>> join us tomorrow and we'll be here following the markets and richard branson will be with me. dow chemical ceo, and bank of america ceo brian moynihan and speak with harvard professor of history neil ferguson and zhang xin. and "varney & company" is next, stay tuned for ashley in for stuart. take it away. ashley: what a beautiful back drop davos is in sight. and the end is in sight, stuart's vacation. and the big selloffs becoming the norm these days. another triple digit drop coming up, 300 points or more, right now we're down 252 on the futures. the culprit, of course, again is oil. fresh 12-year bee lolobelows. >> and $27.

and when someone said it would drop to $25, we laughed. but it's not far off. netflix has gone global, and that's a winner, just barely and pointing higher. how about this, sarah palin endorsing donald trump. iowa caucuses two weeks ago-- away i should saw. i'm excited and eric trump, donald's son is here, and he'll talk about sarah palin and the campaign in general. a blanket of snow could be in the northeast. were you one of those people complaining when it was 70 degrees on christmas? i was. guess what? things are changing. and leonardo dicaprio slamming the oil industry, and says we need to keep the oil in the ground. how would he fly his jet?

come on, leo. it's three packed hours of "varney & company." it starts now. ashley: we begin the proceedings this morning with news of a deadly terrorist attack in pakistan. the taliban claiming responsibility for this. adam, what do we know? >> now up to 20 people were killed in the university in the northern part of the state. there's controversy over whether the taliban did this. what happened was an early morning session, armed men jumped over the wall at the university. they shot the students, police officers, guards, and a teacher execution style in the back of the head. they also shot some of the police force shot some of the attackers and others got away. there was a taliban general who has been part of these attacks in the past, who took credit for this. but then other taliban forces have put out a statement saying, no, this was not part of that. ashley: all right, adam, thank you very much for that. now to sarah palin's endorsement of donald trump.

here are some of the highlights from that event. >> r you ready for a commander-in-chief who will let our warriors do their job and go kick isis' (bleep). and now to be lecture you guys are all sounding kind of angry is what we're hearing from the establishment. doggone right we're angry, justifiably so. we're mad, we're not going to chill, in fact, it's time to drill, baby, drill down. are you ready for the leader who will let you make america great again? things are going to change under president trump. ashley: well, eric trump, donald's son is here and eric, i'm wondering what your father is thinking as he's standing there listening to sarah palin just, you know, making ringing endorsements for his campaign? >> i think he was incredibly happy, and everybody is looking for sarah palin's endorsement and he got it.

she did it off the cuff, in a fun way, jovial and not reading off the teleprompter and having fun and she's got a huge following. cruz was after her endorsement like he was at the time and wanted her endorsement and this is a big thing for my father and big thing for sarah. they've gotten to know each other well and she happens to like what he's saying and i think you'll see a lot of great people coming out of the endorsements eany soon? >> i think you'll see a lot. leading nationwide by 22% and going into the first primaries. i think you'll see a lot of people coming out woodwork to endorse him. ashley: do you think that sarah palin's endorsement is a doub double, the tea party and the women's vote. >> people follow her and like her and the fact that she's fun and has just a light spirit to her and she goes off and that speech was fun and different. ashley: is she relevant in

today's political world? >> yeah, no question, a following with the evangelicals and a major following with the kind of anti-establishment crowd and my father very much falls in the same camp he's very, very anti-establishment and washington, look how they tried to take her down in past years and look kind of at the same opposition they have for my father because he came out of nowhere, a businessman his whole life and you know, he's winning the presidency of the united states right now. in a certain way they kind of have the common threat. ashley: when you talk to him does he ever privately say, you know, eric, we got into this thing, i'm leading in the polls and we could do this? is he surprised? >> i think we all could be surprised. i think a case study for students in colleges for years to tomorrow. a guy who built hotels around the world and set off the political system and decides to run for the president of the united states and six months into it is winning by double digits by every possible

margin. nationwide he's ahead of the other candidates by 2% as i mentioned before. it's an amazing, amazing thing and i think he's already won. even if he didn't win, i think he's will already won, he's changed the face of politics forever. you don't need to be that old guard establishment in order to make a real mark on this country. ashley: we had herman cain on the set for us the half hour, he was not an establishment guy, a corporate executive and kind of lickened himself to donald trump in that way. the only thing i didn't have was the big pockets that donald trump has. is that a huge advantage for your father? >> listen, you look at the money jeb spent, 60, 70, 80 million. we've spent by far the least amount of money. by far the least amount of money. we haven't accepted a single contribution, but yet, we're winning in every poll across the country. that's an amazing thing. this is a cycle it's almost inverse correlation, the more you spend, the worse your ratings are and also, i think,

changed the face of traditional politics, the traditional ads, you know the slam ads, big tv spends and super pacs. ashley: your father put slam ads out. >> they're conventional, tv spots on major tv networks and they're not working. look how much money jeb has attributed to it and how much we've put into it, which is nothing, where we are in the polls compared to him. politics have changed because of this race. ashley: it's been fascinating. what is the one major hurdle or obstacle that your father faces? >> i don't know, i think he's the front runner by a lot. i'm proud of him and proud to be his son and what he's accomplished. he's an amazing man and would do an incredible job for his country. i'm not sure what his objectcles, probably the fact he's not establishment and doesn't come out of the washington guard and doesn't have the 200 old buddies sitting around the table where everybody has done favors for one another the last 30 years and that's probably the biggest

knock against him, you know, in this race, but at the same time i think it's going to be the first election where the american people actually decide who the commander-in-chief are and i think a lot of people including myself and my generation are kind of fed up with that system. ashley: he's certainly resonating, eric, thank you. >> nice to be here. ashley: let's stay on politics and move onto the democrat side. bernie sanders in a poll with a huge lead over hillary clinton in new hampshire, 66 to 33%, oh, yeah, martin o'malley, 1%. mary kissel here, and it's bernie sander's home turf and i look at that one gasping, a little bit. that's a huge lead. >> give the hillary camp should be worried. give him his due. he's socialist, and when he means national health care and sickle pair for all, and means it when he talks tax rates where they were, 90% or around

that area, he means it. when he talks about taking over wall street and breaking up the banks, he means it. he doesn't have to attack hillary to go after hillary in the race. and look at her past, and 13 hours about benghazi. bernie is benefitting from hillary and her record and questions about her record as he is from his genuine views, where he wants to take the country. ashley: he plays well in new hampshire by some. 60% of the latest poll. how does he play across the country? does hillary take the lead? >> i thought you interview with mr. trump's son was interesting. comparing bernie sanders to-- bernie trump-- bernie sanders to drop and bernie beats trump by 15 points. ashley: is that right? millennials looking for free stuff, free education and--

>> i think the american public like to toy around with people who have no experience in politics, but usually they turn towards people who do have experience. ashley: in the end. >> in the end. fascinating, mary. looks like another rough day for the market. stocks have been moving in lockstep with oil. another fresh 12-year low. the dow up 264 points, better than earlier. down some 300 or more points. look at the yield on 10-year treasury bond and that's a flight to safety as the yield comes down, the prices go up. it looks like we've seen a big pop from netflix at the open. but the selloff is taking the steam out of it. but numbers for netflix in case you missed it. >> more than 4 million are

overseas and its total customer base is now 75 million. however, growth in the u.s., that missed targets and quarterly profits fell sharply because of the international expansion and expanding and producing and acquiring new content. still, netflix streamers, this is unbelievable. we're watching more than an hour and a half of netflix per that each day. ashley: at home or at work? >> home, ashley. and they should look, look at that, a nice big ask in a down day. that's the level right now. and also, a brutal winter storm, tens of millions of american in boston and the ohio valley hit with a huge storm this early. it's windy and a strong and slow moving storm that could dump as much as a foot and a half of snow in certain areas. so, brace yourself. ashley: i'm ready. >> for winter. ashley: the shovel is out.

>> get the bread, get the milk, get the eggs, we'll be fine. >> a conspiracy by the supermarkets. and saudi arabia warning that iran will be up to no good now that the sanctions have been lifted. and zuhdi said the same thing. he's up next. feel a cold coming on? new zicam cold remedy nasal swabs shorten colds with a snap, and reduce symptom severity by 45%. shorten your cold with a snap, with zicam.

>> all right, no doubt about it, ahead of the opening bell, stocks are going to be down off 272 points on the futures board. and oil down 28 bucks at 27.80. they're moving in lock step and that means we will definitely be starting this day on a lower, a much lower level. all right, the question is ibm, what are they going to be doing? the closing bell 128, and 120, a big selloff. another earnings report from big blue, gave pretty weak guidance and ibm alone will put a drag on the dow.

apple, 94 where that stock will open or thereabouts, showing 95.15. it closed yesterday at 96.66. so it's going to be a rough day on the market, we'll follow it every step of the way. to iraq, satellite images confirming isis has destroyed that oldest christian heritage site. a 1400-year-old monastery. >> that's right, it's a monastery on a hill at mosul, it was built in 590. ashley: look at that. >> before and after, what they saw was the monastery, not in use, but a historic site and it was destroyed and bulldozers and this was a 1400-year-old monastery. isis ato being and this-- >> it's horrible. saudi arabia's minister saying billions of dollars that flow into the country from the

lifting of sanctions should, quote, worry everybody. with me now from the american islam islamic for democracy, zuhdi jasser. saudi arabia says with all the money now available to iran, they'll get up to what they call nefarious activities. like what? >> anybody watching the region, they're stating the obvious. look at syria, iran has been funding the assad regime against the people and emboldening this in the conflicts and prop up anti-western, anti-american, anti-saudi and the regimes aren't necessarily in the business of stopping isis he they want to stop any revolution in syria. that's just in the region. as americans we should look at

the saudis wrote the book on the regime that spread their ideas around the world. all terror has been sunni terror. the reason we haven't had shia terror, it's not because they're moderate. and you left those, the flood gate of terror will not only be from there. ashley: it's interesting, because really to the outside world saudi arabia actually said it welcomed the iran deal if indeed there were strong inspections, the regime of the administrations were tough and carried out. i cannot believe in private me this were happy about it at all? . no, they've always relied on the fact that they had america and the west in their back pocket. and the saudies are spreading ideas that were anti-american and anti-israel, they've never taken people from their boats and now they see the

normalization of iran, hey, they're no longer there, an isolated saudi arabia that feels on ritz-- its own is as dangerous as an iran unleashed. ashley: thank you very much. >> thanks, ashley. ashley: hollywood crusader leonardo dicaprio slamming an oil conspiracy. you'll hear about it after the break. i use what's already inside me to reach my goals. so i liked when my doctor told me

