joined by several business leaders who understand just how true all of the things we're saying are. we're all thrilled to have a lot of the fake news media in the back. those cameras are rolling. hi, folks. that's what's good about doing it live. they can't cut you. you know? when you do a tape, you end up saying, wait, what happened to the four sentences that they cut out? where are those four sentences? that's true. lot of fake news, but that's okay. hey, they're doing their thing. i don't know what their thing is, but they're doing their thing. i want to start with a man i watched today on fox. he was terrific. jeff norris. jeff, come on up. we know jeff. so we know every employee has already received a $1,000 bonus. and they've gotten a lot of tax,

really lowered tax. they're doing a lot better. jeff, why don't you tell us a little bit more about your plans for the future of the company and also what you have in mind for the money which is going to be a lot that you save on taxes. >> first of all, welcome, everybody, here. it's such a blessing to have you here, president trump. in all my years, you pray for a president like this, that will take care of the working class and businesses. we finally have one here. i'll talk ab my stuff in a little bit. we need to make sure that we support president trump especially in 2018. [applause] we need to vote out people that are an obstacle to him. many manufacturing, our job is to remove obstacles, this man

can remove obstacles. we need to clear the path for him. [applause] what we plan on doing with the tax savings invest in our people, processes and equipment and continue to try to make america great again and like you said before, we have the greatest work force in the world. we just need a level playing field just a little closer. doesn't have to be there. just has to be closer. our people can do it. i'm just proud to have you as our president and i wish you the best and god bless you. thank you, mr. president. [applause] >> i want to thank you for doing a great job, too. thank you. [chanting].

>> that's what it's about. that's true. greg carmichael is the ceo of fifth third bank corp. a big bank. head quartered here in cincinnati. greg, please step up and tell us what you're doing with respect to all of those incredible workers. 14,000 of your employees that you're doing something very special for. i'd like to hear it. thank you, greg. [applause] >> mr. president, thank you. thank you for everything you've done for our nation and we thank you for your efforts and your leadership and bringing tax reform to america. at fifth third bank, we're feeling the effects of the tax benefit and working to pass the benefits on to our employees. immediately upon the announcement of the passing of the legislation, fifth third

bank announced an investments in employees included raising the minimum wage to $15 an hour and a bonus of $1,000 for over 13,500 of our valuable employees. we're investing in our employees because of their contribution they make to our bank, to their families and the communities in which they serve. mr. president, thank you for bringing meaningful tax reform and jump starting the u.s. economy. thank you. [applause] >> it's a great bank, too. thank you. that's a lot of employees. 14,000. a big bank. match strong is a company founded 75 years ago in cleveland.

you must be very rich. matt, why don't you tell us about these massive cuts and how they're benefitting your people and your employees and workers. thanks, matt. >> mr. trump, thanks for your leadership on the tax reform. i'm hahn -- honored to be representing jergens. we're a worldwide leader. last year was a record year for us. thanks to your tax cuts, we seek success in the future. >> shepard: we're interrupting for breaking news. quite a drop happening on wall street. a massive sell-off is happening tonight. moments ago we were down more than 900 points on the session. i'm shepard smith in new york.

this is "shepard smith reporting" on fox news channel. last week the dow was off about 1,100 points. today the dow is off at this moment 875 points. so what is happening here? well, a correction is something that happens in bull markets and happens with some degree of regularity throughout history. it is expected, it's well-comed by many investors, of course. because a correction will keep a market from getting over heated. it will keep it from getting into a boom and bust cycle in theory. this could be the beginning of a correction. i'll tell you what a correction is. a correction is a loss of 10% in market value off the all-time high. the all-time high for us in this cycle or ever on the dow was 26,616.71. so 26-6 on january 26th. we're now -- we blew through 25,000 with the greatest of ease

and down almost 1,000 points on the session. there was a time not that long ago when down 1,000 points would have been curb setting in and markets closing and that kind of thing. but the dow is so high, we're still at 24,553. the dow is so high, that curbs are nowhere near and we have just gone down more than 1,000 points on this session. the dow was down 1,100 last week. off 1,000 points today. a correction, a technical correction would be down 10% from the highs of january 26th. we're not quite there yet. we're now just a few hundred points away. the way this marketing is cratering at the moment, i suppose that it is possible. we know what is happening here. we turned negative for 2018. all gains made in this calendar year are now gone. all gains since the tax plan was

put into place are gone. we're in the negative now since the tax plan. just as disturbingly, the nasdaq is currently off 2.64%. the s&p 500, the broader gauge of the markets where the dow has 30 components, the s&p has 500 components, the s&p 500 which has had a historic run-up is down 3.27% on the session. what is all of this? well, you can look toward vicks sometimes for a little clarity. the vics is an indication of l volatilit volatility. it's a number that comes together with a lot of different things. but if the vics is over 30, you expect wild volatility. if it's under 20, you expect calm in the next 30 days. the vics hit 45.

