that? lori: the latest threats still rattling wall street today, although off session lows at the moment as the treasury department warns default could lead to recession worse than we saw back in 2008. adam: if congress forces his hand, should the president just ignore the debt ceiling? the contrarian view from brookings fellow henry aaron. lori: and does the government shutdown have one of the largest is sectors of the economy slamming on the brakes? the american trucking association's ceo and former governor of kansas bill graves joins us with the good news and the bad news about the trucking industry. adam: right now we're going to head to the floor of the new york stock exchange. our oney coal petallides is there. the dow is down well over 100 points but not as low as it's been so far, right? >> reporter: that's right, adam and lori. we were at session lows earlier today, we've come off those lows to settle below that 15,000 mark. just the idea of the government shutdown looming and how long will it take and the debt ceiling approaching, that issue

on october 17th, the u.s. credit rating now under a microscope. all of this really has just continued to snowball and put some pressure on the markets. we have a lot of down arrows across the board sector to sector, all 30 dow components have been in the red most of the day and the vixx, the fear index, is higher. what's dragging on the dow, some names related to aerospace and defense because with the government shutdown a lot of the employees who would normally do some of the inspections are not available to do that. for example, the blackhawk helicopters and other aircraft weapons, so liz macdonald has been on this as well. just talking about the fact that now these companies, united technologies and boeing are under pressure, and united technologies even talking about the fact they may have to furlough some employees at this time as well. so it does, as i note, have this snowball effect. back to you. adam: nicole, thank you. no signs of progress in washington as senate majority leader harry reid says both a bill funding the government and one to raise the debt limit must be clean bills free of

conditions like defunding obamacare. this comes as the shutdown enters its third day. rich edson is on capitol hill for us, he's got the latest on the gridlock in washington, rich, and gridlock still seems to be the name of the day. >> reporter: it does, adam. something interesting just came up in the last couple of minutes, a report from the "wall street journal" saying house democrats are floating a plan to fund the government for six months and repeal the medical device tax. that's an obamacare change democrats originally said they wouldn't sign up for. however, and here's the wrinkle which could cause problems for this proposal is that democrats in their plan according to "the wall street journal" would need to offset the nearly $30 billion in revenue over ten years the repeal of the medical device tax would generate. that's something democrats have looked for other revenue increases elsewhere and generally republicans have disagreed with. meanwhile, you're right, adam, outside of that which just popped the last couple of minutes, you've got continued gridlock here. president obama saying republicans need to take a vote

to fund the government or else it's a full farce here that they're perpetrating upon the american people, and democrats are urging republicans to fund the entire government. >> we have a very simple message today for speaker boehner: let the house stop those irresponsible, reckless games and just reopen the government. he single handedly is keeping the government shut. >> reporter: meanwhile, house republicans continue to vote on these piecemeal provisions to fund some of the government, this from house speaker john boehner in reaction to saying republicans have sent bill after bill to the senate to keep the government open and democrats have refused to even talk about differences. we want to resolve this dispute as soon as possible, but that will require washington democrats to realize neither side gets everything it wants. it's time for the president and senate democrats to come to the negotiating table and drop their my way or the highway approach. that gave us this shutdown.

listen to the rhetoric, day three, and not much movement. back to you. adam: rich edson on capitol hill, thank you very much. keep it right here on fox business. our own liz claman will sit down with treasury secretary jack lew to talk debt ceiling and the government shutdown. her interview can only be seen here on the fox business network at 4 p.m. on "after the bell." lori: well, speaking of jack lew, treasury warning today of the dire consequences of not raising the debt ceiling saying it would cause, quote, a large, adverse and persistent financial shock. but what are the president's choices? my next guest says his best option is to ignore the debt ceiling altogether. joining me now is henry aaron, senior fellow at brookings henry, welcome to you. >> thank you for having me. lori: in "the new york times" you write: our outlaw president, obama should ignore the debt ceiling. explain why you believe that's in the president's and really the country's best interests?

>> if the congress fails to raise the debt ceiling, it will have precipitated a constitutional requirement of the president of the united states to violate one of his oaths when he took office. he has pledged to spend the money that congress has appropriated to collect no more in taxes than congress authorizes him to collect but not to borrow money beyond limits it set. given the current situation, if the debt ceiling isn't raised, he cannot do all three at the same time. he'd have to choose to violate one of those pledges. and what i said was it seems clear to me that it is far better to borrow the funds in violation of the debt ceiling and continue the obligations that the government has to the american people to provide national defense, to provide pensions and health care for -- and support for the needy. lori: okay. >> and that if he does that, we

will be far better off than if he does not do it. lori: so you're basically saying that not raising the debt ceiling is the least of the bad alternatives, that at least the president would make good on the spending and tax laws that congress has essentially already agreed to. but why would the president agree to this tactic knowing it would fuel the fire under, let's face it, already ticked-off republicans who would basically use that as material against him in the next election. or the democrats, i should say. >> are i think you're quite right, this would be the least bad option. but it would not be a good option, and it would be one that was forced upon the nation by the refusal of congress to raise the debt ceiling. that is where responsibility would lie, and i don't think it would make sense to blame the president in that situation for behaving in a way that is in the interest of the nation rather than buckling to extortionist threats that, from a minority in

congress requiring, asking him to do things that they don't have the votes to achieve through other means. lori: okay. so let's back up. why do you believe that congress, which is under so much criticism right now for being dysfunctional in this cr battle, still have two weeks until -- according to treasury secretary jack lew -- federal spending will breach the debt ceiling limit? why don't you seem confident that we will reach a deal to raise the debt ceiling? >> i very much hope that we will reach a deal. there is no good reason why congress should not vote to raise the debt ceiling. so if it does not happen, it is going to be, i believe, because of intransigence on the part of those members of congress who insist on trying to achieve other objectives by using the debt ceiling as a threat to the well being of the nation. lori: thank you, henry aaron, of

the brookings institute. adam: also making news this afternoon, the average fixed rate mortgage falling for a third consecutive rate, now at its lowest levels since late june. the 30-year fixed mortgage interest rate is 4.22%. this past week while the 15-year average 3.29%. freddie mac cites consumer confidence and concern over the government shutdown as catalysts for the decline in the mortgage interest rates. lori: bp winning a legal reprieve on its gulf spill payouts, and it may save the oil giant billions of dollars. a u.s. court of appeals ordered another look at the evaluation methods being used for claims related to the 2011 spill. bp originally estimated its settlement costs to be $7.8 billion but had to boost that number to $9.6 billion over the summer. adam: so if you say drone, and a lot of people use that word, you might think some covert military operation. but 3-d robotics is trying to

change all of that. its president will join us on its new investors and its push into personal drones. lori: tesla investors burned. the new details in the stock fallout after those pictures of its model s catching fire went viral. adam: and there's just 82 days until christmas, but will a government shutdown be the grinch that stole it? the latest consumer readings from the national retail federation coming up. ♪ here comes san a that claus, here comes santa claus right down santa claus lane. ♪ [ male announcer ] imagine this cute blob is metamucil.

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12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. lori: holiday shoppers may have some a cash to spend this holiday season. consumers are expected to spend just over $602 billion, that is a gain of almost 4% can and topping last years numbers according to the national retail federation. all right, let's take a look at some of the retailers moving on the news today. you have macy's, let's call it flat, and let's not forget we have broad weakness across the sarge averages, but jcpenneys down to $8.50 a share and another big decline in buckle and gap, gap trading at $48.30

at the moment. adam: we want to bring in marie driscoll, a well respected analyst when it comes to retail, and you don't buy these numbers, the 3.9%. we've discussed this, this seems overly optimistic. why? >> yeah. it seems a little aggressive. most of the retailers i've spoken with have brought down their numbers and their inventory investment has been lower going into the season. adam: in fact what was it ago, two weeks ago we saw that walmart being too high. but i'm going back to the christmas report out at the end of september which was less than optimistic, growth of 2.5%. >> right. adam: temporary hiring at best 700,000, nrf is saying as much as 780,000. this is a disconnect, it would seem, based on the economic data we're getting. >> right. and i would assume someplace in the middle is probably where the numbers would line up. adam: okay.

so let me read this quote from the nrf's ceo. he said: this will continue to be a very promotional year, and my conversations with ceos have all indicated all segments are going to be promotional. they're trying to get foot traffic. in english they're saying there are going to be deep discounts. this may help with revenue, but on earnings, their margins are going to be squeezed. as an investor, would you steer clear of some of these retail stocks? >> you know, the stocks i would be comfortable buying going into the holiday would be those who are excelling, like a macy's. i think gap is doing well. i'm comfortable on recommending tiffany and coach for different reasons, but omni channel, i think, is really important. and while that may cut into margins, it's going to help top line growth. investors do care about top line growth, and i think that from the omni channel point of view the cfo at macy's has warned that it's going to cost on the margin front. adam: yeah.

