nasdaq and s&p also way down. >> different ballpark now. today it is green across the board. the dow erasing 300 points out of the gate. a dramatic turnaround from the last three trading days. it was all on worries over that potential slowdown in china's economy. now china's stock market plum meted another 7% today after an 8% plunge yesterday. in an effort to stop the bleeding, china's central bank lowered the amount of reserves the banks must hold and lowered the interest rate. now we'll get right to it with cnbc's sharon epperson. here on wall street, a complete reversal. what market are we looking at today? >> well, we are looking at all of the major averages and if you took money out, you will be upset considering the fact we have seen quite a bounce today. we are looking at the dow, though, and the s&p 500 still

seeing major gains for the month. in fact, the biggest losses in terms of monthly averages for the monthly averages on the indexes that we have seen in about five years or so. so it's still a significant correction for the s&p 500 for the broader market but the fact of china still behind seeing today. the rate cut really helping to inspire investors to think that perhaps we'll see not as significant a slow down in china as first anticipated and traders saying, expect the wild swings in the marketment after all, it is august. there are many traders out of the market. and we are seeing the volatility ensue. but the bottom line for retail investor is not to panic. after we saw yesterday and the swings that you are seeing, it doesn't certainly rattles a lot of invest or thes but "the new york post" are saying sit tight. if you have a plan, a strategy, stay with that because we're likely to see many more wild swings ahead. >> thank you for that report. >> sure. >> for more, we bring in former

ragan economic adviser and honorary professor at the chinese academy of sciences and assistant professor of law and former chief economist of the u.s. house committee on financial services. welcome to you both. a lot of title there is and a lot of experience. bottom line, j.w. are we in the clear or is it too early to tell? >> well, you know, i don't focus too much on day-to-day swings in markets. and especially, times of volatility. i always go back to the wisdom of benjamin graham, the finance professor who taught warren buffett and focused on price earnings ratios, a big focus for him. he tended to think they were healthy around 15. i think that robert shiller at yale who helped to predict the 2000 crisis and market correction and who helped to predict this market correction, frankly, improved on that.

his estimate is high 20s. i think ben graham is conservative but i think shiller's right and too high right now and not surprised with more market corrections. going forward, i think as people look around for that answer, for remedy, to volatility in the stock market, i think they look at the first place that the federal reserve communicates monetary policy and we can talk about today and trying to change at the house. chairman henserling works on a rules based approach that i think is better and as all along looking at the course of the qe exit and the federal reserve starts to raise interest rates again and sell off the part of the portfolio, i think a rules-based policy using a little math rather than picking boards out of a thesaurus as they do now is a superior way. i think certainly a superior way to communicate to markets the course of policy. >> certainly fair some of what you said. but, john, whether we're

talkinging about revenue and price and the viability of any given american company, the fundamentals matter but what's happening in xchina is a factor that seems to have injected some volatility in the markets. where does china fit into this? >> china's having a legitimate bubble. when bubbles pop, they never pop halfway. this one's about halfway down to where it started so the chinese market's got a lot more down to go before it stops. the moves they made last night are little bitty moves. 3% devaluation last week. a quarter point on the rate. quarter cut on the reserve requirement. chinese authorities use reserve requirement changes to sterilize capital flows so that means that capital is flowing out of china and trying to sterilize it.

it's driving the global markets. for eight years we had zero rates and people borrowed dollars to put money in places with higher rates. all emerging markets. last year, trillion dollars of that money's come home and there's a lot more yet to go. so what does that mean? strong dollar and over in the emerging markets. we currencies, commodities, gdps and every other metric. i don't think their market caused our market to happen but it is very important. china's quite soft right now and more bad news to come from their stock market. >> john, part of what you are talking about is u.s. and international capital going to china in a response to chinese policies and is there anything much that the u.s. can do that, other than counsel people not to be overly xub rant in chasing yields internationally? >> the fact we had zero interest rates pushed that money away and forced it to look somewhere for

yield. as our other guest was saying. some point or other, the fed's going to raise the rates. nobody knows how or just when. but when they do, that money comes back from the emerging markets because the interest rates spreads are gone. but the leaders in china are quite worried about growth right now and i think there's some possibility you might soon see a chinese qe program. they're the only central bank in the program that didn't climb on the wagon and they might make it on the wagon yet. >> you mean some kind of stimulus? >> printing money. i remember when we called quantitative easing printing money. >> okay. >> and that printing money has pushed its way into asset prices. when asset prices go up first, but gdp prices like earnings, wages, incomes and so forth, take a lot longer so asset prices have pushed ahead.