that's as high as it's been since august 215. big picture, volatility is very high. the banking sector is getting hit very hard. wells fargo was down 8% at last i was able to look. it's happening so fast now it may be more than that. wells fargo was in the middle of the scandal, a big scandal with charging people fees and that they didn't -- shouldn't have had to pay. now the dow is down 1,127 points and we're approaching -- gerri willis is here. we're approaching correction territory now. it's stunning to see this. >> stunning to see this. we're not there yet. keep in mind, this has been a go-go market with the dow putting on 6% in january alone. this is what happens, my friend. the past ten years, we've had six corrections. that's a 10% loss. i'm talking here about the s&p

500. >> down 1,300 points on the session. and we're 200 points away from a technical correction in the dow jones industrial average. something that ten days ago was unthinkable. >> well, let me tell you, the stocks have been incredibly upbeat and open mystic. nothing could go wrong. that's what so many investors believed. you have to understand that corrections come. they happen. we had six in the last ten years on the s&p 500. they can lost for months. also, in 2008, 2007 hat a bear market. we're not even close to that. nowhere near that right now. here's what's going on inside the market. you look at the dow components, the 30 dow. they are all down right now. >> shepard: we just hit technically a market correction. the dow is down 1,100 points last week. the dow is down 1,600 points today or was just seconds ago.

in fact, it's down so much the graphics don't fit on our screen right now. the dow is officially now in market correction. should it close at these levels. >> should close at these levels. we're seeing across the board nor the dow jones average, all of these stocks including apple, which you'll remember, shep, some of us reporting last week earnings of a dis appoiappoindi. >> wells fargo down 8.5%. the s&p down 5% from the latest high, which was again set on january 26. investors are clearly worried about evidence of rising inflation in the united states. when it costs more to borrow money, which it will especially from the federal government, we talked about the 30-year treasury, when it costs more to borrow money and people stop spending. when people stop spending,

inflation can happen. in all of these cycles, with the vics as high as it is, that investors fears, fears of volatility the next 30 days for various and sundry reasons. investors got scared last week. volatility started in the markets. we were all watching it. it was up and down and the numbers were crazy. men we started to see this vics rise. this vics is a measure of fear of volatility. fear that the markets will be all over the place and you won't know what to do. a high vics is about 30. if the vics gets to 30, people are scared to death. the volatility will be all over the place. the vics hit 45. the highest it's been in two years. told us something dramatic was going to happen and something dramatic has happened. what you shouldn't do -- >> what shouldn't you do? >> buy a thing or sell a thing. don't look at your 401(k). investing in markets is about long-term strategies.

any specialist he tell you seeing a number as you as a 401(k) person, you as a soon-to-be retired person, don't do anything. watch it. you know what we've just done? we've recovered 400 points. >> it's acceptable to sit on your hands through this. nothing wrong with that. let's talk about a couple numbers that investors have been focused on the past couple days. 2.9%. that is the year over year gain that we saw in wages and friday's employment report. that was a massive gain. we haven't seen the likes of since 2006. people out there say these -- there's pressure on salaries, salaries are going to go up. that will cause inflation. inflation is going to have a big impact on companies out there. how much money they can earn. so that's a concern, right? absolutely huge concern. also worries about the ten-year yield. you say gerri, that is so technical. that's the amount of money that

the government has to pay bores to buy the government's debt. treasuries. that's been creeping up and people wonder, does that mean that we're going to town on inflation? clearly this economy is growing. we had a forecast last week from the atlanta federal reserve that when you get 5.4% economic growth, that is a huge number. we haven't seen the likes of for some time. but take a look at these dow stocks here. >> shepard: these are the 30 industrialized companies that make up the dow 30. some questions now about whether there may be changes coming up. look at these energy numbers. chevron off almost seven points. caterpillar 8.5 points. apple was one of the few in the green a short time ago about 500 points ago. now even apple is often $1.85.

you can see in the big picture, all 30 of the dow industrials are in the negative on the session. >> let me make a point here that is important. you would expect banks in a rising rate environment of higher inflation to do well. because that's good news for their bottom lines. you're not seeing that today. that's really interesting that companies like goldman sachs, j.p. morgan chase, all of the citi group, the big banks now struggling here. you can see visa down. all of these companies struggling now as we start to contemplate what is a world with inflation. we don't know. let me tell you, there's lots of traders that have never seen this. who have no familiarity with inflation or even with incredible economic growth. let's face it. the story in the markets has been that the federal reserve is what makes this economy go, right? they just keep interest rates super low and that allows the economy to grow and people to

