we pay attention to these monthly numbers. i do think it means something. i'm not saying that the auto sector is the only canary in the coal mine for manufacturing and consumer spending and demand be, but it is a good one it does give substance and underpinning to the argument that market volatility doesn't necessarily mean the positives in the economy that we've all taken notice and discussed over the last 14 months aren't still in place

maybe some of them, they're initial surges like tax reform may have passed us, but once these things are out there, there is going to be an ongoing process about their implementation actually metastasizing throughout the economy. i think that is a little harder to predict i think as i look at interest rates, as they start to creep up, that we have employment at the end of the week. i always stress whether it's a fed meeting or big data points like employment with subcomponents like wages that give us potential inflation and fed policy that we creep up in rates. i would not be at all surprised to come friday morning to see us back in the 2.80s the way we were for 22 sessions about two weeks ago. >>. >> i'm still thinking about alacraty. >> great word. >> thank you very much, guys,

appreciate it. a little more than 15 minutes to go to the close. dow hanging onto a gain of 331 right here last 45 minutes has seen the session highs for everybody. s&p up 28. nasdaq up 66 even the russell up 20. spotify's first day of trading at the exchange. we'll check on the stock's move. back in two.

bell." it's spotify's first day of trading. the change we're showing on this chart is based on the reference price of $132 set by the new york stock exchange, but since it started trading, it's come well off its highs let's get back to bob pisani with mosh on this impressive first day of trade. >> yes remember, this is a very unusual situation here there is no underwriter. nobody providing any support nobody went out and bought shares from the company itself, new shares or existing shares and sold them to people. these were simply existing shareholders that came into the market, a process managed right here by citadel securities as

well as morgan stanley, goldman sachs were all involved as advisers the opening price was $165.90. $132 was a reference price but that was done on the last trades done in the secondary market we opened at $165.90, so a little question on whether we should use that price, the opening price or the reference price. here's what happened in the middle of the day it held nicely about $160 you can see obviously a lot of interest, straight line across at $160. i think what happened after a few hours is a lot of people who were out there watching it, who were shareholders themselves, realized it wasn't going to go to $170 or $180 and more volume came into the market more people said, i have a nice little profit here, i'll probably take that and the stock price dropped down towards the $150 range that's essentially where it's been here's a good question, the right question is this a successful ipo or not? this is a very unique situation. they did not sell new shares my opinion is, by any standards

you could have, given the risks involved, given the fact that the 0% of shares were available to trade, i think it is a successful ipo, even if you reference the $132 or that $165 price. the big debate going on on the street right now, i can tell you, is this some kind of new model? it's unusual most companies need to raise new shares it's not like spotify, they didn't they're just letting their existing shareholders in perhaps for companies that have that unique situation, it could, indeed be, a new model we'll talk about that a little later. back to you. >> a quick follow-up on that even if a company does need to raise capital, is spotify showing they can do this direct listing perhaps six months, 12 months before a new company needs to raise money and then get the price settled before they go to the market and do a typical kind of secondary raise? >> i would anticipate that most companies, to answer your question, down the road would try to do a secondary, yes so, in that sense, yes

butter it's still very risky because companies need immediate working capital. it's nice to say, we'll see how things go in eight months or a year later we'll do a secondary. that's not necessarily what most companies really need. they need the money immediately. >> bob, great stuff. we'll join you on the floor for the close in 11 minutes' time. the dow is up 326 as we speak. >> art cashin just mentioned there were some big sell orders on the bell. that's largely gone away now small 300 million still to the downside dow hanging onto a gain of 364 points crude oil is also in the green we'll check on those moves right after this stay with us on the "closing bell." tions chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors.

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welcome back to the "closing bell." over three minutes to go to the bell 350 points higher on the dow as we speak we're near session highs but just up in the last half hour or so the peak of the day would he were up 380. the dow is leading the charts. s&p just behind it up over a percent. let's look at the s&p intraday it was steady most of the session and then picked up early afternoon, as you can see. that applied to all three of the indices. if we switch to amazon intraday, that had a strong correlation when amazon picked up, so did the rest of the markets. we also saw auto sales numbers, 17.5 million expectation was 16.8 million that came out at around 1:00 or

2:00 p.m. as well and lifted general market sentiment let's look at spotify intraday that's been a crucial stock to focus on we'll talk about that with bob pisani as well up 13% it was close to $160 at the start, up some 28% from the list price. not quite a list price, of course, but still a pretty good day for spotify. also some support for those subscription-type tech companies in terms of valuation. to bring it back to the sectors intraday, as i bring it back to bob, despite amazon doing well, despite spotify coming in, we have sector tech middle of the pack worse than the pack of utilities, real estate, some boring sectors bests the likes of energy, materials, oil prices up as jackie just told us. but all sectors high today. >> that's right. i want to go back to your point about amazon even though we're up and it's a nice rally, it has a tentative feel put up amazon again. about 10:00 -- we were autopsy,

all the f.a.n.g. stocks up, amazon at 1400 the president putting out a tweet about amazon and the post office it goes from 1400 to 1350 and takes the whole market down with us remarkable in thimy opinion thi could happen then, wait a minute, 2:45 we get a report that the white house is not contemplating any action against amazon amazon at 1360 goes to 1410, 1412 it moved $50 in minutes. look at that far end over there. and the s&p, i look up, i say, what the heck. the s&p just moved north of 30 points in that time period there's a correlation here it's remarkable that it's that sensitive. it's not that there's people selling heavily in amazon when that happened. it's all of a sudden the bids get canceled, walk away, and then buyers come in. >> on spotify, does that draw a

