had a party at our house last night with a cake, and there's scott and his lovely wife nancy. we'll see them later, the collision of bill ackman and carl icahn, congratulations, scot, book drops today >> already no. 1 in its category thank you for watching "power lunch. >> "closing bell" starts right now. dow down more than 490 points, session lows, bringing it down more than 1% >> final hour of trading, anything can happen. welcome. i'm kelly evans at the new york stock exchange you're watching the "closing bell." >> before we get to the big stories, was it a cake party or alcohol party, which would you

rather >> cake perioarty >> i'm generally torn, but big congrats for scott anyway, first, rates, the 10-year, touching 3% for the first time since january 2014. >> finally happened this morning. a kiss off it right now. fang stocks pressure the market secondly declines from 3.5% for amazon and 5% for alphabet. let's get to our reporters covering the action now. we are watching the move in rates, and bertha has the nasdaq names like caterpillar are driving the selloff. >> it's the debate about peak earnings people feel it's too early, but caterpillar threw fuel on the fire numbers this morning fantastic, and guidance was fantastic, but on the earnings call, this is what they had to say, and i'm quoting, the outlook assumes that first quarter adjusted profit per share will be the

high watermark for the year. uh- uh-oh. that's peak earnings essentially. look what happened to caterpill caterpillar. tooling along, up nicely, 4%, 161, and then all the sudden, down to 143, sitting at the lows for the day, 12% move intra-day. that's what that discussion does for you. on top of that, other companies are out with good numbers and decent guidance, but they are not doing anything today lockheed martin, for example, down 6%, decent numbers, dragging down boeing on top of that, and then heaven help you if you give guidance that is unexpected or disappointing. 3m lowered a little bit, lowers high end of the guidance that's not a typo, down 7% that, alone, is 100 points in the dow jones industrial average. then there's the rates issue i want to change that discussion a little bit, make it an inflation issue. company after company, this morning and the last few days, has mentioned higher input costs, so 3m, for example,

talked about higher cost for transportation, kimberly-clark talked about margins impacted by commodity inflation. procter & gamble said higher commodity costs affects them caterpillar said field costs were higher. this is a theme now. it's going to be an issue going forward. finally, another big issue, consumer staple stocks every single day, we're seeing consumer staple stocks hit new lows, pepsi, procter & gamble, all of them down 20% this year of course, brand issues are out there, and, of course, inability to rise prices and commodities an issue for them. the good news, it's cheaper, s&p is at 16.5 multiple now, the lowest it's been in a while. guys guys, back to you. >> nasdaq down close to 2%, 1.6%, let's go uptown to bertha coombs for what's driving the nasdaq >> thank you

it's a large cap driven selloff here chipserlower if you look at spyder tech xlx, that's the big driver, big names, led by fang today all of them selling off. alphabet, despite pretty good results coming on its earnings, look at that, off more than 5% at this hour, and you've got a number of these winners getting sold traders say, yeah, earnings are great, but the feeling is what's the next catalyst? we heard a lot of good news into these stocks they have been priced to perspecti perspectipe perfecti perfection, and some of them are starting to come right back under really negative technological kind of outlooks take a look at apple today amazon, apple both in correction, down more than 10% from the highs, and apple is back below the 200-day moving average. look at apple and start looking at the charts, you are seeing

lower highs, something that's concerning a lot of tech investors that we're not seeing momentum when we bounce off the bottoms anymore, so rallies are becoming an opportunity to sell. as far as stocks that are bucking the trend today, better than expected earnings, iea, shire as they continue to boost offerings for the company to take it over, and intel is one of the few of the large caps today that is bucking the trend ahead of its earnings on thursday back over to you >> we look forward to that report as well, thank you, bertha coombs. now to the big story, the 10-year reaching 3% since 2014 >> i want to show you two looks at what happened with the 10-year, and one saw say, uh-oh, the other, oh, we've been here before number one, where we are now

you can see this fairly steep rise we had going up, and take a look here. we were back this way, all the way, not too long ago, 2014, and this, by the way, was not a wonderful time for the stock market it was yields down, and the stock market was flat along that line there now let's take the longer view, one that says, oh, we're lower than we've been previously let's clear all that out here. pick a line through 4%. you can see in a mature cycle here, and only up near 3%, and why this gap here? what's in there? well, lower inflation over time as well as all the liquidity that's bound in the central banks all over the world some of that's going away, which means that somewhere in here, we might be goating back to normal. that would be 4%, but, hey, if that ends up being the top of the market, that would be pretty darn good compared to the 6%

one more look, how the market changed relative to stocks,s bond market. we went up, this was, you know, like la land here, the target rising, everybody was okay with that, and what you see here is a sharp rate look at the blue line down, orange line, that's the yield going up, and then we had a bigger break right in here this past week where it's weighing, and it's the thing that bob pisani talked about, inflation, cost concerns, concerns about a more aggressive fed, and also, what you have right now is weaker growth in the first quarter and we'll see what happens if stocks regain their mojo and gdp regains its mojo too. >> find out friday, right, steve, how the first quarter was. >> that's right. >> what happens if it comes in under 1% or negative people are concerned about how bad that first quarter could be. >> that's aggressively weak.

i'm hearing on the weaker side, 1.5%, 2% is the cnbc rapid update consensus, but i think the market also is going to take this with a grain of samt knowiknow i -- salt knowing it's weak, and there's the rebound from the decline from the hurricane spending in the fourth quarter that's something the market takes with a grain of salt, and i'm seeing strong numbers in the second quarter, and we'll see how the market reacts if the data comes in strong again in the second quarter >> steve, it's a growth estimate for the rest of the world, though, slipping more than they are in the u.s., and what impact is that having on u.s. yields? >> important point in the following sense, we don't really know why last year world growth turned around and started to be stronger or understand why it's weaker right now. i think it's going to be a continuing issue there's a lot to do with the yield. a big part of the break we talked earlier in herefuls the

result of the tax cuts not financed, and the cr came along. there's a lot more supply in this number, pushing up yields which is independent of world growth, but if world growth slips, we could have a decline in yields in the months ahead. >> all right steve, thank you very much steve leisman walking us through moving rates caterpillar on track for the worst day since january 2016 there's been a number of weak sessions, so that's saying something. >> it has. they beat the tom and bottom line, but comments on the earnings call sent the market falling and the stock. >> to support higher production. our expectation is that inventory levels come down which result in unfavorable changes to cost absorption. it is often the case that first quarter got off to a slow start for project spend and expect

future growth to be higher over remaining three quarters the outlook assumes that first quarter profit per share is the high water mark for the year >> wow joining us to talk more about that in this market selloff is jeffreys, and blackrock here at post nine. dave, starting with you. you are usually, not optimistic about the u.s. economy here, but what do you think is going on and how do you combine interest rates over 3% with what's said about the first quarter with caterpillar? >> i think it's -- you guys have been talking about it all afternoon. you have it exact lly right earnings up because of deregulation and corporate tax cuts, and ratcheting up the rate expectations, people sort of taking their future 10-year note yield from the high twos to the mid-threes has got them to discount those earnings at a a higher rate, and it's, you now