that's why those valuations are looking so high right now because valuation like a pe is asset price divided by gdp price. and that's not people scared and the root of the volatility we have now. volatility not going to go away. >> j.w. your thoughts on u.s. interest rates looking towards the september meeting? >> well, i think it's a huge mistake for central banks to track stock market prices in the setting of interest rating policy. i agree with your own guest's analysis here. but i think, unfortunately, even allen greenspan toward the end of his term was prone to think about how he's going to be reviewed in financial markets, how he looks on the cover of qult business week" and affects the decision making at the fmoc. it shouldn't. if we saw a correction and increase in real gdp to something approaching a healthy 3%, 3.5% in late 2015, 2016, i

think that would be terrific. and that would also have implications for those that focus on income disparity, that's tremendous implications there, as well. because stock market rallies fueled by printing money tend to hold the top 1%. monetary policy is helpful for everyone else in the economy and the antidote to volatility is transparency. i think rule-based policy is the answer. my favorite is a taylor rule approach. one that weighs inflation more and little more hawkish. weighs employment more or the gdp gap and more dovish. whatever your favorite rule is, let vees a real rule. use a little math. this input into the policy making from the division of affairs are sophisticated and the outpitted unsophisticated

and i think it's laughable that you read in fmoc minutes, for example, extensive pages devoted to a debate about whether we should say we're following the economy closely or we're following the economy carefully. i think that's a waste of time. i think it causes unnecessary volatility. mibl a little bit of a difficult transition to go to rule-based policy but absolutely the answer. no question. >> right. >> and yellen said that in '95 as a fed governor. a huge fan of the taylor, in fact, specifically. >> we are getting into -- we are getting into deep fed history and will wrap it there. not because i'm not interestinged in early '90s writings. j.w. and john, i want to thank you both for expertise today on a wild day at the markets. watching the big board all hour and keep you updated on what you need to know. next, the latest clues in politics that joe biden could get into the 2016 race for real. and why the white house is sounding so warm to that idea. also, jeb bush, donald trump

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for 35 years, joe biden has been tested and made the tough decisions that have protected our nation and saved lives. isn't that what we need in this office? >> maybe not quiet but is another ad like that coming from the presidential run? well, 2016 biden speculation is reaching a fevered pitch after meeting with advisers last night. he is expected to court a top democratic set of donors after

labor day and private chats with progressive leader elizabeth warren over the weekend and then with president obama yesterday. a closed-door lunch and definitely the talk of the beltway. nbc's jim miklaszewski at the white house. jim, can you interpret any of the tea leaves for us? >> reporter: well, ari, like tea leaves, the speculation concerning vice president biden's possible run for the presidency, those leaves are still a little green around the edges. but it appears to be coming any time now to a near boil. on air force one enroute from las vegas back here to washington, d.c., the white house vice press secretary eric schultz forced again to answer questions about where president obama stands on a possible run by vice president biden. and he was asked about reports that in their weekly private luncheon here at the white house president obama had given vice

president biden the go ahead, that president obama would not stand in biden's way if he decided to run for president. schultz would not confirm that conversation only to say it's an intensely personal decision by biden and that the private talks would be protected. the key thing, however, here is that he did not deny the reports, ari. >> all right. jim miklaszewski, thank you for that reporting. for more on the president's position and what it means potentially for hillary clinton, we have david froome. how are you? >> all right. thank you, ari. >> you know, you look at this situation and it is something of a reversal. typically when you have an incumbent vice president who has an interest in running, they become pretty much the establishment candidate and potential candidate and others move around it. here hillary clinton's jumped in. she has that role. he would have to have to come in

