this is "nightly business report," with tyler mathisen and susie gharib. the bulls get trampled, the dow drops more than 250 points the nasdaq has its worst day since november 2011, the reason? nobody can explain it. here come the banks, j.p. morgan and wells fargo report earnings tomorrow and what they say could determine how the selling continues. game changer, now that the curtain is being pulled back on how doctors are being reimbursed on medicare, are more changes ahead? all that and more on "nightly business report" on thursday, april 10th. good evening, everyone, a nasty and dramatic selloff on wall street today with a rare

triple digital loss on the nasdaq. red was the color of the day with all ten s&p sectors down sharply. here are the sobering numbers, the dow fell 267 points, the nasdaq plunged 130 points. that is a 3% drop and its worst day since november of 2011. and the s&p fell 39 points, that is a 2% slide. one big reason for the nasdaq decline, more selling in the biotech stocks, take a look at them falling more than 5 and a half percent today. so what happened? usually they blame a steep slide on an economic report, a global crisis or the weather, but there was no one single reason, there was encouraging news on the economy with jobless reports and homeless disclosures falling to seven-year lows, we have a look at the stock exchange and the

hard-hit nasdaq. we begin at the nasdaq. >> today's action is quite the reversal from the two-day rally we saw earlier in the week and more than wiped out the gains. getting hit the hardest are the biotech stock, nasdaq stock down nearly 6% on the day, and also high-flying so-called momentum stocks. they move in a consistent dra direction, that is down with names like tesla and netflix. after all the economic reports have been strong, and earnings reports is not quite in full swing yet. some say there is a shift in momentum, keep in mind the nasdaq rose more than 35% in 2013. as for whether the selloff will continue, earning season which kicks off for the big banks tomorrow will be the next

cataly catalyst. after big gains yesterday it was an ugly day for the market. health care, tech, consumer discretionary and financial were among the biggest downside sectors. it is a confusing moment for the market because it is not clear where the economy is going. the bears argue that it is hard to force the market without clear evidence the market is improving. tonight, they held the upper hand as the bulls sold stocks, the bears argue the economy is improving but we'll not blast off in the month of march, there is no reason to pay off a lot of money for stocks like ñipandorar tesla, because the economy is improving, you can get modest growth cheaper by buying old school names like microsoft, all of which had modest gains this year. who is right? we'll get greater clarity when

companies give reports tomorrow and offer scenarios like wells fargo. here is one area to watch, there are eight ipos that are scheduled to trade tomorrow. it wouldn't be a big surprise to see one or more of those postponed due to poor market conditions. and joining us now to talk more about today's market selloff is jim paulson, chief investment strategist at wells capital. good to have you with us, should any one of us be surprised that the market is selling off most especially nasdaq with the ratio something like 35 times? >> no, i don't think so, tyler, it has been a while since there has been a decline of 3% in the nasdaq or s&p, we have to make sure our hearts are working for us investors. we have been a big evaluation

correction in one small part of the marketplace. biotech, the high flying story stocks, maybe that is not a bad thing longer term for investors. but in the short term it has been very sharp and very eye-catching. >> all right, so we have been having to zig-zag in trading for a while, jim, but is this going to be the market correction that so many strategists have been talking about? >> one never knows, susie, and i certainly don't know either. it could continue on, there certainly was not a big show tonight. but my guess is it is more of an opportunity here than the start of a 10% or more correction, primarily because the underlying economic reports here remain very favorable. they continue to surpass expectati expectations. the report on claims was another report that was better than people thought, the suggested economic momentum was very good.