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see car insurance in a whole new light. liberty mutual insurance. >> leonardo dicaprio going green and blasting big oil in davos and even mentioning climate change conspiracy. listen to this. >> we simply cannot afford to allow the corporate greed of the coal, oil, and gas industries to determine the future of humanity. those entities with a financial interest in preserving this destructive system has denied and even covered up the evidence of our changing climate enough is enough. you know better, the world knows better. history will place the blame for a devastation squarely at their feet. ashley: this is a guy makes a living pretending to be someone else and right now pretending

to be a climate expert, mary kissel. >> did he get hit on the head filming "the revenant". ashley: hitting his head not ducking low enough getting off the jet. the fracking has lower costs, boosts the economy, reducing our independence on middle east oil. >> i'm all for solar and wind and all of those things when they're economic and can compete. remember, things like. ashley: we're not close to that. >> we're not close to that. natural gas was supposed to be the good energy source because it was cleaner now the left didn't like it. who suffers? >> the poor people, a guy who leonardo dicaprio thinks he's helping. ashley: it's hypocritical because when he was filming his movie, there are reports that he took a jet for a global warming climate. >> at the going to ask tom

stire who backs large portions of the democratic party and made his money on carbon based fuel, is he going to give up the money. ashley: a paid hollywood actor talking about greed. that's the irony. and take a look at facebook, down 2% in the premarket. a lot of stocks are going to be struggle. amazon stock of the year beaten down this year, down another 2% as well. before we get to the opening bell, perhaps more in fact. take a look at twitter, struggling, could hit a new low testing $16 a share level. we'll have it all for you. opening bell is next. this weeks btv spotlight features

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we were in a german dance group. i wore lederhosen. so i just started poking around on ancestry. then, i decided to have my dna tested through ancestry dna. it turns out i'm scottish. so, i traded in my lederhosen for a kilt.

>> i think he's already won. even if he didn't win, he's already won in that he's changed the face of politics forever. it's shown you don't have to be the old guard establishment to make a mark on the country. ashley: that, by the way, was eric trump at the top of the hour. we start at 9 a.m. every day. they're down at the new york stock exchange and there they are clapping away, yea, another session is beginning, but it's going to be a tough beginning. we saw tough trading in asia,

all moving down below $28 level. and lock step shall the markets are struggling and of course, china continues to be a worry and right now, safe haven is the way to go. the 10-year treasury bond under 2%, 1.99. we're down 50 points. at one point the futures said we'd lose 300 points when we got going. coming back at 65. the dow 30, we have some green on the screen there, but look for ibm, it's expected to be the biggest loser and it is. a sea of red. we have caterpillar, travelers, united health green, but the drag on the dow, and guidance, struggling as it tries to transition to cloud computing. let's bring in adam shapiro, jo

ling kent, scott shellady and shah galani who is back from the hamptons. on this program you told stuart varney that you expected to see 15 on the dow before 18. and stuart said you were consistently wrong. here we are at 15-8. we're there on the dow. where do we go from here? many i'm giving you props and saying well done. >> thank you. unfortunately, i think we're going lower. the markets today are weak and depending how they close, they could get weaker. there's nothing fundamentally strong to hold up the markets. all of the major markets are on the down trend and that includes commodities, it includes currencies, so, there's really no part out there and i think they've lost their way lieu multi-if i am markets before we see capitulation. it's dangerous out there. ashley: dangerous out there. scott, will let me bring you,

this is a signal to go another leg lower, weak in bear market. >> yeah, it feels like it for sure, number one and we got in extra early to call around the world to see what really was the main reason for the selloff. it doesn't matter if you talk about oil or talk about stocks. there really isn't a good fundamental reason, except for one big thing. the mentality of buy the dip is out the markets right now. when you say come back for the rally. we have a lot of buyers and now they're gone and they're not coming back soon. i agree, that's why the market feels heavy and sell the rallies instead of buy the dip. that's the big change rather than fundamental-wise. >> is that the difference between the bull and the bear market? and the bull market, you can buy on the dip. in the bear market, you do that, you're going to lose. >> yeah, that's one of the big differences. another one is, we can't have all-time record highs in the stock market and not have our

economy do better than 2.2 gdp. we've put people to work, but they're not making anything. slowly, but surely, the world has woken up. yes, we've got the levels, but we're not making anything, nothing is better except for the prices and maybe something has got to give. >> we've seen gold up, joe, so much is made of china, is this a china story or part of the puzzle? >> some analysts are saying it's priced in already. there's uncertainty whether the bank in china is going to inject more capital into the market. they did it on monday our time. we'll see what happens with the gdp number and everyone knows everyone is skeptical of it. maybe the growth is closer to 5% than 6-8, 6-9. >> is china a ponzi scheme? >> yeah, it's a ponzi scheme. look at the real world, what's happening here, it's 200 million pulled out of the stock market by pensions, so there's a huge amount of money that's

sitting on the sides. at some point it will come back in. and disney, not of much for st"star wars," you want to see what's happening with the global economy. $57.99 within the last five minutes and ibm, you talked about that, hit a 52-week low. 118 bucks. ibm is a story to look at. how much it's dragging on the dow. you had a missed revenue down 8 and a half% and looking ahead though the outlook that's dragging the stock this morning, and the question, yes, they're competing in cloud and doesn't necessarily make up for hardware and software. >> that's a good point. a five year low on ibm. is this a story of ibm trying to change strategy and its business model more than the economy? >> yes, it starts off as an ibm story and ends up being the way the markets are falling on top of ibm. the stock, if you look at it from the graphic point of view, it looks like the model should be this is the company that

fell out of bed and can't get up. it hasn't woken up to the realities and it's tried with cloud computing and it hasn't captured any meaningful market share. >> the realities of the new market. the market was one you had the inflated easy money. central banks and you had belief that the brics, and brazil and russia. look at brazil, the economy is in a shambles, will that come back? >> a lot will come back, but it's going to take time. it's capital flight especially out of the emerging markets and another thing weighing on the markets globally, we saw in 1998. if china continues to fall, i believe it will. emerging markets will crumble and we'll see this go around the world. and there's nothing there holding it up and it has a lot further to go on the down side. let me bring in scott to talk about oil. this is a big story. the international agency said this, scott.

unless something changes, the oil market could very well drown in oversupply. that's the bottom line here. so, we could see low oil for quite some time. >> you're exactly right. that's the big story. the plunge in oil prices is kind of a story, but the real story, just like in interest rates. is lower for longer. and that's going to be the new story here, so, i also think that a big, big culprit has been how the central banks arounded world in an effort to get themselves out of their own problems have been cutting or devaluing the currency and makes the dollar a lot stronger, so this is really, if you pull away everything, a dollar story affecting oil and then the supply on top of it, that's the big story. >> quickly, some depressing numbers, the dow at the lowest point and the lowest since last august when we had the selloff because of the big problems. and s&p down to the lowest point since october of 2014. the selloff we expected is very much here. let me ask you quickly, you

tell your clients, go 100% cash and curl up in the fetal position and hope for better days? >> we've been out most everything. put in stops in, and stopped out of everything, maybe one or two long positions. ashley: what are you doing? >> we're substantially short. ashley: we're in baxter, one or two pharmaceuticals, that's it. foundation, medicine that we like, and that's sold off and love it where it is, but that's about it. everything else, we got taken out of, we're happy we're out of it. we're short massively, short oil, and china and a host of companies and happy with then. >> when do you come back in? >> we let the markets tell us where to get back in. when i see this, this selloff, and see capitulation selloff and then maybe dipping our toes in. ashley: you're bearish? >> very bearish, no point trying to bottom fish. >> what's the level, jump in back in 14,000, 14-5, at this point it's hard to tell.

i would have said 15,000, but right now 15,000 is easily broken and we could go down to 14 or 13,000, no telling. this market could easily have drops from the highs, 30, 40, 50%. ashley: to your point. >> things are that dangerous. ashley: you've been predicting this all along and we listen to you carefully. we're happy about what you're saying. all right, listen, the largest regulatory penalty in goldman sachs history and as surprising, not surprising took a huge bite out of the profits on that. let's go to know elk nicole down at nyse. nicole: and that hit goldman sachs in the latest quarter at least in part. the stock is down 1/2 a percent. this was a $220 stock last summer and they come out 55%. you mentioned the regulatory penalty. and that took a toll. they've reached a settlement of $5 billion with the justice department. weak commodities market hit

them hard and even trading in plain vanilla stocks, new low here for goldman sachs. ashley: all right. nicole, thank you very much. let's take a look at netflix, we thought it would be one of the ones. now it's a third of a percent. they're signing up more people overseas and seemed to get the investors excited. it's a tough environment. jo. but netflix is having positive things to say. >> they're saying their global expansion is doing gang busters and doing well. you can't forget the u.s. subscribers growth because that's where they make the most money and that growth rate is slowing down and you have to pay close attention to it. the outlook for the first quarter, 1.75 million u.s. subscribers and that's a miss if they even hit that and the 2.28 million. they're putting the prices up, right? >> exactly, if you've seen it, and have the changes in the market facing increasing

competition from amazon prime and hulu. and they're trying to coalesce and try to fight netflix. do you like netflix? >> i like netflix a lot lower. as a franchise, it's fabulous, but it's going to increase their debt load. i think as they become more of a studio, that's going to leverage themselves to the debt markets and they're going to have problems there. >> it's 107.24. you had a he-- you'd like to see it lower. >> 80, 85, i'm in. >> it could get there if the market continues down. jo: after doubling last year and 10%, it's possible. ashley: to talk about the price increase, going from 8.99 to 9.99. jo: i believe. ashley: some are grandfathered in at 7.99. >> that won't last much longer. >> that will tick up. . ashley: it's a pretty good value. >> i think it's a great value and service, as a franchise, it's fabulous, best on the planet, but it's not immune to

the global markets weighing on it and it's not immune to the debt and not immune to the expansion plans. >> you can watch, okay, 9.99 doesn't sound like a lot, but you can get hulu for free if you're willing to watch commercials. you know what, i get hulu for free why netflix? >> what about scott shellady, i think he binge watches a lot of netflix, i think you do, i don't know why. >> you know, here is the deal. you've kind of got it right there. we have problems internally and problems externally and a lot of stocks we're talking about you will get better prices so we're not here to pick a bottom. at some point in time, when you finally feel sick to your stomach and see market capitulation we haven't seen any by any means, i'm willing to invest here and be an investor and not a trader and feather my buy orders in. you can say i like netflix, absolutely, but i agree, you're

going to get everything in a cheaper price. you just have to wait for capitulation. ashley: since the beginning of this year which has been tough for the markets. one thing we've heard from traders, yes, there's a big selloff, but it's orderly, there's no panic, no charging to the exit. is that still true? >> yes, that's still true and the reason we can say that, like i said earlier. we can't be talking about 18,000 on the dow and all of these people going back to work and we're not making anything. seven years of 0% interest rates and still don't have inflation and a fed that wants to do policy on the back of how many people they put back to work and not inflation, theres a he -- there's no inflation. making the dollar stronger and until the problem is over, we're not seeing capitulation. >> thank you, scott. gopro and twitter, both are struggling mightily. and they should have a camera attached to their stocks so you can get a view as it goes.

