good afternoon, everybody. welcome to "power lunch. the dow down more than 450 points, but it is the tech-heavy nasdaq leading the declines, today down about 3%. 384 points for this. a theme we have seen play out for much of the week that is as rates surge, the ten-year yield crossing above 1.5%, the highest level in more

than a year. plus the revenge of the reddit traders stocks going parabolic, tripling in the last 24 hours we'll dig into exactly what is happening, why and what it means for the markets? contessa >> hello, everybody. i'm contessa brewer, as you just saw, the dow down 465 points bob pisani joins us with a look at what's selling off and why. bob? >> contessa, a 4 to 1 declining/advancing stocks this is what you call lightening up for the moment the stock market is slave to the bond market. i'll explain that in a moment, but tech has been a market leader on and off throughout the year, frankly, but not today materials, banks industrials, energy there's your reflationary trade. tech combined with reflationary trade to the down side, that's a

problem. as for megacap tech, they've been week for the last week and a half apple, for example, and facebook about 15% off their 52-week highs. same for nvidia, 12%, 13% off the recent highs maybe that's expected given the huge run-up in the last year there are slews of banks hitting 52-week highs. they're down at the moment, but at the open, most of these big names, all at 52-week highs. bear that in mind. finally the major indices. bear in mind nasdaq only 6% off the 52-week high the russell 20003% s&p is only 2% off the 52-week highs. we had getting some inflation. most people feel that inflation is happening a bit, because the

global economy is reopening. that is good news for the stock market and why we're 2% off the 52-week highs. >> no reason for panic here, bob. thank you very much. let's talk more about the market sell-off as bond yields tend to put pressure on growth and technology stocks. and we welcome in daniel suzuki. dan, is what you're seeing an overreaction to yields at levels we just have not seen over the years, or an understandable reaction whose income streams go out many, many years >> i think the reaction makes total sense. the reality of high multiple stocks is you're embedding a lot of growth. that means your profits are far in the future. those profits are worse less today. i think what you want to do is

forget the day to day, though, assume that rates will probably be higher six months from now, 12 months from now as well, so you should be positioning for that in your portfolio, which means the volatile you're seeing here is probably not the last of it. >> so if i'm going to position for the environment that you describe here, i would assume that that would mean moving away from high multiple, high growth, high technology stocks, toward maybe some of the traditional winners in this kind of environment, like financials, like value, maybe smaller stocks. >> absolutely. tyler, if you look at the major market indices they're heavily weighted toward the same themes, u.s., large cap, tech, right if you want to be proactive about your portfolios, you should be owning stuff that's not in people's portfolios it happens to be cheeper, but also geared toward the recovery that will take place over the

next couple years i think that's ra rare combination in markets >> what do you make of all this stuff that's been going on with reddit, gamestop, amc, so forth. is that a fool's game to play? obviously it's so tempting when you see the kinds of returns that are being run up here, but you just intuitively, you go, this is not going to work. >> tyler, you're absolutely right. i think half of the story is actually based in fundamentals and very rational, the other half is boscers, to be honest. i think the recovery will probably be the biggest profits recovery in that type of environment, it's usually the riskiest, the troubled companies that do best. even before anyone was talking about these reddit stocks, these troubled companies have been outperforming by hundreds of

percentage points. what's happened in the last couple months is the liquidity and the reddit story has taken it to a whole other level. retail participation itself is not negative, but certainly not a bullish sign, especially when you see the types of investing is on stories and charts, rather than underlying fundamentals. >> dan, if you're saying that the s&p 500 is near its most expensive valuation since the tech bubble, that should be a huge warning to people where are you starting to turn your attention which parts of the markets do you think there are opportunities to get in and feel good about what you've invested, even if you're not invested in the stuff that might make you lose sleep >> you hit the nail on the head. clearly that market is -- it's very concentrated in anything associated with tech, innovation

and disruption so rather than pile heavy into those, which is already heavy in the benchmarks, people should be looking at the rest of the market, smaller companies, more international company, cyclical companies. those will benefit the most from the massive recovery you will see in the economy as we get back to norm at in the next couple years. >> dan suzuki, thank you for joining us we appreciate your advice. >> thank you. as we mentioned while the broader markets are selling off a handful of reddit stocks are soars gamestop was at $45 at yesterday's low, and today it's standing at $139.32. mike santoli has return of the reddit trade, also known as whiplash >> it's about half the level from last month.