with a challenger and a rose garden straeng. what do you make of it? >> yeah. right. exactly right. it is an odd position that vice president bide season not the natural heir to a president who's popular with the party. he's closer to president obama than anybody else. hillary clinton is a former rival. you would think that democrats turn to biden to carry on the work of a president they broadly support. they may still have to do that because the -- i think the obsession of hillary clinton's e-mail problems distracted attraction from another bigger scandal that never got resolved which is the question of the allegations of sale of access to fund the clinton family foundation. back in the '90s, jay leno had a joke of clinton strategy to distract attention from a scandal with another scandal. >> you look at that, you could add to the list of a republican rer suspective, benghazi, right? related to the e-mails and republicans that continue to feel that there is smr there despite all the nflgss that

transpires. does that cut ice? those aren't really edges against hillary in the sense that a lot of the folks joe bide on the appeal to don't want to see her hit on what they consider settled issues. >> benghazi isn't a scandal to hit hillary clinton with democrats and probably not with the general public either even if it is a scandal. the e-mail story, again, that's a highly process oriented story. i don't know that that's going to be big outside the beltway. but to have a candidate when's running as the champion of middle class people, who with her husband made a -- collected about a quarter of a billion dollars orr the past 15 years, in a way that looks a lot like a sale of access and power and influence and you don't with a to go too sfar and overstep the evidence but it look that is way. how does that appeal to voters that are champion of middle class causes to reach? that's scary and i think that's what people around the vice

president are talking about. >> then you look at the white house signals this week, and you are someone who knows how carefully words are crafted in that building. do you feel like the words that have emanated and the leaks coming out suggest a warmth from the president to a biden candidacy that is beyond when's necessary and certainly beyond what hillary clinton's camp's would like to see at this late hour? >> those are not especially warm words to say that the president won't stand in the vice president's way, well, how's he going to do that? there's no suggestion that the vice president has the president's blessing. or, there's no suggestion as, for example -- >> it's funny you mention the word blessing. jumping in, they said at the lunch the leaks were that he does have the blessing. >> no. the leaks were that the president wouldn't stand in the way and coming from joe biden's people, obviously. here's the real test. when the president is really

passing on power, as ronald reagan did with george h.w. bush, there's actually a coordination of policy in the last year, kind of convergence. people closer to the vice president begin to step into top roles, the president draws back from things that might be provocative with a view to helping the vice president move forward. joe biden is not getting from barack obama the kind of consideration that george h.w. bush got from ronald reagan. >> that's an interesting point and historical comparison and i want you on the republican side. you have written a new piece talking about jeb bush's choice to go at trump. let's read from that. you say a reason bush shouldn't fight trump, even if bush wins, he'll lose. most of the republican rivals reluctant to broach the issues but trump's not playing by the usual rules. show trump a line and he'll cross it. he has you write. bush is a candidate that needs lines respected almost more than any other.

you think bush is in the middle of a big mistake here? >> yeah. i really don't understand why -- look. i understand the rationalization. and i understand the reason. the rationalization for jeb bush dusting it up with trump saying if i make it a two-man race i'm more acceptable to more republicans than trump and the real reason is donors are calling him in a panic every five minutes saying take the gloves off. that's what your do lors say. when it's going well, they say be yourself. when it's going badly, they say take the gloves off. this is a foolish thing to get into. trump is hurting other republicans, especially scott walker more than jeb bush. jeb bush has the money to wait trump out. he should be doing that. what by starting this fight he is getting, he is throwing mud with a one-man dredging operation. nobody will throw more mud further than donald trump and bush has a lot of things he doesn't want people to talk about.

trump will talk about them in a way that other candidates won't and people in the media won't. >> right. without any apparent fidelity to the nominee is and how they fare and another thing that makes him different than a typical rival. david, thank you, as always. we'll have more. why fox news is today new going after the donald personally. new developments. but next, the check of some other headlines. could the 19-year-old defendant in the high-profile rape case take the stand today? we'll be live at the courthouse right after this. i'm only in my 60's...