line on valuations over negativity about these new type of tech stocks and how much people pay for them? >> this is a very special circumstance by any level, i think this was a successful ipo we can discuss it on the other end. >> successful market day ten seconds to the close up 390 points on the dow well over 1.5% the nasdaq up about 1% it's the laggard but a decent session across the board kelly, back to you thank you, wilf. welcome to the "closing bell." i'm kelly evans. remember yesterday's big selloff. the dow down 700, then 400 on close. today gained a lot back. going out with a gain of 386 on the bell the blue chips were the best performer. not a lot of big decliners in the s&p 500, a gain of 1.25%

or 32 points, 2614 today there's nike's 4% gain in the dow. under armour led the way up 5% russell 2000 closing higher by 19 points. the nasdaq making a rebound as well the relatively weakest performer in the session joining us to talk about all of this, cnbc senior markets reporter dominic chu alongside me at post 9, jim la camp from ubs and rob cox from reuters breaking news. we welcome you all we have breaking news. we know it's big because mr. faber is back on set with us concerns, viacom and cbs what's going on? >> actually a development but a significant one in the evolution of whether or not these two companies are going to be able to be successful in trying to get back together. cbs submitted its formal bid to acquire viacom stepping back for a moment investors are well aware that

the controlling shareholder of both companies in the form of national amusements run by sherri redstone has encouraged this now cbs's special committee of its board of directors made up of independent directors has come up and made a bid to acquire viacom, as was requested by that controlling shareholder. the bid as reported yesterday late in the day is a real responsibility by the likes of reuters and others is below market i'm told even below the market close of viacom. right around 29.64 i don't know the ratio but i'm told it doesn't buy below market why? cbs did due dell againiligence a number of weeks. they did not necessarily believe some of the assumptions that viacom's management team made about the business overall significantly discounted those assumptions and came up with a

number that, perhaps, will not be to the liking of the special committee of viacom. as i reported earlier today, however, price may not ultimately be the final arbitrator if this goes down, namely the ceo of cbs leslie moonves and his number two, president joe ianniello. there's no question whether leslie moonves would run a combined vbs/viacom but there's a key question whether mr mr. ianniello would be part of that management team sherri redstone wants the current ceo of viacom to be the number two to mr. moonves. cbs's board has made it clear that they feel, and they say

driven as well by their certain -- creating certainty for shareholders in the implementation of the integration plan, they are best served by having mr. moonves and mr. ianneillo in those positions. this could be a key stumbling block, giving you have a controlling shareholder who's not necessarily in favor of such a management team. we discussed this earlier on "squawk on the street" but now that we have the official bid in and it's below market, investors both need to be aware of that and also aware of what could and is, i think, the key area of negotiation between these two special committees namely the management team of the combined company in addition to trying to get the price up for viacom shareholders. >> i would like to get everybody's reaction to this, if you would stick around viacom shares post market are all over the place they were briefly down about 6% on this. now they're in the green slightly while cbs is down by two-thirds of 1% rob cox, what do you think are the implications here? >> i think this is a perfect

advertisement as to why governance matters it's easy in the markets to say they have a/b shares, controlling stake holder gets to call the shots this is a perfect illustration when you go back to the separation when viacom and cbs split, it was because they couldn't figure out whether felipe demon and the chairman of cbs, now les moonves, could get along. so they split it the two companies. it was a stupid thing to do, as we can see with historically hindsight. now you have this other problem with the controlling shareholder wants this and that. the management has them by the short and curlies. the poor shareholder out there who doesn't have extra voting shares, who's just along for the ride, is potentially going to be the one to bear the price. and i think as we go through and we see companies going public like spotify with different shares, different class structures, and as we see with facebook, it's another reminder, this stuff matters. >> david, what do you think

about that >> i think it's important. shareholders in viacom are aware they don't have any real control as they are in the likes of snapchat where there's no votes or in facebook where mark zuckerberg is a controlling shareholder and on and on. here it is in a number of media companies, as we know. what i think is interesting here is not necessarily that the price is one viacom shareholders will be happy with, but even more so this potential conflict they're trying to contain, let me be clear. right now i'm told the relationship between shari redstone and les moonves remains cordial but this could stop this from getting done again. if you don't get this done on the second try, and they tried a little more than a year ago and decided not to pursue it, that's going to make life difficult for both companies. >> jim, you invest in either one of these names what are the implications to the rest of the media stocks >> well, i haven't been in either one of these names. i think the buyout space is really interesting now because

you don't have the growth that we saw all of last year in the market last year it didn't matter what share class you were in because everything was moving up now it's more difficult. the market is a lot more volatile it's not moving straight up. you'll see a lot more of these things at the same time, interest rates have started to come up, so some of these deals are going to get to be a little more challenging. i think we'll see more challenges the other thing you'll have to deal with here is if you do a deal under where the market is trading, you might have shareholder lawsuits these are all things that will be tricky to navigate moving forward. >> dom, not to mention viacom shares are kind of a moving target right now it's fascinating on david's report, while they did spike lower initially, they're still hanging onto a gain of about two-thirds of 1%. >> it's so hard to handicap the movements of merger and acquisition deals without the names you're talking about in media. when it comes to media companies, more than any other industry, it's almost like you have -- there are always big

names and big personalities involved when you have the likes of these large, very, very big media conglomerates controlled by these very large personalities, we talk about cbs and viacom this is huge but when we talk about even like the disney/fox and everything else, when we talk about these type of media moguls, it's hard for the markets to really handicap exactly how these things are going to price out. when we do see this kind of movement, it is just that real-time jockeying or handicapping the odds. >> it goes back to the point that was made, david, which is you're talking about the personalities who have a lot of control over the matter as opposed to just pure economics what about jim's point, could this leave them open to shareholder lawsuits if it's a take under >> they tried to go a good governance route here to -- oftentimes you get shareholder lawsuits regardless of how well you do on the governance front i think the key here is for these two companies, or at least in the of the controlling shareholder, try to figure out how to come

