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tv   Closing Bell  CNBC  November 12, 2015 3:00pm-5:01pm EST

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big show tonight on "fast money," we're going to talk cisco earnings and also the sun power ceo so you won't want to miss it. 5:00 tonight on "fast money." >> that is a big interview, we will look forward to it. i will see you back in the new york metro area tomorrow. from the schwab impact conference in boston, i will be back in new jersey tomorrow. "closing bell" starts right now. welcome to the "closing bell," everybody, i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. okay. so it's a selloff today in the stock market. energy weakness, it says here there are concerns the fed might not raise rates next month, but i think there's a concern that they will raise rates as well. so you get it both ways here. we will talk about what's behind today's pull back coming up in a moment. >> it's not just oil and energy getting hit today. take a look at copper. also feeling pressure. a lot of people have been watching that 220 level, bill,
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it's now breached that level as it gives up another 2%. it's at a pretty tough year, it's funny to think about copper relative to natural gas prices, the point being largely there is a lot of copper out there, demand isn't quite where it has been obviously. we will take you live to the floor of the nymex for a special report. >> the copper to natural gas ratio. >> they almost -- if you look at the trough moves in dollar terms they're probably pretty close. also we have a rare interview with liberty's john malone, we will find out why dr. malone says he was cursing disney ceo bob iger for those comments that shook the media sector a few months ago. >> plus a new study says the percentage of young women still living with family members is at its highest level at record. this takes us back to 1940 when we were at that level of just over 36% of all those young
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women, but it's a very different reason this time around. >> and it's a very different world. >> yes, it is. let's start with the markets. bob pisani has been wandering around the floor here looking for stocks. what did you find? >> actually, i do that every day, wandering around on the floor. it's not being been a great day. again, it's the commodity complex, we are sitting an ex am pangs of new lows. exxon is not a in you low, but down 2%. much of the complex in the ent group down 2, 3%, strong dollar and weak demand is the problem. i mentioned expansion of new lows, it's a new low for alcoa, down 2%, not only metals in general, but anything specifically global. freeport and other stock, all the sector is weak. there's some pockets of strength. coal surprised everything wun, we thought the numbers were going to be weak, but it's pup better than expected.
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people are now a little more hopeful about nordstrom which is tonight and nordstrom is getting a little bit of a wind here, up 2.6% because of the kohl's. remember something is important. nordstrom had good revenues last quarter, up about 5 rs -- up, kpufs me, 12%, same store sales up 5% and the big driver here for them -- remember, guys, a nordstrom rack. this is where macy's yesterday announced we're going to set up a discount store as well because nordstrom racks has been so well. it's that discount part of nordstrom that's providing the engine of growth for that company. expecting a lot of comments from them about how rack is doing tonight. >> a great read in the journal today about macy's ceo terry lundgren trying to steer this retail ship as they continue to get buffeted by a changing consumer. a down day for commodities. let's get out to jackie deangelis with the latest on this sell off. >> that's right. your 3% sell off in crude oil today, 4175 is where we close and what's interesting is there
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are days where i will argue it was a weak equity session that took crude down and some people will argue the other way around. today we have fundamental reasons that the commodities took a hit specifically energy, the first would be the inventory report this morning, for wti that was a big build over 4 million barrels but opec was out with its monthly report talking about its outlook. unchanged. it doesn't see an uptick in demand, it's a slight decrease in production in saudi arabia, worried a little bit about iraq, but, again, still near record highs. the third point is what draghi came out with this morning, this increased dovish tone. a lot of people are worried the dollar index will continue to spike and if this rate hike still on the table that will strengthen the dollar as well. these are all bearish factors for crude. the draghi part of that equation definitely took the metals down as well. gold taking out a key support of 1087, the next level to watch is 1060ish and a lot of people think that this momentum in both
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spaces is going to continue at this point barring some unforeseen catalyst. back to you. >> jackie, thank you. we have much to discuss in our "closing bell" exchange today. joining us for that cathy jones from charles schwab, she is at that schwab impact conference in boston today, peter costa from empire executions is with us at post 9 and we have rick santelli in chicago as well. cathy, i mean, for you it's clear that the fixed income market has been preparing itself for a fed rate increase in december, isn't it? >> absolutely. in fact, the market has been preparing itself for nearly a year now so credit spreads spreads are widening, short term rates are up, most rates are up but particularly short term rates, so we've seen the market preparing itself and then of course the stronger dollar. i think the market has already discounted some fed tightening. >> it has but stocks seemed to hit the skids when we hear from