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for all the confidence you need. td ameritrade. you got this. we are back following developing news of a rape charge of a student of an elite prep school in new hampshire. the prosecution may rest today and the defendant is expected to take the stand. he would face accusations he sexually assaulted a then 15-year-old underclassman.

nbc is at the court in concord, new hampshire. jamie, how does the prosecution's case look so far and what do we expect to hear from this defendant? >> reporter: well, it's been another, frankly, uncomfortable day of testimony on the intimate details of the case. and the prosecution's case has been battered a bit, frankly. yesterday, with testimony from friends of the defendant who said that the defendant led them to believe that he had had sex with the accuser and the defendant, of course, has told police that he has -- he never had intercourse with the girl. also, today, we have had testimony from forensic experts, police forensics experts who have said, an expert on the stand right now said that underwear enand again undercomfortable details, underwear of the accuser in the case, the dna in the underwear

from the accuser in the case appears to match dna of the defendant. she says that that matches to a reasonable degree of certainty. she said a second test performed on the underwear came back inconclusive. earlier, another expert said that he found fluid in that underwear and this morning a police detective in the case was pushed by the defense attorney about her methods asked by the defense attorney why she separated labrie's mother from labrie when labrie gave his initial interview to police. the detective said that this was because he wanted to give -- she wanted to give labrie a chance to testify without being embarrassed having his mother around. the labrie pleaded not guilty and may take the stand as early as tomorrow. the prosecution's expected to rest today and in the middle of their last witness and, of course, as you know, the school

has put out its own statement and said that the allegations are not emblematic of the values or culture, ari. >> jamie novogrod, thank you. i did interview several criminal law experts in new hampshire about the defense's strategy and told us that the cases hinge on the credibility of the accuser. you can find that entire report at msnbc.com. we have an update on emotional testimony in colorado as survivors and their family vs a final chance to speak at the sentencing hearing for convicted movie theater shooter james holmes. leanne gregg is live in sen innocent call, colorado, with more. >> reporter: ari, dozens of people are continuing to testify today about how the crime impacted their lives. holmes is sentenced to life in prison without the possibility of parole where a jury failed to agree on a death penalty. he got life.

that was only for the first-degree murder charge. this hearing is to deal with the other 140 charges he was convicted of. in the end he could be sentenced to thousands more years on top of that life sentence. under the colorado victims' bill of rights, the victims and family member vs an opportunity to talk about the crime and what it's done to their lives and that's what's happening today. one of them was carly richards, she's a veteran. she was inside the theater, shot, able to get out and here's what she had to say about the impact. >> the crime comes up constantly with conversations with people, especially with strangers and look at me like they have seen a ghost which maybe i am. i don't know. i don't know what's real and what's not half the time anymore. >> reporter: again, more testimony expected this afternoon. the defense will also have an opportunity to ask witnesses to testify. james holmes so far has refused

to testify during the trial. it's been interesting what the witnesses have chosen to share, some people have offered forgiveness for holmes. others expressed extreme anger and others questioned the justice system itself and the integrity of the jurors. yesterday the judge sharply defended the justice system and the jury saying there's no evidence of wrongdoing and as to the question of why thousands of years on top of the life sentence saying under our system, you have to punish holmes for every crime that he's been convicted of regardless of the number of years. the defense will have its turn later after the prosecution fin initials. the judge should make the final decision on wednesday. ari? >> thank you. we have breaking news here now, as well. this is a brand new video of the suspect in the attack on the paris-bound train and the first look at ka ziny. they opened a terror investigation into the dramatic thwarted attack and revealing new detalls of what they say the

suspect was doing minutes before he boarded the train. nbc's claudio lavanga is in par wis the latest. >> reporter: the investigators here opened the investigation of charges of attempted murder with terrorist -- of a terrorist nature, possession of weapons and the participation in a terrorist organization. now, they gave a lot more details about that attack and the attacker. they said that the attacker khazzani boarded that train in brussels bound for paris with an incredible amount of weapons, ammo. now he had an akm which is an assault rifle, some kind of short ka lash cough and cam mo and 270 rounds, a hammer, a bottle full of gasoline, box cutters and so forth. well, enough to cause or to

carry out what investigators said could have been carnage if it wasn't for the brave and sxwift action of the three americans and the investigators kauled heroes. a fourth american who first tried to wrestle away that assault rifle from the gunman is still in the hospital with wounds after he was shot in the back by the gunman. now the doctor from the hospital spoke to the french media saying that his conditions unfortunately are worse. >> all right. thank you for that, claudio. the racing world mourning the loss of justin wilson. he passed away overnight from injuries struck in the head of debris in a crash. that was this weekend. craig melvin is outside the pocono raceway in long pond, pennsylvania, with more. >> reporter: ari, good afternoon to you. from to ro ko no raceway here in pennsylvania. the site of that tragic accident two days ago.