look, in the grand scheme of things, kelly, we're down 2% in the s&p and 50 points in the 10-year notes. we have not moved much in stocks, a big ratchet up in the bond market, and that is kind of weighing on all of this positive earnings that fueled the move of late last year, and it's tempered that move we'll wait and see, steve spoke about it in the previous segment as well. we have to wait and see how this fed reacts and how the fed reacts to data which looks a little bit difficult to decipher i'm not of the opinion that we have some big cataclysmic move coming higher in rates that are going to really mess with the stock market, and the rate volatility market is telling you that too >> do you think stocks are the place to be despite issues that we've just mentioned, still most

attractive place begin risk-reward. >> absolutely. one shouldn't overreact to one day market moves if you look at fundamentals, growth outlook remains quite strong, particularly in the u.s., and in the u.s., there's potential for upside relative to consensus. q1 has been looking weak, frankly, q1 looks weak year after year after year, so there's seasonality there. in the rest of the world, the slowdown has been perhaps a bit more pronounced, but rates go up, so that's not a good place to be. we like the short end of the - >> rates go up even with the data so going back to caterpill caterpillar, just say it's seasonal, but when they say it's a slow start, could be the high watermark for the year, you still think that's an environment where rates are going higher >> we'll have to see if growth rolls over, growth remains

strong for the end of last year, and so, yes, it's up for rates >> we're seeing rates rise in the government bond markets, there's a warning paps that's something they realized it or not? >> it's two tales. high yield, they are at their tightest level of the cycle. this past week, so spreads are compressing, suggesting there's not a lot of credit risk in the markets, even though bankruptcies are up quite a bit in the high field market, certainly not in the ig market, but you find your stress in high yield, and high yield is holing in incredibly well at the tight level, another signal this sort of everything's going wrong story may be actually a lot

closer to wrong than right >> feels more like a growth scare narrative than a slow down, but we'll see. could change in 45 minutes thank you very much for now. 46 minutes to go until the close. we are down a full 2%, nearly 2% in the dow, s&p down 1.4, and nasdaq down 1.6% >> move in interest rates, the story of the day, and we're just getting started here on "closing bell." straight ahead, much more on the markets, rates, and big tech as stocks fall across the board. plus, the trading trends the ceo of td ameritrade sees. he'll bring us behind the curtain. this is the closing bell on cnbc with kelly evans and wilfred frost live from the new york stock exchange you know what's awesome? gig-speed internet.

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trade, down 1.8% on the dow. let's check in on individual market movers, shares of whirlpool bucking the down trend gaining 4.5% despite falling short on earnings expectation and they plan to sell the business to japan's corporation, and a billion dollars in cash, up 4.6%, and shares of waters tumbling 7%, and the company saw solid growth in china, affected by weakness in ya, down 7.5% we were down 600 a short time ago on the dow, and we bring in art with your view on why the sudden declines this afternoon. >> a couple things going on. number one, for the past several days, we have broken a series of theoretical support lines, moving averages, trend lines, things like that, and that accelerated today. when we took out yesterday's lows, the selling accelerated.

now, there's some people who follow something called the elliot wave principle, and that's a series of waves, and i wrote in my pre-opening comments that a couple friends of mine believe we may be in a down cycle in the elliot wave, and this may be a cycle three or four down, which could get a little ugly, and it did get a little ugly, but the primary concern is we are a third of the way through earnings season, and 83% of the companies that have reported have easily beaten the estimates, and yet the averages are below where they were when earnings season started, and it is something other than earnings upsetting the market >> art, today, the great individual example about that, first of earnings season, those who reported earlier were up in the premarket, sold off significantly. when you look at the other factors, is the ten year hitting

3% what else could it be? >> partially a factor m i think you're still getting concerns about trade and tariffs and where things are going, but as bob said on air, there's concern that things are good now, but is that the peak? caterpillar set that off announcing things were good, but there's concern that the first quarter might, in fact, be the high water mark for the year, that caught everybody's attention. the other thing is, we've got gdp coming up, and that continues to be marked down, and at one point, it was theoretically above three, now down around two, and some people have it down to 1% you have, the market is saying, yes, things have been good, but what are you going to do for me tomorrow >> what about the iran deal? you cited that too in the market

affecting everything from the price of oil to how stocks are moving >> yes, it was originally the president said something about potentially working things out, and that sent oil down hurting the energy stocks, and later, he came back and revisited and call the deal insane, and that allowed oil to go back up you have all the external factors causing trouble here >> are there sectors that can catch a bid at the moment and bring the market higher, whether it's interest rate related or otherwise? >> i don't really believe so in the sense that what led the markets up until a couple weeks ago, and that's the fang group, the texches they are under suspicion because of potential new regulation coming in, changing business models, what happens here, and so we'll look for an entirely new leadership somewhere else. we're not getting it in consumer staples or industrials, and it's something we're not thinking of right now. >> author, thank you very much,

pleasure as always 38 minutes before the close. we just came off session lows, down over 600 points it's more like 430 points now, but still over a percentage decline. ahead, two stocks to watch as we head towards the close, including a dow name tanking on earnings results >> there's only one? >> exactly >> could be a couple ones today. first cnbc interview with tim hockey, and whether this year's volatile markets are driving trading revenue when we come right back

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welcome back to the "closing bell," watching markets here with 35 minutes to go, dow down 416 points, all selling pressures just in the last 90 minutes or so, so a lot to watch for going into the close >> three dow stocks, 3m, boeing accounted for over half the losses, again, another with driven effects two stocks to watch, pultegroup, higher today after a beat on first quarter earnings, up around near 3%, and no. 3 home builder, did not raise the forecast by much, but i guess

traded down with the rest of the sector, a little bit of a reprieve >> sector still lower, but home sales strong i still think the housing market is going to take off, but 3m, down 6.5%, worst day for them in nine years after they cut the earnings forecast and released results this morning, and one of the worst performers in the s&p 500 too. >> broadly, talking about cap or talking about lockheed, coming up with it later, and the industrial sector of all the sectors should be hot, all hot on eps and revenue, but not the guidance of the year >> maybe they are cautious time will tell still more than a half hour to go here, market is down 450 today, dow just on the nose of 24,000 now we'll see if we hang on to that level. up next, ameri trade, the

ceo, tim hockey. the 10-year treasury yields hits 3% today for the first time in more than four years and it could go higher. looking at the sectors that could see the biggest impact from rising rates.