borrow hand get bigger. that's not happening anymore. in fact, the federal reserve has done a 180. they'll do something different here. instead of buying debt, buying bonds in the market, they're going to start selling them. that resets everything. a fundamental change and assumptions for these companies that's going on that is critically important for individual investors. >> and the fed without overly complicating it, trying to get back to a more normal situation where it does cost to borrow. normally to borrow money, you have to pay. money is not free. though recently it's been free. >> seems like it. >> shepard: so where are we now? we've recovered 700 points off the lows. dow jones off 3.5%. there were questions on fox business network about whether we took this huge drop at the beginning of the trading day,

about 300 points and then the dow and the others recovered to some degree and maria bartiromo and others were wondering have we found that valley. and maria was very clear to say, what we really need is a wash-out. we need a wash-out so investors tomorrow don't go did we hit it. >> people were saying this. webster knows about this, too. >> ashley webster joining us. >> what a day. >> people were saying initially this is -- might be a minor correction. when do we start to buy. let's lock at buying now. >> there was some of that this morning. >> yeah. >> it's changing and people are saying this is bigger than possibly we anticipated. the rapidity of the route is what people are focused on right now. >> don't forget, trading day, shepard, is not like it was in the 90s. a lot of computer algorithms out there. you take your hands off the wheels and let these computers go through it.

there's triggers to sell stocks. in an environment like this, that selling picks up momentum. is this the washout? do we flush it out? some would argue this is healthy. you can't keep going up forever. at some point you have to have a revaluation. that's what we're seeing now. >> shepard: we hope that's what we're seeing. the truth is, you don't know what the markets will do until they do them. it's like forecasting a hurricane. you can think what it's going to do but only the hurricane decides to do and the markets are the same way. it would appear that there's -- i know i've seen the biggest one day sell off that i've ever seen. i know we had a flash crash of about 1,000 points during one day. that's not how the session ended. then there was two years ago -- well, the biggest one was 778 points on the day that there was an attempt add tarp, the troubled assets relief program

that failed in the house of representatives and the markets went down 778 points. the markets weren't valued at a third of what they are now. that was a very scary day. our country was in great peril. the world economy had been on the downward trend. we were losing something around 600,000 jobs per month. looked like the united states economy was in historic and very big trouble. this is not that. we are not even down at this moment 10% off of the highs from last month. january, 26 of last month, we hit an all-time how and we're not done from that. are we approaching correction territory? we're almost there. but this is no time for panic, this market has raced up since the election of this president since inauguration. we're still way over where we were. whenever everything gets crazy in any sector, no matter what it is, that's when you don't flip

out and run with the bulls or the bears in this case. you take a deep breath and reevaluate. for an everyday investor the key is to do nothing. >> the question is, isn't apple, amazon, walmart, any different today than two weeks ago? absolutely not. is the economy doing well? yes. are companies making profits and earnings going up? yes. part of that is the problem, shepard. now the fed is saying, all right. we've given you all of this cheap money year after year. now we're going to start raising the interest rates. the markets knew it was coming. now it's coming home to roost a little bit. >> shepard: if we're not at technically full employment, we're about that far away from it. in many parts of the country, we're at full employment. that means people looking for a job got it. that also means people looking for the job, the job they wanted, they have found it. that means there's not as much movement within jobs because there's not many jobs left and

that creates stagnation. it also creates an environment where the cost to borrow money goes up. when the cost to borrow money goes up, people stop spending as much that can create inflation as well. all of this stuff works together with the rest of it. when money is more expensive to borrow, inflation normally follows. >> that's right. and that labor market means the wages go up, which is a good thing. but then we worry about inflation. >> and also have to keep an eye on the 30 year treasury. it's done the same thing for 30 years. a lot of years. there's a lot of traders that have never seen what's happening now. >> it's only above 4%. when i came to this country 1982, i was ecstatic because i got a mortgage at 17%. just keep that in mind. there's a little perspective. >> that's what happened to me and my family. we wanted to build a house.

cost of the mortgage was going to be 17%. we had to say now. >> now it's 4%. still a good deal. >> it is a good deal. the experts seem to think the cost of borrowing money, which was basically zero, is going to go up. >> it will. >> inflation which has been independent behind wages is going to go up. >> the other thing that is going on, i've made all of these profits. let me cash out. now i can put them in a bond. the bond is paying decent. the rates are going up. you feel safer doing that. >> there's movement. >> yes. >> and is that program trading doing that? >> a little bit. more so now. it's amazing to me. the algorithms pick up on a word, hit a certain price, they're doing it all. they're selling, buying, moving money around. >> when big market events are like a pendulum taking your finger and clicking it, the pendulum has started going last week. so this volatility one would think would be with us at least

the short term. >> yeah, to maria bartiromo's point, you want to wash it out. we're going to do it, get it out of the system completely and then you could see another fresh leg higher in the markets. people will say, amazon is a good deal at this price. whatever stock you're interested in. we need to get to that point. what is that point? the market will decide. >> we have now experienced together, if you've been with us and thank you for that valued viewer for 22 years of mine, yes were down 1,597 points a few short minutes ago. the largest point drop in the history of the dow jones industrial average by a country mile. in the way of percentages, not even close. the dow was down 6.26% at its low. the biggest percentage drop since the august 5 flash crash. but not historic. a blip. >> not at all. remember 1987?