this run-up here, intraday got above $400 back in late january, you have to ask the question, did anything in particular happen to call this revival of this activity? it's unclear the cfo seemed to have been forced out there seemed to be some chatter online or it's just a matter of, hey, we did this once before, let's turn those machines back on. the coattails are not quite as big this time around in terms of the number of stocks riding along, those these two certainly the massively year to date, but you see what they did late back in january koss has gotten caught up in this. it was a dozen stocks back then, just a few today i do want to look at the arc investment flagship, arc innovation, a tremendously hot story in terms of the disruptive tech companies in here you see this great run, still up

47%. tesla the biggest holding here across the portfolio this is another to watch in terms of risk appetites. >> mike, thank you for the charts appreciate that. what exactly led to these stocks taking off again and really what is the long picture? let's bring in steve sosnick with interactive brokers thank you for being here i want to look at the two-day rally of gamestop here and what it was doing it's hard to not have motion sickness when you're watching this when you see it's up 55% today, i think something like over two days, you've got -- you can see the big bounce what was driving this? is there something specific? >> something specific? no, but i think what we saw again was the effect that the options market can have on the

stock market i think that the catalyst itself was relatively simple. we started to tick up. we got above $50 it was a fairly speculative type of day, but then i saw a couple major options trades go off that i think catalyzed the speculation. that's when you start to see it go parabolic in the day. you couldn't catch up because of the limit up and limit down and the close, people couldn't do what they needed to do in the session, and it continued on into the post session. >> so you're basically saying they're caught in a feedback loop, right? >> very specifically what i say caught lies it was 258 yesterday -- sorry for looking at the page yesterday -- but 258, it was already ticking up to 53.47

someone bought 750 contracts of the 50 strike that expire tomorrow they paid $6.85 to them. that got the symptom moving. within about ten minutes, the symptom was about 68 or so then the stock fell back a bit, and then at 3:27, the stock was down 60.80, somebody ball 400-plus of the 80 calls those are big prices, but that's also -- that also, once you see buying in options like that, it creates new excitement the people on the other side of the trade have to hedge. if you have to do it with 20 minutes to go before the close, you're going to see some craziness happen. >> then what role do the retail investors or -- i know some call them speculators -- what role do they have to play here >> i think what we saw yesterday

was a lot of small activity. now, the volume was huge, it involved stocks and options, but a lot of it was small, small trades but, you know, if you put enough ants together, they can move a huge log if people have learned to be energized, that's going to move the market in a huge way >> you know, i'm wondering here, to someone as informed as you, what you're describing seem fairly routine options were bought and then the stock investors responded to that, it alls seem reasonably as one might expect, but to someone who doesn't understand it, it smells is there a reason why it seems to smell >> because of ferocity of it you know, what i have described goes on all the time amongst the

options market again, having spent 20 years making markets, you know, you sell your options, you buy other ones to hedge, you buy stocks to hedge, but i've never seen this much mobilization by individual investors, but people hopping on -- both individual and institutional. don't get my wrong, there are institutions hopping on these trades as well, but i have never seen a situation where it's captured this much of the imagination and where options have kind of become weaponized as a tool, because the public has caught on to the idea if you buy enough options, you get the stock moving as well optioning can be used to gamble -- i don't like to think of them that way, but optioning can differ when you make a bet on the football game you're not affecting the outcome. if enough people make a bet on the options market, they do affect the market. >> yeah, they do

is there anything in the activity that feels illegal to you, or is it just normal? >> um, something smells wrong, but illegal and smelling wrong are two different things i'm not a lawyer, so i won't categorizes it as manipulative, illegal. yesterday wasn't clear what got it launched, but there is definitely something that needs to be looked into, into how to mobilize this many investors in one situation, and whether that is a sustainable and healthy situation. >> steve, thank you so much. thank you. coming up, folks, we will have more on the market sell offtoday obviously gamestop is move the other way, but tech and consumer discretionary stocks are two of the worst-performing sectors, as stocks remain under pressure from the rising interest rates plus check out the carnage in some of the recent ipos

airbnb down 8%, and after the bell, we will -- it comes out after the bell we will speak sooner than that to an early investor in airbnb in ft,e' dac wllo it right after this break some say this is my greatest challenge ever. but i've seen centuries of this. with a companion that powers a digital world, traded with a touch. the gold standard, so to speak ;) ♪♪