and adam, these two stocks are struggling. >> they have struggled especially twitter. twitter is trying to figure out what it's going to be and people were outraged when they talked about 10 #,000 characters. when you try to find winners today, delta airlines is trading up today. >> low oil. >> remember, they have to buy the-- disstill it for the jet fuel. ment, but the losers, since the ten minutes, caterpillar another 52-week low. twitter, you're the tech genius, twitter, they'll turn it around? . jo: twitter will face scrutiny on february 10th when they release earnings, there's a lot of pressure on jack dorsey to see if he can actually create more users. ashley: and jack dorsey, jo-- >> there's a great period there since he retook over as the ceo, but that's waning. 300 million of monthly active users is not serious growth when you're facing serious

competition by snapchat and continue to sustain and google shutting down a lot of the social media, but focusing on what works. ashley: shah do you twitter in the hamptons? >> i don't twitter at all. ashley: why? >> i think the stock is just a waste. ashley: scott, come on, yes. >> yeah, you know what? twitter is valuable to somebody else. twitter is not valuable to itself on its own. that's going to have to be purchased. number two, gopro, four words, it's just a camera. and that's why it's in freefall. ashley: a one trick pony. shah, gopro. >> this is what we've said all along. it's got competition all over the place. but as far as the delta being up and some of the stocks, the airline stocks, a little bit of a boost in the days and weeks ahead because their hedges, oil hedges betting that oil was going to rise are coming off and be greater beneficiary to falling oil prices and that's a

reason that delta is up today. ashley: let's look at the big board, off 250 points, we were threatening 300 a couple of minutes ago. a rough start to the day and no big surprise we knew it because of what happened in asia and oil down at let me see here, 27.58, how low that go? we have increasing number of people saying at least down to 25 bucks. where is the bottom on oil? we'll have to wait and see, but we all know that the most important part of the day is in the last hour, the las half hour, shah could we see this go further down or do we have a little bit of a comeback? >> every time we've tried to rally and had a couple of days when the market as strong and powerful. it's faded into the close and this is a worrisome sign. at the end of the day the investors don't want to stick around for the next day, they're not capitulating, they want out and to the sidelines because they don't trust the market. if we see that today we have a lot more to go on the down

side. . ashley: we talked about ibm, 50 points, disappointed with guidance and earnings and that's not helping at all. big blue, a big drag on the dow today. scott, will et -- let me bring you back in. is this a good thing, flushing out of the market and getting back to fair value and all of this once the dust settles? >> yeah, it is. it's going to be healthy for the market ultimately, it wasn't healthy with the free fiat money out there that gave us some valuations in the first place, now, yeah, we're getting back to reality and some of these fees are going to come in and we're starting to see value the lower we go here and could be healthy and take off. that's good for the market. because anything that goes straight up and buys the dips, that's not good psychology either. once we get through, it will be getting in. and the retail was getting in 17-5 and looking for 18 and now probably smarting. jo: looking at ibm. as the company tries to

redefine. a strong bite out of the company, ibm is not alone here. it's an ongoing issue we talked through earnings last year and we may continue to see it. ashley: and jo, the dollar is a big story here. jo: the business is overseas and talking a serious cut here. >> that's going to hit companies, too, like apple, 16, 18% of their revenue from china. kick, a question for you, in newmont mining, if we see a selloff, why would a mining company be doing well? >> i think there's bottom fishing. things that have been beaten the most. commodities have been pummelled. as a trader, i wouldn't mind throwing some money at some stocks that have been so beaten up in the mining sector and commodities and industries and interior sectors, they've been so beaten up, any jump would be 5, 10% higher.

but i don't want to. ashley: a break from the markets, we'll look at the dow off 233 points at this hour. a top inspector general says that hillary clinton's home server, home brew server, if you like, contained intelligence from the government's most secretive and highly classified programs. all rise, judge andrew napolitano is here. you've been following this from the get-go judge. here we have what we understand to be the very very most secretive e-mails, above top level, found on hillary clinton's private server in chappaqua. >> the level is special access program, acronym sap, it contains the most secretive that the government has and does not come to her in an e-mail. she must purposefully open it.

she knows what's in there. names of human intelligence on the ground, moles, people who work for two governments. block ops programs that government participated in that the government will eventually deny. ashley: this was found on her home server? >> several dozen of these were found on her home server. now, what does this do legally? >> right. >> this is a rare area of the law for which one can be prosecuted without the government showing intent and without the government showing harm. the government only needs to show the negligent maintenance of this information. the evidence of her negligence is now overwhelming. we're talking about 1200 e-mails. ashley: 1340 e-mails at last count designated as classified. >> in the top secret or

confidential category, of which, two dozen are now in this s-a-p category. is that a game changer? she's argued from the very beginning and her staff said, look, it wasn't classified at the time. how can you argue that with a sap where you have to go through a special protocol in order to access it? >> she can't answer that. and she probably won't answer that. and when she says she never sent or received anything marked class fight, it's a word game. nothing is marked classified. it's marked confidential, secret, top secret, or sap. ashley: if it's a sap, you have to go through a special process in order to access that information. >> correct. ashley: they cannot deny that. >> even if it's not marked sap, the essence of what's in there is what puts it in this category, not some magic marking on the page. now, take a step back to general petraeus. ashley: yes. >> who's case is still in the news and now the government wants to take one of his stars

away, which reduces his pension. he was prosecuted for keeping loose leafs of his diary, backed up with secret documents, in a desk drawer, unlocked in his house, guarded, because in the house he had a friend who also had a security clearance, but not the high level security clearance that he did. this is a tiny, tiny fraction of the evidence against mrs. clinton and it was sufficient to prosecute a four-star general who was the head of the cia. ashley: what strikes me, what you've said on the s-a-p, thises information about moles, people who are helping the u.s. government, that may be actually of officially working for another government. >> yes. ashley: she's exposing them and threatening their life by being so negligent with the use of these e-mails, by having them on the home server and these names are revealed, these people are in big trouble. >> absolutely, now, many of the e-mails that she received, she

forwarded to her friend sid blumenthal, not-- he was hacked by romanian intelligence two of them serving jail time for hacking. and we don't know what of hers was taken from him that was hacked. in the universe of what she had, the sensitive material that the government had, she signed the same oath that general pate' petraeus signed, swearing to maintain secrets and secrets and keep them-- >> does this increase the odds of indictment? >> yes, it increases the odds of recommendation for the indictment from the fbi. what they do is in the politics of this. she's in the hands of very,

very serious law enforcement professionals who don't care about politics. ashley: judge, thank you. appreciate it. let's check the markets, take a look at the dow 30, telling you all morning that the ibm is the biggest drag on the dow taking off at least 50 points away from the dow and there you have it, the ibm off some, well, 5, 5 1/2 points, down to 122.61. caterpillar also down, these are the biggest losers, chevron no big surprise, the oil company, dupont, you name it, it's a sea of red, it looks like moscow on may day, all red. verizon at the top there barely lower, and that pretty much tells the story. the s&p 500, by the way, breaking friday's low, hitting the lowest level since october much 2014. we're down more than 30 points at 1850. down 1 1/2%. oil, by the way, as we know, big story, well under $28 a barrel now, down almost a dollar, down 3 1/3%. as we mentioned before, ibm

struggling to reinvent itself, if you like, down, taking off more than 50 points from the dow. so that's a huge drag today as well. new lows talking of which, for gopro, twitter, square. there you go. twitter now under $16 at 1595 and square, isn't that jack dorsey's other. jo: yes and publicly traded company now. ashley: yes indeed. netflix strong global growth we hear, we thought it might be one of the bright spots, so much for that. down 102.52, shah galani says i'll jump in when it hits what, 85. >> 85. ashley: let's turn to politics, donald trump getting the endorsement of sarah palin and our in exguest calls for donald trump to jump out of the race. and david jolly coming here congressman thank you for being here. >> i appreciate.

ashley: we'll talk about donald first, do you feel the same way. >> he had a great day the endorsement of sarah palin, folks who identify themselves as tea party to look at donald trump in the past. ashley: why is that resonating? >> i think he's speaking truly of the anger of the american people you look at mounting debt and our security and you're angry perhaps you see a washington not doing more about the problems we face. donald trump is articulating the measure of that anger. ashley: i want to change gears. a motion that you're involved with, basically you want to stop lawmakers, legislators from having to go to fund raise, is that right? >> that's right. this is different than campaign finance reform. why are we angry, why is donald trump resonating? because the congress is not attending to the priorities we have. we don't have have long-term

tax reform and debt and security issues. i think the american people will be angry because congress spends 20 to 30 hours to raise money. >> that's their full-time job and law making on the side. >> we have look at a slide from a package to minor of congress, they spend four hours on the phone out of their hoves, fund raising and two hours at the job. ashley: is this how the founding fathers envision things, that money was the most important aspect of everything that you do? >> listen, my legislation says no member of congress can directly solicit a contribution, two things we accomplish, get back to work and rhesus spendingses o-- spending.