because when we talk about omni channel, we're talking about keeping inventories so tight that the shelves may be empty forcing customers to the digital platform, expecting growth, by the way, of 13-15%, but they're going to have to offer free delivery, and that's going to cost money. >> right. even all the i.t. investments you've had to make for mobile technology, for mobile shopping, for ipad shopping, it's a but it does -- expense, but it does help the top line because it protects the sales. adam: people always looking for a buying opportunity. jcpenney hit a new 52-week low, but you think don't write them off. you were in the store recently. >> i was in the store, saw a great product, saw a leather skirt at, like, $68 out the door. very good quality. and what i'm really excited about is the shopping shop disneys that are going into place week, i think that's going to bring a new customer into

jcpenney's that will shop the store. adam: weed we had the ceo of gis going into jcpenneys. bottom line, you think they may surprise us this holiday season. >> i do. adam: marie driscoll, thank you so much. lori: let's update you on the markets, nicole joins us from the floor of the new york stock exchange with some shares moving in this reaction to analyst calls today. >> reporter: that's right. bringing to attention three names that we know well, so let's take a look at them closely. talking about angie's list, five below and also blackberry. right now you can see a mixed bag, five below is gaining up 2.3% while angie's list down 15% at the moment. that's pretty dramatic. blackberry down 3%, angie's list actually changing their pricing point, trying to bring it down to woo new members, and some of the analysts were actually liking that. mkm put a buy reading on the $34 target and also steeple took them off the selects list but kept their buy rating. five below, stern ag talking

about them, the analysts are loving what they have ready to go, some things $5 as they've nailed that teenage sector. and blackberry, citigroup raising from a neutral to a sell. blackberry we have fairfax that may be interested in blackberry. we'll watch that for us. lori: thanks, nicole. adam: so it's been a quiet hurricane season, but as they say, it ain't over until the large lady sings, i'm going to be politically correct because i don't want to offend anybody. and her name may be karen. the latest warning for the u.s. gulf coast as tropical storm karen strengthens in the caribbean. lori: and the u.s. gaining an upper hand on russia. the shifting landscape in the energy industry and production as the u.s. gets set to overtake russia as the world's largest oil and gas producer. ♪ ♪ so ally bank really has no hidden fees on savings accounts?

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>> at 21 minutes past the hour, i'm harris faulkner with your fox news minute. we are following that shipwreck carrying migrants from africa. the boat has capsized off the coast of italy, and now the coast guard there is saying it has pulled 114 people from the water, and they didn't make it. they're looking for more. that ship may have been carrying

as many as 500 africans, many of whom could not swim. in tennessee the highway patrol says it could take a few days to release the names of eight people who died in a bus crash, a north carolina church bus blew a tire on i-40 yesterday causing it to veer across the highway median and into an suv and a tractor-trailer. fourteen other people were hurt in that accident. and there's been another spill of radioactive water at japan's fukushima nuclear plant. the operator of the plant which was breaked, as you know, by the massive earthquake and tsunami in 2011, says about 110 gallons probably leaked into the ocean. apparently, the tank did not have a gauge to monitor the water level, and so it spilled. those are your headlines on the fox business network. now back to lori and adam, rock stars that they are. lori: we'll take that on this otherwise tough news day, harris, thank you. adam: we have some breaking news, too, regarding that trop gaining

steam in the caribbean, and that has the u.s. government actually recalling furloughed workers to prepare. >> fema has begun to recall currently-furloughed employees necessary to serve functions of the agency that protect life and property as they prepare for potential landfall. for tropical storm karen. adam: for more on when that storm could make landfall here in the united states, we're going to go to the fox weather center and rick reichmuth. hey, rick. >> reporter: that's great news, to hear that. the first time we've had any kind of watches this year across the u.s. coastline, it's right here we have hurricane watches from around apalachicola all the way to plaqueman's parish and grand aisle in louisiana. that'll probably be the bull's eye of this storm that i don't think is going to be all that strong. right here is where the storm is, right in the yucatan channel. weakening a little bit. it will likely strengthen for a while over the gulf, but then conditions become a little less favorable for continuing

strengthening, and i think we'll see it weaken. sometime maybe tomorrow we'll see this get to hurricane status for a small period here, and then it moves very quickly in towards parts of the gulf, probably as a strong tropical storm. this shouldn't be anything wind wise that's going to cause major damage, not storm surge wise either, but there will be some significant rain with it. it'll get caught up into a front and bring a lot of rain, but the heaviest of the rainfall likely to be somewhere here around the central gulf, a few spots maybe picking up 8-10 in. s of rain, and some of these areas have seen a lot of rain, so we could be looking at localized flooding across south georgia and maybe the panhandle of florida. that certainly is good news all the way into october, not a major storm. adam: rick, thank you very much. i know the people in the drought areas to the west wish that storm would go that way. thank you, sir. lori: all right. fracking giving the u.s. the upper hand on russia.

the wall "wall street journal" d that america is on track to pass russia as the world's largest producer of oil and gas combined this year, if it hasn't already. u.s. energy output has surged because of shale rock formations that were unimaginable a decade ago. russia, meanwhile, has struggled to maintain its output, late to embrace fracking that has boosted american reserves. let's bring in fox business contributor phil flynn of price futures group who joins us from the trading pits of the cme. phil, thanks for joining us. >> thank you. lori: this is interesting considering the foreign policy climate the u.s. has enacted of late, we were a little embarrassed by russia, even iran. so do we finally have an advantage over them in terms of energy output now? >> i think we do. we have turned the tables on them, lori, and i'll tell you why. it was only a few years ago where russia, iran and qatar basically said, hey, listen, we can teach the west a lesson. we can control the natural gas.

u.s. has hit peak natural gas production, they're running out, we can create a cartel, and we can use it not only to influence prices, but as a political weapon. we saw russia, of course, two times cut off europe in the middle of winter, you know, to send the message to countries like yugoslavia and belarus to say, hey, you know, we're going to control this market. so it's changing the political landscape. and if i was russia, opec or iran, i'd be wary of u.s. oil production because it's changing the game in a dramatic way. lori: what about the u.s. economic landscape? as you know, we've been muddling along for years now. could this be the shot in the arm, this energy production, number one in the world, that we're so desperate for? >> it has been the shot in the arm. could you imagine what our economy would look like if we didn't have this shale gas revolution going on? we wouldn't be at 3.6% -- 2.6%,

we might be at .6% growth. you know what? the energy industry, you hear politicians yelling at big oil and how bad they are and all those evil guys, well, if it wasn't for big oil, our economy would have nothing going for it. the biggest thing that we need in this country is innovation, something new, something exciting, something to get people excited about. the energy industry has provided that, and that's what the economy needs. it doesn't need printed money and those other things. this is the american way, and that's why we're going to be great forever. lori: leave it there. phil flynn thank you,. >> thank you. adam: can the u.s. economy keep trucking with the u.s. government stuck at stop? the ceo of the american trucking association on the health of an industry that makes up 70% of this nation's commerce. lori: caught in the crossfire, government employees aren't the only ones facing fur allows. -- furloughs. the warnings from defense contractors as the shutdown enters day three. ♪ ♪ [ male announcer ] need help keeping your digestive balance in sync?

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lori: time for stocks now. as we do every 15. let's send it back down to the floor of the new york stock exchange and nicole petallides who is watching constellation brands. >> we have a winner for you, folks. looking at constellation brands. some good numbers for the latest quarter and the stock is higher up by 2 1/2%. we could take a look at it right now, 59.76, up 2 1/2% for constellation brands, the world's biggest branded wine-maker. not only do they have a up arrow today but they also hit a record all-time high today. their profit topped analyst

views, driven by the modello purchase. they say the acquisition was a real game-changer for them. they beat the street with their estimates. they have other wines you may know, robert mondavi and raven wood. the dow is down triple digits but constellation brands hitting an all-time high. adam: thank you very much, nicole. for those who believe the government shutdown is use lated to capitol hill get ready for a real wake-up call. because the shutdown spreads. defense contractors nationwide fear more furloughs and that is sparking fears of more recessions. with more, liz macdonald is watching "emac's bottom line" and who is hit hardest. >> this goes beyond the news we know about. united technologies talking aboutthousand workers, contractors being furloughed this monday -- 2,000. could go as high as 5,000 in november. the lobby groups, defense lobby groups, they represent companies like raytheon and lockheed,

there is concern on top of sequestration cuts which created furloughs and job losses that even more job furloughs could be coming. look at city, counties, states we're looking at closely. stratford, connecticut, where basically, you know, united technologies has a plant there. all the way down to west palm beach, all the way west heading into hawaii. we're talking about makers of the black hawk helicopter. also boeing has been talking about delays in the delivering the 787 dreamliner into the market. here's the problem. it is the auditors and government inspectors who have to certify this equipment as ready for sale and those people are being furloughed. if you can't get inspected, you can't sell the goods, right? that means that translates into job losses. >> it is amazing when you think about how it spreads. there is also the little businesses around plants and facilities that get hit. people with catering trucks or

restaurants providing lunch to different people. is anybody measuring that kind of impact? >> there is one thing really striking that jumps out. it is also not the local downturn and ramifications to other businesses and small businesses, it is also about hiring too and there was a survey done of the national association of government contractors. 925 members. almost a third say we will not be hiring. so new jobs won't be created either. i'll tell you something, there are 7 million contract jobs in this country. 7 million people could be affected by not just ski questions operation, not just the shutdown, but when this continues to roll out. adam: sure. >> we're seeing profit margins boosting, being boosted at these companies and when these companies see their profit margins boosted because of layoffs, they will say, hey, we don't need the individuals anymore. i'll tell you something today, united technology and boeing weighing on the dow, responsible for 1/5 of the selloff. adam: emac, thank you. >> sure.