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. welcome back, everyone, i'm sue herera with your cnbc news update at this time. the prime minister trudeau extends condolences after 10 were killed and 15 injured in toronto monday afternoon calling it a senseless tragedy >> the collaboration between all forms of government and law enforcement in the handling of this situation they are continuing to monitor it closely, and they are working with law enforcement partners across the country to ensure safety and security of all canadians. >> former president george hw bush is recovering from a houston methodist hospital due to an infection that spread to his blood. the former president was admitted to the hospital just a day after the funeral of his wife, barbara, a spokesperson said he's responding to the treatments he appears to be recovering.

bill cosby, along for the first time with his wife, arrived for his sexual assault retrial, which could go to the jury today closing arguments beginning this morning. the defense rested on monday after the 80-year-old entertainer declined to testify. you're up to date. that's the news update this hour, back to you. >> sue, thank you very much for that we are down on the floor here, and we were down over 600 points, of course, now down 492, close to 500, worsening and recovering over the last hour or so i'm joined on the floor by mike santolli to talk about individual stock movers in the broad industrial space >> we've been talking about caterpillar that ugly reversal this morning, lockheed martin in a similar position, numbers good, top line, bottom line, and even the guidance for the rest of 2018 was strong, and in terms of earnings and revenue,

however, they think the cash flow, guidance was not raised on cash flow, they are making contributions to it so it just shows you the way investors scrutinize every last detail and difficult to impress this season >> a great story in terms of how much numbers improved since last year because the eps was $4.02 versus 2.69 a year ago relative to expectations >> growth rates are great, even this quarter beat expectations, but it's about what's next and do you have the momentum >> 24% in the last quarter last year so, again, can that really prove growth let's switch focus to look at boeing, too, mike, because that's down 3% because of lockheed is down >> same thing. >> they report tomorrow morning. >> an expensive stock, and they braced if the potential another sell on news for stocks as we had for so many. stock was caught up in a lot of momentum, and i think the trade tension has not been a dominant

theme this week, necessarily, but it's been an overhang on the psychology >> of course, boeing had a great run last year in the early part of january boeing down 3%, and attention turns to them reporting tomorrow morning. the dow, as we stand, down 496, kelly, back to you >> all right, thank you, wilf and mike, see you in a sec shares of ameritrade down today, but the firm reported record client trading activity attributed to the resurgence of volatility in the market, which we see again today tim hockey, the president and ceo of ameritrade is here, thank you. >> we had a nice quarter, a fantastic beat, integration happened in february, and the market was looking for us to affirm a return of a capital plan now that the integration is

down, deferred that by a quarter, number one, and number two, made statements about investments we're going to make because revenue is strong and growing business, and post-integration analyst community, in particular, wants to say, did you get your synergies, and can we have them please >> right you are investing for the long term, waiting for the capital return, and they want it now is your feeling >> i think so. we were conservative in our forward looking view because we're only halfway through the year, but if you look at both rate and the trade environment, we are on the conservative side, and i think the analyst community tends to look at the forwards than current rates. >> by the way, maybe you can explain a little bit, do you -- this is a weird question, but do you know the year looks better hearing everybody from caterpillar, all the guidance seems so cautious, we try to read, are the ceos just super careful or really believe this >> i think it's being super careful, and i try to run the business you are not betting on

a lot of tail winds, but continue to do well, even in times when they are more moderate we had tail winds over the last while, and they might continue, but that's not to run your business that way. >> what about volume now down 500 points, a bunch of days like this, recently with you guys, what was your best month >> a great quarter did something north of 940,000 trades for the quarter in fact, in february, alone, we did a million trades average per month. >> that's on big decline days. >> yeah. in all of last year, you guys would know this better than i, we had, what, ten days of 1% moves for all of 2017, and yet in the first quarter, it was 34. >> wow >> trading activity was very acti active, and we're seeing it less so now, but thespectacular >> a 1% move for you guys likely means another -- >> yeah, i think our average this quarter is running at 780 level. to put that in perspective, at

this time last year before the scott trade deal, we would have done 500,000 so a million level today, we'll do between 850,000 to 900,000 given this activity >> thank you very much, good to get your view. dow down 508, and nasdaq down 2%, and s&p 500 down 1.7% at, and up next, why looking at emerging markets and stocks for growth, and later, 10-year touched 3% today, first time since 2014 we have a beat check on how the rise is impacting financial and housing sec sores coming up. [ male announcer ] eligible for medicare?

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that's right for you. welcome back, 21 minutes to go, back down more than 500 points on the dow, down 510, and low of the day was more than 600. first, a lot of the show we were better than 500 points, though, just 450 or so down, 2% for the dow and nasdaq >> back to dom for a look at stocks seeing the reversals with the moves today. >> caterpillar was the tip of the iceberg. a big day for intra-day swings among big economy names and

those industrials specifically 30 stocks in the s&p 500 saw declines of 5% from the opening price alone, and if you take a look at the biggest mover, it was a mining giant, down more than 15%, you can see there, and they show just about 15% below its opening price, the number of the top moversmovers, though, o materials. you got cummins, a defense contractor, and deere and company, all seeing declines of 5% or more just from the opening price alone, and, of course, in particular, that caterpillar move, down 10% from the open it will easy be the largest open to close decline on an earnings reaction day for it since 2001 the next expected notely less by 5% or so in october of 2016. it's also worth noting on the earnings front, 15 of the 55 s&p 500 companies that have reported since yesterday's close are now down 5%, compared to four just

up over 5% that gives you a reference point, kelly, what's going on in the markets right now. i point out, looking for the more expansive list of the big drops, go to cnbc.com. there's a great list of the biggest declines so far from the opening price to where they are now. back to you. >> all right, dom, thank you let's get to the closing bell exchange now, phil, and peter here with us at post nine, are you the ceo, peter >> i could be. >> oh, really? >> yeah, i could be. >> president, founder, ceo >> i am about seven titles >> you are president is what we've here >> head janitor too, but, you know, not something i brag about. >> and rick. >> oh, that's right. we have to be careful there. anyway, welcome to all of you, and we'll start with you, peter, on this 500 point drop in the

dow, what's it say to you? >> says to me, look at the names down and how significantly they are down, that's the story you have lockheed martin, down over 10 points, and triple m, big cap names getting killed part of that is people's expectations for the earnings were met, and guidance is looking good, but i think people are just not thinking it continues and think this could be the end of that part of that earnings run we've been on i'm not that surprised i think that the second quarter might be a little more difficult. you know, i mean, their expectations are very high, and, you know, i still think, you know, the economy's doing well and whatnot, but the expectations have been so off the charts for the last year, that i think at some point, people have to start wheeling it back that's what you are seeing >> the earnings offsetting negatives like trade or rising

interest rates, if you say the run is earnings growth we see might be ending, the bull market all together ends. >> yes i don't think what you're going to see is a traditional end to the bull market, which is that massive correction or that, you know, slipping into a bear market territory, you're going to see probably a period of time where you are going to see a corrective phase in different sections in the market will come back, and we'll go into a correction period, and could be three months long, a month long, but you're going to start seeing that and that's where investors are going. >> rick, coming to you next. talk about 3% on the 10-year, is that a great thing wonderful? awful? what's the message >> you know, i think if it happens in 2017, it would have been better, would have happened in early january, and really penetrated would have been better my opinion is the markets were out of sync. the equity markets are out of face with the credit market, and how do we know that? i think there's a couple ways,

and all the guests said all the right answers, just trying to put the puzzle together in my opinion, and that's what i find the most fun about markets, and steve leisman used the chart i use many times when we have the momentum in 2017 with low volatility, the strategies packed, everybody's portfolio is full of equities, and they all loved it because regulation and tax policy, everything was getting pulled forward, and these are all good things then we ran out of runway, volatility trades never heeled, we are not packing it in the way we did switch gears, credit markets are up 60 basis points for 2018 because the central bank is running out as well, and the global central bank presence is getting more diminished, and it's at a point where it's going to start to really fight, and those two forces are at work i thank art for this, a lot of the same things i look at. the wynn we were under