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bill dudley. and all of a sudden people were like, wait a minute, is this a repeat of september when we were positioning or anxious for the fed to raise they wind up giving us a little bit of a hold here. >> do you know what it is, kelly, i think it's, number one, oil, i think that still set the wheels in motion this morning and the fact that, you know, we're looking at a lot of these big cap stocks that are probably going to really feel the affects coming in the next couple of quarters with the higher dollar and i think that that's what the market is reacting to now. i think that if we do have a rate hike in december, which i'm still not going to say that i think that, i still think it's going to be sometime next year, if we do have one and it's very -- i think right now economists are saying it's a 75% chance that we will, the dollar is going to strengthen and these companies are going to get hit a little bit overseas. this is what you're seeing now, people are preparing for it. >> rick, as you know, we got an
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earful of fed speakers this morning. before noon eastern time we had five of them talking. with two of them were hawkish, two i wish and fed chair yellen didn't show her hand. there's our fed right there, it's very clear what they're going to do next month. what do you think the market is trying to tell us here? >> i think that the equity markets are uncomfortable with the notion that the tightening timing isn't correlating in equity investors' minds with the underpinnings of an economy that's going to keep stocks going up no matter what rate changes are made. i think the normalization of rates is necessary, i think the timing is awful and i think the stock market is going to continue to show you what it's been showing you. it's uncomfortable. i mean, think about it, you had jolts today, over 5 million job openings, there's only a handful of reads in the history of that data series that are over 5 million, you can count them all on one hand and have fingers left over. we see the president talking about historic strings of job creation. this morning we had an initial
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jobless claim that isn't far from its recent mark of some of the lowest claims since the early '70s. all of that sounds like we should be tightening aggressively, but at the end of the day you fall back on where the actual growth is and nothing squares. everybody is uncomfortable and with talk about energy affecting the fed, oh, my god, it's one market like the nasdaq after the tech wreck, these issues are uncomfortable but the marketplace is working them out. the last thing we need is a bureaucratic organization which the fed has become to weigh in on that affecting their decision. >> rick, you bring up the strength of parts of this economy. i wanted to ask what you make of copper falling 22% this year, being at multi-year lows. rick, what does that if anything tell you about the u.s. economy? >> what it tells me is that whether it was oil or whether it was copper, whether it was a variety of other commodities not that many years ago they were
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faux market, created with the expectation of growth on the global side that would never end and china and other countries tried to corner what they perceived is the valuable ingredient to baking the global economic cake. the cake went flat and we are still trying to i don't nd to the overpricing not that many years ago. they will work it out, it's going to be a rough road and on the simple surface of it what we see in copper definitely isn't giving me confidence that there's some recurring growth ahead that somebody -- including us -- are missing. >> cathy, the strength of the dollar that's another indicator they're expecting a fed rate increase. here we go again, the talk it was all the rage earlier this year maybe we would see parody with the euro, we're at $1.07 right now. do you see that? i was reading your comments earlier and you feel like we will see a sell on the news if the fed does raise rates in december on the dollar but are we destined for much higher dollar values going forward, do
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you think? >> we do think that we are in the midst of a longer term bull market in the dollar and it's -- you know, mostly this divergence in monetary policy that's going to drive it and it's very difficult to make the case for a weaker dollar when you have negative interest rates in europe, flat rates in japan, most of the developed world, and the fed is talking about tightening. you just can't make an argument for someone wanting to invest at negative yields somewhere else when they get positive yields in the u.s. dollar, plus we've got a growing economy, europe not so hot, japan not so hot. where are you going to go with your dollars or where are you going to go with your investment flows? you're going to go where you get some positive rate of return and that's probably going to draw the dollar higher. >> peter, what do you think needs -- we need to see for the market to get its footing either today or going forward? >> i think what we're going to continue to see is we're going to see this churning where we're