lori: we're directing your attention to some breaking news. getting comments of the federal reserve bank of atlanta. dennis lockhart saying quote, a protracted shutdown could have a measurable impact on fourth quarter growth. don't think that's a surprise to anybody at this point but we will see what happens. negotiations continue. all right in the meantime truck freight, tonnage, jumping in august, up nearly 1 1/2% from the month before. why is that important? well, trucking has long been an indicator of the u.s. economy but if this jump really good news? joining me is bill graves, the american trucking association's president and ceo and former governor of kansas. governor, thank you so much for joining us. >> sure, lori. lori: when you hear about this 1 1/2% jump in one month in freight tonnage, and if you believe that trucking is a good indicator for broader growth is that necessarily a sign we are seeing a nice growth trend here or is there more to it? >> well, certainly a lot of the tonnage we're experiencing right now, lori, is heavy tonnage.

your prior segment about the energy sector, clearly a lot of our tonnage is being driven by fracking and energy production. it is also being driven by a rebound in the housing market and to some extent being driven by the rebound in the automotive industry. so we don't have as many loads as we previously had but we're moving more tonnage. i think those are good underlying indicators of economic recovery. energy, housing and then the mobility of people in this country. but we're clearly concerned because we think the government shutdown and the potential for ongoing debate over the debt ceiling could really have a very, very negative impact on consumer confidence and the overall health of the economy. lori: explain how that would trickle down and impact the trucking industry. >> well, i mean, again, in your previous segment the comments about the impact on all of the government jobs. i mean a loftonage in this country, a lot of product is moved in support of government functions. as people get laid off and

there's, you know, not disposable income. people perhaps don't get checks, they don't buy stuff, there is not much demand to restock shelves and inventory it, adds up. at the moment we're starting to feel pretty good even the though it's been a slow recovery. we're starting to feel a little optimistic then all of sudden you say we bump into ourselves. so we're anxious to see a successful resolution of the shutdown and a successful resolution of the debt selling debate. lori: last we spoke we were talking about the face challenges facing the trucking industry because of new government regulations about the amount of time drivers can work and new electronic logging procedures. i'm curious if you met those challenges, how the adjustment period is going, if you could update us on that element of the industry? >> well we still expect on average, for about the next 15 years, there's going to be a demand for around 96,000 new drivers in our industry of the part of that as a result of

retirements. part of that as a result of simply growth in the economy. some of it is because some people just don't qualify, aren't safe or or capable of being, good commercial drivers. hours of service is a challenge because it really limits the amount of time a driver can behind the wheel. the electronic logging of those hours, even, more tightly restricts and constrains, you know, people's hours. and so, it's going to be a drag on our industry and it is going to basically pass on some additional costs to the shipping community which as you know, ultimately ends up costing consumers a little more every time they buy something. lori: so what is your overall outlook, governor, on the trucking industry and the broader economy if we can get over these fiscal challenges? >> well it is going to sound self-serving since i run the american trucking association but i'm pretty bullish on trucking. one, we know the economy will continue to rebound and come back despite some government

inadequacies. we're bullish on natural gas. we think we'll have competition for the first time ever in the fuel that we choose to use to, to power our vehicles. that has the potential to perhaps lower operating costs. you know, we think that there's great upside in terms of economic expansion for the trucking industry. lori: we'll look forward to the next chat in a couple months. governor bill graves, thanks again. >> thanks, lori. adam: story for you on tesla. shares getting slammed again after falling 6% yesterday. this is because of a video which went viral which shows a tesla model s on fire. the tessa says the fire started in one of the car's battery packs, after the car was struck by a metallic object. a company spokeswoman says, and this is a quote, this was knot a spontaneous event. and indications point to the fire being the result of a collision. shares of tesla had previously been up more than 400% this

year. with the automaker touting many positive reviews it has received regarding safety. stocks coming back from the lows of the day. ahead we get the view from the trading floor. lori: the latest out of dallas and mark cuban's insider trading case. the maverick on the stand telling jurors why he was upset. adam: super fly, forget some stealth military operation. we'll introduce you to a new drone marketed for the average consumer. call it a camera phone with wings. 3d robotic as president on its uses, the price tag and the big money behind it. ♪

>> i'm cheryl casone with your fox business brief. the imf is warning the u.s. a failure to raise the u.s. debt ceiling could damage the rest of the global economy. imf chief christine lagarde said it is quote, mission critical that this be resolved as soon as possible. fiat and chrysler ceo sergio marchionne hopes the ipo process will give a clear valuation of chrysler shares and pave the way for a merger. they want to buy the 41.5 mistake it doesn't own from the uaw health care trust. the uaw forced ipo filing when they couldn't agree on a price. talks are continuing but have

not made progress. growth in the sector cooled in september. non-manufacturing index dropped to 54.4 in september from 58.6 in august. new orders dipping and hiring slowed. that is latest from fox business. we're of course giving you the power to prosper.

adam: it's bird, it's a plane, it is your very own drone. 3d robotics is looking to change the image of drones of something used by the military for covert operations to something more akin to a camera phone with wings. new infusion of 30 million bucks from investors will go a long way to make that happen. according to our next guest, 3d robotics president. welcome to fox business. great to have you here. congratulations on the second round of fund-raising. who will buy this though? it will not be applicable in new york city but there is plenty of space in the united states for

it. who and where and what will buy this? >> thanks for having me on. i appreciate it. so we're looking right now at a big consumer market that will be buying these and we're eventually going to be moving into more of the commercial aspect of agriculture, construction, mining and deploying these vehicles in more robust enterprise types of environments. adam: when you talk about agriculture, right now thee use satellites for imaging of the fields for a portions of a farmer's field where they may be too dry, too wet, overexposure with chemicals. could you do that cheaper with a drone than say satellite imagery? >> we believe so. one of the limitations i've seen of satellite imagery it doesn't look through clouds. so there is a large portion of country that is covered in clouds through a large portion of the summer. they can fly through clouds and produce valuable data in situations where satellites can not. adam: what about other applications for drones? what would they be? are we talking

about a total discretionary, fun kind of a thing or would there be a business application that people would wish to purchase the drones? >> yes. so, right now we're really pushing on the consumer market with our new product, iris. it is a lost fun to use. it gives you great angles that you couldn't achieve in other ways. and, it teaches you a lot about electronics and mechanical actuators and aerodynamics. adam: goes on sale in november, right? >> correct. we're going to have the consumer version ready for 730 bucks ready to fly with battery, transmetaer all that good stuff right around thanksgiving. but we're -- go ahead. adam: battery and transmitter. i'm thinking outside the box here. for instance, for weddings, people get annoyed when the photographerrer is there in middle of the carpet trying to get the photo in a right moment. you could have drones quietly hovering, if the church or synagogue allow them in, they could be taping this kind of

stuff, correct? >> yeah, could you do things like that. at this point in time we're trying to keep them away from people and built upobjects, keep it nice and safe and allay privacy concerns. that is why we're focusing on agriculture but you will see those things all over the place in the future. adam: they already see them in europe. we're kind of behind the eight ball, aren't we? >> i believe we're behind the eight ball. the legislation for vehicles is 2013. the good news for 3d robotics perspective our market is not just the u.s. we're a worldwide organization. adam: i have to imagine the faa looking at potential regulations that will somehow impact this. there would be a huge market among news organizations for this kind of a device. you could eliminate, i don't want to put anyone out of a job, helicopter pilots with the traffic reports. paparazzi chasing george clooney or alec baldwin. with the drone they wouldn't know they were being chased

would we? >> they're a little louder than you probably think. the bottom line, manned vehicles, helicopters, airplanes, things that can produce aerial imagery now cost thousands of dollars an hour to operate. these you can buy for $1,000 and fly them repetitively and reliably for a chunk, small chunk of change. adam: john, we appreciate you being here from 3d robotics. i will suggest to our producers we bring you back. i know you're not doing it that but looking at uses of these things for commercial delivery. i know that is fascinating path to follow. we'll keep an eye on 3d robotics. all the best to you. >> thank you so much, adam. adam: lori? lori: i love the idea of using at weddings. adam: absolutely. everyone is looking for the different angle. lori: did you remember the priest got so plusserred with the photographer so close? it was youtube sensation. >> i missed that. i will have to look it up. lori: can you imagine the drones

being used? teddy weisberg on the floor of the exchange. always wonderful to see you. markets are back some but i drifting down again. hearing reports that house speaker john boehner is reassuring the american public we will not in fact default. anymore you can add to that? >> well, of course i guess we'll all have to wait and see but i would be inclined to agree with that statement though there is no, there is no accounting for our politicians and the dysfunction in washington. and unfortunately we are at the moment just hostage to this political circus. but the good news is, we know what is causing the downdraft in the market and my sense is that this too shall pass. so bottom line, lori, perhaps this is they're creating interesting buying opportunity for investors. lori: ah, there is that. teddy weisberg, thanks. looks like we'll not get too much more economic data this week with the economic shutdown. maybe that is a good thing. less is more. adam: less is more sometimes. buying opportunity always good.