yesterday's lows, that's when it fell, and i think that gives you an idea the equity markets are looking for something big to hang their hat on, and volatility guys are not packing in anymore so they have to wait for big data points. trump didn't start speaking until an hour after that at 12:47 eastern, and he's blamed a bit, and did say aggressive things, and the market did break, but the major damage had already been done. the next chart, for example, lowest level since march of '16, but credit spreads are healthy, so it makes since. rates are catching up. credit markets don't have a bad transmission, nothing going on there, but equity markets can't find their footing i don't see the relationship changing any time soon unless you get something big, and i don't think that big issue's momentum nobody's worried in equities like they were in all of 2017 that they're going to miss the

bus and they have to run after it the next three stops. >> how do you weigh out the quality of the u.s. economy at the moment good data outweighing the bad, and if so, are the selloffs too big? >> the selloffs are too big. i mean, when you think about the idea that when you look at consumer confidence today, when you look at the earnings cycle in general, wages, unemployment, all solid numbers, the underlying economic data says the economy is still moderately expanding. question comes, does this experiment around tax cuts that fueled earnings certainly, will it continue to expand the multiple and get it through valuations and drive the market higher i'm in a camp that it makes sense now, debt gets more expensive, but as long as the underlying current expands, stocks go higher look at the sales number forget earnings, there's a lot of noise there, but the sales

growth, and cap spending are strong 10% tells you companies are growing, and if that continues, we're going to go higher, and this is purely volatility setting us up for that >> before we go, then, because bob mentioned that the multiple on the s&p 500 is down to 1 e6.. are you buying with two hands here >> depends how you look at it. look at the currents, it's 21 in the s&p. look at forwards, it's 16. that's the key do you believe we're going to get expansion and forward multiples that are set are real or current real? i understand we get expansions and have better numbers in the second, third, quarters, and the stocks are cheap here, buy stocks and enjoy a uptrend for the rest of the year, and it's between 6-10%. >> there we go nice time to buy if you are phil thank you, all we have 30 minutes until the

close. we have settled into a roughly 500 point decline in the last hour or so, but that's a full 2% for the dow and nasdaq >> sounded like 30 minutes to go >> 13. >> 13 minutes. >> you agreed peter. >> yes never saying anything. >> 30 minutes. ll 13 minutes to go before the bewe have amgen, wind, and texas instruments. that's thex. let's get started. show of hands. who wants customizable options 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. 1, 2, 3, go.

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2.7% up or down, over the past eight quarters after earnings released, and texas instruments moves 3% up or down, and wynn moves the most of the stocks, up around 5.4% on its earnings day over the past eight quarters >> bringing you the results and instant analysis as soon as they are released remember, yesterday, google after the bell, look how poorly it is in the session today >> google was up and down itself even before this morning when things really started to back up after. we're coming back with the countdown. >> after the bell, earnings, beat check on the rise in the 10-year yield. that's the story today, hitting w 3% hois that impacting the banks, financial, and housing sectors what you need to know still to come on the "closing bell. think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income.

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the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. welcome back to the "closin bell," four minutes to go, down 420 points really, extraordinary, we opened higher, and then a really steady and sharp selloff until about two hours ago. we found the bottom, were down 619 points at that hour, and then we steadily improved a little bit into the close, still down 435 points or 1.8%. the dow the laggard for the day, but if you look at the three

major indexes, the nasdaq is the laggard now approaching close down 2%. the russell there, but i can tell you, the nasdaq is down 2%. if you look at sector performance, it's the industrials the standout negative today largely because of a number of big movers within the dow, likes of 3m, boeing, caterpill caterpillar. switch to see what the individual stocks have done, there's sharp declines we got 3m down a chunky 7% or 8% there they are now boeing down a decent amount as well, and actually, low of the day, those three stocks accounted for half of the dow's decline, and if we look into cat intraday, there's that extraordinary move we saw for the broader dow, higher at the open, and they reported earnings, but their guidance was disappointing, and we sold off sharply, dropping the markets down, and, bob, mentioning the yield on the 10-year hitting 3%

because there's been more earnings as i mentioned that, two week start, i got on the yield on the 10-year, hit 3%, but the sharp moves were days ago, not today >> that's right. there is a story more important we hit on all day, and chast tcn wage inflation story that's a mover of interest rates. rates move partly in response to inflation issues, and in the last week, including today with caterpillar, companies came on and said, listen, we see significantly higher input costs, things like steel, whirl pirl complained, caterpillar complained, packaging costs, higher oil for kimberly-clark. >> eucalyptus oil for kimberly-clark, the pulp, used in toilet paper. i didn't know that, in tissues

in general this is impacting the ability for their margins, and question is, can they raise the prices? some can, some can't they can't rise prices, and that's going to hurt them. this is why we keep seeing consumer stocks at multiyear lows >> bob, actually, it was the rise of the bank as well, prices went up, essentially the input, gets cash from people, and it's a theme that is throughout all of earnings, yeah, beat on etf and revenue and guidance is soft, and we saw that in the other industries today >> what i want to say is the thank that moves the market was caterpillar. i said last week, i think it's too early to have the debate this is a peak of earnings it was a small group of people who were yelling about it, and today, caterpillar blew it up saying, this will be the best of peak right here in the first quarter. well, that played into everybody's hands, and you can see caterpillar was $161 at

11:30 in the morning eastern time, and all the sudden, it's $142 or somewhere there, that was a straight down. >> the industrials - changing direction for people's acceptabili -- >> earnings and guidance was fine, but it dropped boeing, all of the defense names >> one big report, and big sit of guidance tomorrow, does that change it around again a big round? >> i think the good news is the market's cheaper now, at 16.5 times forward earnings if you believe that, number one, global economy is not going to significantly slow down, and i think a lot of you are in that a camp, and earnings are going to be fine through the next three quarters, and it's too early to have the peak earnings, if you believe that story, then, yes. >> new home sales this morning,

that was fine. >> they were great >> consumer confidence fine as well >> good going up because there's no inventory >> there we go, bob, thank you very much, there's the bell, only 420 points, i say "only" because we were down as much as 620 points, so there is the bell, ringing the bell here at the nyse is hotels and resorts, and at nasdaq is iea we are down around 420 points at the close. kelly? >> thank you, i'm kelly evans, not as bad as it could have been is all you can say right now we were down 619 anotht the lows hours ago. still 1.75% decline. the s&p down 1.3%, a 35 point

drop, and nasdaq at 1.7%, and russell 2,000 is interestingly holding up, shedding eight or nine points to 1553. earnings movers in the market, 10-year hit 3%, and comments from the president this afternoon could have shaken things up. we'll get to that. also, big names reporting earnings after the bell today, and meg has amgen, and ontessa has wynn, and pete is monitoring numbers from texas instruments see you in minutes joining me now to talk about the markets is michael, bill smead, and charlie -- by the way, charlie, didn't you assure me we'd beat? the bar was not too high >> we have beaten earnings the earnings have been great it's just been some guy at caterpillar said this was the peak, which i don't know where he got that idea from, but they beat handlely. >> caterpillar was up this