together, come together on some sort of agreement on the social issues, we call the management of the combined company, not to mention the economics, namely the price. as you guys well know, this landscape with the disney/fox in the offing, with netflix having a market cap that is five times larger than what a combination of cbs and viacom would be - >> is that so? >> yes. >> netflix - >> it's about $130 billion - >> five times combined >> yeah. i haven't looked at the numbers but it gives you a sense as to the size we're talking about big names that we know well, but fairly small market caps at this point. real questions about their ability to compete in this ever-changing media landscape that we talk so often about. >> and cbs shares down about two-thirds of one% viacom has turned slightly lower. great reporting, david. dom has something positive for us now to focus on, mr. chu. >> we are talking a little about the positivity, but we can focus

on what's happening with the marketover all we decided to take a look at parts of the market doing pretty well overall we looked at the s&p 500 and said, hey, which ones are actually still holding up relative to where they have traded historically? we ran a screen and looked at s&p 500 companies and took a look at exactly which ones have been trading still within their recent highs and 23 they have been, are they still positive year to date? turns out only 25 of those companies fit the actual bill we're talking about there. as things shake out around the close. among the names you talk about, they're the ones that maybe some investors look rat for some signs of momentum or at least sustained support. we're talking about interesting ones, like the likes of northrup grumman, which is 4% away from recent highs yum brands on the restaurant side of things within 4% tapestry, formally known as coach, about 3.5%. conocophillips, a standout energy company

conoco is within 3% of recent 52-week high estee lauder look at a chart over the past year it is the almost definition of a 45-degree angle from the lower left to upper right without any pullback whatsoever. there's some of the accentuate the positive elements. >> as we talk about facebook down 20% from its highs -- >> google -- >> estee lauder down 1%. >> that's right. there are parts of the market that are resilient if there are people that feel as stock-picking is part of their model, there are chances and opportunities to outperform. maybe that will be a theme this year. >> jim, give us one name you're picking as well. >> well, look, we like a lot of names in the energy space. not only do we think energy prices could go as high as $73 if you look at where inventories are, but if you want to focus in on companies that have held in well during this market selloff, that is where you need to focus. small company companies, medium

sized companies that didn't participate in the big ten-year bull market are moving now part of reason they're moving or hanging in there, holding their ground, because they're not as subject to the tariff possibilities that the big cap multinationals are we're also seeing the biotechs to dom's point about estee lauder, the consumer discretionary names have turned up as well there are parts of this market doing much better than others. >> let's go from the micro to macro. i spoke to peter navarro here's his reaction to the fed's proposed action for 2018. >> i was a little puzzled when the fed announced three rate hikes before the end of the year because when i look at the chess board, i don't see any inflation to speak of in the economy. >> let's bring in cnbc senior economics reporter steve liesman. that certainly caught my attention.

i said to him, are you saying it's a mistake for the -- and, of course, he wouldn't go that far, but it's pretty clear from what he said that he's not sure we need three hike, right? >> yeah. it's unusual for administration officials to comment on the fed. not unheard of you know, you've been covering this a while, too. one thing is the fed is a whipping boy, one way to put it, or whipping person, the more cp way to put it. but the idea is that they often end up blaming the fed for things peter navarro is the architect of the administration's trade policy and i think it was yesterday when you interviewed him, wasn't the market down 700 points on something that was related to trade or trade fears looked like a little deflection going on on the other hand, the points he makes are out there as legitimate points of debate which are that, where is the inflation that the fed is hiking

against now? >> right that we've been talking about. by the way, larry kudlow for years was saying that he didn't see the need for the fed to be too tight. low interest rates were fine because there was no inflation and their whole argument is, look, these were supply side reforms which means you can have growth without the inflation, right? >> sure. that's one of the things peter was saying these are noninflationary. on the other hand, they can say that, but i'm not sure that's exactly the case in the sense that the federal government will spend an extra -- i don't know what the number is, something like $1 trillion this year and that the supply side effects they talk about probably not going to happen this year. if you think about what they're talking about which is companies take those tax cuts, turn it into capital investment and that, then, boosts growth over time by the time you get to that enhanced productivity, you'll be several years down the road. i think it's pretty clear that the initial impulse is going to be a demand side impulse

that's something that does concern the fed. as you know, we have never had a fiscal stimulus at this magnitude of what is considered to be full employment. >> it sort of depends on how these trends play out. let me bring in our guests as well rob, what are your thoughts on how many rate hikes are needed in this environment? >> honestly, i don't know, but i don't think it's peter navarro's business if you looked at the way donald trump has treated all sorts of institutions and agencies, including independent ones, there's always been this question, how will he deal with the fed when things aren't necessarily going his way, whether it's the economy, or as yesterday's -- or yesterday in the stock market, will, as steve points out, a whipping post or -- sorry, that's an almon brothers thing >> by the way, i asked him at the end of a 15-minute discussion about interest rates. it's not like i asked him about

the selloff and he said, let me decide to go -- i specifically said to him, why aren't interest rates up and this as an economist was his personal answer and belief what's wrong with that >> look, i just don't think it's his position you don't want to be in a position where the president or the white house is going after the federal reserve. we had that happen that's why we love paul volcker. we want that independence of the federal reserve. and to see it so soon, i think, is worrying but not actually at all surprising given what we've seen from this presidency. >> steve, what were you going to say? >> look, you can't have it both ways you can't say, look, the stock market's going up because of my tax reform and because of my policies, and then as soon as the stock market is going down, when it's clearly been going down because of one of the major concerns being tariffs and then all of a sudden you're going to die to deflect it on the fed, that's not going to work. >> i was going to say, the new information here, say, since