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you can check on the the carnage in a passel of them. draftkings the least of that quartet. airbnb down a bit, as it gets ready to report everybodyings. before today stock has been on a big run. we also have the founder and partner of first are firth mark capital. mr. wiseman, good to have you here you're still an owner? >> i haven't sold a share yet. are those anomalies? >> i think they're complete

anomalies. i think the pandemic will go down as an anomaly for airbnb. you'll probably see sales down year over here so i think what you'll see is a positive side with increased site traffic at folks are planning either car or plane trips on the back happen of the year, and maybe some of those travelers don't want to go to traditional hotels, rather what bespoke apartment on the west bank rather than a big place. how does airbnb really make money? >> it's a cut of the rent.

to either help hosts find customers, or customers find that nice place on the left beha behavioral. >> i think it comes globally, especially before the pandemic, china was growing quickly, but a lot of it comes from earning globally it's what you expect top places, new york, london, paris, apollo, so from people from philadelphia, other parts of new york are

. >> i was just looking for an airbnb in phoenix, you can't find one for a reasonable price. there's no good prices for a decent airbnb. in the catskills, no good prices to me it looks like the demand, that pandemic demand still exists, much less when people start flying again where do you think this company could go >> i think you're going continue to see continued demand. people wanting to take less faraway plane trips, so going to phoenix in the winter maybe than somewhere internationally. going to the catskills if you don't feel comfortable on airplane, or maybe people want to go someplace for a longer

period of time and work from there. if you think about all of those trends, even when post-pandemic people are starting to return to work, returning to their normal lives, there's going to be more flexibility, more corporate travel, which is going to rotate from traditional hotels and high rises to airbnbs, and then rides on plane as well as car travel there's no limit's, and being very asset light, gives them flexible to scale with all this demand >> rich was an early investor in airbnb and says he hasn't sold a share. >> thank you don't be as -- miss the interview with mr. chesky on "mad money" today. markets in sell-off mode

you've got chip makers, nvidia, sky works, tesla, docusign, they're all falling. plus we're watching shares of gamestop go wild again, bringing its year-to-date gains more than 800% as we head to the break, february, of course, is black history month. we honor some of our cnbc contributors here is degas wright on the importance of perspective. >> my biggest influence after my family was my appointment to the united states military academy i remember summer of my freshman year walking around with my roommate he saw the buildings being gray, but i saw silver i really want to do to be there. he dropped out after freshman year, and i was able to

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even as the broader markets tumble, gamestop and amc --

you're seeing huge moves there robinhood has criticized for its role in the boom, bust and boom again in these stocks. today the company is firing back at charlie munger for comments he made that were very critical of robinhood and companies like it >> it's really stupid to have a culture which encouraging as much gambling in stocks by people who have the mindset of -- and of course it's going to create trouble, as it did >> i think you should try to make your money in this world by selling other people things that are good for them. if you're selling them gambling services, where you rake profits off the top like many of these new brokers who specialize in luring gamblers in, i think it's

a dirty way to make money, and i think we're crazy to allow it. >> i tell you, the casino industry does not like being compared in a negative way to all of this. kate rooney joins us with all of this >> robinhood responding to charlie munger's criticism, in part to suggest that new investors have a, quote, mindset of racetrack bettors is disappointing and elite st they've been at the center of the sanaa. and valuation, appear to be stronger than ever that could bode well for a public listing bids for pre-ipo shares surged during the mania last month, according to rainmaker

securities demand rose again after robinhood's ceo testified last week before congress, and it's the most bid-upon stocks rainmaker is seeing in markets and it's estimated they added 3 million accounts in january alone. the growth and demand are seen as a vote of confidence for the company and the ceo. i spoke to a few robinhood vc investors who said tenev did pretty well during that hearing. but gamestop is up as much as 80% today. we'll see how well robinhood handles the volatility this time around. >> in addition to robinhood seeking to go public, coin base also filing. this is the first major

cryptocurrency, it's the first glimpse into how they make money. most is on transaction fees. they also make interest from deposits their revenue doubled from last year but during this bull market, they have 43 million users one fun thing they mentioned natoshi knack motto, and there was a lot of talk about this one being a popular stock and direct listing for retail demand, which we have talked a lot about with gamestop >> all right we'll be following that. kate, thank you. ahead on "power lunch," the major indices selling off. we're off the lows of the day. the dow down about 300 at one point it was down more than 500 meanwhile, rates surging, with the ten-year yield sitting around -- and the meme stocks, gamestop climbing again, we will