blackm monday? that was scary. this was disconcerting but it's -- i like using the analogy of a prescribed forest burn. you burn away the dead brush and everything else to build a more healthy forest. kind of what is happening here. flushing it out. >> shepard: at the moment it is that. and it's that until it hits 20%. and then it's something else. >> then we have a different conversation. >> no. >> shepard: ashley webster is here from the fox business network. we have nicole pettalides from the fox business network. it's been an impressive turn around here. normally this sort of thing happens when you see that drop there, that drop there, the bottom dropped out a few minutes. when it did, people saw vol. a lot of people made a lot of money that minute. >> a lot of people looking at this market, looking at individual stocks and saying, oh, my god. i want that stock. i know it's going to go higher. it's a brave person that jumps in and buys something in this

market right now. make no mistake. at some point, some of these stocks looked very attractive and will see a comeback. >> there was a time when we were well below 10,000 on the dow. well below 10,000. as i said, the market crashed. nobody had a job. the manufacturing sector was falling apart. housing starts weren't starting. there was nothing going on. had only we'd go a nibble of a dow index fund that day. up three times since then. >> since president trump became president, this market, the dow, still up 20%. when you say i'm losing this money, you're losing some of those massive gains you made. it's not like if you jumped into this market early on, you're still doing well. >> all of that said, it is shocking sometimes, especially if you're on a fixed income or close to retirement, you're about to have to rely on your 401(k) and look down and go oh,

what is this. >> miss it today. >> shepard: a good day to sleep in. >> nichole petlize is live at the stock exchange. how did enhandle this? >> you're right. biggest point drop in history. takes your breath away. i sit here every day for my entire life. i watched it. when it crosses that 1,000 point mark and got down to 1,600 points, that's a big move. so i walk around the floor and say what is going on? what do you think is happen something last week nearly a 1,100 point drop. the traders think a couple things. one trader said, nicole, it's not three days of selling. how about we've been up for 400 days since the election. keep it in perspective. they're waiting for something called capitulation. this feeling where it takes your breath away, a panic so you can decipher where the value is.

at some point, everything is overbought and overvalued. the third thing that is also happening is sell programs. there's sen levels that they say listen, when it gets to this level, sell. when it hits that support level. i had people that were looking for areas to buy. yeah. buying when it was down 1,600 points. i had a trader that told me this morning that i'm waiting to buy some of these energy stocks. i bought exxon. i want the get in on some. he did. he was shaking but he bought it. he had no idea. they say it's tough to catch a falling knife but he got in. the big picture is they're trying to find value and settle this down. it's certainly not panicked or crazy or anything like that. you have to know your risk tolerance when you're in a market and have your money invested. >> shepard: i don't know if you know where the vics is. the business desk gave us

imperfect numbers. >> yeah, i have it here. it was over 100%. it was up 96% 40 minutes ago. the highest level in two years since february of 2016. so the vics is a gauge a fear gauge. to give you a glimpse to what people are thinking going forward. there's a lot of great things that are real disconnects. you can't have corporate earnings doing better during earnings seeing and a market that is selling off. so maybe it's just trying to find a balance. we have a lot of great things happening in our country. we have wage growth, you have corporate earnings improving, a corporate tax plan, a tax plan that is beneficial to corporations and to individuals. so the ground work is being laid. however, we've run up far fast. we have paired the lossed.

i'll give you another warning. one trader said we can go back down and test the levels again. don't be surprised if you see it. take a breath and think about what you want for the long-term. if you have a short term horizon, you probably shouldn't be here. >> shepard: thanks, nicole. hopefully things have moderated for the day. if you're watching such things, circuit breakers that were installed after previous market collapses don't kick in until 7%. that means the overall market, the industrial average of those 30, if it gets down more than 7% on one day, a circuit breaker can kick in and they'll slow it down. we're not anywhere near that now. less than 3%. i want to get to jeff mason the wife house correspondent for reuters. i've heard it said, if you live

by the stock market, you can die by it. president trump has owned it. many of us hope a return to up comes. >> you're right. president trump has owned this. he's made the stock market rise a measurement of his own success. he repeatedly touts it, likes to talk about it a lot. the fact that it's gone down today so dramatically is a blow to him. you didn't hear him talking about that in cincinnati just now. i did speak to a white house official today as the market was going down. he mentioned that, you know, having day-to-day ups and downs is normal in a stock market. you don't hear the president saying that. he's been making a big point of saying he's been good for the market. this of course goes against that. >> shepard: presidents normally avoid such things. anybody that understands much about the economy and especially the markets, i'm not one of those but i listen to those as a reporter and what they say is, presidents come, presidents do.