december is the size of the deficit and the extent to which the tax cuts were not paid for that's really the information. the federal reserve has been pretty clear about the outlook for interest rates, what it's going to do with its balance sheet. it's a little hard -- some have been saying the market has been spooked by the federal reserve i would say i could go back to probably june of last year, even earlier, to tell you essentially what the fed would be doing and its plans. >> john williams, does that change the status quo for this discussion at all now that it sounds like he'll be the second most important person at the new york fed >> two most important words in your question, which is status quo and i'll leave it there. >> steve, thank you very much. >> pleasure. >> steve liesman joining us there. let's also hit spotify shares. on the bell up $17 to $149 per share. now, this is relative to the reference price, which was the

private market trading it's up from $132. it's off the highs of about $165, $166. >> it's very interesting one of the points brought up by a number of folks out there within our building and even outside in the trading community in general, is this was not a traditional offering, where there was an underwritten price sold to clients and then they turn around and then they try to float it out there this was a reference price based upon private transactions in the past just to give you an idea we use it because there's no other public trading history to benchmark -- >> just some -- hang on a second we have breaking news coming in. gives you a benchmark to look at on spotify let's get over to contessa brewer with breaking news. >> we're just learning police are investigating reports of shots fired near youtube's campus the san francisco police tweeted out there was police activity. please stay out of the area. we have not confirmed there is a

shooting at youtube, but just that the police are investigating alphabet, which is google's parent and google owns youtube, had told reuters that they had heard the reports and looking into it. we're working on getting the information as well. you're seeing a map of the area. as soon as we get a new update about what's actually happening at youtube or in the surrounding area, we'll bring that to you. >> thank you in fact, we're going to our affiliate in the bay area. kntv and listen in >> between 280 and 101 near the shopping center. we heard from a witness at the walmart offices who says heavy police presence and the first thing we heard was about 12:50, about ten minutes before 1:00 today, police presence and a possible shots fired we're still trying to figure out if there is an active shooter. if the shots were fired and that

shooting it over, if anyone was, indeed, hurt again, we have heard from some credible witnesses that a body bag was being seen carried out we are continuing to follow this first thing we heard was about 19 minutes ago the witnesses tell us the first police activity they saw was at ten minutes until 1:00 we're working to confirm any information we can find. i believe we have someone who will be talking to us on the phone. for now what we know is what those witnesses are telling us they work in the area of 900 cherry avenue in san bruno they told us they had to shelter in place, hide under their desks. we're told at least 1,000 people work in this area. a lot of people being affected at this time likely a lot of people coming back from their lunch breaks being impacted by this

we're told that many people have seen a large police presence and that reports are that there was a body bag seen. i believe we have marco on the phone. hi, marco. thanks for talking to us today can you confirm you're an employee at nearby walmart >> yes, ma'am. >> at the headquarters and what did you see >> what we saw -- well, we first heard a number of shots fired with coming from the directions of the youtube building, coming from what sounded inside, about 15 of them or so and then we saw a number of people, dozens and dozens, just streaming out of the front of the building yeah, just fleeing the scene within very short time and then the shots stopped i don't know, 15 shots heard in about 30 seconds or so long.

within minutes san bruno police arrived and fire and ems and all that kind of stuff. >> what time would you say this all started? >> about half an hour ago, i guess, 12:45. >> oh, yeah, 12:45 and were you all working at your desks and you heard the shots or - >> yes. >> -- did you see the people coming out >> no, we heard the shots first and that immediately drew us over to the window to see what the heck is going on next thing you see is people streaming out, just running, dozens of them, just running out from the front exit. we got a really good vantage point of the youtube building. and it's a -- there's -- it looks like there's multiple exits all over the main one we saw fswas, yeah, people were coming out quickly. >> you as a witness, one would surmise that this was happening

at the youtube offices >> yeah, that's what i would speculate, absolutely. >> are you on lockdown currently at that walmart e-commerce headquarters >> yes, ma'am, we are. we are actually being instructeded to stay away from the windows, so trying not to go peek out >> i would imagine it's hard not to you all must be terrified. we have a helicopter overhead right now, our sky ranger is now in that area you can see dozens of police cars people look like they're walking through the street with their hands up can you see any of this happening right now? >> one moment. >> i shouldn't have asked you that if -- >> i just took a quick peek. not at the exact moment. >> but you all feel you're in a safe area? >> right i mean, last i looked, there

were about 30 or so first responder vehicles there surrounding from the back corner, the intersection around the building so, again, the first responding officers from san bruno pd were here within two to three minutes. >> i don't know how familiar you with with those buildings next to you, with the youtube building, but it looks like our sky ranger is showing us probably the scene of the crime. it looks like an area, a lunch area with red umbrellas. there appear to be police officers possibly marking where the bullets may have landed. it's a building with a green roof would that be the youtube building >> the youtube building actually has a brass roof. >> yeah, yeah, a grass roof. >> interestingly the area to which you are referring, i believe -- well, it's shielded for the most part from our view. it's obstructed by the building itself so, i don't know anything about that area to which you mentioned. >> yeah, it looks to us at least