justin wilson, 6'4", the tallest driver in indy car. he was also quite soft spoken. a bit of a gentle giant. this afternoon, the racing community and fans alike are mourning the loss of that giant. a life cut short far too soon. tri butds are pouring in this morning for late indy car driver justin wilson. >> great guy. you know? one of the few of guys that was a friend among everyone in the paddock. >> reporter: the family calling him a loving father and devoted husband to his wife julia and their two daughters. his younger brother fellow driver stefan wilson tweeting i often told him i just want to grow up to be half the man he is as that will make me a pretty good man. >> justin's elite ability to drive a race car was matched by his unwavering kindness, character and humility. >> reporter: the 37-year-old england native died one day after crashing in a race at the

pocono raceway in pennsylvania. >> oh! he's gone! >> reporter: the fatal chain of events started when a driver lost control, crashing into the wall. seconds later, the nose cone from the front of that other car struck wilson's head as he drove by. >> and that is -- if that is the nose of the car, that's a very, very heavy thick object. >> reporter: wilson knocked unconscious drive boog the wall. medical teams rushed to treat him. he entered a coma. >> he really understood how the game sort to speak worked. and that's why the gravity is so big. his loss will impact so many but so many personally, i'll really miss him. >> reporter: wilson's tragic death, the second in indy car in four years. fellow british driver dan

wheldon died. mario andretti spoke out about the safety of the sport just before wilson's crash. >> the sport, actually, you know, i'm knocking on wood, but we reached a point that's as safe as you could possibly make it and then on the other side still a work in progress. >> reporter: the last race of the season comes up this weekend. after the grieving, after the race, most people think that attention will turn to how to make indy car safer perhaps. keep in mind that the helmets are exposed because the cockpits are open in this sport. and the cars themselves frequently reach speeds of nearly 200 miles per hour. that's the very latest from here at the pocono raceway, ari, back to you. >> craig melvin, thank you for that important report. next, back to the breaking news this hour. this rally, well, it's fading and looks like it's fading fast and keeping an eye on the stock market for you. firefighters out west getting help from a world away.

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sears optical we are back and here's what's happening now. a new storm gathering in the atlantic. erica formed late last night and likely hitting late wednesday at the leeward islands before landing in pfr thursday or friday. forecasters will have more information once the hurricane hunters fly into the storm. that's expected today. firefighters in the pacific northwest getting much needed help battling what's become the largest wildfire in washington state's history. dozens of firefighters from australia and new zealand joined the effort. and the complex of wildfire s spans more than 250,000 acres. now we return, of course, to an update on the top story. wall street bouncing back today. the dow is up with just about 20 moneys left in the trading day and the nasdaq and s&p 500 indexes are also up. but it's a complicated story.

rejoining us now is sharon epperson. it's a brutal couple of days. we were talking earlier in the day and selling the rally more and looking at the final 20 minutes before close and up to the 40s. when's going on? >> less than 1% up for the dow and s&p 500. we were up about 3%. so some people may be saying what really? we're barely positive here with the major averages and even when we were at the highs of the session those were still were not enough to erase the losses of yesterday. the gain if we do see one the first for stocks in six sessions but traders say the market action that we're seeing are typical for right now. for this time of year and going to take sometime for confidence to rebuild in the market. a lot of it will hinge on what the market sees in china and with that rate cut what happens when w the markets tomorrow in china and here in the u.s. here in the u.s. we have seen technology leading the way. we were seeing that being a

positive area. utilities were lower. but even when the dow was at the height up 441%, that's still 441 points i should say that's still not enough to really do away with the losses we saw yesterday. down almost 600 points yesterday, of course. >> thank you as always. we have been seeing wild swings on wall street. negative and positive directions. what do we expect next? for that, we bring in dan burns, an editor of reuters and elan w i. let's start with when's happening, dan. this is the kind of thing that makes people wonder are we in the clear? >> probably not. this is the feel of a dead cat bounce and more than 400 points off the high of the day or around and the high of the day it's little bit of a mirror of yesterday just in smaller magnitude and yesterday opened at the bottom and closed down