the latest on mark cuban's insider trading trial. billionaire dallas mavericks owner took the stand and testifying that he, and this is his quote, he was upset he learned the ceo of mamma.com was planning an equity offering to dilute his stake. cuban went on to say he could not recall the details of the conversation which took place way back in 2004. the sec and its key witness claimed cuban agreed at the start of that conversation that he would learn confidential information. prosecutors say cuban saved himself $750,000 selling on the information but cuban denies doing anything wrong. lori: four years after michael jackson's death, concert prother aeg is cleared in the wrongful death suit filed by his family. adam: take a look at some of today's winners on the nasdaq. great we have some winners. we'll be right back. ♪ when we made our commitment to the gulf, bp had two big goals:

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lori: michael jackson died four years ago already but the court battles over who is to blame continue. a big victory for the concert promoter. dennis kneale is here with more. >> hey, lori. the nation's number two concert promote hears been cleared by a california jury in a $1.5 billion wrongful death lawsuit filed by the mother and children of michael jackson. he died of a drug overdose in june of 09. catherine jackson and her grandchildren, prince, paris, and blanket had sued aeg live, jackson's tour promoter allege

he had hired the doctor that administered the fatal dose of anesthetic that killed the singer. jury said aeg was not responsible and doesn't owe a indictment of damages this is a deliberations over four days. jackson was in rye hersals for a comeback tour and cast members were concerned about the his emaciated state. they said he. aeg hired a competent doctor, conrad murray though ruled was unethical and jackson contributed to his own demise. he was $400 million in debt since he died, since then 50 million albums have been sold. the estate is worth over 600 million bucks. even with this loss in court it means his heirs should do just fine, lori. lori: amazing how wealthy in death. >> perhaps. lori: becoming more so since the

death. >> elvis presley's estate earns $55 million a year. lori: that is terrific perspective. thanks, dennis. >> thanks a lot. adam: stocks clawing back from the lows of the day. could a deal be coming from washington? greg valliere joins tracy byrnes and ashley webster on the next hour of fox business. [ male announcer ] legalzoom has helped sta over 1 million businesses. if you have business idea, we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. we're here to help you turn your dream into a reality. so ally bank really has no hidden fno hidden fees.accounts? it's just that i'm worried about you know "hidden things." ok, why's that? well uhhh...

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and that gelling hes to lower some cholesterol. metacil. 3 amazing benefits in 1 super fiber. ashley: welcome back, everybody. i'm ashley webster. tracy: and i'm tracy byrnes. stocks come back a little after a morning selloff as the drama in decease continues to heat up -- d.c. the dow was down 190 points at its low. now just down about 100. ashley: coming back. the question is, could a deal be coming? in a speech this morning president obama showing no signs of compromise, putting more pressure on house speaker john boehner to allow a vote on a clean spending bill. we'll have the very latest from capitol hill straight ahead. tracy: it is not even halloween

yet. oh god, another holiday, but a new report shows that holiday sales are expected to rise. lazard capital's jennifer davis disagrees. she actually thinks we're in for a weak year. ashley: halloween in d.c. is very scary. i mean, come on. tracy: oh, i'm with you. ashley: not pretty, put it that way. but first climbing off the lows of the day as tracy just said, let's go down to the new york stock exchange. nicole petallides, nicole. >> we've seen some improvement, ashley and tracy, that is absolutely right. right now the dow is above the 15,000 mark. earlier today at its lowest levels it was at 14,947. most of the names have been in the red any given time. all 30 names are red show now some are squeezing out gains. nasdaq composite is worst of the bunch down 1 1/2%, down at this point down .8%. but the tone is somewhat negative, getting close toward unchanged line as we recover some. the vix, the fear index, is to

the upside and surpassed one-month highs we've seen. that shows you there is a element of nervousness. we're in day three of the government shutdown and what that could mean if this were to snowball, economic activity and the like. let's look at some names and how the government shutdown is looking at other names like boeing, united technologies, among the losers on the dow jones industrial average because they won't have amount of inspectors to inspect products in aerospace defense factories and the like. contractors of these companies, united technologies may be furloughed as well. back to you. ashley: all right, nicole, thanks so much. tracy: we check stocks every if i have teen minutes. seems now we have to check capitol hill that often. rich edson, the hardest working man in town has the latest on the government shutdown. hey, rich. >> thank you very much. i want to address a couple reports we're seeing in "the washington post" and "new york times." they're

reporting that house speaker john boehner is telling his colleagues that he would require a number of democrats in the house of representatives to pass any debt ceiling bill. we asked a number of republicans about that whether or not the spiel r speaker has been saying that. a few of them came back and told us you need to look at the history of the debt ceiling especially in this congress that that into the all republicans or enough republicans voted to increase the debt ceiling under any circumstance. they needed republicans and democrats to come along. they said that this would likely be the case this time. a statement, speaker boehner always said that the united states will not default on its debt but if we're going to raise the debt limit, we need to deal with the drivers of our debt and deficit. that is why we need a bill with cuts and reforms to get our economy moving again. house speaker john boehner and republicans are looking to figure out what to precisely put in a debt ceiling bill. they have to figure out with the

government shutdown going on day three. there is number of challenges on the house leadership on the right pushing them to stand firm. now the moderates are trying to push in the republican party, a government funding bill with no strings attached. >> we're here to lead. or here to break the impasse and really want to get something done. we're all tired of the brinkmanship and the showmanship and all the drama and thee at tricks and which want to get on with the business of governing. >> the problem for the moderates, are there enough of them to gum up the works in the house and stop the temporary measures and attempt to get house speaker john boehner attempt a different strategy, to put a clean funding bill on the floor. that is what democrats want. a bill that passed house would pay the national guard and reserves. democrats and white house continue opposition to the piecemeal approach. you have to fund the whole government or don't fund any of it. back to you. tracy: back to square one we are. rich edson, thank you very much. ashley: all right. so two weeks ago now until we

hit that debt limit. can the fiscal standoff being sold? not so far but no one better to ask than greg valliere, chief political strategist at potomac research group. greg, let's deal with this, you know, government shutdown first. there are increasing reports that moderate republicans are saying, enough is enough. we need to move on. is that what you your sense is? >> absolutely. you can just start to see things turning. i think that boehner would have to see 50, 60, 70 house republicans say, let's end this. we're not there yet. it may take a few more days. might be the end of next week. but i think you can start to see an endgame on the shutdown. of course it is important to note, even if we end the shutdown, the government will only be funded until november 15th and we'll go through all over again. ashley: yeah. that's a good.some what gets done, if anything? do we get a clean cr passed in the house, or

is there something going to be attached to it, something the president and democrats said, forget it? >> eventually john boehner has got to capitulate. it is just a question of when and on what terms. harry reid is enjoying this. this is great. this is exactly what harry reid would like to see. he feels it helps the democrats in 2014. that is how people think in washington. but i think to get boehner to capitulate, two things have to happen. one, happened today. the white house scared the daylights out of the markets about how apocalyptic a debt ceiling crisis would be. the other shoe to drop is to scare grandma, to tell grandma she may not get her social security check if, if the debt ceiling isn't raised. that would put john boehner in a very difficult spot. ashley: it certainly would. he is already in a difficult spot within his own party. who is running this right now? is it ted cruz or john boehner? >> ted cruz has an enormous influence in this group of 20,