the i'm trying to lead a movement when the country learned of insider trading four years ago, congress had to pass the rules. we passed the stock act. let's change the rules. ashley: if that's the way the system is set up. how optimistic are you for support for this and get it enacted? >> i need the help of the american people. if we create a quiet anger and outrage that members of congress are spending money and not doing their job, balance that with responsible leadership in washington. we can get it done. i'm not doing this to criticize my colleagues, they're fighting for their political future in the rules set before them. i'm trying to change the rules and do it respectfully. if we can have a congress that spends 40, 60 hours on the job and not raising money. ashley: we've run out of time. congressman jolly you're in a competitive race for marco

rubio's seat. >> i've sworn to have solicitation today, i'm not going to do it. ashley: we'll have more varney next. m..

ashley: second hour of "varney and company". the picture is worth a thousand words, triple digits sell-off and the sea of red. that is the dow 30. ibm bottom right-hand corner, the worst performing stock, and that takes 50 points of the dollar loan. the big blue as we say proving to be a big drag today. check oil, seems like we say this that every time second and another 12 year low, down 2725, down another 4 present dropping significantly in the last half hour down $1.21. s and p 500 breaking friday's low hitting its lowest level since october of 2014, down 1843, a 2%. let's look at the ten year,

people run to the treasury bonds for dear dear life, safety play, look at the yield on the kenya down 1.97, under 2%, the prices go up as the yields go down sharply. shah gilani, super bear, whatever you want to call him. not looking pretty. it is the glee. >> scott shellady in chicago, the mentality is out the window. it turned quite negative and another thing we don't focus on the ninth. as the market continues to fall and company stocks fall, $3 trillion over the last five years spent on buybacks is almost out the window now, don, wasted. that was part of the process stocks enjoy and that is gone and investors look at all that money, how it could have been put in and infrastructure put into operating improvement and is gone.

ashley: where do we go from here? we say you are a superbear, we have lower to go to flesh it out. >> there is nothing supporting the market. just look at commodities, gold, oil in particular, there is nothing there, very the demand for industrial metals and varied little demand for industrial materials, little demand for oil and energy and as supply increases and demand falls that way on the commodity sector. this is waiting on currency? this is weighing on high-yield debt, waiting on stocks. across different asset classes. ashley: stresses in the oil market-showing different facets like saudi arabia. >> the saudis and other governments have lowered the subsidies they give people on oil which is creating another wave down in demand and this is just beginning to filter into

the market. other countries where they produce, have long supplied their citizens at low market costs. they are beginning to reverse that but oil is separate from copper and other commodities. oil is also achieve political weapon and saudis are doing this intentionally. it could change. >> countries like indonesia or egypt which subsidize oil prices for their citizens, they are going to get a benefit from cheaper oil prices, they're going to recover quite a bit of revenue that might help in the long run. ashley: venezuela and russia. thank you very much. let's look at gun stocks, haven't talked about those in a while. as president obama talked about gun control we have seen done stocks go up, they are moving lower, smith and wesson off 81 points, these stocks up to this point of done very well.

>> since the president was inaugurated in 2009, over 900%, that said, last year, 2015, the fbi says we have a record number of background checks for people purchasing firearms and it just december there were 314,094 objects. it is not just dennis smith and wesson is down in december. we are down at a firing range and people buy guns. up tremendously, suffering a bit today. ashley: is their saturation point. >> and it is a narrow market. which were modest at all.

and dumping those stocks. >> this is even though the road down is pretty steep, it is orderly. volumes are high but it is not a panic or recapitulation. >> last week we receiving bigger volume on the downside than the upside and the market closing lower, tried to rally, these are not good science technically. ashley: amazon and facebook. >> that is where profits, people stuck it out and stuck with those stocks and did pretty well last year in those names, very few that their work, now they're going 9 need to get out, what can i sell that will not kill me? >> this week jeff bezos is down, personal wealth lost billions. the day he is down $1 billion. ashley: look at those big tech names on the screen. facebook, twitter, twitter has been struggling everyday.

they said they may play with 10,000 characters and everyone shouted no. >> those of us who can only think in the one 41 characters, don't have much to say. facebook has clobbered them and there are other new social media platform that are doing better. it isn't growing. that is the problem. ashley: jack dorsey has his hands full. just turned negative, 300 points on the dow. this is where we begin. we are down 220 ended celebrating a little bit, the s&p also down 1844, the nasdaq down more than 2% down, almost 100 points. sarah palin and -- endorsing donald trump. listen to this. >> ready for a commander-in-chief who will lead our warriors do their job and go kick isis -- are you ready to stump for trump? to be elected that these guys

all sounds kind of a angry is what we hear from the establishment. doggone right we are a greek, justifiably so. we are mad. we are not going to chill. it is time to drill baby drill, down. are you ready for the leader who will let you make america great again? things are going to change under president trump. ashley: doggone increase says sarah palin. does this help or hurt donald trump? >> it is like a flashback. i think donald trump is determined to win iowa and this will help him win iron was end story. he has been brilliant. ashley: not to put him past ted cruz? >> that is the game plan. look what he has done recently. they went after him on the birth issue with this calculated way, talked about goldman sachs and if you look at the most recent politics in iowa, trump is

coming back and he is on top in a couple holes. i think -- no one thought he was going to be a good politician. this is a genius. the last two three things he has done have been incredibly powerful impact phalange sarah palin is one of those. ashley: she is a tea party conservative. also female and donald trump needs the female vote. >> yes, though polls show it is not terrible on the female vote, that is not telling him. donald trump is doing better than expected in almost every demographic. it is amazing. >> the trump white house with gold columns. >> pictures of the donald everywhere. that is his decorating m o. >> don't underestimate the electorate. let's go to hillary clinton, the toughens the general says clinton's home e-mail server in new york contained intelligence

from the government's most secretive and highly classified programs. national security analyst kt mcfarland is here, thank you so much. with each new revelation i find myself saying i you kidding me? we are talking about, we talked about this in the last hour. the s a p which stands for what? secret action program. it is above top secret and they were found among a random sample taken from her private e-mail server. the danger here is these critics those names of people that are working for the u.s. government around the world, may be covertly are overtly and their lives could be in danger. >> if not already. ashley: when she claims -- >> i think hillary clinton won't be the democrat nominee. ashley: because of this. >> and several other things that

not just e-mails and the classification of them. people don't understand what that means. the next criminal, the criminal investigation, the fbi is doing two investigations, one about the classification level of the e-mails, was a negligent, did she handle information, put things at risk, the other is the criminal investigation. did the clinton foundation get many? did bill clinton get big speech fees so they would have favorable consideration at the state department? was in a quid pro quo? was it corruption? was it a kick back? we'll understand government has individuals, political, correct. ashley: our people numb to this? are republicans on the witch hunt? >> no. the obama fbi. i think they say about general david petraeus we are not considering taking the third star way, that is a shot across the dollar at hillary because you can't do something like that to general david petraeus if you don't want to. ashley: we will see prosecution.

energy stocks hitting all-time lows. adam: look at the list, it is down today. this is a 52 week low, murphy down, counsel energy down, you know these names, this is a 52 week low, marathon oil corp. down something like 6.5%, diamond offshore drilling, we were talking about that the other day, the number of rigs being pulled out of service, diamond is down, candor morgan, transition, conoco phillips, everybody down. one of the things they were talking about in the energy discussions is which one, not necessarily bigger companies but smaller companies, which was having a cash on the side. the edge funds are lined up, waiting to come in to buy up companies at bargain basement prices out of bankruptcy and there is expectation of 50% of the shale producers going bankrupt. >> that is the problem. so much money went to this industry that no one wants to

pull the plug. as long as they continue to produce oil they are continuing to receive cash flow keeping them alive. i've been through two of these oil cycles, they will hold on. the hedge funds are already there. i know which fund players already in this business and they don't want to see this thing collapse. >> they are producing oil to make interest payments at some point. ashley: sine die arabia's strategy is working, to keep pumping shale producers can't exist anymore. >> the economist last week rent a peace which showed the actual production cost of every country and so forth, saudi arabia, $15 a barrel. they can survive and there is no floor under this because extra barrels of oil cost money at this point. ashley: we know we win at the

pumps. >> destabilizing is that this day. ashley: the dow was off 290 points. and we knew it was going to be this way. we continue to struggle. more varney and we are following the markets after this.

ashley: let's continue to track what is going on on wall street and market from the world, you're well down, asia down overnight and that is when the dollar is doing. we are now all off 311 points. there is your gal 30 in the bottom right hand corner, chevron with oil prices falling as the worst performer followed by ibm which has had a rough go in its last report giving weaker than expected guidance. ibm as you concede down $5, that is a 50 point drag on the dow alone so big blue, big drag, big

red today. royal dutch shell struggling with oil at $36.71 down 4% announcing today more big job layoffs, and 10,000 people around worlds, bp doing the same just recently. that is the reality of what these oil prices are doing. take a look at some of these big names taking a hit. on the tax side facebook up 3.5%, amazon down 3%, alphabet, google down 2%, netflix too, we thought they might be a bright spot today with their experience overseas and the increase in subscribers but they are up 5%. starbucks if you are thinking of getting a couple of coffee they are down 3% as well, one of those days, very far upstream on a day like this. back to oil there is a warning that the world could be drowning in it. >> from the international energy agency the actual report and the u.s. report, in 18 formation administration but here's what they are saying globally.

oil supply could exceed demand by 1.5 million barrels a day in 2016, the pace of stock building eases in the second half of the year supply from non-opec producers falls, they said non-opec producers down 600,000 barrels a day, unless something changes and this has ever wants to, the oil market could drown in oversupply. the answer to our question is an emphatic yes, it could go lower. ashley: nothing has changed and we talked about saudi arabia pumping oil, opec hasn't been trying to put pressure on smaller producers and is working but also we know what is going on in china, 12% consumers consume 12% of crude, that economy is struggling. i hate to use the term perfect storm but it is for oil. >> will get worse because iran production will be ramping up, probably not going to come on stream as fast as people are expecting.