today. we opened and rose and fading that level pretty much throughout thedy. >> one thing that for those of us following the markets less, we learn the gyrations. the traders are finding the floor. this is not a normal floor to walk on obviously. >> it's clearly not. >> more like an indiana jones and the floor over there and can't see it until you see it. the question at 3:41 on the east coast, are they testing a floosh here as we see the gains of the day erased? >> i would say not. we had a full 10% correction in the s&p 500 an finally confirmed yesterday with that close. and once you make, you know, confirm a correction, you don't really rebound off of that. in 2011, an initial low in september. traded sideways and then finally confirmed that low in september

and then moved that. made the first low. may trade sideways from here. stocks all that cheap either. >> right. >> we have come down from a forward earnings multiple when the market was at the top in late may and two points off that and down to about 15.3. that's still a little rich compared to the average of about 15. so we could do some more work to make stocks cheaper here in the next couple of months before we maybe find a bottom. >> you're headed out to jackson hole, what can you tell us what you think of interest rates? >> the global economic slowdown is not the only thing we have seen causing the market volatility and policymakers doing about the fact of a shakier global economy. you saw china's moves later on tuesday. and that really is part of what helped, you know, sort of break the global selloff. have stocks surge in europe and

then again here in the u.s. and now the question turns to what's the federal reserve going to do about interest rates? traders expected the federal reserve to raise rates next month in september. but now those calls are a little bit iffy and many expect that the fed has to wait longer to raise rates because of the turbulence we have seen in markets, because of the inflation and falling oil prices. so the fed is really sort of in a very tough spot because it doesn't want to be seen as responding to the latest gyrations in the markets and same time trying to figure out how much is this actually impacting the real economy and going to force the fed to stay its hand and keep the stimulus going? >> you are putting your finger on the balance they have to keep an you have also said that with regard to china, now you have china intervening in an aggressive way to save its own economy. walk us through how the fed weighs those things and avoiding the trip wire that they don't

want to look like day traders. >> right. so when you look at the financial gyrations, how does that pass through, affect the fundamentals of the u.s. economy? you see and unlikely to affect hiring or the unemployment rate before the september meeting but it can affect inflation and that's a real question mark in fed policy lately. inflation is well below the target of 2% for years now and been sort of stumped why it's not getting higher. to the extent that you see the stronger dollar, to the extent that you see falling oil prices, all of these things weighing on inflation, the fed wonders how much longer is inflation low and to do to ensure it's back to the 2% target. >> right. thanks both for giving us the updates here. we'll continue to keep an eye on the big board with the countdown here to the close. 15 minutes away. next, another update on 2016 politics. jeb's newest bash and jab at the

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the war of words between jeb bush and donald trump is heating up. today the establishment favored hit trump at a town hall event for veterans. >> i'm not a talker. i'm a doer. there's a lot of good talkers running for president. there's one in particular i'm thinking of. >> for the second day in a row

slammed trump's plan for a fence at the border and trump taking swings hitting close to home in a new instagram videos. >> would you like to see him run? >> no. i really don't. i think there's a great country, a lot of families and other people out there very qualified and we've had enough bushes. >> some great editing there. watching for more zingers as trump holds another event tonight in a key state of iowa and gabriel sherman is saying that he's building a real field operation and called the trump expansion plan and gabe sherman is here. >> thank you for having me. >> thank you for being here. you're reporting on the field side of this. what it takes to build an organization that can turn momentum into not only votes which are quick but caucus goers, an event that takes well over half an hour in the cold of iowa. what did you find? >> this is surprising to me and

i think to republicans is that trump is actually building a real campaign. he has ten paid staffers in the state of iowa. he has santorum's former iowa field chief who orchestrated his come from behind in the last cycle. so this is actually turning into a real campaign. and i think that is what's troubling a lot of the other candidates who thought trump would just be a summer flash in the pan. but he's putting steps in place to play into the fall. >> and even if he loses ground later, which as you say has been the working assumption of a lot of republican elites, you write that actually might make it harder on them. it is also possible a trump losing would be more erratic than the one winning. his numbers are going to come down and then he's going to panic. what would happen there? >> what's clear is that trump is capable of almost anything at this point. today we saw a new war of words with fox news.