30, 40, very radical house members, they have tremendous clout. but my suspicion is, today seeps to be a day of a turning point. things are looking a little different. my suspicion is making it clear to his colleagues he will not have a u.s. debt default laid on his doorstep. and i think that's a very encouraging sign. >> it is but to your point you just made, greg, how much damage is this doing to gop candidates come next year? >> well, if it is resolved in the next couple of weeks, no, i don't think there will be a lot of damage to them at all. they got all their sound bites on obamacare. and the public support for obamacare has diminished in the last two or three weeks. no, i don't think it will be devastating. now that they have made their point i think they can't persist much longer or it will hurt them. ashley: that's a good point. do you see the government funding bill getting wrapped up into the debt ceiling limit being raised? in other words, just this kind of a grand

bargain? >> it could be, and i'll tell you, i'm one of the biggest skeptics around that we could get some grand compromise. we're certainly not geting a huge simpson bowls deal. but as part of a deal that might wrap everything up later in the fall i don't rule out a package that would have some revenue raisers, mostly loophole closers, some entitlement reform and maybe the end of this much-hated sequester. bottom line, even more spending cuts. i think the move towards fiscal restraint is very, very much in place. ashley: but you can't see the gop tying obamacare again to the debt ceiling issue? >> they can't win on that. they are not going to be able to kill obamacare. ted cruz led them down an alley, abandoned them without an exit strategy. there is a lot of things republicans can win but ending obamacare is not one of them. >> has this rift hurt the party overall, this perceived split between those on the far right and those somewhere in the

middle? >> it's a really divided party now. you've got internationalists against isolationists. you have libertarians against social conservatives. now you have a tea party group that doesn't listen to big business. they don't listen to wall street. so it is a very divided party now. but important to note, this is 2013. there are no big elections for over a year, and a lot can happen in a year. ashley: a day is a long time in politics. >> yes indeed. ashley: greg valliere of potomac research. thanks so much. >> you bet. tracy: that is crazy town but you have to stay tuned here to "after the bell", 4:00 p.m. eastern. liz claman will sit down exclusively with treasury secretary jack lew. and of course this comes after the treasury's warning that if the debt ceiling isn't raised the economy could plunge into a downturns worse than the great recession. you don't want to miss this because the crazy train keeps going. ashley: as greg pointed out, that message is starting to have impact on lawmakers who get it. that it is just not a good thing

to be doing. much more on the market slide coming up. we're down 117 points now on the dow, with the shut down heading for day 4. could the selling on wall street carry on? one strategist still sees some upside. tracy: believe it or not, it is open enrollment season and not just for obamacare. gerri willis will break down what you should watch for when your employers roll out their private plans. this stuff gets so confusing. ashley: it does. boy, does it ever. first as we do at this time every day look how oil is trading. we got a raise in oil yesterday. down again today. down half a percent, 53 cents at 103.57 a barrel. we'll be right back. [ indistinct shouting ]

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tracy: with today's declines the major averages are now on track for a weekly loss. all thanks to the gridlock in washington. our next guest says the shutdown is only for a short term, get in there, do something. we have the managing director and partner at high tower. he joins you now. okay, it's short term but it is

wreaking some havoc and today too the market is down from the ism number. that non-manufacturing number fell to 54.4 from 58.6. that wasn't so great. >> it is wreaking havoc for really good reasons. every week that the government it schuss down it's a about a .3% hit to the gdp. think about that. our gdp is $16 trillion. that is a loss of 30 to $40 billion a week. this is real people, not going to work, losing their paycheck. tracy: and you, you know, we were going to talk about this at the end the, but your clients are in the defense contracting business because you are in virginia. so you're feeling even more so than most. >> we're right in northern virginia, called the beltway bandits. a lot of our clients are feeling it. they're literally having to lay people off because the contracts are being suspended because there is nowhere for them to go to work. tracy: double-whammy, right? sequester whammy hit and also now the shutdown hit?

>> that's correct. everyone knows come october 11th you have the debt ceiling. so there's a lot of uncertainty. the markets can withstand bad news. they can digest that but when you have uncertainty like this as the uncertainty continues to mount the markets don't like that. tracy: to your point two weeks can be eternity when you don't know what the heck can happen. >> it can be eternity. the market is going down 100 points, 200 points. tracy: nervousness on weak economic data. what are you doing for your clients? are they saying get me the hell out of it all together? >> they're not panicking. we have a long term gameplan. we think with the fed policy of stimulating and they continue to have that position now, once we get through this it will be like a coiled spring. once we get through this we'll see the markets resume. so if as the markets continue to pull back we'll view that as a buying opportunity. tracy: between now and october 17th, sharpen your pencils make your list, right. >> exactly. tracy: where are you looking to buy? >> we like technology and we%

like small, medium sized companies. when the economy expand and begins to resume there is more upside potential for small and medium-sized companies. tracy: i thought it was interesting you like the whole electric car robotics world. >> we do. there is so much technological advancements happening. gm came out and said within two years they will have a $30,000 car that will go 200 miles. tracy: would you buy gm here? >> can't get into specifics of actual automobile manufacturers. tracy: okay. >> just today it was announced in the united states is the number one producer of energy. coupled with all the work that's been done with electric cars and energy efficiencies, when the price of oil begins to come down, at some point it will, that is like a tax cut for americans. tracy: speaking of oil, you're loose looking at companies that do a lot of fracking. >> love, love the fracking sector. there are so many deposits that we have not been able to tap into that we're now able to reach. tracy: so, between technology,

robotics, you're getting ready, your clients though, are you going to be buying for your clients or are they still so nervous they say don't even do that? >> no. we have some cash on the sidelines and we'll be deploying that capital to in these areas. tracy: what is the one area you're totally staying away from? >> bonds. do not like bonds. tracy: even muni bonds? >> even muni bonds. tracy: really? >> we're at a three-year low with interest rates. look at the risk/reward paradigm. if treasury moves .1 of a percent, people lose eight to 10%. not a good risk/reward proposition. tracy: even for tax purposes? >> even for tax purposes. >> paul, thanks for coming up from the beltway and joining us in this fabulous, fabulous new york city day. thank you, sir. ashley: beltway bandits. there you go. that's a new one for us. it is a little past quarter past the hour. time to check markets. nicole petallides done on the floor as always. you're checking a couple of big

movers. >> checking a couple of big movers on some big stories. we're talking about the drug realm. we're talking about viva, the stork is soaring up 10.5%. isn't great to see a stock on the move with the dow down one pun points? cowan upgraded from outperform to a from a market perform. the weight-loss drug has good news there. on the other hand angie's list has slashed its prices in order to bring in a lot of new members. while the analysts say the pricing idea is a good one, what does that mean? doest mean they are just not getting members they hoped? they're certainly will not get as much revenue if they're lowering their prices dramatically, slashing prices roughly 75% in some areas. the stock is down 12.75% at the moment. we should also announce that the chief technology left the company recently. so that is another point that is not so great for the company.

back to you. ashley: nicole, of course it was as we hear the statements coming out of d.c. from one side, then the other, what are the traders saying and what impact is it having on the dow? we're certainly well off the session lows. she's gone. she is already running off to talk to more traders. tracy: they're moving on. ashley: but it is definitely, definitely headline-driven as we think we may have an agreement or at least a glimpse or a glimmer. tracy: i keep saying this but never at a time in our lives be was wall street, the market so affected by what happens in d.c. ashley: yep. tracy: minute by minute. ashley: yep. tracy: ping-pong, would you call it? ashley: political ping-pong. >> i like that. we'll make it. shirts. rollout of obamacare this week stealing the thunder for open enrollment from private employers. gerri willis is here to tell what you you need to know. ashley: look how the good ol' mighty u.s. dollar is moving.

boy ever a mixed picture, it is up and down across the board. euro moving higher against the dollar but the u.k. pound still higher but dropping a little at 1.6161. we'll be right back. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened

so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, whe experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger.