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going to be pulling back 200, maybe tomorrow we will be up 130. this is going to continue until we have specific clarity from the fed. once you have that and at least we know what the timing is when it's officially out there i think this is going to continue. this might continue for the next three months which for us as traders is great because our clients are getting in and out of a lot of things so we're active, but as far as the investor is concerned, you know, this is -- it's very disconcerting, you'd love to have some clarity and love to know where the economy is going and the direction that the fed is going to go in and how soon. >> you demand a lot for sure. >> thank you. >> thank you, folks. appreciate your thoughts. we are also mindful that former high flier gopro has now fallen below it's $24 initial public offering price. over to seema mody now for a market flash on that. >> bill, it's important to know that this is the first time-shares of gopro have broken below it's ipo price since going public in june of last year. this after having been a hot stock, trading above $90 last
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october and clocking in at nearly 100% gain in 2014 making it one of the best performing ipos that year, but concerns over weak sales, valuation and future growth have slowly pushed the stock lower. it took another leg down after its latest e before it disappointed the street, it is down holiday forecast also didn't help. gopro not the only ipo that has recently lost moment couple, vox and bojangles' trading below their ipo price. >> what do you calling a falling unicorn? >> wait a minute. what do you call that? >> i don't know. >> you really want to know. >> i don't know. >> i thought we had a setup for a joke. >> i feel like there's clever people out there who can context lies from all of these unicorns and exciting valuation stories to the market we are seeing now, whether it's in the private space with square and some
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others, whether -- and snap chat. >> yes. >> or whether it's in the public markets. look at all these recently ipoed companies that even when they can put in some earning.growth -- >> when you take a look at first data among others and then also a lot of these new companies citing market volatility as the reasons they are pushing back their offerings. a lot of factors in play. >> the companies, too, angie's list being one example after the sell off. thank you, seema. 45 minutes to go. dow down 216. >> you've got to come up with an answer to that question, what do you call a fallen unicorn. twitter but keep it clean. up neck david faber joins us to talk about his interview with media mogul john malone. why you shouldn't always follow the smart money. mike santoli has a look at crowded trades that have been
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getting killed this year. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back.
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dow is down 200 points. these are the ten sectors inside the s&p 500 index, all negative.
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technology the least negative. again, energy, we've highlighted the selloff in commodities and energy leading the way, that is the weakest sector today, down over 2%. >> liberty media reclassifying its common stock and the three new tracking stock groups, david faber sat down with liberty chair john malone earlier and joins us now with those highlights. hi, david. >> that's right, we did have a chance to speak with john malone chairman of liberty and liberty global as well. you mentioned the creation of more tracking stocks including one that tracks the atlanta braves. we had a wide ranging conversation earlier this morning that included so many different things that malone is focused on, content or globalization or scale and the cable business of course his old favorite haunt. one thing i did ask him, though, was about of course something very -- a large focus for media investors which is the disintegration, if you will, of the bundle. many people remember that day this summer when disney reported numbers that perhaps were a big
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surprising, especially losses of some subscribers at espn. i asked malone did it surprise you and what was your reaction? >> i was cursing bob for generalizing because we weren't seeing this kind of attrition. i mean, i'm sitting at charter, we're growing video subs, i'm sitting at discovery, we are not seeing any meaningful sub count attrition, in fact, we're seeing a strong advertising quarter right now. so the numbers i'm looking at are going this way and bob is gloom and doom going this way. i'm looking at that and saying, gee, you know, internationally discovery is growing at 20% a year. 20% a year. domestically discovery is growing at mid single digits, right? probably now they will accelerate a little bit because they have new affiliate
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agreements with everybody and it's upper single digit on affiliates and it's all about advertising and discovery's audience share is growing. so i'm looking at this and saying what happened? you know? i mean, who said what to who that, you know -- why is this stock getting creamed? >> of course, malone, a large shareholder as you guys now in discovery and he is never above talking his own book as he did there. of course, we talked about a lot of other things. interestingly in the q & a that just ended with all of the investors people were asking him as well what do you regret or what's the biggest sin you have made of omission and he said as he only does, i wish we had gone hostile on netflix. kind of interesting. apparently they were at least thinking about that a number of years ago, they didn't pull the trigger and that is at least something he regrets. back to you guys. >> wow. >> that from the guy who has long been the smartest guy in the room. >> usually. >> david, thank you.