markets will do what markets will do. can there be an effect day to day? certainly. as far as the trends go, rarely is that the case. jeff, how is it now? you were head of the white house correspondent's association and now working for reuters. what is the climate today? >> i was always working for reuters. but you're right. and the mood is -- this is a white house that is accustomed to various crises. usually more political than the economic kind. the president came in a year ago to a strong economy and the economy has strengthened since he's been here. last we're, it was good economic news and the white house said the same thing. wage growth is something that both candidate, president trump and hillary clinton said that they wanted if they were

elected. those were good things. but the impact, of course, partially on friday, the fact that wage growth had gone up that the era of cheap money was over. in terms of the mood here at the white house, they're just waiting to see what happens like everybody is. i think the big question will be whether or not president trump decides to comment on this on twitter later tonight or not. >> shepard: yeah, that would be interesting. hang with us. ashley webster again from fox business is with us. the era of cheap money is over. what happens today won't effect that. >> no. the fed is looking at the economy, wage growth, potential for inflation. in some senses, what sear seeing on the markets today is a reflection of how good the economy is becoming. that's counter intuitive. but because of that, the fed wants to raises rates to get us back to where we should be. for years, cheap money sloshing around the markets like --

everyone can spend like a drunk sailor. it's been great. now we have to start coming back to reality and this is a bit of that. >> shepard: the nasdaq off 2.24%. s&p 500, which is what we like to look at more than maybe we show it on the screen because it involved so many more stocks, it's 500 stocks. the s&p 500 down to 2.73%. big percentages. >> they are big. but if you're a technical trader, you look at certain levels. if it breaks through, you think it's growing to go to the next step down. we haven't seen that yet on the s&p. what we're trying to decide and difficult to gauge because it's down to the investors in these programs, at what point do we say, okay, that's enough. now we're going to start taking advantage of the cheaper stocks. >> technically our dollar policy has been weak.

oil got more expensive. >> which is not great. a weaker dollar is -- if shepard smith industries is pumps out your products to the rest of the world, it's great. people will buy more. the dollar is not worth as much. but ultimately it hurts the united states and has. and oil haas been that way. but now we're a huge producer of oil. our reliance has been a game-changer. so yes, it does have an impact. the dollar has gotten stronger today. that tells you there's a bit of flight to safety. >> shepard: it has strengthened. historically speaking, when everything is crazy, if everything is nuts, you go to a place that you feel comfortable. when there's a storm, you get in your safe room. the rest of the world, when they get weird, they go to the dollar. the dollar is up today. oil prices, we talked about how that will work. with a weaker dollar, if you go overseas on vacation, your money doesn't go as far. if you want to buy chinese

products on wherever you get whatever it is you get, the price goes up when the dollar is not worth as much. >> they do. the dollar will strengthen even more. >> look at a.b. stoddard from real clear politics. she's the host of no labels radio on sirius xm. this was a wow to see. >> yeah. quite a surprise. obviously president trump was out in ohio touting a booming economy and the benefits of tax reform and tax cuts. it's doing to be very disappointed by this turn. he as the previous guests have noted has used the metric of a booming stock market to measure his success and to sort of in replacement of approval polls show how much americans believe he's doing a great job and the confident that they have in his administration. even though there's not a whole ton of people in the majority of

his coalition that probably do a lot of work on exchanging on the stock market. this is the kind of thing that republicans didn't want to talk about, shep, after tax reform and the fact that the tax reform approval increased so much between december and now, it's much more popular. they're dealing with the fact that they're always getting to another government-funding bill or questioning whether or not there will be a government shut down. they have to raise the debt ceiling a fan in a couple weeks. they're looking at the fact that they know they stimulated an economy that was in a bubble. not in a economic downturn. your other gets have noted it's going to lead to rising interest rates and inflation and what is up can come down. they're hoping to ride a political wave and see stability and more growth with the tax reform benefits to ride it up

till november. this is stressful this is happening at a time that they can't get their act together and fighting just to keep the government open from week to week with more debt on the records than we had a year ago. it's just something that they really want to change the subject from. >> shepard: a lot of people on the hill are starting to think that a government shut down might not be happening as we are down 909 points. let's got to mike emanuel. mike, isn't it starting to look like they're just going to have another continuing resolution, another band aid to use their parlance, a kick of the can down the road? >> i'm perhaps hearing that, a six-week extension to get them to march 27 or 23. even if they can reach an agreement on the end stephen paddocking levels going forward for a long-term agreement, it would take the people that write that legislation to fill in all the numbers into all the blanks. so they're saying they need more