if that stays in place then i think greed will return to this market and more and more people will start to look at lower values and start to step up again and push the market higher. so i don't know if it goes much lower, i thinki if we do have a correction this year it will be much higher numbers. >> jim paulson just made the point that for the most part the selling has been concentrated in what we describe as the main names, the stocks going up because they are going up, biotech, small caps technology, but today in recent days there has been some bleed to the dow stocks and to the blue chips in the s&p 500. how vulnerable is this market and is this the time to buy the companies that have been on your buy list and you have been waiting for them to come down? >> i think that the market is vulnerable. what i look at are two things for me that tell signs of when you should be stepping in

safely. we are very optimistic in the long-term, but there are times which you want to be careful. and right now there are two things that concern me. the first one most importantly is we had a pretty big down day today. we have had a couple of them. and the measure of fear is really not reacting the way you would expect, given an almost 300 point drop. so we were up a couple of points today to 16. you want to see that approaching 20 as a relatively safe entry point if you're in a big decline. the second thing that concerns me more in a long-term sense is what is happening with the bond market. when you have interest rates flattening out, that is telling you that the bond market thinks that the economy is not doing as well as you think. a lot of us that are optimistic hope for a significant pick-up in the economy in the second half. i'm not sure we'll get that. and the bond market tends to be more right than the stock market. so i'm a little bit more concerned with that, as well. and i think as i mentioned on your show, a couple of days ago

i was nervous the things were not looking like i would expect if we were in fact a continuation of what has been an amazing move. >> so if you're nervous, joe, and you say it is a little bit risky to be buying stocks even though there are buying opportunities is it risky to hold onto stocks that have been doing !tñy(÷l. you still like them. the fundamentals have not changed but you see big selloffs. the companies like google, netflix, today they were down by 4% or more. is it too risky to hold on to these? >> no, i think the first thing everyone should do is make sure their overall allocation is right. you know we talked about this at the end of last year when you have a big 30% move on stocks and the bond market is negative your ability to have an allocation that is far more aggressive than you should have is very easy. and the market is still relatively flat for the year so we should hold it in context, it has been disappointing because we started the year off quite well. but the thing to hold in context

is well, we're still doing fine, look at your overall allocation and don't make quick moves. there are a lot of day traders, in the long term you want to be careful. >> jim, respond to what joe just said. >> yes, i think joe is looking for bond yields to come down but really they have been in the same area as last year. what i am attracted to is some of the coming back, look at the relative price performance with the inter-term make-up of the market here, the stocks are doing phenomenal on a year to year basis, the back material stockins are holding up well, i other words, the most cyclical parts of the economy are doing well. which tells me this is a short-term part of the adjustment in the market.

the great broader part of the market is still showing signs of improvement in the economy. and i think if anything we're doing good things with this. we're bringing down rates, bringing down the hurdle for stocks. we're creating a little fear which is causing people to raise some cash. that is new buying power for the future and we're cheapening stocks overall. and i think we're setting ourselves up to really rally highs, so i look at it as a buying opportunity rather than -- >> and joe sees it the other way. we have to leave it. but that is how a market is made. you see it one way, joe, a little more cautiously, and he says we're not afraid enough yet. but anyway, thank you very much, joe paulson, and jim duran of united capitals. and as we reported there could be a lot more turmoil in the markets tomorrow. two of the big banks reported

earnings for the quarter. we're talking wells fargo and j.p. morgan chase. what will investors be looking for in the numbers, you know, when they look at banks they think about mortgage fees, loans, treating revenues, are these going to be the drivers of banking revenues or something els else? >> there will be, susie, and there is a little bit of something for everybody, a little bit of good and bad. the thing is, the banks are a barometer for the economy, the economy is getting better, loans are improving, spending up slightly. but trading revenues are expected to be negative. unfortunately, the weather hurt the banks as well as the retailers. they are not immune from this. a lot of people were not trading during the harsh winter storms that happened throughout the quarter. that alone could drive revenues down 10% as some of the big institutions. >> how much are the legal settlements going to affect the

earnings or has that wave crested? >> you know, tyler, it feels like we're in the eye of the storm here. we're not in the worst of it, but in the very awkward quiet period. we have had a couple of scandals erupt. fraud and cities unit, that broke the quarter, a lot of banks are being investigated for foreign exchange and interest rate rigging. we've not seen those settlements come to pass. but we've seen a lot on bank of america, on the mortgage front they had a big settlement with the fhfa, and we also had j.p. morgan well behind us, you're not going to see some of the giant blockbuster fees paid but this is not the end of it certainly from the legal front. >> all right, the big banks, you report, which ones will report solid reports, what are you hearing? >> unfortunately, no one thinks it will be a blockbuster