a couple hundred thousand barrels a day coming out of iran in this estimate. it is sort of a perfect storm. demand is increasing. take a deep breath and say it is not like nobody wants oil anymore. growth is the biggest market has come down and it is not enough to absorb the new supply. if we are in the midst of a huge cycle, we side in the 80s and see it now. oil is a self correcting mechanism, look what is happening, suv sales through the roof because gasoline prices of come down. we will see demand begin to pick up. neil: bolognese to trade oil and always called the widowmaker. >> very tough business because there are these things that happen like the saudis come out tomorrow. and everyone who is short is going to get killed so is very unpredictable. in the short run, long term it

is not so unpredictable. >> getting on to netflix, at what point did a big oil companies start thinking about cutting dividends? >> i don't think soon. it has to go further is than this. what they are cutting as long-term investments, no one is going to go into big deepwater places that are extremely high costs at this point because those are available in the future. it is too risky proposition. the choices they are making probably not dividends. ashley: a big story, let's take netflix, a huge increase in international subscribers, going all over the world. we thought it would be good enough news to push it higher today but it is tough out there. eric, what is going on with netflix? >> they have really good sales internationally but domestically they really didn't do that well.

the stock to me is overvalued, in terms of the competition that they could face, the fact that no one says they are experts in content, who made them the self-appointed expert. if you try to say you can figure out hollywood there is a graveyard i can point you to. there are a lot of challenges for them to really grow but investors are really thinking they could continue this growth curve and i am a bit skeptical frankly. ashley: are you skeptical on netflix? they are raising their prices never a good thing but a popular service, people say i will pay an extra buck. >> what happens at a moment like this with uncertainty you have a profit in this sector you kind of thing i don't understand what the game plan is. it has been and predictably

successful. so i think i know people in this industry and they don't know what next year will look like so the pieces are moving very quickly. and certainty is not a good thing to have right now. ashley: we will take a break, dow at special lows, the dow off 344 points, we will take a break, more varney after this. you pay your car insurance

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story down 2733. the international energy agency will be releasing its latest oil numbers tomorrow said that could have a big impact, we see any build up again in oil reserves. now this, hillary clinton slamming police said the democratic debate. have a listen. >> there needs to be a concerted effort to address the systemic racism in our criminal justice system. that requires a very clear agenda for retraining police officers, looking at ways to end racial profiling. ashley: thanks for joining us. are ian l. instantly putting in a retraining program for your officers? >> not. my sympathy goes out to the survivors in the salt lake city

area, one of their finest in each of those places went down killed in a line of duty. you, democrat debate, i call it a minstrel show. and pack is for a moment, she is at an event sponsored by the congressional black caucus. mrs. bill clinton faces a black deficiency dilemma, she knows she has to drive the black vote to have any chance to win should she get the nomination. easiest way for her to do that at that minstrel show was to climb in bed with a black lives matter movement. the best way to get the black lives matter movement's support is to-the police. that is the easiest way but also the scummy its way. as for the criminal justice system is not inherently racist. there is no systemic discrimination in the criminal justice system and in fact the only training that needs to go on is mrs. bill clinton's understanding of why we need the police in the american ghetto because of failed liberal urban policies.

this criminal justice system protects black crime victims who we never hear about from these democrat candidates. also disproportionately affected, black people, by crime at the hands of black perpetrators so she needs to keep that in mind instead of bashing the criminal-justice system, she needs to understand that it protects black crime victims as well and does a great job of doing it. ashley: you don't buy the argument there is systemic racism in the justice system overall? >> not one bit. ashley: leave it right there. we are cutting this short, we have a huge market day today otherwise i would love to talk to you more and i hope you come back. thank you. let's get back to the markets, netflix, stock of the day going global, 75 million subscribers, more on that after the break.

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ashley: boy, big market selloff. here we go the dow off 346 points with just an hour into the session. we knew this was going to happen when we came in today because we saw the big selloff in china, europe moving significantly lower, the dow at 15,673 right now. let's take a look at oil. that has been a big story since day one since this year came into being on a very frustrated day of the year. oil. now down 27, 28. down another buck 18. down more than 4%. we give the oil inventory numbers tomorrow from the international energy agency. if there's anymore buildup in oil, we could that go way lower. now let's take a look at the ten-year. the treasury yield now well under 2%. 1.97%. that is a flight to safety. of course as the yields go down, the price goes up, that tells you something about the

sentiment in the market right now. let's bring in eric back in. eric, in a market like this, what do you tell your clients? douse put everything in cash and hide it under the mattress or what do you do? >> well, i think it really depends on what their goals are. i think long term, the companies that we -- that i certainly am supportive of and think highly of will do very well. but right now there's a big issue. i mean you have a market that frankly is a lot like a zoo that's let the animals out. the fed was the cage and right now the fed really has no power. it has no bullets. the volatility that they used to be able to control through mechanisms, they can't -- they're not going to do it anymore. they're not going to control the volatility. so we're staying -- we're going to continue to see crazy volatility. ashley: uh-huh. >> i think the market has a lot more to drop largely because of the risks that are inherent and that's going to be a risk for investors. ashley: so with that in mind,

let's talk about some of the stocks that you do like. let's begin with amazon. do you jump in now or wait for it to go down further if that's what you think? >> if you're a long-term investor, amazon has great stock. probably one of the true visionary leaders that's alive today who just think so really big. he's reimagined almost every industry. he is getting into almost every industry and succeeding at it. this is a company that in 10, 15 years could be 10x on what it's worth today. ashley: uh-huh. >> great company. great leader. ashley: you like it at this price? 550? >> again, i'm looking long term. i think when you really investing -- this is more of a long-term play. it really is. i think if you're risk adverse, i wouldn't touch anything right now because there's a lot more to drop. but long term absolutely. ashley: stuart varney will love you for this. you like microsoft? >> i do.

i do. and the largest reason for that is the cloud. what you have is this huge transition that's happening where products that they were under bomber -- and frankly one of the best things that's happened to microsoft is that steve bomber left. frankly i think he was horrible. you have now with this new leader someone who really gets the need to transition. they're transitioning well. you've got opportunity galore with microsoft. i think it has great potential in the future now. ashley: all right. 40 seconds left. the last one you picked was oracle. >> similar story. you have, again, legacy systems, they have great relationships with so many enterprise companies, and they were always visionaries in terms of the vision of the cloud. and now these companies that have to figure out how to transition to the cloud are trusting oracle to do it. they're growing like crazy.

the cloud is going to be their growth story over the next few years. i expect them to do very well from a stock perspective and certainly from a revenue standpoint. ashley: so what happens with oil, eric, if it falls below 27 bucks, which it's threatening to do now in the next several minutes it appears, what shadow does that cast over the markets? >> you know, i think there's two different diverging opinions. i think that ultimately it hurts. ashley: yeah. >> when it continues to go down that low. i really do. it's no different than when the economy -- or, excuse me, when the stock market goes down. as it continues to go down there be there's going to be a ripple effect in the economy. i think if we see the stock market stay at this level or go down further, these growth estimates of 2, 2.5% in the u.s., forget about it. i think you're going to see it get hit. so there's at these these types of implications.

ashley: thank you for joining us the dow now right off 400 points now off on the dow. with that said, take a look at the shares in netflix, the dow 400 points thereabouts. we thought netflix would be one of the bright spots today adding 5.5 million subscribers worldwide making that a total of 74.8 global members. sounds impressive. 43billion hours of streaming in 2015 up from 29 billion the year before. former google executive currently the founder joins us now. so let's talk about netflix. we've had people express two different views on the show already today. some saying you know what? it's limited. too much competition. other people saying, no, it has a good model and expanding around the world. what's your view. >> so my view is netflix olympics is very well positioned. what they have to do is bid for global rights for content. ashley: yeah. >> you see an opportunity that

really local players will have a hard time meeting and as netflix continues to add subscribers, what it has is the big pot of money for content acquisition. and you have an advantage with content creators. ashley: expanding abroad is great but it's not cheap. it's expensive. is it a while before they see the fruits of that? >> well, i think they're claiming 2017 until they see profits from international. but on the other hand the backs of popular shows and bidding on the rights but on the other hand big original investment in the programming and they've shod showed their ability to have very garb. ashley: and also put their prices up. which is a negative but will it hurt them at all? >> i think it will hurt them a little in the united states where competition is more extreme, internationally it's still a scare resort to get access to these shows like breaking bad. so i think internationally they have to -- in terms of covering the cost. but in the u.s. there's certainly to watch there

because they have increased content. ashley: they do. are you bullish? i i feel some of the companies have been dragging the market for so long and now the real story is coming out about the overall markets because the amazons and the facebook are struggling. >> yeah. look, at the end of the day the tech sector is going to flow with some of these market tides. but i will -- as you always know step back and say if the macrolong-term perspective as your colleague pointed out, amazon, linkedin, trip advisor, these all have sustained network effects with their businesses and customers and when you look at their overall growth opportunity, it's still tremendous long term. ashley: i'm interesting in what you think of apple and the developments of china and how important china is to apple& what that does to its bottom line. >> yeah. look, as with every player, china is the one thing that companies have the opportunity to get right and locked out of.

so for apple i think china is the last place where they need to win or succeed. so bull on apple. and i would say a long term bull on the companies that have long-term network effect. ashley: do you have faith in tim cook? >> i believe. he has proven himself to be a great thoughtful leader and takes it after jobs. ashley: thank you so much for joining us, again, on what are has a very tough day for the market. talking about the market, time for the sector report. jo ling kent just joined me right behind. what are you watching, jo? >> we're looking at the biggest laggers in the dow. looking at ibm, right here down 6.19 right now. shaving off along with some other companies, 53 points of the blue chip index. also looking at ibm -- excuse me chevron, boeing, destiny, exxon mobile, and apple. all of these are plunging. you can see red across the screen here. of course you see chevron and exxon mobile losing. why? because you have oil plunging down approaching that

27-dollar level but certainly ibm not looking good as the company tries to turn it around to cloud computing. ashley: just a sea of red. jo, we appreciate that. as we look at the dow now be it's off -- been down as much as that's where we are down 400 and also the s&p down 3% and the nasdaq as well down 3% at 4346, the price of oil continues to fall and stocks continue to fall right with it and we'll continue this stock fall off the biggest challenge for business today is not