morning and turned around and couldn't catch it a bit, could it sm. >> actual earnings, this is important, are up 20% compared to 17 people projected we had 83% of companies beat estimates. earnings have been fine. there's been peoplesaying a fe things about the outlook, which, frankly, i don't agree with, and i think they are being too conservative >> are you disagreeing with the ceo of caterpillar or the cfo in. >> cfo, yeah maybe he meant this is the biggest percentage increase, the first quarter is up the most versus a year ago. okay fine that's not what matters. i'd be very surprised if that ended up being the high etf quarter of the year. >> there's caterpillar, down 6%, 3m down a similar amount what do you think of it all? >> no problem taking issue with what they said, but you're taking issue with the entire stock market, really, because it was universal across the board

almost that all these numbers, they just were not enough in terms of reassuring investors you're not going to see a fallout in the rate of growth in the next three quarters or something like that. i don't think it's really a different story. i think we've been dealing with the theme for a while. this idea that, geez, what should we pay for these great profits in a world where inflation is perking up and rates are in a higher range. that's the story we've been following. >> yeah. >> these companies are not talking about cost pressures moving up through the pipeline >> nope. >> bill, it felt like the story of the day, and in a way, it is, 10-year yield hits 3%, but i don't know, maybe earnings stories are more important and maybe the president's rhetoric -- i don't know how much you think that feeds into anything that's going on here. >> what did caterpillar and boeing and amazon and netflix and facebook and google, what do the companies all have in common they were the momentum trades of

the last 12 months that's what they have in common. they were crowded trades crowded trades get punished. whether it's a short term punishment or long term punishment investing is the only sphere of life where victory, security, and success goes to the minority, never the majority maybe this is just the beginning of the majority taking its punishment >> we'll see bob pisani is standing by with more, will be. >> almost a 700 point move in the dow. stocks started the day higher, following a flood of earnings reports, but those changed there's four issues that bother the market the first one and most important is this debate about peak earnings is this as good as it's going to get? earnings are strong throughout the rest of the year, 20% every quarter, and caterpillar said it

would be the high water mark for the year there we go it okay that blew everything up, folks, dropping caterpillar an the entire market in the middle of the morning. second issue, rates are creeping higher the yields on the 10-year treasury hit 3% for the first time since 2014. they are nervous about rates because that means the cost of borrowing goes up. related, though, to higher rates, are concern over inflation. several companies in the last week, including caterpillar today talked about rise in commodity costs, particularly things like steel, oil, and several companies even talked about higher wage costs. third problem, there's been major resistance in big momentum names, fang stocks in correction territory at this point. they have been down four days in a row now. finally, consumer staples are hitting new lows like clorox, procter & gamble, pepsi trading around the 52-week lows, a good example of the inflation problem. they can't raise prices even though they have higher cost for

things like packaging because, well, they just don't have the pricing power that they used to, and that's a big problem for the companies. back to you. >> bob, thank you very much. what do you do, then, staring at the consumer staples sector, performing terribly, and it doesn't help that that yield is going up. talking inflation, they should have pricing power, but they do not, and we're talking about profit margins being depressed >> we talked about this a lot, not everything moves together, and the staples are a double whammy sector because they are bond substitute stocks people buy them afraid of the market who want security and not tied to the economy, and so they buy them instead of a bond and when rates go up, that pressures commodities, and hit by inflation, and third, hit hard to go away from brands >> yes >> what were you going to say,

bill >> yeah, kelly, i'd like to mention i know one staple is up today, walgreen's, and the difference between walgreen's and the other staples is most of them make something, a staple product rather than providing a staple retailing service and pharmacy service, and the market found out this week that i think larry robbins told you at cnbc it's going to be very difficult to go in the pharmacy business, right? here's walgreen's that had been beaten to smithereens because of the threat of amazon, so they stick with their bearish trade on staples that continue to get beat up by what scott gallaway called amazon's zero cost of capital, and on the other hand, walgreen's looks like a screaming buy because i don't think -- you just can't create that many pharmacists, so it just is fantastic. that stock looks like a powerfully good buy to us. >> all right

let's talk a little bit more about yields today, the 10-year treasury yield hits 3%, first time in four years we flirted with it we finally punched through it. what's so significant about that >> it's time to assess you know, the fact that borr borrowing costs are going up, and the reason maybe it gave the market pause is because of what bob said, it's this sort of doubt in the back of people's minds that maybe it's happening for not the best of reasons. it's not just about growth accelerating >> people said that, oh, as soon as that happens, you're going to see people selloff the fang names. >> yes >> what is the connection there? >> that has been a story line, kelly. i think the general idea is that if you are facebook or alphabet, you're a very, very long-lived growth story you have many, many years of future earnings growth that you're trying to discount and price back into the present, and a higher interest rate today means you discount them more that's the kind of -- that's the cfa math you hear of, kelly, but i honestly think it's something

also, like, bill's point about crowded trades essentially, momentum, people clinging to the growth what's interesting about fang, and that's f-a-a-n-g to include apple, they peak at different times, facebook was earlier. amazon held out by far better, so margin to peak, it's really not that far off the peak so i would say amazon is probably your best looking one right now, and, of course, today, the story was alphabet where, again, it was considered a value play in digital advertising, and really not easy to assail the numbers other than the expense line, and here you see this looks like a fairly dramatic peak, early february or so, and i'm grazing the screen too much, but that's not a great chart pattern. a don't theink a lot of people love that. >> i called that the kneeling camel. >> the kneeling what >> kneeling camel, i think

that's a technical term. >> you don't necessarily want to buy one. >> i don't think so. charlie, bill, bringing you in here, just, charlie, first to you, look, this is an opportunity to buy the tech names for the first time, but are people interested in doing that right now in. >> well, the point is, exactly what mike said of the it's not a theoretical point, but it's that a value stock you get earnings today, and a fang growth stock, it's 20 years from now in a high interest rate environment, those earnings are less today that's not a theoretical thing it is a real thing companies have benefitted from extremely low interest rates, extremely low costs of capital if we get a return to normal cost of capital, value stocks should be worth more than fang stocks >> yes charlie just said a bird in the hand is worth two in the bush, and for the last three and a half, four years, two in the bush has been worth dramatically

worth more than a bird in the hand, so the interest rate thing is we had abnormally low interest rates for an extended period of time if you read jamie dimon's news letter, he warned people that when rates go up, they go up abruptly the truth of it is from a 35 to 50 year historical perspective, 4% on the 10-year treasury is a low rate i came into the business june 1980, 4% is way at the low end of the range of 1.5 to 15% on the 10-year treasury that i've seen, so what this sets off now is an on and off again bear market in bonds that could last for a couple decades, and you got people who have been investing and taking extra risks than the two in the bush based on the idea rates were going to

go lower or stay lower >> if they are not in the bond market now, should they be in the stock market that's interesting now, both places, investors did not seem interested >> well, the answer is from an index standpoint, you go in the index, get 25 to 30% of the money in tech and quasi tech alo alone, throw in the other super expensive growth stock that everyone's enamored with the over three, four years, and you set yourself up, if jeremy grant and other experts are right, for lousy seven year returns, but there's loads of stocks that have been beating to death like walgreen's and others who have been out of favor that stock pickers might be able to make good money for you on. >> we'll see how the earnings come in. wynn results are out contessa >> we have a big beat on etf