from our sky ranger, our helicopter vantage point, that it would be a lunch or, you know, a common area with red umbrellas, which would make sense. youtube's logo is red. and chairs strewn about and some law enforcement placing yellow markers around there of course, we don't have this confirmed, but that would appear that, perhaps, shots were fired there. and you say you heard about 15 shots in 30 seconds? >>. >> yeah, about that. it was a first burst of maybe ten shots, relatively short pause, and then about five more shots or so. that's what i recall >> wow and you're just going about your regular day at 12:45 and you suddenly hear shots firing >> yes, ma'am. >> did you all just look at each other? what happened in that moment >> in that moment, there's a little confusion

a couple of individuals on our team said, that sounds like gunshots, and we could tell the sound where it was coming from the very first shot you kind of think is like a car going by backfiring but they keep going it definitely has a different pitch than a car backfiring. we all rush to the window. >> wow >> and within seconds we saw people just fleeing out and that's putting two and two together from our side that's how i'm speculating >> yeah. and, you know, i know you don't work at youtube where this looks to have happened you work at walmart headquarters nearby but do you all have metal detectors when you go in is there a form of security, you swipe a badge when you get in the building >> we do we have a pretty darn security system here at our building. not metal detectors, of course.

>> swipe a badge - >> yeah, we have to swipe our badge to access and a robust security force at least for -- to prevent unauthorized access >> something like this happening. well, i'm surely glad to know that you are safe and you and your coworkers are on lockdown hopefully -- you said you haven't heard shots fired in the last, what is that now, 40 minutes. so, hopefully the situation is under control now. is that what you're thinking - >> nbc affiliate in the bay area talking to an eyewitness of what appears to be a shooting at youtube headquarters witness at nearby building at walmart's e-commerce operations there. you're looking at the helicopter shot of the place where the shooting appears to have taken place. we have scanty information but it's an outdoor seating area on the phone is jason.

you're the inside.com founder and ceo. we understand you've also been to this building a number of times. can you give us any information about what you're seeing in these images and what you experienced at this building >> well, i was here to report on other stuff today and this happened to break while we were on air and thoughts and prayers to everybody at youtube. i have a lot of friends there and i've been to that building many times for lunch you're seeing the lunch area it was a single door system the last time i was there. in the front you have two long steps is that lead up to the front of the building and a big glass door and you can tailgate right into the lobby. without knowing what's happened in the last two years since i've been there for a lunch, i don't think it's the most secure building

steps you're seeing on the screen right now also there's entranss and garage area in the lobby area this is horrible and tragic and thoughts and prayers to everybody at youtube and all of our friends at google. it's just horrible to see. i hope everybody's okay. >>cara joins us now, co-founde of ricoed. can you give us any more information about what's happened >> not yet i've been thinking of the people from youtube, including the ceo and others there's not much information jason is right it's a very accessible campus. it's want a campus it's a building on a street. i was just there a couple weeks ago and walked right into the lobby. you can walk right into the first part of the lobby. it's a big, beautiful colorful

lobby with youtube logos everywhere the cafeteria is relatively accessible and an outdoor area and you have to badge into the places where people work but it's a pretty loose, just like a lot of tech campuses, it's a pretty loose system, at i suspect there's security and cameras everywhere but it's not on the google campus it's not nearby, in fact it was north and always maintained as a separate operation. >> the images we're showing of this outdoor seating area, you're saying that's something people could easily access from the street >> if they wanted to, yeah again, i walked into the lobby without -- with just myself the other day. the lobby area in most of these tech companies are open, relatively open. again, it's a single building. it's not a big building. it's a small cafeteria it has a very large area, opening lobbyand it's always showing videos of youtube, you know, different youtube

channels but, you know, there's an area to the right where employees work and that's on several levels it's not a huge building by any stretch compared to a lot of tech buildings, but it's right there on the street in san bruno. i think there's a restaurant on the corner, across from a bunch of other things. it's not in a campus-like setting like google is or microsoft or any of the other tech campuses. >> and the details at this hour, which are still unconfirmed, come largely from an eyewitness speaking to our local affiliate saying around 12:50 pacific local time he heard about 15 shots fired within a period of 30 seconds the peopleat the walmart e-commerce building across the street immediately looked out the window, saw people streaming out of the building. so, all of this would appear to have taken place during a lunch hour at what looks like -- that is the outdoor cafeteria >> i don't everyone the picture you're seeing. there's a cafeteria in the back that has sort of an outdoor

sitting area it's a regular cafeteria most people eat on the inside. >> the picture you're seeing right now is the front entrance, yeah. >> right there's some stairs that go up it like jason said, it's very accessible to walk into initially. i was always met with people and brought with upstairs to different offices of executives, but in general, you can -- it's a pretty -- it's a pretty -- it's a lovely building again, very small, not a big building again, not on google campus at all. >> to put it on perspective for those not as familiar with the north california, bay area setti setting, we're talking about a city in san bruno south of san francisco. it's an area with a lot of tech and biotech campuses you're at that point only about four miles away from san francisco international airport. so, for those travelers out there who have been through the san francisco airport area, you're seeing photos from like

the downtown san bruno area about ten minutes away from sfo, in reference to silicon valley, from google, and then san francisco and downtown, which is further up north in that peninsula. this thing is happening very close to a very transient-heavy area in san francisco international airport. >> the shooting reportedly took place around 45 minutes ago. you can see, of course, activity has ground to a standstill and people in nearby buildings have been told not to leave in fact, not to even go near the windows. kara, what would you add about the area we're looking at? i assume this is where the ceo of youtube and all the top officials have their offices >> yeah. it's not a very big staff. it's the ceo of youtube, and she was a long-time google executive. youtube is owned by google, which in turn is owned by alphabet it's been kept separately since they bought the company many years ago and run separately