continue to break all tofhis down when "power lunch" returns after this quick break

welcome back here's your cnbc covid update at

this hour. more than 21 million americans are fully vaccinated after receiving two doses. that's the current standard, but in an exclusive interview with lester holt for today's "nightly news", pfizer's ceo said they're doing tests to see if three doses are better. >> is it your expectation this will turn into a three-dote vaccine? >> i think we need to wait and see, but the is we'll have an annual re-vaccination likely with one dose, and that could be a booster with the same vaccine or if there are strains in the variants, and adoption to the new variant vaccine. for the first time since the fall more than 62,000 middle-school opportunities are back in school billings for mix

of in-person and remote learning. last year the government says vehicles traveled just 2.8 trillion miles that's a lot of miles, but it's down 13% from the year before, the lowest we have seen since 2001 you got some kiddos back in school, and i've certainly seen it here in new york, but traffic is in full swing >> it's definitely not what it was in the summer, when it was a pleasure, a pleasure to ride into the city. ra rahel, thanks. the dow is off about 310 points, as you see there, about 1.09%. the s&p down more than 1.6%, but a lot of the high growth in technology stocks reside it's down about 2.3%, the russell taking a breather today.

after big run-ups look at some of the travel names being hit. united, the worst performer down more than 5% now, but you see southwest, american and delta all in the red crews lines have been outperformers this month, all lower today, though, as you see by 4% or thereabouts, five, almost six in the case of norwegian cruise line. let's go to rick >> boy, at 1:00 eastern things were getting nasty seven-ee note auction maybe one of the worst with regard to demand and invest offers not showing up that i have seen in a long time. intraday of twos, at straight up 1:00 eastern, it shot up to 19 basis points it auctioned two days at 0.119

the check for that has to be sent in on monday, and in lieu of that, all these loser, big-time loser intraday of five, it shot up to 86 now, obviously it settled back here's how aggressive it is. look at a year-to-date chart of five they settled, now at 78. that's some zoom zoom zooming going on there intraday 10s spiked up to -- a spike gives you big clues. the high spikes, remember those levels they will come back in the future 160, even though we're right back down under 150, 153 is probably good resistance intraday 30s spiked up close to 240. finally bund overseas, they're not immune yields are settling up less than

half of where they are now contessa, back to you. >> all right thank you very much, rick. appreciate that. here's what blackrock's rick reider said about the impact its having on stocks >> when you look at interest rates this fast this quickly, this much of a move, it introducing uncertainty. that's what markets can't stand. by the way, i'm not sure, the markets when you listen to chair powell, the economy data sects we'll have an explosive growth rae in 2021. i think we'll hit over a 7% growth rate. >> well, are the markets just painting the fed into a box? hey, steve, how are you?

>> >> good afternoon, contessa. bond people are spoke this listed this as a factor, massive fiscal stimulus on the way, massive monetary stimulus in place. we were just talking about that. our rapid update looking for 6.5% this year inflation fears, including the fed, aiming for inflation of up to 2%. some say the fed doesn't have its back anymore, that could lead to a tapering, which powell tried to talk against yesterday. they're keeping a lid on yields, but each time he stopped talking, yields moved higher this afternoon around 1.5 -- i guess, 1.499, the highest level in the year. the fed has seen higher yields as improving the outlook, so it's not been worried about it it doesn't seem them crimping

growth, but the fed doesn't have complete control of this market. when bonds want to return, they're going to return, no matter what the fed chair says, contessa >> yeah, you're starting to see a lot of financial voices of authority we listen to, talking about the fact there's been easy money for a long time, maybe it's time to rein it in. what are their options we hear jay powell say, no, the economy still needs support. what level are we looking at that might prompt the fed to act? >> i think there's a couple things to think about. first, i think in the market we tend to look more at gdp the fed is looking closely at the shortfall in jobs. the number has been bounced around a lot at unemployment rate, it seems closer to 10%. that's the focus of the fed. until that happens, i don't see a reversal of policy but two, with higher bond yield

potential crimping growth, at some point -- and i don't know where that point is, maybe 2% ten-year, the fed could come in and put in pressure on buying on the long end of the curve. >> so -- i don't know if it was you and i were talking, what the fed can really control are very shortend rates, but it's not to say they don't have influence or the able to control through buying, right? >> that's a really good point, tyler, and a retively good development in the years we've been cover the fed may i say decades. now they're using quantitative easing or asset purchases, they can buy on the long end, sell on the short end, and it could essentially flatten the curve or drive down long-range bond yields it considered that earlier this

year kind of backed away from it. i'm not hearing talk of it at this point they think of it as the real yield. and that yield is negative right now. >> steve, thank you wretch steve liesman, a big -- very mu. thank you very much. the dow is down, but that is off the bottom of the day. it's the tech stocks taking the worst of it, with the nasdaq off 335. inside the dow, the biggest decliners are intel, salesforce, boeing we'll tell you what is dragging on boeing today. take a look at twitter, one stock atth's bucking the down