time to work on immigration, to also work on a long-term government funding package. there's concerns about folks that are tired of kicking the can down the road. there's folks concern about national security issues. they feel like these continuing resolutions are terrible for our military. but here we are and tonight the house republicans will meet at 7:00 or so. they're going to go over a variety of scenarios. what i hearing is most likely a six-week government funding extension. perhaps more military money to get them through the crisis to get some of those people that are national security hawks on board with it. they may talk about the debt ceiling, the congressional budget office turned up the pressure on folks here on capitol hill last week by saying they would need to address the debt ceiling sooner than later by early march when initially the projects were early april or late march. that's another item on the agenda tonight as they talk over going forward, whether they want to cram this stuff together in one bill and voted on one tough

vote rather than doing a series of tough votes for members in what is an election year. >> shepard: you holding your breath? >> not at all. >> shepard: i didn't think so. mike emanuel who is too smart for that. live on capitol hill. down 931 points on the dow now. think of this. while the president was speaking on the other side of the screen was the dow industrial average. for a few minutes, six minutes, the market was losing 100 points a minute. we lost 600 points in about six minutes in 18, 17 minutes past 3:00 this afternoon. as one who has been in a 3:00 time slot for what seems like 150 years, i love it here but always been here, that last hour of the day is -- can be a volatile one. something that i haven't experienced is 20 minutes after the hour, it happened. normally you wait for the end of the session and watch what they do. are they buying or selling.

>> it feeds on itself, shep. once you see one big drop down, somebody else is saying get on the phone to that i can brother. >> shepard: like we might test though lows again? >> we could. it's interesting. funny about the president. for the first time he didn't mention the markets. >> shepard: who didn't? >> the president. rightly so. he can still take credit for a 20% gain. >> shepard: he can take credit for it if he wants to take blame. previous presidents have said you can have that. i don't know what will happen there. >> we'll see. >> shepard: he might have to worry with a fix. >> maybe. think tax reform is helping. overall people will say let's get this out of the way. we're clearing off the frothe off the top of the market. that's what we're doing. we're back down again 1,000. we're retesting the lows. >> shepard: a lot of frothe. i got that much frothe in my beer, i would slide it back to

the bar keep. whether we will test the lows again remains to be seen. it's stunning to see that our graphics department and they're very good, was not even prepared for this. as you can see, the numbers go off the right edge of the screen. >> for years we haven't seen anything like this. it's been a slow, steady upward build. all of a sudden, just like falling off the top of a cliff a little bit, we're seeing this sell-off. it's checking. >> this is not our graphics department. this is the graphics from the stock exchange. just last year they changed their graphics package because two years ago, we had an intraday that was so big that it messed up the graphics. they came out with new graphics. they tested themselves again today. now we know dear wall and broad, if you get down more than 1,000 points intrasession, the numbers won't fit. still down about 4%. i want to check in with the

other markets now. like i said, sometimes those are -- especially the s&p 500 is a better indicator. >> a broader based index. >> and down 3%. 3.12% on the session. is s&p 500 off 86. the dow, the 30 industrials just about 1,000 points. >> this last 15 minutes or so as we head to the bell will be really interesting. do they start -- does the sell-off continue to pick up speed or does it trail off and people jump in towards the end. i don't think it's going to happen. >> shepard: it's usually one way or the other. both things rarely happen. i say this from being in this slot all the time. at the end of the session, if things look like wow, there's money to be made there, people will sell and the inverse is true as well. >> true. they have what they call the sell points. you have a stock, when it goes

down a certain level, the computer will do it for you. as we move lower, the sell orders start to pick up pace. so that's why you see -- what is interesting how it went down 1,600, came back to 800. now down almost 1,000 points again. shows the nervousness and uncertainty beneath the surface of the investors right now. but again, many analysts say this is ugly but it's healthy and needs to happen. >> shepard: as an indicateder, a reminder of how quickly this thing has gone up. for a while, it seemed like every day as we finish this news hour, i pointed the big wall and go, we set another record. another all time -- >> every day. and just yawned. >> shepard: this is where we were at the end of 2017. the dow jones industrial average all-time highs and at 24,719. we're right at the end of 2017 numbers. not to add any kind of spin to

anything, just to give context. that is the run up has been extraordinary. the idea we have a construction is not only expected but often almost always welcomed by investors on the whole. because if you get too overly x ex-supe ex-super rant, the idea of a crash is greater. >> too many complacent investors out there. many going this is what they needed. a reminder that you know what? back to basics. rising interest rates. people take money out of equities and put them in into bonds or some other instrument. >> shepard: it's not like price to earnings ratios. what your stock is priced at versus what your stock is earning. they're not out of whack. >> in a few cases. generally no. i don't think the stocks are overpriced at all.

now they're getting cheaper. >> shepard: exactly. the one thing that is different since the last -- since the fox business network that's been on the air, a new thing with the 30-year. help our people that don't understand. >> to get a fixed year lone for 30 years, many people you can't do it. here in america you can it's been in the 3% range for so long. that's an incredible low rate of interest that you pay back a bank for a loan on a house. now it's crept above to 4.2% or thereabouts. still cheap by comparison. >> context matters. these are the dow 30. they're all in the red. on bad days, usualry there's still a couple green ones. a little while ago, we were in the middle of a day down 2%.