>> at 22 minutes past the hour i'm harris faulkner with your fox news minute. weapons inspectors overseeing the destruction of syria's chemical weapons are reporting encouraging progress in their mission. the team says the syrian government has handed over a promising set of documents. international inspectors are racing to meet a mid 2014 deadline to take out syria's chemical stockpile. their daily work as you might guess has been shrouded in much secrecy. there is a civil war going on in syria. their mission stems from a deadly august 21st attack on opposition-held damascus suburbs which the u.n. determined a nerve agent, sarin was used on citizens. the federal government is gearing up as tropical storm karen is moving towards the gulf coast. the white house says fema has begun to recall employees affected by the partial government shutdown to help prepare for the storm. the national hurricane center has issued a hurricane warning along the gulf coast from louisiana to florida. tropical storm karen by the way is the 11th named storm after the atlantic season and

formed this morning off the yucatan peninsula. those are your headlines. i'm harris faulkner. now back to tracy. tracy: well, thank you, girl. >> you're welcome. good to see you. tracy: pretty in blue. >> thank you. likewise. tracy: i try. smoke and mirrors most days. october starts the start of open enrollment for corporate health plans totally coinciding with opening of obamacare health exchanges. just to confuse us more. gerri willis is here with a guide to tell us what to expect. this is enough to make your head spin off. >> this is what you're used to. i know, disturbing when we see it. >> wouldn't know which hospital to go to. tracy: i look like linda blair often. ashley: no pea soup. >> no pea soup. ashley: because the exorcist. tracy: linda blair, "the exorcist." >> too scary for me. ashley: it is. >> we need to talk about insurance. for goodness takes let's get

down to facts. there is no coming back. ashley: there is. tracy: open enrollment comes up ever year and every year i close my eyes and say do the same thing again. >> don't do that. it is all changing and you don't know what they're offering you. chances are you pay more for health care expenses. ashley: gerri, we heard shots fired near the supreme court. we'll try to get ahold from rich edson as you can see from these pictures. tracy: these are live pictures. shots fired down on capitol hill. ashley: we have no control over this picture. as this is happening again, shots fired inside the u.s. capitol. this according to a senate aide. as you can see on your screen. seeing ambulances respond. our very own rich edson trying to catch up with what is going on. this is initial early reporting. that may explain the video or pictures you are seeing are a little jittery. tracy: key ron's at the bottom

said offices were on lockdown already. ashley: yeah. tracy: so we'll be getting more? ashley: all right. again, we're being told that rich edson, on capitol hill has been told to evacuate. soon as we can get ahold of rich we will, we'll talk to him to find out what is going on. already a huge response as you can see in the nation's capitol. tracy: can understand i guess, there is tension down there -- ashley: shots fired inside the u.s. capitol that is the initial report. again our very own rich edson being told to get out, to evacuate the building. all this comes of course with the ongoing partial government shutdown, the tensions are high between the political parties. what this involves we have absolutely no idea but as you can see, some of the chaos from the video that we are watching as, authorities respond to these reports. we know is, that again, shots fired inside the u.s. capitol. those inside have been told to evacuate immediately, including our very own rich edson.

soon as we get ahold of rich by phone of course we'll speak to him. but we already lost the picture on the left-hand side of your -- tracy: we're transferring to rich edson right now. ashley: rich, can you hear us? >> yes, i can hear you. ashley: what can you tell us? tracy: are you okay, first of all? >> yeah, i'm fine. capitol hill police are running around everywhere. i went to pop my head out into the hallway here and capitol hill police officer told me to get back into this crawl space i'm in. looking basically walking through the capitol, police get a call on their radios and tell everyone just to get into their offices. they're still running around the capitol right now. we're getting some reports over on the understand side from our fox producers telling us capitol hill staff are telling everyone to shelter in place, get into their offices. a lot of running around on capitol hill right now. ashley: so you say you're literally hungered down in a crawl space, rich? >> yes. i've gotten to a point that i

have never been in the capitol. i'm in the basement and there are a lot of different hallways and passages. so capitol hill police ushered everyone into the closest doorway. i ended up into this one. looking at my email here. yes, capitol hill staff saying they're hearing shots fired at the capitol. no sense where they're being fired but the hallways in the capitol right now are simply buzzing with capitol hill police officers in full sprint around the basement of the capitol right now, through all these corridors, yelling at everyone to get to their closest office, their closest doorway. ashley: rich, did you hear any shots yourself? >> no. i heard nothing of that sort. i was routinely walking from the house side over to the senate side of the capitol and all of a sudden we just started seeing capitol hill police officers just run. i can hear through the door right now, every time i peek my

head out, they yell at me to get back in, but, you can hear through the door, just radios buzzing and police officers running by and yelling. still shouting. tracy: rich, you keep yourself safe. and you hang on and stay in touch with us. rich edson is on the house side. we are going to head over to the senate side where our very own liz claman happens to be down there in preparation for her interview later with jack lew. just to recap, actually liz claman is good right now. liz, are you okay? >> let me quickly tell you i'm a little out of breath because i just tore into the building. immediately the police here inside the russell building, the rotunda said, lockdown. pressed the button, every door in the entire building locked. darrell issa from california, would not let him get out. he said he had a vote. they said too bad. rushing to the balcony doing the live show for fox business and my cameraman mike leaning over

the edge shooting to be a car that was pummeled by bullets by police. rich gave you more information about that. but apparently several police officers surrounded the car and began shooting at it. i then saw an ambulance come through right down around first and constitution. immediately as we're leaning out the balcony, and mike is continuing to shoot, police came running up said everybody inside, everybody inside and they slammed the door shut. the building here in d.c. is under complete lockdown at this moment. they wouldn't let our makeup artists in. wouldn't let anybody in. wouldn't let anybody out. several representatives are trying to vote. they can't get out of the building. i said to darrell issa, is this normal. do they do this a lot? he said no, this is not normal. ashley: it is interesting, liz, we're getting reports from reuters the shots were fired outside the u.s. capitol, not inside. the capitol police reports that

there are people injured including a capitol police officer. now of course all of these reports said to be, you know we can't always rely on the initial information, from your standpoint, liz, i would imagine everybody is just hungering down. we have rich edson on the house side who is literally hungering down in a crawl space. >> correct, correct, yes. i'm telling you right now, mike, did this occur on first avenue or constitution? exactly at the corner of first and constitution. if we step two steps out on the balcony which police will not let us we would see it and our video which i believe was running as soon as you guys got it, is exactly where it appears to have happened but police surrounded this vehicle. you can see that video. and, atall of sudden, martin, our photographerrer from the d.c. bureau said he started hearing multiple shots. multiple shots. tracy: liz i want to confirm to people the video they're watch something not the video you're

talking about. this is taped from earlier. >> correct. tracy: liz claman on the phone right now with us from d.c. saying her camera people who were preparing for their show later today actually saw and potentially have video of a car that was pummeled by shots. liz, i'm correct in what i'm saying here? >> correct. , yes. in fact i literally walked in to do this live show and i was going through the x-ray machine. there was another camera crew that was, had a lot of equipment. i thought myself maybe i go outside for a minute. the doors just slammed automatically. we are inside the rotunda of russell building. they said, hold on don't let anybody out. the doors locked. darrell issa congressman from california started yanking on the doors saying i have to go. but he can't. can you get a sense of the

activity around you? liz: the activity? okay. so i am looking directly out on constitution, and i can see just as i peer through the glass because they kind of made us lock the door for our own protection, of course, a lot of police activity of the kind that's after the fact. i don't know if they're pursuing, you probably have better information. tracy: liz, also, i want to just reconfirm that we did get confirmation that capitol police officers have been hurt -- ashley: yes. a capitol policeman has been injured near washington's capitol as reuters is reporting -- liz: hello, they're letting us go out for one second. ashley: okay. liz: let's see -- out on the balcony. the building's still on lockdown. no, they are shutting the door again and duct taping it. i'm talking about capitol police. they do have guns right now. we are on the third floor, we'll keep you posted on any developments, but right now they're not letting us go

outside. tracy: lizzie, you stay safe. we will get back to you, and our very own rich edson is on the house side down in some basement tunnel -- ashley: in a crawlpace with many others as the capitol building is under lockdown. shots reported initially perhaps inside the u.s. capitol building, but we're, in fact, being corrected to say they were outside which kind of follows what our very own liz claman was saying about a car that was riddled with bullets and surrounded by police. we're also having reports, reuters saying that a u.s. capitol policeman has been injured near washington's capitol. doesn't say he's been shot but, obviously, this is a developing situation. injured officers plural, we are now understanding. so this is, again, happening outside of the capitol building. as you can imagine, everybody on lockdown, many people down in the basement. rich edson told us capitol police and others running around the building telling everyone to get down, to get out of the way, to essentially hide while they take care of this situation. tracy: seems that liz claman and

her crew showed up just at the exact moment this was all happening. dow down about 50 points since this happened. nicole petallides is on the floor of the exchange. >> reporter: as soon as this news broke, a couple of things happened. the dow jones industrials quickly took a big dip of about 50 points going from a level of 1530 down to 15,030 down to 14,975. so you did see that drop of over 50 points or so. but it is recovering, some of those losses, as i talk to the traders. first of all, every tv here is now tuned to what's going on in washington. the level here on the floor has gotten louder as people are blasting their tvs to stay abreast of the news, also just the chatter going on people, everything from the shooting where they'd like to get more details and also just back to the negotiations of our government shutdown. so we are seeing the markets

coming back some now, back above the 15,000 line. but it's interesting that we see something like this, obviously, it just brings more jitters to the markets. the vixx, the fear index, has been sitting at a one-month high, so we'll continue to follow this one. we did see a big dip, and some of the traders talked about the fact that once they realized it was outside not inside, that it may or may not be politically motivated. it gave a little bit of a sense of relief, and that may be why we saw a dip of about 55 points and no further. we didn't take out our session lows. tracy: nicole, you stand by. again, market down about 50 points. we are going to go back to our very own liz claman who's on the senate side with more details. liz: i have to tell you, they're telling us get our equipment inside, they are telling us to get to the middle of the building away from windows. they want us away from windows. we're hearing lots of sirens still, and so the capitol police