quarter, they are raising revenue thinking that more home buying and interest rates will help wells fargo. citigroup is not willing to say as a buy just yet, because all the other issues. a setback for consumers fighting other big issues, and a lawsuit dismissed regarding credit cards, they accused them of colluding, saying they were settled by arbitration rather than class action lawsuits, american express, discover financial all ended lower on this down day in the markets. we have an update today on the troubles with general motors and the recalled cars with the faulty ignition switches. now the automaker will take a 1.3 billion charge in the first quarter for the cost of the recalled cars, that is much more than the first charge of $300

million, also, gm placed two of their gm's on paid leave for their recall in delaying the recalls. and will it lead to greater change? from vermont governor howard dean, on the future of the health care industry. some good news from a troubled economy, greece in the nation's first bond offering in four years when it was bailed out by eurozone officials, today

the country saw a build of more than 4 billion from investors. and today, budget shrinking with more americans working and tax receipts growing, the government's budget shortfall has dropped to just $37 billion in march, down from $107 billion in the same month last year. and shares of allied financial stumbling. 95 million of ally shares were offered at the low end of expected range, 25 apiece, the sales were the biggest initial public offering so far. the shares were sold by the u.s. government, which means you and mean that took the $17 billion stake in the auto lender during the financial crisis, the shares were off to 23.98. ñ a.

the company expects to benefit from new generic drug benefit launches andhrm6 believes it w earn more customers in the loyalty program. earnings topped numbers because of strong pharmacy sell, sending the stock up today. and the opposite story for family dollar, the discount retailer announced an earnings list, closing 370 stores and cutting prices on a lot of back items, shares fell more than 3% to 57.17. and ebayw> we thought we were going to win the vote, but you know, carl himself said let's make peace, not war. this proxy battle was not

something that was helping ebay shareholders or helping us execute more effectively. so now that that is behind us we can focus on what is more important which is competing in the market and driving strong innovation which willd$drive strong growth. >> despite those optimistic comments, ebay shares fell to 53 and change. and hepatitis treatment showing a 98% cure rate. the pill stopped the virus in newly treated patients with few side effects. despite that, merck could not stop the drop of shares to 55. and figures out today from health and human services show more than 7 and a half million americans have signed up for a health insurance plan through the aca and state and federal on-line marketplaces. but doctors, insurers and

regulators are still talking about another batch of numbers. we're talking about those medicare payments to physicians that yesterday were made public for the first time ever. joining us to talk more about that is howard dean, former governor of vermont and advocate for universal health care. mr. dean, thank you so much for coming on the program to talk about this. you know, now that we know more about what doctors are getting paid do you think this is the beginning of a game change or change movement between how physicians, how patients, how regulators all react with one another? >> i do think so although this is not the beginning, this has been going on for a long time but this is a major milestone. one of the big problems in health care is lack of transparency, and the costs out of control, exceeding the rate of inflation every single year for 30 years. so transparency is the first step to try to determine what is the matter with the system.

these figures are in some ways shocking. and now we're going to drill down on those figures and find out what those folks are getting paid, why they're getting paid and whether the care is worth it. now only on behalf of the government but the american people. >> and it goes to the heart of what is described as fee for service medicine. doctors who performed the more services got the more fees, big shocker there. is that the heart of the problem in american medicine today? >> yes, it is the heart of the problem. people are always blaming trial lawyers or insurance companies or drug companies and also -- the biggest problem is we have an incentive system to spend as much as we possibly can. and if we're ever going to control costs in this country no amount of tort reform or different compensation systems will be fixed unless you get rid of fee for service medicine. and i think that has now become widely accepted among people who really understand how to deal with health care. so interestingly enough, obamacare, because it created