and it's considered a different unit they operate right there actually, there are tech companies in san bruno most are down further near palo alto they wanted to keep -- they wanted to keep it separate in order to keep it creative and for other reasons. but it's -- again, many of the employees there, they have a very large facility in los angeles and they have offices worldwide. youtube is a global sensation. that's a main area where many of their workers are. >> unfortunately, we don't have any further information at this point about the situation with the shooter, reported shooter or if there's more than one individual, what the deal is with their location. jason, to kara's point, this is not in the middle of the silicon valley, as we know it. do you think security is more lax here >> i don't think it's any more

lax than anywhere in the bay area the office was created for youtube, and as kara said, they wanted their own culture this is equal distance between san francisco and mountain view. it's got its own culture there that was by design i got to think that this is going to, without knowing exactly what happened here, i think this is going to make people rethink the open nature of campuses in silicon valley. we have a very open culture here people can walk up to almost any building i think this could be, you know, a moment toreconsider, like schools are having to reconsider, sadly, having open campuses and putting fences around them and having double layers of security i don't know if any of that would have changed the outcome here we don't know if this is an employee of youtube, outsider, random, and we shouldn't speculate until we have all the facts. but i can tell you that it's on people's mind, you know, security here in silicon valley. a lot of the marge tech

executives have security at their home and private security details. so, i think it's just the age we live in where people have to think about, my gosh, at work, are we going to build a multilayer system, multiple areas for people to come to work and putting multiple gates, multiple security and something's clearly been lost on our society. something for us all to deeply consider if we want to live in this society where every building has to be turned into airport security >> cara, at the same time -- yeah we're looking at these facilities and trying to figure out what information we have about the shooting that appears to have taken place about 45 minutes or an hour ago we know there had been tension between google and the local community, for example, the google buses being harassed and that kind of thing, but is there any reason why youtube or google would specifically be targeted that we should be aware of >> well, it's a popular -- you know, it's a popular platform. it's a high-profile platform you know, there's no reason for

any of this except -- there's no reason for people doing things like this. i think a lot of people -- a lot of the employees are tweeting from the site and saying they thought it was an earthquake, actually, because people were running from the facility and then realized it was a -- they were gunshots. there was someone with a gun on campus there's no particular reason jason is right they're quite open they're designed that way. they're designed to be like college campuses they're designed to be very open and to proceed moss -- most of these campuses have sports facilities, volleyball courts. google has a small pool. so, they're designed to feel open where people can work inside and outside and move around campuses. this happens to be a very low-profile building, actually, except for the youtube sign there. compared to a lot of others. it's really incorporated into the community. they've taken -- from what i

understand, they've taken a bunch of -- over a bunch of buildings in the area. it's not a youtube campus by any stretch. it's on a city street. again, there's restaurants nearby and other things. >> if you're just joining us, about an hour or so ago reports from an eyewitness and our local affiliate, talking to kntv and nbc, explaining what they thought was a shooting at the youtube. >> to keep the public in place to assess the situation, make sure it's safe and then respond accordingly. again, we're looking at about 50 minutes ago this report coming in of an active shooter at the youtube headquarters location in between 101 and 280 just off 380 in san bruno. the address -- the street address on cherry avenue there and so the report we had earlier from a caller who called in, i believe his name was marco he is there in the walmart

building that's the walmart e-commerce, i understand it, he was talking about how employees there are currently locked down, in place, doing what many businesses instruct their employees to do, is to just stay in place if there's somebody in the building to get away quickly, but stay in place so law enforcement can take down the active shooter and make sure that the situation does not escalate even farther so, we have our nbc bay area chief photographer is in the area i'm curious if mark is still there. can you tell us what you're seeing no, we don't we'll get back to mark as soon as we can. he was describing the scene earlier. he just happened to be driving back from san francisco to our studios down here in san jose and was able to give us a firsthand account of what's happening here in the middle of an otherwise ordinary tuesday afternoon. so, we can see there are a good number of people out, but also crime scene tape now up.

we imagine that the law enforcement is trying to figure out, a, what's going on, but, b, how to secure what's happened at the scene so that eventually this becomes in-depth investigation as to what happened and if there was a criminal act that kuroccurred h, which likely there was they want to preserve the evidence to make sure whatever court case proceeds from this is buttoned up and that there is a fair judicial review so, thus, you see the crime scene tape going out far away from the actual, perhaps, scene and a very large perimeter being set up so they can preserve whatever has occurred here in the past, oh, 49 or 50 minutes or so. our sky ranger remains over scene, watching police now some of those officers on the move, walking through the parking lot. i can't see from my vantage point whether we see them bran dishing any weapons. at, i imagine some of them might be again, an active shooter situation. i don't see anything new with regard to that

whether they're still considering it currently an active shooter or whether the shooter is down. sometimes we don't get those determinations for a fair amount of time. but, we have 50 minutes here of activity from police outside the youtube headquarters in san bruno. if you're thinking this is the google headquarters, it's obviously not. this is different from that. google is very much spread out this is not the mountain view location google and youtube, yes, are one. you can see video here of looks like those are law enforcement that's a live picture. live picture of some -- looks like law enforcement or other people running in is one of our nbc bay area cameras on the ground. i'm not sure what the exact location of that camera was. you could see there obviously is still a sense of urgency with regard to the law enforcement response here. with san bruno police department as well as nearby responding agencies that's the youtube building you're seeing with the grass on top. we believe that this might be

the main area of focus this is an outdoor dining area with the red umbrellas it seems as though that might have been the focal point at least originally earlier kara was on cnbc, you might know kara as being a very outspoken voice in the tech community, a well-respected reporter she was on cnbc almost immediately after the shooting and discussing a recent visit to that campus and how she found it to be fairly accessible. so if, perhaps, the shooter was coming from outside, she was speculating it would not be terribly difficult to get in the tech companies around here are fairly open. their lobbies are fairly open and perhaps if that dining area or lunch spot is an open spot, that it would be fairly easescy for someone to get in. now, that's her speculation and that assumes a bunch of things, including that the person who is an active shooter at this campus is not inside the building and not an employee or a vendor or someone who's visiting that just assumes it's someone