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>> i'm nicole petallides with your fox business brief. the dow is down 400 points right now this second. down 384. 15,682. the s&p 500 down 49, the nasdaq down 23, all of the major averages down roughly 2.5% as we see a selloff in oil that leaves us to 12-year lows on the oil. dragging down all 30 dow components are red. ibm40 points to the downside for the dow. goldman sachs down 17 neck dow points and hitting new lows to both of those stocks. chevron also a lagger. who of the three actually reported their quarterly numbers. energy lows, you have diamond offshore, all to the downside hitting new lows. conical phillips hitting 8.5%. netflix is adding subscribers and seeing international

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starting at $38,950. ashley: well, if you're just joining us, that is the picture, dow off 382 points, been as much as 400 we knew this going into today that it

was going to be tough. big sell off in asia. same story in europe, world jitters about the global economy. the chinese slow down still euro focus and also the price of oil, which has dropped considerably, adam. and now threatening below 27 bucks. >> yeah. touched $27 and 3 cents 27 minutes ago. oil off 74% from its high and on its way continuing down. you saw we talked about the iea report. ashley: yeah, out tomorrow? >> knot the report in the united states, the local report comes out tomorrow, the report about the world drowning in oil and opec users like the united states that has fallen 600,000 barrels a day. ashley: full tilt. >> but the fact that our oil sector was getting crunched, which is the saudi arabia intent. ashley: that's what they've

been aimed at the get go, knock out on the small producers because they can handle these prices for a long time. >> we'll see. they just cut subsidies in saudi arabia. ashley: yeah. >> they control that country with a iron first. they execute people, chop their heads off and crucify them. how much longer can they cut subsidies and keep stability with an iron hand for them to have enough. ashley: oil continues to go lower. we may find out. all right, adam, thanks very much. let's get to politics. back to sarah palin endorsing donald trump. eric trump, his son was on the program earlier today. roll tape. >> she's got a great volcano with the evangelicals, no question a major following with a antiestablishment crowd and my father is in that same area. antiestablishment, antiwashington, look how they tried to take her down and has the same opposition from my father because he came out of nowhere, been a businessman his whole life and winning the presidency of the united states right now.

so -- in a certain way, they have that common thread. ashley: well, here's the question. did ted cruz miss out by not securing sarah palin's endorsement? wall street journal shelby holiday is here to talk about it. big victory for donald trump? >> well, yes. i would say it's not going to hurt him and people, you know, can debate the relevance and the influence of sarah palin. they have been for the past 24 hours. but i would say for donald trump, this wasn't so much about palin as it was for a few other factors that could really give him a boost. number one? huge point up on ted cruz. these guys have been duking it out in the media for the past few weeks. this was a move for donald trump to take a former ted cruz supporter, campaigner, make her a quote trumper and sticks it ahead to cruz weeks ahead of the iowa voting. and this doesn't appear to be so much trump supporters caucus as it does caucus goers to trump and big question heading into the primary is whether or not trump will actually vote.

so, you know, sarah palin appears to be speaking to the part of the iowa population that actually goes to caucus. ashley: does she still have a big following -- she was the tea party darling back in 2008. >> she does have a conservative base and speaking to people who would go caucus and don't know who they're supporting. another reason this helps trump is maybe she doesn't swing people to trump. but if she swings them away from cruz, that helps trump. because cruz is his biggest competition in that state and has longevity. this is essential for cruz. ashley: it's a tight race in iowa. >> in iowa. ashley: but trump is up big. >> much more than he needs -- ashley: that was my next question. yeah, if cruz loses iowa, that puts a major dent into him because going into new hampshire, trump has a big lead. >> exactly and you see these southern states looking to evangelicals and iowa to signal whether or not these are serious candidates. if he doesn't win iowa, people may discount him as -- they

may right him off right away. ashley: donald trump trying to appeal to the evangelicals down at liberty university. do you think he gained any traction there? >> well, i think a few things about liberty university and also we saw the iowa governor this week say don't vote for cruz. ashley: yeah. >> it just seems like donald trump is continuing to pile up the points against ted cruz. and as we've seen in the polls, that's his biggest competition. i also don't think you could pressure to pick a winner. donald trump is playing this card very well right now because they've chosen losers for the past couple of elections. ashley: since 2000. >> he's saying if you don't pick me, you're going to pick another loser. ashley: that's donald trump. >> may have something to do with it as well. ashley: shelby, thank you very much for being here. on a very busy market day so thanks for sticking around. let's take a look at the big board. the dow down 370 points, we'll see how it sticks around especially to the closing bell period. we'll see where we go from there.

meanwhile a state of emergency in michigan. flint water supply contaminated with led and here come the lawsuits. more varney next

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a barrel, we haven't had it at $27 or less since 2003. the dow is off 419 points. and of course there was the iea report the international energy agency that said the world could drowned in a oversupply of oil. now oil trading at below 27 bucks. the michigan water supply has been contaminated in flint, michigan. now the epa admits it should have acted more swiftly in addressing that issue. attorney emily is joining us. and what good is having an agency like the epa or the state agency if you have doctors telling them the water has high levels of led, blood tests show people have high levels of led and they ignore it? because that's what happened. >> exactly. and that's part of what's fueling the outrage. the irony here is that the city of flint has been

defending class action water lawsuits since 2011 and a whole new one in 2014. that is what prompted the city to take that big shift from purchasing treated water to untreated water. so instead of cutting coroners and saving costs, it resulted in everyone getting sick. and according to the epa. ashley: they moved the water supply from detroit to the flint river which they then didn't treat properly. we have to wrap up. where does this go? can you really sue the government for recovery? i have about ten seconds. >> the state of michigan enjoys government immunity when they're operating in their normal functions. you can argue that this is proprietary or might fall under sewage, and you can also argue the employees were grossly negligent, which would provide another exception here. ashley: all right, emily, thank you very much. sea of red, stocks down, oil down even more. varney after this in the regenerative medicine space. hart develops

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ashley: it is the third hour of "varney and company," we are tracking this market sell-off. we are down 442 points on the dow all 30 dow stocks are lower. we thought maybe a few the session woody johnson jeans. it and the big loser today. that stock taking to the points of of the dow. is your take on all this? >> it is a readjustment of world markets. i don't think people know whether readjustment should be. and i invested in stocks of years ago. and there was no consequence for

is that. america base the same. and we are having a hard time finding that price. ashley: in the bull market you could buy on dips knowing it would go about is this a bear market? he said there is a buy on dips right now. >> certainly feels like one. no one is buying when you go down. you don't see a bounce back, you usually see an acceleration in to the close of the day which is a terrible sign for the markets. there's no conviction right now and when you look at the united states we suppress financial volatility by a false rate. we need corporations to stick a because the government won't in an election year. spending is that four year low because a lot of the uncertainty. not a lot of things coming forward. ashley: are you getting a lot more calls these days? are they panicked?

how would you characterize it? >> like the great boxing referee, cover up in the clinches. here is the thing. if you look this doesn't help on a day-to-day but if you look at the s&p in 1986 it started the year at 238, over 1800 right now, eight times including the dip of the internet buzz and housing bust. that doesn't help when you are going day today but when you're looking long term it does, i like stocks that have a great financial yields. the automakers, and the company's recently, the outcome of the high yield and their position they will lot more companies and a high dividend stocks of at least you have something coming in while you are waiting for the market to normalize. ashley: stay right there if you could. charlie gasparino is in davos where the elite are talking about things while rome burns.

the selloff is related to the middle east. is that right? >> there is one reason markets might be selling off recently, but here is the big picture. oil is crashing coming down by $26 a barrel right now. from whenever the high was a couple weeks ago, 50, 26, more and half. that forced middle eastern sovran will funds to set liquidating u.s. stocks in a big way, that is what peak traders are saying here in davos and these of the top traders, when you walk around using major bankers here, that is what they're talking about, the sell-off is precipitated a large degree from a sell-off in middle east sovereign wealth and why are they selling off? to fund government. these are big government will funds, finance programs and projects and that is what we have. a couple things to look at. look at shares of twitter, twitter is held by several sovereign will funds and those

shares have crashed, they are crashing more than on a lousy earnings. and why you're out here it is the sovereign middle east and sovran will funds on the decline in oil and one of the big point, why did al-jazeera america close down. people are saying that is because the qatar government, they own that thing. when oil broke $30 a barrel al-jazeera america's fate was sealed and they've done. that is what i am hearing from people. that is the ripple effect of low oil, u.s. consumers benefit the we don't see the spending a lot of that money but there is a dislocation going on in stocks directly related to that. and there is a carryover effect, hedge funds don't want to be caught, they start liquidating to what is going on here so we have a messy marked on top of

the fact, the u.s. economy, seven years cycles, since we go below even allows the growth like we have right now we will have a real interesting issue particularly in time for the election. ashley: very quickly, you are among the world's leaders and movers and shakers, what are they saying about the state of the world economy and how oil is reflecting that? charles: listen. if you go into the propaganda that they put out in the left wing garbage that is in all these sessions who knows what type we are going to get out of that, not much but if you talk to these guys a lot of this is done in private in private meetings they're worried about the world economy, worried about china, worried about the impact of oil, this is interesting here. generally in past times when oil has plunged this much we have not gotten what spillover effect in the u.s. market. in the past was seen as a tax cut in the 1980s, u.s. stocks

rose, we are a different ball game, problems in china, the u.s. economy growing at a 2% clip and american consumers not spending the tax cut, they're worried about the economy, we don't get the gdp out of it, that is what people are talking about behind-the-scenes where they are talking about how to spend more money. ashley: back to the cocktail party and report back to us. thank you for taking time out to chat with us. let me go back to john layfield. interesting angle charlie had the some of these middle east and sovran will funds selling of their equities to try to shore up the money they're losing on oil. >> it is a great analysis by charlie, the point very well taken and that is the thing being missed in this, we talk about saudi arabia, below oil prices, they are not -- they need oil $100 a barrel to be able to pay off all the graft