here at $2.30 against the estimated 1.98 wynn revenue missed slightly, expecting 1.75 billion, and they came in at 1.72 billion. a slight miss, but close, but no cigar here big news today is increasing the dividend from 50% to 75 cent per share. what we saw here in the last week or so has been elaine wynn taking on that role of activist investor pushing for a big overhaul on the board and wynn, naming three new women to the board of directors keeping an eye on that >> surprised they would do a 50% dividend with that beginning on right now. >> that's one thing that they urged to hold, from making any big moves until the overhaul of the board and selling off assets like the property in boston and the like and said there needs to

be a new board in place before that happens, so 50% increase in the caps dividends right now is the big news from the earnings release. >> thank you mike, shares down now -- >> yeah, to her point, it's trading not just on this quarter, and i do think you might have puzzlement over the strategy, paying out too low in the past when it was controlled by steve wynn or a way to distract and get cash out of the company, maybe it's not as attractive a target. >> i wonder for the companies, the supreme court, any day now, expected to rule on the new jersey issue about legalizing sports gambling there an online gambling, so all are looking to see if that's a huge opportunity for them >> texas instruments now, kate >> we kick it off with texas instruments, strong quarter, eps 1.21 adjusted, versus estimates of $1.11 revenues beat 3.79 billion

versus estimates of 3.65 billion. they are giving eps guidance that's strong and revenue guidance higher than the range they provided. stock is up by more than 5% now, and we move on to insurance company chubb, beating across the board for them, reporting eps, this is not adjusted, $2.30, and estimates called for $2.26. revenue coming in at $6.55 billion, and the street looked for $6.42 billion. also, industry metrics were a possibility, combined ratio at 90.1% and estimates were 90.3% slightly lower, which is good, and the ceo said it was a good quarter for them despite having more disaster losses due to winter storms and california mud slides the stock, though, kelly, unchanged. back to you. >> kate, thank you, kate rogers there, mike, quickly, texas instruments up 5%. that's more -- that's a name that the markets would hear more about, right >> absolutely. a little bit of relief,

semiconducts were a leadership coming into the correction, and they are down hard, i mean, you know, texas instruments down more than 19% from the high, and, of course, relief and a bounce >> all right, over to amgen, up 4% right now, and meg has the results from amgen meg? >> kelly, earnings per share adjusted basis at 3.47 versus estimate of $3.23. revenue at 5.55 billion versus average estimate of 5.43 billion. the company slightly raised the 2018 guidance for earnings per share and for revenue, but on the bottom, raising from 1280 to 1370 it was up from 21.8 billion previously interestingly, parsing through the results a little bit, if you look at the rapatha, sales

increased 50% year over year in the first quarter to 123 million, coming lead of estimates, good news for amgen we are listening for planning for m&a and what to do with the $30 million in cash, guys. over to you. >> shares up a little less than 1% thank you. bill, are they in your basket? >> second largest holding, owned the stock for the entire ten and a half years we've been running the strategy if you look at what people do with stocks that run these companies, in the last 12 months, there's been about 3 partnership 5 million in total sales by insiders, which is a tiny amount of stock to be sold by people who are officers and directors of major huge public company with loads of equity compensation the people that run this company believe in this company, and i add that rapatha, those with

horrendous bad cholesterol dropped the bad cholesterol number by 70% for 91% of the people that took the drug. >> wow >> so if president trump, who has 143 bad claholesterol, ther' a 91% chance it goes to 70, and he would tweet it's the best thing to have happen and have your insurance company buy it for you. >> a tweet from him on that, that would help amgen. >> and cut the price in half >> that is true, that is true. charlie, the time word before we go here, especially if you bring us back to the move in rates and how the market responds today. >> it's three companies reporting three beats and three raises it's, again, continuation of very strong earnings, and you're right, higher rates, rates are a gravitational force that brings future earnings back to the presence and higher rates are a problem, but right now,

corporate profits are going faster than interest rates, and that should be positive. >> all right guys, thank you so much. charlie and bill joining us to talk about the markets today there's a lot more ahead still on the "closing bell." next up, how stocks in key sectors react now that the 3% barrier for the 10-year has been broken omhe is the "closing bell" live fr t new york stock exchange with kelly evans we're back in two minutes. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business.

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after hours news on two major drug makers, meg has those. >> kelly, a little back and forth with shire, up after hours on a report that they are close and possibly plan to announce a preliminary deal tomorrow. this, according to reuters, citing sources saying that this agreement has been reached after they sweetened its 62 billion dollar acquisition offer, and now they've gone back and forth a number of times, all playing out more publicly than usual because of the takeover codes that requires all the disclosures, so we heard about several offers they have made for shire here, and it sounds at least from reuters as if there may be a potential $62 billion

deal or more announced tomorrow. we'll update you as we can back over to you >> meg, thank you, shire shares up 4%. yield on the 10-year treasury hit 3% for the first time since january 2014, and that could impact the market, maybe it did already, but especially in these two areas, diana, what's it mean for housing in particular, and wilfred talking about what it means for banks. >> despite how a flatter yield curve is worse for banks an a steep curve, high yields in general are a good thing for banks, thus 3% on the 10-year today compared to below 1.5% in mid-2016 is the main reason why the kbw banks index rose 60% over that period however, it is true that the steeper curve is better. why is that? well, banks borrow short and lend long. when they borrow money from the government or savers, they offer a rate based on short term

rates, but when they lend, they do so for long period of times time, therefore tied to longer term interest rates. steeper curve means bigger margin between lending and saving perhaps more important is the deposit beaters. regardless where we are, banks over lower rates to savers than they receive from lenders, and typically as rate hike cycle continues, the ability to maintain that margin is harder as competition increases the most recent set of banks earnings highlighted rising competition was occurring as deposit rates rose faster than expected it is that more than the shape of the yield curve that's weighing on investors' minds over the last couple weeks because, in general, higher rates remain a positive in the grand scheme of things >> that earns you a couple gummy bears. >> thank you very much >> thank you very much diana now, difficult to explain these things, but housing seems more straightforward >> oh, yeah. this is real simple, kelly higher interest rates makes

housing more expensive in a market that was already seeing steep price gains due to tight supply the 30-year fix that follows the yield on the 10-year treasury jumped at the start of the year, then nothing over the last month and dipped a little bit, and now we're headed higher again. we ended the day yesterday, matching the highest rate in 4 years and likely higher again today. this will not, however, throw much water on demand we saw sales of newly built homes jump over 4% last month. that's being driven by a strong economy and the biggest generation hitting the home buying years rates did not matter higher rates are hitting stocks of big builders. lenar down year to date despite strong earnings. the builders bank on the move up buyer who is not as concerned about rate moves as the entry level buyer who is cap strapped. i don't get the gummy bears,

huh? >> no, but i want to ask wilf a question now >> i did finish them i swelled them hole. >> there was insight there >> you're going to have a stomach ache i'll have them for you next time >> a promise is a promise. dow falling 400 points today. facebook did help to lead the fallout in the decline for tech stocks today fast money traders will join us when we come right back on the closing bell

welcome back, caterpillar with negative attention today, the stock initially popped after reporting better than expected earnings this morning, and then promise from the ceo this morning sent the stock lower as well as the broader markets with it this is what he said >> cat inventory grew in the quarter to support higher production our expectation is that inventory levels will come down, which would result in unfavorable changes to cost absorption it is often the case the first quarter got off to a slow start for project spend. we expect that targeted investments for future growth to be higher over the remaining three quarters the outlook assumes that first quarter adjusted profit per share is the high watermark for the year >> high watermark, sending slivers through the market bob is back, and, look, cat down