breaking in. kara is here. >> i spoke with that man, marco, on the man he's a walmart employee, so he works at the walmart e-commerce headquarters adjacent to youtube. and i did ask about that he said no metal detectors, for example, when they go in taking into account this is not youtube. they're two totally different companies. he said at walmart they do have -- they have to swipe in their badges to get into campus, into the lobby, into the elevators, i believe and so you would hope that that's also the case at youtube. youtube is owned by google, parent company is google you know, i would imagine that they would have those types of security measures in place as well we have just minutes ago heard from google they're working actively with law enforcement to get any updates out. thousands of people are impacted by this active shooter situation

happening in san bruno if it is confined to those youtube headquarters in san bruno, it's also affecting google across the street and wa walmart e-commerce headquarters. a thousand people work in that area and it would affect their colleagues down in silicon valley >> as we understand it, if you can take a closer look at what's happening on the screen from our nbc sky ranger, you can see people who have evacuated from the area if you look closely, there are police officers currently patting down those individuals i imagine that is part of the protocol, to make sure the people who have fled from the scene aren't armed or aren't part of the investigation that is going on. >> which is reassuring to see. if i may, you know, when you looked at parkland, apparently the shooter was able to get out

with all of the high school students who were escaping and he was able to escape unseen so, if they're able to so quickly get this situation under control, and as people are leaving this youtube headquarters, they're patting every single person down, that hopefully will help in their identifying who the shooter is >> you have to wonder whether -- >> you've been listening to our local nbc affiliate in the bay area, kntv back at headquarters, contessa brewer has more on what we know so far on this unfolding incident in san bruno, california, at youtube headquarters. >> here's what we know right now, the city manager told dow jones there is no longer an immediate threat out here. as we watch overhead, as kntv's chopper is seeing now the police investigation going on you can see the people who have been evacuated from this building now the process takes them through a checkpoint of sorts where the police are patting

them down to make sure there's no weapons again, the city manager says there's no threat here we have also had an update from the hospital thezuckerberg san francisco hospital says they are receiving patients from this incident but they can't give the number right now because the patients are still coming in. we've seen a line of ambulances and police cars outside as the investigation continues here we've heard nearby buildings, including a walmart communication center has been on lockdown with people hearing those shots fired. we heard from an eyewitness locally telling kntv that he heard some 10 to 15 shots within a space of just a few seconds. also we're reading tweets now from some of the employees who have been inside on twitter, an active shooter at youtube headquarters, heard shots is and saw people running while at my desk now barricaded inside a room with coworkers he later updated his twitter to say that he had gotten out safely and was moving away from the area todd sherman, another employee

here at youtube had said, we were sitting in a meeting and then we heard people running because it was rumbling the floor. at first we thought it was an earthquake then he says, i looked down and saw blood drips on the floor in the stairs, peeked around for threats and then we headed down stairs and out the front you can see the crowd of people now outside of this youtube building what we're hearing from the parent company of youtube, from google communications, we are coordinating with authorities and will provide official information here from google and youtube as it becomes available. the san bruno police department had tweeted out that there was a report of a shooting there, that they were going to investigate and asking people, please, to stay away from the area. and those chopper shots, again, show people leaving the building what we saw, as you might see after a school shooting, people leaving with their hands in the air or on the backs of their heads, again, showing the police officers who have gathered that

they are no threat we've also seen officers collecting and placing evidence tags in the outdoor cafeteria area of this youtube building there. that's the situation as it stands right now but, again, important to let people know that the city manager at least says there is no longer an immediate threat here >> contessa, thank you contessa brewer at headquarters. you can see the police are patting down youtube employees one by one joining us by phone is the former chief of staff for the department of homeland security, now the ceo, chad sweet. mr. sweet, thank you for calling us and for your time any initial thoughts on what we're seeing unfold here >> i think so a couple things. number one is for those that are in the building or those in contact or tweeting with them, it's helpful to recap sort of the three best practices in an incident like this so, if your loved one or someone is in the building right now, the three things that we emphasize over and over is either get out, hide out or, if

necessary, take the shooter out. what we mean by that is, your best option right now, as you saw people lining up and police are looking at folks, most have evacuated, but reports the shooter is barricaded or may somehow still be in the building if you're in the building, they need to get out. if they can't get out, if they can't find an avenue of exit or egress,they need to hide out they need to secure themselves in an office and stay there if necessary. if they can, barricade the entrance to that if they're in a hallway, they need to get into an office and barricade. get out first, if not, hide out. unfortunately, if it's a situation like we saw in parkland where the shooter was actively going through and attempting to attack individuals on a room by room basis, if necessary, you need to take the shooter out. and, unfortunately, in these types of scenarios when you're faced with a life or death situation like that, you have to find a way to incapacitate

arm yourself with a chair, loose metal, get prepared. those are the three things, get out, hide out or, three, if necessary, take the shooter out. >> chilling but practical instructions as employees and everybody employees there and everybody in the area stris to make sense of what's going on. what about the external security looks like this is a fairly accessible area. it appeared from may have been some kind of wall. as we heard from people in the building you have to badge in but you can make your way into the hobby at first without doing so any thoughts what that means for a shooter getting access. >> it's likely there have been a variety of video available to law enforcement. number two, because of social media they have an ability to activate and utilize -- we see that happening right now when i was chief of staff at