and welfare they have to keep civil unrest, and iran is the same, and to reinvest in oil infrastructure in saudi arabia you also need toilet $100 a barrel, they won't be able to reinvest and when that starts going up to $40 now you will see the shell drillers in west texas and north dakota hopping back in keeping those prices down. these leasing countries are really in a massive bomb and and i am not sure they know what to do. ashley: until we get the rebalancing if you like of the oil markets will we continue to see this kind of volatility in the equity markets? >> i think we will until we see some type of bomb. oil, you have to find somewhere around the mid 20s, $21 a barrel is what it takes to bring a barrel of oil out in saudi arabia, cheapest in the world, we need 95 million barrels a

day, we have to be able to bring that out economically. we may dip below that but the point a has to settle on is the 96 million barrels of oil per day to be able to be brought on the ground somewhere at least in the mid to high 20s. ashley: thank you very much, we appreciate it. we will stick with this oil scene. oil prices we have been following slipping even further. >> back above 27 in the last five minutes. keep in mind this is the february contract which expires today, this is essentially this price for oil, not a future price given today's exploration. the march contract which is the next one up which we are trading tomorrow trading about $1 above what we see. it is a dollar even though it is not really up a dollar. that is down $1 and half and

that is moving in tandem. the american petroleum institute numbers are out today. reuters did a survey and found there is a build of 3 million extra barrels, that is downward pressure. positive on the bosnian side the imf chief economist saying he thinks stocks are overreacting to oil. that is one voice in the forest but we will see. ashley: what is the mood to, the sense, these are 12 year lows. what you picking up on the traders? >> one trader said can i get a bailout from janet yellen, would be 34, 35, i don't know where the bottom is. i don't think anybody knows. ashley: jeff flock, as always, thank you very much. the dow is down 422, and bring

back market, we are following this. and midafternoon to closing bell period, where do we go? do people get tempted to jump back in at some point? >> i think there are going to be buying opportunities that you have got to be very careful for sure. i am concerned, you are going to see what could be another 12% drop overall for the market. the market is like a zoo, the animals are out, the fed was the cage, the fed no longer is the cage, the capability to slow down, nor will they so volatility is going to run, you are going to see problems and that could spill over to the economy, that is my concern. we have really big problems.

ashley: they think the issues with china are overblown and the market's looking for an excuse to sell off? there have been complaints this market is overpriced and we needed a good flesh out? >> i don't buy that china argument anymore. this is a much bigger argument. sovereign funds are a piece of it. it is a dog traders and investors who are risk averse right now all and they are letting go of positions and not getting in where they traditionally would have gotten in and that creates another cycle so you get a downward win and that is what i think is happening more so than these arguments about china. that has been priced in. ashley: let me bring in jo lin kent, following developments. what has caught your eye? jo lin: i watching ibm shave off of the dow. it is not just a today story, this is a story going out into the next year or so. the outlook is not looking

terribly peachy, then you look at netflix, that brought back and cancel their earlier gains and the reason you see netflix dropping is people realize the u.s. growth is a problem. it is down 7% right now. we have seen tremendous growth internationally, prices going up, and building the next 50 million users, a very difficult thing to do plus all the money they spend on contests. you see the investors and traders reacting to that in no new digested way. ashley: i want to talk about earnings. we are in the earnings season and we have weak guidance from ibm justin in one. there have been others. how important is that in this equations as we see the market sell-off. is easy to beat the estimates because you shoot solo use and that the market but the guidance which is critical is not that great.

>> the fundamentals are not that great and that is a factor. i come back to my earlier position. the fundamentals are not that great. that is a peace but the bigger driving underlying force is risk of derision and cycles that come from that. ashley: i will leave it there, thank you so much. the dow off 36 points, we read down 400, 420 at one point, we will check these markets as the sell-off continues, the dow trading down 400. more varney right after this. iall across the state belthe economy is growing,day. with creative new business incentives,

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85 let's check the big board every couple minutes, we are seeing a sell-off, the dow, cute sell-off down 402 points. what is catching your eye? >> chevron, exxon mobile, we saw

chevron earlier, down 5.7%, you can see oil has broken below the $27 mark, this affects all the airliners airplanemakers, oil companies and all of us whose windup consuming. we see a dip of exxon not so bad, 3.5% compared to the rest, how does this trickle-down to consumers and we see earnings being affected, and how much tickets cost. ashley: i will jump in on these big oil stocks, they paid great dividends could be an opportunity. next against jason rockman joins us on the phone. it is a rough market out there, we get this when we come in this morning, where do we go from here? >> i really believe i have been talking this idea up, and the

oil driven market, everything is getting more interconnected from italy to china to all these different issues but oil is really driving the global market weathered as bonds, stocks, etc.. if oil keeps going down and honestly i would not be surprised to see a couple dollars of downside. if that happens that will mark a low and everyone should feel comfortable, in st. discounts and i would not be surprised to see more selling. ashley: what are you telling your clients when they call up and some are saying so, what you telling them? >> i'm trying to play psychologist and tell them that is not what is is a successful investors do. that has been proven time and again. successful investors have of plan which does not include panicking. is not timing the market. it is time in the market. that sounds boring and additional but it is really true. i also am a firm believer of

utilities. utilities to drill down into more granular conversation, utilities are classic defensive play in bear markets. i don't see a massive 2008 style 0 years this year but utilities are the place to be, they pay dividends, they are solid companies so i am recommending people look at that. ashley: is this good for the markets? is this something that was needed to flesh it out, however you want to say and get back to fundamentals? >> if it is a good thing i would say no. it is never that enjoyable to see the market go down 10% to 12% and a 15 day period. ashley: maybe we get back to the real fundamentals. >> the problem is it is fed plus oil. we could see the fed, the bottom line the fed is going to try to support market is going forward, they will not four times, 0.25

is enough at this point. ashley: thanks for joining us on the phone from newport beach, tough for some. and the market sell-off. all rise, judge andrew napolitano is here. judge napolitano: is stuart varney on a beach somewhere? 10,000 miles. i think you're last guest has his finger on the pulse of things, this is a long-term thing. i am a defender of the constitution which means defense of a free market. ashley: do these give more wind to be sales to regulate these markets but this is a casino and the rich guys are getting richer and -- candidate you hear that from mrs. clinton and senator sanders. it will resonate with a lot of people and with people in iowa

and new hampshire. the audience is not billionaires, their audience is people on fixed income whose incomes will be unaffected by the reduction in interest rates kick in from their investments. this is caused by government interference in the marketplace, caused by the fed refusing to allow by natural interest rate to float the law of supply and demand, and like a heroin to an addict and this is a natural shift. it is painful, it is a good thing, and has to happen, provides bargains for people when this bottoms out. you have been asking people all morning, when will -- nobody

knows. ashley: is this insider-trading? judge napolitano: the insider-trading issues interesting. and the supreme court is going to resolve the difference. in the second circuit which is new york basically, and seriously diminished because of burdens' prosecutors have to meet, they have to prove the person who gave inside information received a benefit return for giving it. your brother-in-law gives you a dip in a dinner party and you act on the kid in new york, that is not a crime, in san francisco is a crime so how can the same law be interpreted profoundly differently in the united states the supreme court will resolve that but it will not resolved it in a fit of panic in the marketplace. and what the loss purpose is intended to accomplish.

ashley: as always thanks for being here. back to the market. chaos if you like, the dow selling off, the price of oil continuing its plunge. we are following your money and we will be right back. growing up, we were german. we danced in a german dance group. i wore lederhosen. when i first got on ancestry i was really surprised that i wasn't finding all of these germans in my tree. i decided to have my dna tested through ancestry dna. the big surprise was we're not german at all. 52% of my dna comes from scotland and ireland. so, i traded in my lederhosen for a kilt.

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ashley: let's look at these markets, the dow off 405 points. there is the dow 30, it was performing, bottom line, chevron no big surprise as we have seen what is happening with oil, cisco down there, ibm, and jo lin kent, getting hurt like everyone else. jo lin: i want to shift you do it square, not doing terribly well, down significantly today, 9%, you can see but what you should note is trading below its ipo price for the first time ever, there has not been one earnings report out yet. this is a stock that already was being watched closely and now really the issue -- not a profitable company. ashley: it is a tough environment but does this raise calls project dorsey to pitt one company or the other because he's running both square and twitter. jo lin: i have a feeling he will

be asked that question. we are looking at amazon and facebook, those are more expensive stocks that perform very well, you are seeing them down a little bit, perhaps a buying opportunity but not sure. ashley: sarah palin endorsing donald trump. greg gut felt using that is to critique ted cruz's campaign for president. >> i have no sympathy for ted cruz because an abuser is a person who feed the crocodile hunting the crocodile will eat him last. ted cruz declined to denounce donald trump's attacks on john mccain and other notable, did not go after trump for making fun of john mccain for being a pow. now trump is eating in last. ashley: trump openly criticize your father as we know and as greg talked about but sarah

palin was your father's running mate back when he made his presidential bid jumping on board with donald trump, is that a slap to your father? >> it is fun and rowdy and this is a hard one for me. it was all about character and integrity and i know a lot of love believe that my father has a staff isn't popular many more. i understand the anti-establishment candidate caretaking dover but for me it is hard as someone who worked on his campaign for two years, his adviserss and staff, my extended family, it is hard for me to watch endorsed after what donald trump said, on a personal level hard to differentiate personal and politics in a situation like this. ashley: was it a surprise? >> 7 spoken to her since my father lost and released with ted cruz, responsible for his

political career and i wish i saw this all less like pandering and doing something that is popular instead of sticking with your integrity and the kind of conservative believes she has a spouse for so long, glenn beck said a similar thing. it is hard for me. ashley: you see her announcement with donald trump? what do you think of it? >> this is not my style of politics. using vulgar language, i have a mouth like a trucker all day long but not like the future of america and isis and things that are very serious. it is well aware of the anti-establishment sentiment. people like me, independence, you are going to have to talk to them as well if you want to become president of the united states and at a certain point is going to get very real in a general election and quite frankly it has been more

emotional for me. it has not weird thing to watch just because i did not expect this from sarah palin. ashley: does this help donald trump? what relevance does sarah palin have? does she tap into the tea party conservatives? >> most sarah palin fans are probably trump supporters. i don't believe all from supporters are sarah palin fans. statistics and shown a lot of independent support from democrats in some places but i don't think it necessarily hurts him but this won't move the knee lot in iowa. ashley: it is just around the corner. thank you so much. it has been a wild start to the year the market selling off, oil plunging, hitting fresh lows, traders hitting the sell button. it is only january 22nd. more varney next.