the de facto media arm of the republican party. and trump is unafraid to challenge fox news and fox news's chief roger ailes. >> some may think to megyn kelly a few weeks ago but this is brand new today. donald trump, megyn kelly must have had a terrible vacation. off her game. no confront of the carnal west. and again, claiming it was unscheduled which fox folks say is not true. and then today i want to read and get your thoughts. roger ailes coming out with a big statement defending megyn kelly, attacking trump. saying this whole thing is as unacceptable as -- what's going on here. >> these two men came to a private deal two weeks ago where ailes according to my sources believed he had gotten trump on board with stopping these

attacks. because this is the problem for fox news. donald trump supporters are the loyal fox news audience. and donald trump has rallied his base of supporters essentially against fox news and kelly. and ailes can't have the daylight between the two of them. he worked out what he believed to be a truce. and today donald trump threw out the truce and has gone on the offensive. and that's caught fox news by surprise. >> you covered this stuff pretty closely. you have written a book on it. have you ever seen a republican government official or candidate take on fox news like this? >> never. in the 19 years fox news has been around, i have never seen this kind of open warfare. to me it represents a new chapter in the history of conservative media and a new chapter in rogers ailes' remarkable five decade career. uncharted territory. >> just to break it out because people at home watch and say okay. and at a certain point there is something potentially cartoonish about trump.

potentially dismiscible. and yet what you just described is a type of what he would call leverage, media power and power that -- >> what other republican candidate could fill a 20,000 -- bring out 20,000 supporters. he said he would fill the stadium. he did about. but 20,000 is historic numbers. and i the party is saying donald trump is defying the laws of the political gravity. for the time being, his numbers are still there. >> the other concerning part to many journalists, regardless what you think of fox news and weird politically is just how thin and personal donald trump's ongoing concerns with megyn kelly are. and i will say. i've said this before. but i will say as someone on a rival channel. whatever. from an objective point of view. she was asking fair questions about facts. some don't like the question, fiber. they were about facts and the

candidate's job is the o address them. and he's gonna on a tirade. retweeting and sexist. and totally over the line. and his defenses aren't very logical. this is what he says out new. donald trump totally disagree with the fox statement. do not think megyn kelly is a good journalist. hopefully in the future i will be proven wrong and he will be able to elevate her professionalism to a level fox deserves. this is about his view that he was treated unfairly and citing polls doesn't tell you about the kwolt quality of her journalism. >> i think this might be the first time in history that roger ailes is on the side of people like you and mainstream journalists than his audience. we built a network that was supposed to be the counterweight to the mainstream media and now he has to go out and say oh

megyn kelly is a fir respectable journalist it. trump is more in sync with the fox news audience than ailes is. >> and what do you expect to see at the next debate? >> he's going to continue doing what he's doing. it's worked so well right now. he doesn't feel the need to sort of modulate his tone. and this is the trump that's working. >> and that's what you have from your discussions with him. >> yes, i asked him what do we expect to see in the fall campaign? and he said i'm going to continue doing what i'm doing. >> i you and he stay on speed dial. is there anything else that you think he can do to look more serious a as we've shown the negative numbers he has are higher than any other republican candidate. there are a lot of people in the republican party who view him less favorably than anyone else. does he want to change that? >> i think he sees the poll numbers. he's leading in a lot of states and as he cites the poll in his statement about ailes.

he looks at these numbers and sees i'm a winner. the minute he becomes a more strategic candidate, i think that is a strategic misstep for him. >> we are now just three minutes to the closing bell on wall street. ayman mohyeldin lv full coverage on that and what it means.

the closing bell is about to ring on the stock market. the dow seeing a serious erosion

of an earlier rally in late trading. throughout the day we saw the dow rallying in triple digit, bouncing back from a three day rout. including the most dramatic point drop every in a market trading day on monday morning. but after being up more than 440 for a sex hission high earlier today, we are now down. listen to it. all of this coming even more steep losses in the chinese markets today. are we out of the woods yet? we want to begin with sharon epperson. it was a rebound early in the day. looked like we were going to be out of this trouble at least from what we saw yesterday. but with a steep drop late before closing, what happened? >> we are looking at the dow, the s&p 500 and the nasdaq having wiped out all of their gains after a big rally this