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lunch. amid this market sell-off twitter shares surging to all-time highs after the company announced it plans to double its yearly revenue by the end of 2023 that comes hand in hand with a goal to hit 315 million daily active users by then it also markets matt, yew those on the fact that twitter is downit's outperforming on a down day it's breaking out gog back seven year, especially when it's an all-time high, you think, my gosh, this is a great stock. you look at the rsi chart in

fact it r50e67d about this level two times in 2018. each time it was followed by a 42% decline. if i like this one, i'm going to let it come back to you. >> i do agree, seema, on a fundamental basis as well look, we own the stock and at 100 multiple, i think a lot of the

good news is reflected it's relative price-to-sales ratio. this is approaching historical highs where it's been prudent to be a seller here i think you may want to dip your together back in if there's one twitter account you want to follow, it's trading nation thank you, guys. tyler and contessa, back to you. seema, thank for you that. as the broader market sinks, the reddit trade is soaring once again. we'll talk to a former gamestop analyst -- we say former, because he dropped hi coverage when this hysteria started boy, is he fired up about what's going on do not miss his take

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i mean, i have a lot of thoughts, this is the biggest dead cat bounce. what happened when it was to 48 on this is the second dumbest. i've been on wall street for a long time. when the cfo is fired just after

the quarter ends, that's not a positive sign. that's a very, very negative sign so i'm gobsmacked right now, just as i was a few weeks ago. what do you make of those moves? >> i was being generous at $10 like the cfo, like i said was fired a few weeks ago. i would probably lower my price target in the short term, the stock market is up, and what that means is that at some point the stock price is going to have to reflect, and the fundamentals of

this company are terrible. we're not hearing many stories about them this will end badly. it's not a question of if, but a

question of when this is worth $10 at the most. >> we were talking earlier today, anthony, and i asked this -- as someone who is uneducated, it sort of smells, it reeks, frankly, do you think there's anything kind of malfeasance or illegality, or is this fundamentally a crowdsourced group of people talking their book to talk the stock up and force a short squeeze or whatever they're doing now? >> i don't think this is a situation of blue horseshoe loves, gamestop calling all their clients, i don't think there's anything untoward. the only thing that would be illegal if it was a pump and dump in other words people were talking up the stocks and then selling into the strength. star i can tell, these people are true believers there's nothing that's wrong with it from a legal perspective, but like i said, a lot of investors will get hurt

i'm not worried about melvin capital of the world, but i am worried about a person who buys 100,000 of a stock on margin at 480. that person will get hurt. anthony, appreciate it shares of hp spiking higher before being halted for new e nding. thcompany wa

it has been a rocky day for stocks as you see there, the industrials are off about 1.3% s&p, nearly 2% the nasdaq, nearly 3% as those tech and high growth names take a hit. speaking of one of the tech high growth names that has been taking a hit, look at apple. those shares are down, contessa, about 15% in just one month's time again, the business is pretty good but the valuations have people a little bit worried in a world of rising rates >> well, and this is where the rates bring attention, again, to stretch valuations and how much froth and enthusiasm has been behind these big build ups in the stock. i mean, when you are looking at

some 40% of the markets right now at 30 times expected earnings for this year, you for example it's expensive speaking of the treasury yields, we are seeing that up about .1%. 175% higher now than the dividend yields for the s&p 500, tyler. >> all right contessa, we will see you tomorrow thanks for watching "power lunch," everything "closing bell" with sara and wilf starts right now. >> welcome to the "closing bell," everyone. i'm wilfred frost along with sara eisen volatility back in a big way on wall street. stocks plunging after wednesday's wild turn around sends the dow to a record close. feels like a long time ago treasury yields spiking the ten-year touching above 176% hitting its highest level in more than a year that's putting serious pressure on the nasdaq. today's selloff comes despite upbeat day, fewer jobless claims