ashley: tough day for the markets, all 30 dow stocks just ran across the screen, the dow itself up 33 points, there you have all the laggers, chevron not surprising in the oil sector down by the most but you have cisco and ibm, ibm replaced by home depot, it is across a broad base of, and the reason for the

oil moving lower, under $27, at 26 down 5%. todd horowitz said the cme, what is your take of what we are seeing today? >> what we expected all along. you don't have true rose in the market, too much financial in the market. everybody made a lot of money on the way up. mergers and acquisition and overall investing when you have big money but the problem is the middle class never participated in this, didn't get good jobs, were not allowed to work forward and we are seeing a real problem with deflationary here. not only oil, look at the farmers getting slaughtered this year, and soybeans for another year. we have problems everywhere but

the financial engineering, and of course free-market and price discovery and when you let people engineer markets, never has a happy ending and we see that playing out right now. ashley: you call that a house of cards, doesn't take much to bring down the house of cards which how much lower do we go? what is the bottom? that is the big question. >> the bottom is going to be we are not going to rate their. before we turn around we will see 1586 in the s and p sell another 12 or 15% from here minimum. what you have is levels, many huge rallies before we get there. there is going to be what we call in the trading business bear market rallies, the most vicious. we saw that last thursday, 400 points in 20 minutes. ashley: todd morrill woods, thank you so much. joining me now market watcher,

you have seen a lot of markets come and go, highs and lows, you used the expression bear market, would you agree? >> yes. this is reminiscent of half a dozen of the worst markets, it was sudden, unexpected by most and what it is all about is credit. these declines in energy and commodity prices, and given credit during the period of easy money that probably shouldn't have gotten credit. central banks were so easy for so long, and lending away from regulated transparent banks to the shadow banking sector. and coming home to roost, we got to cleanse in that period. we have all lived through periods like this before at some

point and, in the next few months you get to levels on stock prices were you wish you had bought them. what i would say to investors is it is going to get worse before it gets better, and stocks get cheaper but three four years from today if you're a dollar cost average into this overcoming months he would have done better than cash or bonds so don't panic, don't go all in, don't panic, don't sell -- don't sell the high qualities. ashley: thank you very much. let me bring in steve hayward. pepperdine university professor, this market drop largely due to the sell-off in oil, there are problems in china and elsewhere but in your opinion do we not see market stability until we can rebalance the oil market? >> the thing to bear in mind is a long-term view.

we now go through our third significant cycle of oil prices in the last 20 years. yesterday i just off an old cover from economist magazine from 1999 that said we are drowning in oil. yesterday bloomberg put out a story with the same headline, we are drowning in oil. people can remember when goldman sachs was telling us oil was headed to $200 a barrel and do was going to be scarcity as far as the eye can see and now a lot of market analysts are saying oilers 5ing to $10 a barrel which is possible. i think the best evidence has always suggested higher oil prices and especially price spikes to the upside that are major contributing factors in the beginnings of the recession that correlate closely over the last 40 years. now suddenly we are seeing low oil prices are problem. the problem is not low oil prices which benefit consumers although we see some balance sheet problems for the average energy companies but the problem

is there is not price stability. but everyone will tell you in the oil industry is our biggest problem is lack of predictability. if we know what the oil price is going to be what the ban is going to be we can plan better and there will be less violent swings in the marketplace but that is hard to do in a competitive world with new supply coming on the we are told high oil prices are bad, lower oil prices and bad, no pleasing some people. >> geopolitics playing a big role in all of this. a lot of countries not willing to work together necessarily to stem the route of oil prices, how do we see the geopolitical environment, iran, saudi arabia affecting the rest of 2016? >> interesting question. tied to know what the saudis are up to. they are the biggest problem with opec, they could stabilize the market if they want to cut back production but they haven't and some people say they are trying to squeeze american production out and drive our oil show industry out of business. they want to stick it to the

iranians to depend on higher oil prices also we bailed them out with the iran arms deal obama gave them but also we like oil prices because it puts the squeeze on russia and venezuela. hard to figure that out but the biggest thing that happened lately out of saudi arabia was the announcement that they might take it public, the fact that they bring thinking of selling off their state-owned assets suggests to me they are nervous about low oil prices and a looking at running out of money themselves. ashley: we shall see. thank you for joining us from los angeles, we appreciate it, big market sell-off, huge drop today, all 30 stocks lower, a sea of red, oil still dropping, the dow off 400 points, we will be back. these are the hands thaw the data, dig up clues, create opportunity, and weave messages that lead to sales. these are the hands of pitney bowes, the craftsmen of commerce. these are the hands, the hands that drive commerce, that build business across borders.

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nicole: i am nicole petallides, selling on fox, dow jones industrial average down 400 points, 2.5%, 15,616, the s&p down 48, nasdaq composite down 110 points, major averages down 2.5%, the an end list since october of 2014, the dow, 1800 points, all oil added 12 year low, and all ten are lower, material, financial and technology, oil dropped below $20 a barrel, and equities moving together, chevron this month down 15%, home builders in

the red and the latest housing start drops 2.5% in december, and sell-offs on the downside. you do all this research on the perfect car. gas mileage, horse power, torque ratios... three spreadsheets later, you finally bring home the one... then smash it into a tree. your insurance company is all too happy to raise your rates... maybe you should've done a little more research on them. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. see car insurance in a whole new light. liberty mutual insurance.

ashley: we're keeping an eye on the market sell-off, the dow off 414 points, part of the story

has been since the beginning of the year is oil and jeff flock is at the cme in chicago. what are we seeing now? jeff: psychological may be more than anything else. those who trade oil will know this is the contract that expires today, this is a february oil contract which is the spot price for oil, not much liquidity in this contract, 11,000 contracts out there right now. the march contract is the one being heavily traded, that is 300,000 contracts but they are moving in tandem. both are moving down today. you will see it starting tomorrow that oil price, it is more psychological futures, the futures and current contract expiring today. not only oil is down but heating oil is down 5%. big numbers today will be the

american inventory number. what is this survey, they say it is a bill of 3 million barrels of additional inventory. we will see, but their own numbers the next day. we are on a ride. ashley: pretty much straight down. thank you very much. a shake-up, let's look at politics. and gain support in new hampshire, democratic strategist penny lee here with -- bernie is beloved in that part of the world, is it a surprise, are you surprised he is leading by so much? >> the validity of some of that poll seems like a little bit of an out liars but no doubt bernie sanders has been running as a strong campaign in new hampshire and has led for the last couple weeks so not surprising he is

from vermont, folks in new hampshire, what it shows is democracy is alive and well in our country and this is going to be a fight. we have a true primary fight on our hands. ashley: do that point they you get the sense hillary clinton underestimated bernie sanders? >> i don't think they underestimated. having talked to him at the beginning they were fully prepared for a long primary. a lot of supporters say it is a coordination, mrs. clinton has in the bag but if you talk to insiders and those working on the campaign, they knew it would be hard fought battle. ashley: who is it bernie sanders is appealing to not connecting with hillary clinton? >> he is appealing to the ideal, usually experience winds out, practicality, being able to say what you can do in a realistic way has given way this year to

those people as you talk to on this program today those middle-class voters the do-they feel they have been left out not only for the last eight but the last 15 or 20 years, they have not gotten any benefits and he is tapping right into that anger in a very passionate way. ashley: turning into a spirited debate, that is for sure. thank you for joining us, appreciate it. back to the markets being a big story so far, check what the dow is doing, down with 437 points, look at the s&p that hit lows not seen since october of 2014, the s&p moving lower. it is down nearly 3%. more varney after this. and worked with liberal chuck schumer to co-author the path to citizenship bill. he threatened to vote against it. and then voted for it. he supported his own dream act and then he abandoned it.

marco rubio. just another washington politician you can't trust. jeb bush. he's a leader, so you always know where he stands. right to rise usa is responsible for the content of this message.

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ashley: the selloff on wall street continues, the dow off 452 points, the s&p down 3%, same story on the nasdaq, jo lin kent, three stocks hitting 52 week lows. jo lin: we want to look at caterpillar first, this is a company with big exposure to a lot of countries especially china in addition to the oil story bringing down, you see it is down 3.6% right now, goldman

sachs posted the smallest profit in four years due to the massive bond settlement, that is bringing the market down. ashley: $5 billion. jo lin: definitely cutting into goldman's performance in addition to the market, and looking at ibm. and strong dollar, cloud computing. ashley: accompany in transition, especially in this environment down 6% today, big blue. fear of government costs, spending 4 and did thousand dollars to send text messages to latino men saying what? encouraging them to exercise. the washington free begin's liz harrington and covered the story and she is here. even when i read it i don't believe it. what is going on here? wyland tina men?

>> this is the latest fad of behavioral scientists on the national institutes of health which is if we can send text messages we could get drugs to stop drinking, smokers to stop smoking and overweight latino men to start exercising. so the university of california san diego got this funding to do this study where they will recruit about 60 mexican american men, and roll them for six months giving them health information and sending text message reminders to hit the gym and my favorite part about this is it is described as low-cost intervention. we had a 400 grand. ashley: how does a a latino man get this text message that he is so wait challenge that the government is counting him by text message? >> it goes against the anti fat

shaming thing. what about self-esteem and all of that? it is a tiny portion. there are so many studies that have this idea if we just send a text message we could change people's behavior and it is one of many and this is the latest example. ashley: thank you for bringing this story to us, how the government spends our money, quite shocking, thank you so much. we are a session lows, 454 points, the interesting thing is where do we go from here as we head into the afternoon? >> oil is down 6.7% continuing to drop ever so slowly. curious to see the ten year reaction to this news. ashley: oil is the story, dragging stocks down with it, we will have more varney right after this.

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ashley: it has been a crazy day for your money.

do not look at your 401(k) right now. down as much as 450 in the morning session. a big story has been loyal. it continues to edge lower and lower. let's see where we go from here. neil cavuto, take it away. neil: whether a correction turns into something worse. close to 3%. 20% would mean a bear market. the nasdaq down a little bit. i should say that pretty much all of these averages, underneath, well into bear market territory. what giorgio of them are down.