this aco, the vertically integrated health care systems is now able to move towards a flat fee basis, take all comers for a flat fee per patient. and that will get rid of this incredible drive to do many, many more procedures that are necessary. >> uh-huh, do you see a down side to that, you know, the american health care system is raved at all around the world for the high tech and the high quality doctors, is there a down side? >> yes, there is a down side, cheaters in ever profession, there will be people who short-service patients. and you can get in danger by serving too little. we spend almost twice as much as most countries, there is a lot of downside and there will have to be a lot of regulations. and there is the question of innovation. if you can sell 10,000 medical devices you can make money off

cutting edge medical devices, if you can only sell 3,000, and people are putting them in to take advantage and make money, then you have to look at innovation, we can't afford to keep up with the fee for service medicine. i think you can say good-bye to that. it may take two or five years but we can't continue in this spending pattern. >> and just to clarify what replaces it? >> what replaces it, essentially, a model that looks very much like kaiser, you sign up for kaiser and get a comprehensive care, you pay a flat fee, that is all they get. their incentive is to take care of you, this is the incentive. to take care of you. if we get sick, what we would like is to get paid a lot essenti essentially by paying expenditures, and keeping you out of dialysis, and early taking care of diabetes and high cholesterol, early taking care of obesity and not waiting to be

in the intensive care unit when you're 55 or 60. >> all right, governor dean, thank you so much. >> thank you. >> and coming up, some of the nation's biggest retailers seeing a spring thaw in their monthly sales. that is coming up. a huge settlement from a now shuttered hedge fund which will pay the largest criminal fine

ever for an insider trading case, $900 million, a federal judge worked out a deal where se capital, and the founder will pay a total of $1.8 billion after the firm and three subsidiaries pled guilty to wire fraud charges, the former employees have been convicted of insider trading. and walmart going national, they are teaming up with organic foods maker wild oats. they will package foods for the bargain conscious shoppers, walmart expects the food to cost 25% less than the other organic brand it sells, shares of walmart down 1% today, while shares of organic retail whole foods dropped 4%. and tight-fisted consumers are not just watching what they're spending on food,

they're cautious on all kinds of spending as we saw on the drops in the clothing chain, take gap stores for instance, sales felln 6%, and numbers from its name sake stores were well below expectations. that sent shares lower in after-hours trading. courtney reagan has more on all that as we hope consumers catch a little spring fever. >> reporter: this year has been harsh for retailers, with severe winter weather keeping shoppers at home cranking up the heat, subsequently cutting into budget slowing, and easterr, retailers expectations for sales. cbsco and shopper traffic up for the month. costco is a rare stand out in the shopper space.

>> we have the shift of the easter effect which definitely benefitted one more day in the month of march and helped sales for costco. >> l-brands, the retailer that owns the limited and vaccination secret and -- victoria secrets and bath and body, they believe they will have to increase the promotions to clear some of the inventory that did not sell. that is helpful for consumers looking to sell easter baskets and spring wardrobes. >> the month of april we'll see consumers get a boost from their tax returns and also we find historically the month that easter falls in tends to perform very well as consumers go back and buy spring merchandise at full price. on top of that, shoppers have stayed at home for the past few months. >> reporter: leaving retailers and investors hanging hope on the easter bunny. for nightly business report, i'm courtney reagan in tucson, arizona.

finally tonight, a big change comes to the late-night tv landscape. it took less than a week for cbs to tap steven colbert after letterman retires, colbert is host of "the colbert report." no word on how much the deal is worth. plenty, i bet. >> big bucks, i bet. that is "nightly business report," i'm susie gharib. and i'm tyler mathisen, have a great everything everybody, we'll see you back here tomorrow night.

larriva: it's like holy mother of comfort food.ion. woman: throw it down. it's noodle crack. patel: you have to be ready for the heart attack on a platter. crowell: okay, i'm the bacon guy. man: oh, i just did a jig every time i dipped into it. man #2: it just completely blew my mind. woman: it felt like i had a mouthful of raw vegetables and dry dough. sbrocco: oh, please. i want the dessert first! [ laughs ] i told him he had to wait.