homeland, there is offense case the ground truth is more accurately recorded by the social media activity. youtube is able to monitor social media and try to piece to the what they can as far as the fog of war right now third thing, likely because of the badging situation there will likely be some ability to identify if somebody badged in and who is remaining that gives an indicator of who the likely remaining both victims that could be in there as well as a suspect. the reason why police right now on the v -- it might be offensive to some people to see them wanding and checking those seeking to exit thshs they have got them away from the shooter in a safe perimeter or cordoned. the reason they are doing that, sometimes the shooter will attempt to hide themselves among those that are exiting

that's the reason why they are doing that. >> chad? >> yeah. >> it's dominic here one of the points that we are looking at as we are watching videos here of the security kind of kang grated around and trying to fix the situation, your firm especial specializes in consulting with businesses about event radioing this type of thing from happening. in the wake of this -- obviously the details are fluid. as you are watching this happen what exactly can companies do to better protect their employees and their staff so that something like this doesn't happen again. >> that's a great question right now, one of the most important things -- we are seeing this. whether it is schools, a horrible situation like what what happened in parkland, florida, and what we may be seeing now at youtube, private and public businesses needs a

balance that has to be struck between security and intrusion you want to get left of the mini you want to help your employees both prepare before the incident and you want to encourage those to come forward if they detect or sense something that's off. when i was at homeland security, the department has secret services in dhs. they did an active shooter study over a five year period. what you will find is there is a thing called the bystander phenomenon it is unfortunately. but virtually in almost every situation there will be individuals who after the fact realized they had seen indicators that an individual was going to go active. >> right. >> so being able to create a culture where people know preincident to the left of boom, how do we encourage and have proper information sharing the second is once an incident happens, if there is a moment of boom what do you do about it and proving the response and

resilientsy is key the three points of get out, hide out or if necessary takeout, teaching everyone those basic response pammer trameter s critical. >> what we know at this point. four to five patients at the stanford hospital have been reported don't know the condition the most we can say about what has happened here at youtube is based on eyewitness reports to our local affiliate. about a dozen or so shots fired about an hour ago in a very short period of time we have seen from the helicopter shots an outdoor area with red umbrellas and seating where it being lunch hour it appears employees would have been gathered and this might have gone down. conflicting information from local authorities. the police said they are responding to an active shooter at youtube headquarters. the san bruno city manager says there is no immediate threat at youtube's headquarters chad, of course to your point, we are seeing the police outside

patting people down. you were explaining a little bit about why that might be going on but also to the employees inside it is unclear what the threat may be. >> the guidance we are seving here is around 1100 people are part of that building complex. to put it in a numerical complex in terms of this size and scope of this particular incident. >> obviously when you have that large of a work force it is difficult to know the safety of your team. many of you have received amber alerts if a child is abducted. one of the things we are looking at my company is looking at options to be able to use employees cell phones and mobile devices as a means by which they can have essentially the same capability but it's better than an amber alert >> i'm going to sbroupt you for

one second the city manager of san bruina is speaking with our local affiliate. let's listen in. >> our police department and fire department from other agencies have responded to 901 cherry, youtube headquarters multiple 911 calls of an active shooter.the police department is in the process of securing the area and they are reporting to me there is no immediate dane e dao the public the public is being asked to stay away so they can complete their work without interruption. we hope to have more information that we can put out in about an hour >> okay. and although you are told no immediate danger to the public we have heard from people at nearby walmart that they are under a lockdown do you -- have you heard this same thing, that offices nearby are all under lockdown >> i am not aware of that.

my understanding that -- [ audio problems ] >> sorry connie, you seem to be breaking up. so we missed the last bit of what you were saying there >> my understand iing that -- cherry, that's across the street from the walmart building. but it's my understanding that there is no continuing immediate threat to the public in the vicinity >> do you know if your city of san bruno had training put in place for scenarios like this? >> absolutely, yes the police department has trained and coordinates on a regular basis with critical facilities in our community relative to active shooter situations >> how big is your police

department how many officers theoretically if everybody responded, how many officers would be on the ground today? >> well, how many officers are on duty and how many officers we have are two different things. approximately eight or ten police officers were on duty we have a total sworn work force of about 45, 50 officers. >> i don't know if i missed when you said this or if this was when the phone was break up, but, connie, were you able to find out if this is still an active shooter or if the shots were fired we heard shots fired, witnesses told us, around ten minutes before 1:00, which would have been moore than an hour ago now. do you know if the shots are still being fired? >> no. my understanding is that the

shooting is not continuing there was an active shooter situation that began right about that time. maybe just a little bit earlier. >> you heard that same thing, about 15 minutes, around 12:45 >> correct that's correct >> okay. we are seeing live pictures right now of people who are walking through an intersection, some of whom have their hands up on their heads as if to not be able to reach for a weapon i imagine that's a command from law enforcement. so what's your understanding of what happens next, manager jackson? >> so the police department having made entry to the building will need to conduct an initial investigation to determine whether there are victims, where they are, and to make sure that the situation is completely secured

we will provide additional information in approximately an hour once we have it. >> and when you talk about the situation being secured we initially had heard this was happening a tlt youtube headquarters but now we are hearing that there may be multiple locations can you confirm that >> i cannot. that is not -- i have not been informed of that i don't believe that that is correct. >> okay. that's good to know. we are piecing to the probably as much as you are at this point. >> right. >> i would imagine you are a little bit in the dark with such a dchaotic scene. >> we heard there were several people transported to stanford hospital, four to or five and an additional three or more to san francisco general. what do you know about the extent of those injured and the extent of their injuries >> i heard the same thip from the media but i have no information to confirm numbers of injuries or transport