came in, again, we're in the russell building overlooking -- for those of you who know d.c -- constitution and the corner of first. and they're saying, nope, can't do your show as planned out on the balcony. so one at a time we're calling in piecemeal our equipment, and they want everybody in the building to be in the center of it away from outer offices and windows. that's where we stand in the wake of this shooting. tracy: can you confirm exactly where you are? you said you were on the third floor? liz: correct. if people were watching gerri willis' show the other day when she was live from the rotunda, the exact same location as we are today. as soon as martin and mike, our chief photographers, were setting up, they started to hear multiple gunshots. okay. so this was not a question of, oh, is that a fire cracker. ashley: right. liz: this was multiple gunshots. mike jumped on and immediately started shooting, that's the video you guys have, and i was just entering the building, and

the doors just automatically slammed shut almost like a prison. you know, they're used to this. they are prepared for situations like this. it's calm, i want to say it's pretty calm on the inside, but i asked can i go out there for a second, no, no, no, nobody's going out. ashley: and, liz, i'm just reading a notice that's been put out by the u.s. capitol police telling people as you just said to shelter in place, essentially close, lock and stay away from all external doors and windows. it says no one is permitted to enter or exit a building unless directed, of course, by capitol police. and what was also interesting, i was just reading a message that they've locked members in the house chamber as they were debating a bill inside. and, you know, chad pilgrim, a producer down there for fox news, also saying, look, two capitol police officers were shot and killed back in july of 1998. we have seen these things happen before. we have no other details other

than there are injuries to capitol policemen, and it is outside the building, and as you say, liz, you turned up right at that moment when a car was being riddled with bullets by capitol police. but that's all we know, and that's why people are being told to stay in the middle of the building away from windows which suggests that this is still an ongoing situation. tracy: right. and also, too, to reiterate, this video that you're watching is not the video that liz is talking about, not the video that her cameraman has pretty amazingly shot. liz, how is everyone else? how's the crew? liz: you know what? let me run up, because our makeup artist just got in. you got in? did they open the doors? >> no. liz: how'd you get in? >> [inaudible] liz: and what's it like outside? >> it is scary, and it's on lockdown. everything's on lockdown. liz: that's mandy, our makeup artist. my producer and i had just kind of walked in, and that was when all of a sudden it was like

timing, you know? immediately we started hearing very almost frantic, i don't want to say panicky, but frantic sounds on people's walkie-talkies from the police that are here, and i kept hearing the word "lockdown." i said, okay, interesting. and that's when i saw one of them slam their hands on a button, and the doors went shut. congressman darrell issa of california walked out of a elevator, and i said to him -- he started trying to negotiate with them to let him out. he said i've got to vote. you can't not let me vote, and they said, too bad, you're not voting. if there's a vote, you're staying inside, and i said is this usual, and he said this is highly unusual. tracy: so just to confirm, the senate finish the shooting occurred near the botanical garden, that staffers inside the ray burn building could hear the shots inside their offices. just to give everyone a better sense of where this is taking place. and, again, liz being able to

basically watch it from the third floor saw the car -- ashley: just reading a comment here from congressman gerry connolly, a democrat from virginia, he said he was on the balcony on the south side of the capitol and heard what he thought was seven or eight gunshots in rapid succession. of course, police are a trying to usher surists away because this is, obviously, a popular area for lawmaker, reporters, tourists and everyone else. and for authorities, it must be an absolute, you know, nightmare to get everyone safe and sound while continuing to try and take care of -- liz: ashley, can i just say one quick thing? ashley: yes, please. liz: the police were very serious with us. we're on the third floor in a corner by the balcony, and they said, out. we've now duct taped our ball by door, and we're now scurrying out, keeping low to pull our equipment out, set it up so that we can, you know, hit the show live when we are able to. but, again, this from a very busy day where we were with the

treasury secretary jack lew at 11:30 a.m. taping an interview that will air at 4 p.m. a lot of stress and pressure be here inside the beltway. no idea whether it's related, whether it's a criminal, something like that. ashley: right. liz: again, that's correct what the representatives are saying, five, six, seven gunshots is what mike, our cameraman, said he absolutely heard and martin. tracy: if they're telling you to stay away from the windows, i suppose there's somewhat comfort in that that you're safe at least we hope at this point. what else is happening now as far as letting people in and out? are you at least able to see your camera crew? liz: i'm pulling them in. they're yanking me -- [laughter] and now i'm seeing, okay, i have two representatives who -- [inaudible] just trying, you know, sometimes you don't understand how this works. we're trying to get a live shot out of a, you know, century-old

building here, and there's a lot of equipment that has to be moved. we have now moved. i'm walking over, setting down my stuff, and you'll see me in front of the camera hopefully soon. in the meantime, as i said, we've got at least our representatives were already inside the building. i'm looking now at a door -- here's another point, you guys -- ashley: yeah. liz: government shutdown, a lot of these doors are not manned. so the only thing they have are red velvet ropes. i'm looking at one right now, and it's basically a simple lock. i'm sure it's a little more sophisticated than that, but there's only one way in at that point. ashley: yeah, that's a good point, liz. of course, this comes as the government is partially shut down and would not, perhaps, have the full complement of personnel as you normally would have. now, i can point out there's one issue being seen here that perhaps this was a car chase that got near the capitol and shots fired.

this is completely unconfirmed and, again, these types of reports come out. but there are reports -- not confirmed -- that there was a car chase near the capitol and shots were fired, and that's what this was about. we'll have to confirm that, but that's one of the reports coming out. tracy: so let's just update everyone. we have heard from capitol police that there are officers that have been injured. liz's crew, her cameraman was able to see -- as she said -- pummeled with shots that drove away. she's on the senate side. our very own rich edson is also on the house side, and we're hoping to get him back on the phone. sounds like his battery's draining, so we don't want to lose touch with him if his phone goes down. and also to confirm, too, that the shooting occurred near the botanical gardens, staffers inside the rayburn building could hear the shots from inside their offices as well. ashley: liz, let me ask you, is there some sort of -- okay, let's go to rich right now. liz claman, stay where you are.

rich, we left you in a crawlspace somewhere in the basement on the house side. what can you tell us now? >> reporter: just want to give you a little geography here. you said liz had heard she'd said something on her side of the senate. liz is on the senate side. if you look at another report that's out right now, that the location was near the botanical garden near the rayburn house office building, so that is two very separate and distinct sides of the u.s. capitol. also a little bit about the security where you noted chad pilgrim's note earlier that two capitol hill police officers killed in 1990s. part of that, reaction to that to get a car anywhere near the capitol complex, the actual capitol building, the house or the senate, you have to go through those barriers that are stuck in the driveway, then they lower them, they check all the cars that go in. so it's not like you can drive up right next to the capitol. the office buildings, one of

them where liz is located, the other office buildings, those are on the street. you can go right up to those office buildings. to get in any of the office buildings or the capitol here, you do have to go through magnets, so the security here ever since the '90s has certainly been bumped up. you can still hear in the hallway where i am, they are incredibly sensitive to anybody walking around anywhere in the capitol right now. i'm basically, if you look at the capitol doarnlings i'm right there one floor down, two floors down locked in the basement in a room that i have never been, happened to be the first door i was standing next to when the capitol hill police came running through telling everybody to get inside the door. you can only hear capitol hill police officers running through the actual capitol talking to a number of staffers right now, they say their members are either stuck on the floor, stuck in their offices, capitol hill staffers are stuck in their offices. so everything in the capitol complex, the area that i was

discussing inside the barricades which is the actual capitol with the house and the senate -- tracy: right. >> reporter: -- that is locked down. you can't even get in the hallway, and all you hear is cops going by. tracy: can you just confirm what you said, that the shots heard at the botanical gardens could -- it's a different location from what liz claman is hearing off the third floor. >> reporter: it is a distance. you have to go across basically the width of the national mall plus. tracy: right. >> reporter: across the plaza. so the botanical gardens are on the house side, but liz claman is on the senate side. that's not confirming anything about the location, and reports heard in two different locations of that. tracy: that's an important point, rich, thank you. you stay with us. ashley: let's go over to liz claman. liz, we are hearing more reports that perhaps this was a car chase that headed towards the capitol building. we're continuing to get more suggestions that this could have been the case but, again, it's all unconfirmed. what -- tell us your, from

your -- there you are, we can actually see you, which is great. all right, you take it away from there, liz. liz: okay, let me explain where i am. i'm on the third floor of the russell building in what's known as the rotunda. we were just pulled off the balcony. balcony was over there, and if you go left, that's where the shooting occurred, on constitution and the corner of first. that's what we believe because our crew started hearing five, six, seven shots, absolutely gunshots. there was no question about that. and we were just walking in, my producer and i, katherine, were just walking into the building. and all of a sudden there was a kerfuffle, and we started to hear the capitol police who were on the inside of the building say lockdown, lockdown, lockdown. they pressed a button, doors slammed. some of our team were locked outside. let me show you, because the government shutdown plays into this. a lot of the openings that would normally be open are shut, unmanned because they don't have enough people. there's one of them. they've got a lot of red velvet