6%, and then the dow down 600 points >> that's right. last week, we discussed this is this peak earnings? a small group of people say this is as good as it gets. i said it's too early for the discussion caterpillar blew that up, thank you very much, guys. well, there you go that's what it did it did that for the entire market we were 161, caterpillar dropped to 140 something good heavens i don't think the cfo intended that, but it happened nonetheless. the earnings for caterpillar are great. they have been on a general uptrend for a long, long time now, what we talk about when we talk about earnings growth over the last couple years, and we are straight up. are we at peak earnings for caterpillar? here's the problem the answer is yes. everybody knew this. in fact, going into it, i have to show you the estimates for the rest of the year remember, this is the highest watermark for the quarter here, so first quarter, 282, and next

quarter, there you go, folks, we knew this was going to be the high watermark they are adjusting their numbers right now, but they are articulating it, and everybody went crazy because they thought the rest of the world would be like this. it's not that's my opinion, at least m meantime, you saw the damage it did to everybody else, okay, lo lockheed, martin, example has good numbers and earnings growth, but it dropped on it, killing boeing on it, and boeing is a beat as well, and 3m, well, 3m outright gave guidance below expectations on the top end for 2018 heaven help you if you miss here, good heavens look at caterpillar, doing a great job, and then down 7%. so, again, are we at peak earnings i think the market is going to calm down. i think you're going to see people talking about things a lot better in the next few quarters >> one reason that traders are a

little bit twitchy about at least the prospects that caterpillar is maybe seeing the best growth, so this year, the estimate is for 920 a share for earnings for caterpillar, guidance above $10, perhaps, but you know the prior peak earnings in the cycle 2012 >> wow >> 8.50 at the peak in 2012 to 0 in 2016, and now back. it's a cyclical product line and company. >> yeah. >> that's why you flench ahead of the blow, not saying the market's right about this. >> down 16% from the recent high >> yes the number, the guidance today, again, and what i showed there, the analysts have not caught up with what they were doing. those were numbers this morning, they are going to go up, but $2, they raised it, overall for the year that's an absolutely amazing number, but this tells you, you know, just look at the -- read what the market says, market says, we're upset with the peak

earnings, and, oh, he said "peak earnings," so everything else will fall apart around here. >> 14 times peak earnings, five years after that, if, in fact, it falls away. so, again, that's why i think you get a little bit nervous about it >> call up the cfo and said, did you mean that to happen to the stock? let me walk it back. >> i'm wondering if there's going to be a walkback caterpillar, let's talk about it, see if you want to clarify that commentary at all shares down 6%, and that was one of the major stories today, bob, thank you. okay >> over to sue for the news. >> hello, everyone, this is what's happening at this time. president trump holding a photo op with the french president in the oval office. regarding the contested iran nuclear deal, trump warned iran will pay if they restart their nuclear program. >> we're not going tor be restarting anything, if they restart it, there's big problems, bigger than before

mark that down they restart their nuclear program, they'll have bigger problems than they ever had before >> three suicide bombers attacks pakistani police, killing six police officer and wounding another 15 the troops opened fire on them cracking down on a popular e-cigarette brand following complaints from parents, politicians, and school administrators the fda issued warnings to 40 retail and online stores as the operation gepsz illegagainst th illegal device, jewel, for children back downtown to you >> thank you, sue herera there two more stocks moving this afternoon, creed and irobot. the maker of the roomba.

eps of 66% adjusted versus 49 cents, revenue at 217.1 million versus estimates of 214.2 million and raised full year guidance range, plus 5 cent on the high and low ends, and stock higher by 1.5% now, and moving on to the semiand lighting companies, reporting etf adjusted of 4 cents. revenue is 356 million versus estimates of 348 million also, the q4 guidance slightly higher at 390 million to 410 million versus estimates of 380 million. revenues, also, they are a bit lower on the low range there stock is higher by nearly 7% now. back to you. >> all right, a pop there, thank you, kate. fang names crushed in the market today, especially alphabet up next, fast monetrery ads tell

us whether facebook can turn that around. reports earnings tomorrow, we'll see what they think. imagine traveling hassle-free with your golf clubs.

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welcome back, here's how we finished on wall street today, starting as a quiet session and

closed in a dramatic way, dowdown 600 points to close down 424 at the bell. 1.75% decline there. s&p down 35 points, nasdaq down 1.7%, and russell holding up with a half percent decline. this is our rapid recap now. the stocks, stronger, boosted by big industrials, caterpillar, united technology, as well as quarterly beats from other components >> the results are coming across a broad, broad spectrum, growing in all the geographies and categories we compete in >> 10-year passing 3% today for the first time in more than four years, stock got out of the gate strong, quickly retreated. >> within the context of the post-crisis recovery, we've seen rates as high, and nothing fell off the rails. >> 3% on the 10-year is not a magic number, but a

psychological stress test. we have not been here with stocks valued where we are right now. >> bears are out today, dow plunging 500 points, names like caterpillar and 3m leading the dow lower. >> down 425 points on the dow, were down 619 at the lows. >> made the rapid recap today. >> that's it i mean, it's only downhill from there. we are talking about, you know, the peak - >> peak earnings let's talk about facebook, down more than 3 partnership pennsylvania% today, reports earnings tomorrow after the bell joining us now to discuss it, fast money traders, karen and guy, welcome, guys >> hi. how are ya >> karen, what do you think about facebook are the declines we've seen in the stock justified? how much pressure is there with them with user numbers tomorrow? >> oh, my gosh, tons of pressure to borrow. i'm concerned. i'm long, i have to say, also long alphabet, so having a delightful day, but i think, clearly, a lot of bad news is in the stock.

the question is not how good are the earnings, but they are very good if not, we have bigger troubles, but so much more is the commentary about the business, clearly in a pr crisis, if not another kind of crisis, and so we have to see what kind of expenses they are going to be loading on to the business, and, also, we have to see how much this delete facebook campaign, does it have traction or not my guess is not. we'll get a little bit of sense of that from the numbers, but all that said, i think this is a powerful difference. i want to own, but i got to tell you, i'm nervous >> mike put up the chart earlier, and i joked, looked like a kneeling camel, and, well, there is such a term for this kind of setup >> it's called a puking camel, and that's made famous by brian kelly who appears on the show on a regular basis, so, yes, you nailed it. >> it was not aware of that. there's the formation behind you. you know, what's that tell you what's the sick camel in a sick

market then? >> i happen to think it's fine, and alphabet's quarter was fine, but for facebook, it's about the guide. are they in position to give a robust guide in the environment that they find themselves in, and my answer is simply no i think they have to be some caution and talk about things they might not want to talk about, and so i think there's going to be continued pressure on the shares. jim cramer came on a show a couple weeks ago, and the argument for facebook is valuation. that's a great argument. they probably have 20% or so eps growth, probably trades at 19 times forward earnings, but jim said, why is the stock so cheap? maybe it's cheap for a reason, and maybe it's the flush tomorrow it's hard to say what to do ahead of earnings having no idea where it's going to trade, but i think there's a real chance this stock puts up 150 dollar handle at some point out of the -- during the day or post earnings. >> okay.