apple was not off. that one, this is the nasdaq. the graph on the nasdaq. hard to remember this morning the tech heavy nasdaq sector was up. here's the precipitous drop here. another one of those stallagtites. they're off 2.3%. 150 points at this moment. here's a look at the s&p 500. the same stallagtite. there were a little green dots in the s&p 500 this morning. we knew that these markeds were volatile. everyone knew that. we've known that since last week. last week it was down 1,100 points. everybody looked at the 30-year treasury and the cost of money and everybody head what the fed was saying. pressure, pressure for this to

be going down. voila. it's down. the dow is off 966 points. we'll know in the next five minutes where in is probably headed. you'll remember the numbers on busy days like this, used to be more so, but busy days like this, it takes maybe a minute or 2 after the close till you really know. >> yeah. they call it settling. so many back orders that have to be processed that came in ahead of the 4:00 bell. it's a settling. >> shepard: it's not like they have tickets. they have -- >> the old days. >> shepard: they have the massive computers that can handle millions and millions of transactions at once and they get so backed up. the volume is extremely high today. >> no big surprise. >> shepard: the volumes have been high the better part of a week or two. everybody is in. it's that period, early february. >> it's been a market that has been looking for an excuse to do

it. we couldn't figure it out. would it be a black swan event where somebody would heat up with north korea or something. but finally the ten-year bond rate shooting up. the fed saying yeah, we're going to be raising rates three, four times this year popped the bubble. that's when people headed for the exit. >> shepard: our friends on twitter are familiar with that word. they know what triggering is. the goal to trigger somebody to get a response out of them. you never know what's going to do it. we didn't know what would do the trigger with this market. >> bond rates. what would have thought? that was the cat list. >> shepard: and coming on last week. >> once the hole appeared in the dam, the trickle turned into what today is, a flood. down 1,000 points. >> shepard: it's interesting that -- we have traders in this building. this is one of those cities where everybody knows traders.

there's traders under every rook and every nook and cranny. they're all over this town, traders. most of them of a certain age, my age, have never seen a bond rate like this ever. >> it's the old guys that say, well, i'm one of them. barney and i talk about paying 16, 17% for a mortgage. the bond rates. they've been so low for so long. who has gotten killed during this period is people that saved. the older people that have nothing back on their money. so they are going to start seeing a better return on their savings. >> so many people for years and year bought certificates of deposit. >> smart thing to do. >> you get 8, 9, 10% back in the day. we did. we tried to build the house. couldn't afford 18%. making decent money off of cds. if you've been a saver, if you have money in the bank, there's going to come a time if not tomorrow or the next day, it's

coming, when that money will make you more money. inflation will go up with it. there's a lot of people in this room, millennials that work very hard on the news that never experienced run-away inflation. they don't know what it's like for prices to go up. >> and hopefully not run away. it's frightening. >> we're not expecting venezuela. >> or zimbabwe. >> but certainly up. it's been a triggering really -- this is all the news around the world from all of our didn't sources. jeff mason at the white house. would we expect anything? jeff mason for reuters expecting anything out of them? traditionally the white house would be quiet until after the markets close. >> yes, indeed. it's hard to say. i think the biggest person to watch is the president himself. since we've been talking about this issue, he's tweeted about taxing and talked about how his tax reform and tax overhaul helped bring more money into

people's paychecks and taxes down. he didn't say a single thing about the stock market. as far as the other white house officials, there's a briefing today because the president was out of town. the first time we might hear somebody talk about it is tomorrow. this is a president that loves talking about the stock market. now it's going in the opposite direction, it will be interesting to see if he addresses it. one of -- an earlier conversation you talked about taking credit or taking blame. there's nobody for president trump to blame here. you don't talk about political dysfunction leading to the drop. you can't talk about president obama's fed chair because he department accept or didn't continue with former fed chair now janet yellen. so in the end if he wants to take credit for the extraordinary gains, it will be

hard to push blame for a drop like what we're seeing today on to other people. >> shepard: which is the reason given by previous presidents, previous administrations for keeping their noses out of it. >> exactly right. what is interesting, every time the market has gone down the past several years, people looked at it as a buying opportunity. i can jump in now. this is the first time in quite a while that we've seen no one buying on the dip. that dip is a fall. you know, again, you have the warren buffets. this is their kind of environment. when everybody else is screaming, he comes in and gets some value. >> shepard: i do wonder what is historic in the way of numbers, not in percentages, but in the cold numbers that 1,600 point drop, when we were at 1,600 points and cut half of that back, it was going to go one way

or the other. we've sold off a few hundred points. >> even though it's not that big on a percentage point, down 4% is not great. but psychologically, there's an impact. >> explain that. how traders -- >> many people haven't seen anything like this or lived through something like this. all of a sudden, a little panic gets in and they're getting their customers calling them. the traders saying i have to get out of this market, a lot of traders that we have spoken to said i tried to tell them hang in there, don't bail. the long-term is still very positive. the economy is strong. companies are making money. too many people said nope, sell. i'm taking my profits and run. >> this is not day one of this. we had a whole week last week. we didn't know what was going to happen. why know we should expect to be if a period of high volatility.