ropes, so there was really only one entrance here, we had to walk around the building, and that's where we slammed into a couple of camera crews who were trying to get in. the shooting started to happen. people started flooding down from the elevators including congressman darrell issa who was dying out because he said, liz, i need to go vote. he was trying to negotiate with the police who said, nope, nobody's leaving. whether it's related, again, total speculation, probably not. we don't know yet, but nobody's taking chances here. the entire building is locked down. i want to show you, these are my crew, we're trying to set up and other camera crews as well, and if you swing back around, there are people just waiting on the inside because that's what we've been told to do, stay on the inner core of the building and away from outer offices and windows, you guys. tracy: liz, don't go anywhere. we have cynthia smith, an audio engineer, now on the -- ashley: with fox news -- tracy: -- who potentially heard or saw the incident. cynthia, tell us what you know. >> i saw and heard, i was

outside setting up for a shoot that we were getting ready to do, and i saw the police following this car, and i figured it was following it because usually when you see a bunch of sirens, you move to the left or the right, and it didn't move to the left or the right, it kept going. it wasn't a high rate of speed, but it was a steady rate of speed, and it was on constitution avenue, and then the car was dark, maybe a toyota, something like that, and it made a left on first. and all of a sudden a whole bunch more capitol hill police came and jumped out, and we heard a shot -- pop, pop, pop, pop, pow, you know? then we started smelling gun smoke, so they told us to come in, and we've been on lockdown ever since. ashley: did you see how many people were in the car there, cynthia? there are reports the driver got out and ran away, but eyewitnesses claim the police removed a 1 to 3-year-old baby from this sedan. of course, this is all unconfirmed. >> right. ashley: what did you see after

the shots were fired? >> they went a block away -- ashley: okay. >> i saw the chase pass us as we were on the balcony, and so i wouldn't be able to say how many people were in the car. i know, you know, there was outside of the driver to be honest. but i know it stopped, whatever happened, it stopped at first and constitution with those gun shots. tracy: and that's, actually, fox news carl cameron confirming the same thing. again, a black two-door compact car described as going east on constitution, much like you said, cop car right behind them in a high-speed chase -- >> not a cop car. maybe 15. there was a lot -- tracy: that's what he says as well. and he says the car stopped at hart and constitution, this is first and constitution, five to six gunshots and, again, as ashley pointed out, someone saw a 1 to 3-year-old baby taken from the car which you're saying you did not see. >> no, i didn't. i was a block away. i just saw the actual chase.

ashley: so, cynthia, you are inside now under lockdown, is that right? >> yeah. we're on lockdown in the russell office building right now. can't go out on the balcony, and we're on lockdown trying to -- tracy: we have heard also, too, from gw hospital and washington hospital, both are unaware of any be incoming victims at this point. ashley: all right, cynthia smith, fox news audio engineer, thanks so much for taking the time to talk to us. again, shots outside the u.s. capitol, reports now that this could have been the end result of a police car chase east on constitution -- let's go to congressman john gaer mundy is joining us now. congressman, thank you, first, for joining us. what have you heard, what did you see? >> well, what i've heard is the news reports, and what -- we were actually on the far side of the capitol where all of this took place. we got our alert, we were in the midst of a conference with all

of my staff. we were told to lock the doors and to continue on. but this is a very, very stressful time for the, for all of us. we've got the shutdown going, we've got very controversial legislation and this added to the top of it, it's a difficult period for people that are unemployed, furloughed, and we're going to do the best we can. but it looks as though the capitol police are on this, and i would expect this to return to the normal chaos of the capitol here pretty soon, that is the legislative process. tracy: we're getting word from our producer in washington, chad, that people can leave per the south door. if i said that correctly, right? ashley: yes. tracy: through the south door. you might be right about this, maybe this is getting back to the other nuttiness and the police have taken over and gotten -- ashley: congressman, we have a reporter there, liz claman, who said that part of -- a factor in this maybe is the partial government shutdown means there

weren't as many people on the doors and in the capitol area that there normally would be. is that >> oh, it's absolutely true. i walked into the visitors center at 9:00 this morning, it was shut down, totally empty which is -- it's never that way even on sundays and saturdays when we're not here, it's completely filled with people. absolutely, the entire capitol grounds were largely uninhabited, and that undoubtedly, i guess, a good thing and perhaps a bad thing at the same time. ashley: yeah. tracy: again, to e -- to reiterate, the video you're watching is not of the shooting we've been now told car chase, pummeled with shots was liz claman's statement from earlier. representative, how is your saf? are they okay? are they scared? tell us how they're doing. >> well, a very interesting -- we have a security system set up for every office in the capitol, and one of our staff is responsible whenever we're here

for that alert, and he carries around a little pager, if you will, in his pocket. but in the middle of a meeting, this thing goes off. he jumps up, turning white, listens to it, runs out, locks the doors is and then comes back and tells us what's going on. yeah, there was a moment of high anxiety and then calm down, we're just fine, we're locked into our rooms as we're supposed to be and, i suspected, every other office and the three buildings on the south side of a the capitol are. so there are procedures in place. we have a great deal of confidence in those systems, and i will tell you that bomb alerts are not unusual around here. so this one, obviously, dealt with an incident. tracy: thank you for sharing, thank you for being with us, representative john garamendi, you stay safe, sir. ashley: let's go to congressman john mica, now, of florida.

congress match mica, where were you when you got this news? did you hear the gunfire, and just kind of explain what you saw and heard. >> well, actually, i just returned from my house which is only about a block and a half from the hart office building and had passed that intersection minutes before coming back to the capitol. sat down at my desk and was looking out the window and started seeing people fleeing the capitol grounds, police with their arms drawn and struck by a family grabbing their kids and running towards the building here. so as that happened, of course, all the alarms have off -- have gone off. all of our staff are safe, i think all the staff and members in the capitol and the surrounding buildings are safe, so i know there are a lot of family that are anxious

watching. but that's the most important thing. so people, we've been through some of this before, but again, a lot of new members and new staff. tracy: scary -- >> hopefully, a random incident and someone, you know, you've got folks with all kinds of agendas. it looks like he was coming up constitution in front of the senate building. i could, you can see there's a car that they're examining a block -- tracy: we have live video of that right now, sir, and i just want to reiterate to everyone per our producer, u.s. capitol police are now lifting some of the lockdown orders telling everyone they can exit by the south door of the capitol. so maybe we do somewhat have this under control. sir, does this happen often? >> well, not that often. we've had, we've had incidences. i was here when they, unfortunately, killed the two police officers. i think that was back in '99. i've been here for, of course,

through 2001, and we've had a couple of scares since where, you know, you do take every precaution and, unfortunately, we had the incident a few weeks ago in the morning with the naval yard which isn't too far from the capitol. but hopefully, again, it's just someone who is a lone actor here and that the damage would be minimal, any injuries. we're not sure, again, the extent -- ashley: right. >> -- of who he hit or where the gunshot -- ashley: we are continuing to follow those reports. congressman mica, thank you so much for taking the time to speak to us. >> thanks for check anything and, again, all of our staff and even we know is safe. thank you. ashley: very good. tracy: be safe, sir. ashley: let's get to liz claman who's heading outside of the

capitol building, another indication parts of this lockdown is being relieved. liz: i want to show you, we've got fnc, fox news and mike emanuel, and as we whip through here, i just want to show you how relatively empty these halls are as people are starting to come back out again. we are still on lockdown, still on lockdown, but i want to walk over here and show you where we were when this happened. were when this happened. we are in the rotunda of the russell building, and as we walked back over here, this is the balcony where we were planning on going live. it is directly at here where we can peek treacly at here where my guys were sitting up here, the fox business group. it is down there. i don't want to get yelled at, but it seems like we are okay to come out. can we come out? rick folbaum. be careful as you step over here, mike. liz: the shelter in place order has been cancelled.

liz: speaker around and let me show you where it's happening. my guys are multiple shots right at that location and began about a half a block away, but now if the order is canceled considering there were that many gunshots, perhaps the criminal who was starting this may have been neutralized in some way. cynthia, the idea tech for fox and fox business. you heard of thing. >> what i saw was a car going of the constitution avenue. a lot of cop cars following it. it's a chase. usually when you see that many cup cars in on the move to the left of the right. it was going steady. now a real high rate of speed. maybe 40 miles-per-hour, but never stopped. get a first-rate and made a sharp turn to the left and a lot more cars can. we just heard about 67 gunshots. liz: did you see police doing the shooting? >> i could see from this far