like watching karen's face >> we're at a 150 handle >> 1.50. don't play the game with me there, michael, just so you know by the way, i know we're up against it, but karen is going to be a fencer this kind of fencer. >> wow >> yeah, it is tremendous. >> if that's true, i wouldn't bet against you, karen i wouldn't want to face you either >> all right, we'll see how facebook does tomorrow, thank you, both, karen, guy, catch "fast money" another 5:00 p.m. eastern time another mover, edward sciences >> a mixed first quarter for edward life sciences eps as a beat, $1.22 versus estimates of $1.11 revenues were a miss, though, and we also give weak guidance for the third quarter. eps number there, a heart valve

manufacturer said it drove a lot of their growth this kwaurquart. stock is down 5.5% now >> that's the market reaction, kate, thank you, down 7.5% two names taking businesses that's after this. alerts -- wouldn't you like one from the market

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welcome back it's time now for the take away today. if you saw this, plenty of bull market signs out there for starters wework plans to raise half a billion in junk debt, although it's still not profitable, and netflix raised $2 million in junk bonds and needs to content spending are they rational here >> aggressive or basically saying, look, we know this is a risky end of the debt spectrum, else wework but we think we are compensated for it in the low return world, and it's still a healthy sign for the overall markets, and when you find demand for these offerings >> tells you we talk about the stock moves and bond moves, but that's not story the credit markets and they very tight. >> that's positive, still, even if it's not, you know, a clear buy signal >> another sign of good times,

you can get paid a $25,000 signing bonus for becoming a railroad worker. that's how tight the labor market is. especially for out of way places and difficult hours, and this has got to be feeding through, 3% today, right? >> to the higher rates and idea that, you know, main street is kind of gaining on wall street, even though that's a half speed way of looking at it, but labor costs and labor shortages in pockets are working their way through the system >> this is a story every day about it, but this catches my eye. >> absolutely. >> amazon, two pieces of news, today, one, it's delivering to your trunk, really, and this starts in partnership with gm, volvo, today, and secondly, reportedly working on a robot to move around your house with you. i humbly suggest both, michael, evidence of a raging bull market >> raging bull market in the grand crazy future >> yes >> i definitely believe that it's not financially because amazon has a tendency to put stuff out there, we're going to do this and can do this, and,

therefore, we will, whether the world asks for it or not, drone delivery, all that stuff to showcase it, and you lend the idea we do anything for customers' convenience >> they have the capacity right now and markets gave it to them. dow fell 400 points today, though, a top strategist says why not even good earnings save us from recession. next, buy bitcoin or buiit coin cash tom lee will settle it for you

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the first time in years. joining us to talk about these signals is jim bean-ko and kenny bicario. was it the yield happened or we talk about some of the earnings being down shouldn't we be welcoming the higher yield >> it depends on your point of view. why we getting the higher yield? is it higher yield because it's, in fact, a stronger robust economy or because we're worried about inflation and wage pressures and all that stuff. there's two different reasons, so therefore that's the concern. in my mind this morning, i've been looking at the charts on the s&p, the index, the dow and they've been this down trending line. so there's been lower highs and lower lows and so net -- it's down trending and when you look at it, i thought today was much more technically. we hit 3%. you can feel the weakness in the market and caterpillar comes out

talking about this being the best quarter of the year. >> jim, are you concerned -- we set it up this way but are you really concerned that a recession is headed down the pike i don't mean we'll never have one again but is that a real looming risk for you >> not immediately. i mean i am concerned that the economy is probably peaking and its off of its highs and that's especially the case if you draw globally and look at what's happening in europe. their economy is decelerating in the last month or two. we are coming off those highs. the problem is that we have these sky high expectations. we've got third of the way through earnings season. we're probably going to to 20% earnings growth. we've never done this this late in an economic cycle to have that kind of earnings growth and the stock market is down. the stock market's looked at all of this and said peak earnings so when caterpillar comes out and says peak earnings, you've got the collective of the stoke market agreeing with that before it was said which is why it was

taken to radically. >> one thing that's interesting to me -- there's one way of looking at this which is the market ran up and priced in all the good news. it's not getting better. the other is, it's a different thing to say earnings have peaked period. >> sure. >> can it be that they keep growing? >> absolutely. that's what the story is. the acceleration has peaked, the rate of change has peaked and also the components of earnings are something that the market's not willing to pay for right now. they're not willing to pay a very high p.e. on a one time tax wind fall. not willing to pay it on a currency gain and last year earnings were up 15%. you had a little bit in the bank that you're drawing from now. >> what do you think, kenny? >> i think mike's right. the market's telling you that. we've been struggling for a while. we can feel these happening. we've been talking about it. the other thing people need to put into perspective is the way that the market trades today and the automation and the algorithms.

the minute there's negative news -- if it's negative news then the buy side order, they just move lower. there's this vacuum in liquidity. you see this exaggerated moves in the dow. it wasn't panicky at all when we were down 600 points today. >> it hasn't felt like that this entire year. it's never felt scary. >> the same thing's going to happen tomorrow. if all the news turns good, the sell sides will be moved higher. they'll be vacuum in liquidity and the buyers will take it up 500 points. >> if you have concerns about peak earnings, what do you do? >> my biggest concern right now is the fed. they think they'll raise rates six more times between now and the end of 2019 unless inflation actually picks up. that's going to avert the yield curve. the fed moves too much, the yield curve inverts and then we could be talking about a recession. it's early right now but the

market is afraid that's the road we're starting to get on. >> it feels weird to talk about the fed backing off when all these signs are strong. i take your point in looking at the tea leaves. thank you very much. it was a volatile day on wall street. we'll recap the move during the ssn d after-hours. that when we come right back. you know what they say about the early bird...

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let's get a check on the names making headlines in after-hours trading today. texas instrument jumping after reporting better than expected profit revenue and issuing strong second quarter earnings guidance. the industrial and auto markets, i'll see if this one helps the market tomorrow. different story for edwards life sciences which is down 7.5% after missing wall street's revenues estimates and wishing a weak earnings outlook and shares of shire rallying on a reuters report that finally the drug maker will announce a preliminary merger deal tomorrow. mike, the txn, it's not faang but it could help especially if it -- >> it takes the news not the news itself. industrials had a problem

because a lot of people said tech looks overheated but industrial isn't going to get overexposure and semi-conductors and the likes. part of a life sciences tools and products group. one of the strongest growth sectors of the year. >> it's done quite well. everybody, that does it for "closing bell." "fast money" begins right now. "fast money" starts with a major selloff. stocks getting crushed today. dow dropping 600 points. below 24,000 and it all began with these words which took the entire market down. >> we expect a target investments for future growth to be higher over the remaining three quarters. the outlook assumes that first quarter adjusted profit per share will be the high water mark for the year. >> the high te