>> here we are. >> shepard: that's why we have the vics. we're in one of those periods now and don't know how long it will last where the numbers are all over the place. could they go back up? they could. >> they could. look, be nice to get to the bell today, get this day over. >> i'm ready. >> let the dust settle. be interesting to see the psychology at the opening bell tomorrow. >> shepard: i think -- we're six minutes from the final bell on wall street exactly. the final bell starts ringing at 15 seconds before the hour of 4:00 as the president ascends the stairs to get on air force one. that were lots of fans of his in cleveland. he had the speech and brought some folks up. he will head back to jba, joint base andrews and looking at this, i'm confident. from everything that i know about the president and how he travels. he will get in there on air force one and the first thing he does is pop on a television or talk to an adviser. somebody will sell them the market is off 1,100 points. not that that is some

cataclysmic event for our nation. it's not. markets go up and markets go down. corrections happen thank god. we haven't had a correction yet. but if you're a president who said all along, look at the markets, historic run, look what has happened, look, look, look. you run the risk some day this will happen. that said, it's still thousands of points where he was. another example of why previous administrations have said we can't really affect that market too much. the more we stay away from it, the safer. a.b. stoddard is here with us from real clear politics. what happens in washington politically when you have a day like this on wall street? >> i think the republicans will take great care to not shot the government down and get another funding bill passed as soon as possible without any disruption. they don't want a focus on their

sort of dysfunction and their inability to govern right now. as we talked about with mike emanuel a debt ceiling increase to come up shortly. it's interesting. there's been quiet negotiations between republicans and the administration trying to convince president trump not to make the rash moves that he promised as campaign promises. designating the chinese currency manipulators, slapping tariffs on them. withdrawing from nafta. republicans have said that you don't want the stock market to go down. this has been such a great rally. he loves so much the success and the numbers that he sees on wall street. as i said before, it's an indication of approval for him. and the success of his first year in office. it's going to be an interesting environment now if -- with this

new volatility if they're no longer able to use that as a buffer against president trump making a move to fulfill promises about trade that he made on the campaign, majority of his party strongly disagrees with. >> shepard: outside of politics, on the money side, ashley, tomorrow people will process this throughout the rest of the day. tomorrow they'll make decisions about what they're going to do. >> they will. they'll talk to their brokers and say -- this will have a big impact around the world. the asian markets will pick up on it and follow to europe. follow the lead of the u.s. markets. i don't know. it's a very good question. certainly the psychology has been shaken a little bit by this sell-off. there's so many analysts saying this is what we needed finally. flush it out. let's get rid of this -- what is the world that alan greenspan used? >> shepard: irrational exuberance. >> thank you. a little bit of that.

has it been washed out? we'll see. i have a feeling could be more selling before we're through this. >> shepard: important to remember again, to belabor the point because that's what we do, we've never seen 1,000 points off in a session. it's something we've never seen. we have never seen a dow jones industrial average this high. so all of that said, the context is, we're not down 10% from the high. the high was january 25, 26, something like that. it was right around 27,600. we would have to be down as a result. 2,700 points to be a technical correction. we're not. we were down 1,100 points haas week, 1,000 points today. 2,100 points. it's not 10%. what does that mean? it means that. there could be more to come. there could be a huge sell off coming. could moderate. we don't know. for today, people lost money on paper. if you go to your 401(k), like

i'm tempted to do, you'll see something in the negative. you don't need to do that. you don't lose money until you sell. ashley webster, the final bell will start ringing in 45 seconds. >> where do we finish? down more than 1,000 points? maybe more sell orders coming in. looks like we'll stay below 1,000 points shep. 4.3%. >> the s&p 500 is off 100 points, 3.63%. the nasdaq index is now off 3.37%. 237 points in the nasdaq and a wild dow right now. 1,100 points on the dow jones industrial average. thankfully we're not at the numbers we were a few years ago where this would be an enormous percentage. today it's not. let's listen as the final bell

rings and then comes neil cavuto. >> neil: taking stock of a wallowing. you're looking at something in history we have never seen at the corner of wall and broad. the dow jones falling more point-wise than it ever has in history. the only consolation, for a while it was worse. all 11 sectors including financials and energy, defense and home builders, pharmaceuticals, foot, beverages, fast food chains slammed and badly. a lot of that on the notion that things are improving. i know that strikes you as odd, but for the dow down about