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by the way, media stocks recovered nicely after that last quarter. bob iger himself when he spoke to julia after earnings this past quarter said while he stood by the remarks that he thought people were kind of jumping to -- you know, taking them a little bit too far jumping to conclusions. >> the unbundling thing is for the future. that's still coming. you can still have growth, the kind of subscriber growth that john malone is seeing and still have the problem of unbundling going down the road. >> david, are you still there? >>. >> he's gone. >> if john malone felt like that last time around, the platform is always there. >> yes. come on back, dr. malone. we have 40 minutes left in the trading session here. still down roughly 200 points on the dow jones industrial average, led lower by a lot of these commodities you've highlighted copper, we talked about energy, dollar higher, dow down to 17,506. >> coming up millennial
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nightmare or dream? new data showing women are living with their parents in numbers that haven't been seen in 75 years, the experts weigh in on whether that is good or bad for the economy. up next mike santoli has a special report on some of the hedge funds the world's most crowded trades. are they good or bad? we'll find out when we come back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p.
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i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you.
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>> welcome back. a broad selloff today, the dow giving up nearly 200 points,
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keeping an eye on every sector which is currently in the red, energy the weakest again today, crude oil down another dollar, that wti under 43 bucks or so a barrel. advanced auto parts falling on weaker than expected earnings and full year guidance. saying they're dealing with headwinds from their acquisition of general parts in 2015. shares down nearly 15%. >> sunedison talk about having a rough week, it's had a rough period since the summer, down nearly 40%, what, in just the last week. i mean, it's one of the commonly held hedge fund stocks that is down this year. but it was a $30 stock in july. we were noticing. >> valeant, avis, platform specialty products and others down 40% since january. for more on this mike santoli joins us because what's interesting about these is who is in them. >> these names you mentioned obviously are concentrated hedge fund ownership, they are known
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as hedge fund hotels sometimes, a lot of these names -- valeant was probably the poster child for this trade, it was the epicenter in hedge fund land. why do these funds find themselves in certain types of stocks and select names? >> a lot of stories are about roll ups or restructuring. has that was the case of sunedison, they have a bunch of affiliated companies they own pieces of. hedge fund managers have to go to a place where they feel like it's a misunderstood idea with potentially a catalyst. >> that kind of hedge fund sponsorship is good for these stocks' performance, right? >> it's not as if we're saying these overrated arrogant hedge fund managers can't earn their money. it's a matter of a down side of when you have heavy bets in certain areas where you think you have an edge and maybe the edge doesn't pan out. we have names that have done relg tifl well still in this
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environment to have heavy hedge fund ownership. time warner cable, mohawk industries, al err began, expedia is another one. all the liberty media affiliated companies always been really loved which hedge fund managers. >> there anything about this time around that makes a difference? >> what we're seeing is a self-reinforcing element of the sell office, when valeant was down as much as it was you're going to say ackman is going to have outflows, but there is this game effect that goes on, where somebody might be trapped and forced to sell and maybe it doesn't pan out, but this is obviously the environment we are in right now where we're hunting for these things. >> these have been weird black swans that have hit these stocks. sunedison another one. >> on paper they make sense, demographically and otherwise, right? >> that's true, on the other
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hand the financial backdrop for each of these individual companies is a matter of chief debt, for valeant overpriced currency, buy for companies, get pricing power the way you think you can. a lot of things have to fall in line for them all to work out. >> we've talked about whether -- this is a recurring theme -- whether you should be following what the pros are doing. you would cover these guys for a couple reasons, one is because they move the shares and have this knock out effect, the other is because if they are so good at doing their job something everybody else could pile on to, what does that tell you about the risk for the retail investor here? >> when they get to something early often there is this period where edge fund managers can be a leading indicator of performance. goldman sachs actually tracks a quasi portfolio of popular hedge fund stocks, for most of this bull market it has outperformed. these are not just necessarily obscure names, a lot of them are big time stocks, but what it does mean is when you're hearing about t when they become known
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and huge positions of a hedge fund manager maybe a lot of that upside still in the price. >> this has been a tough period for hedge funds, that's for sure. see you next hour. time for a consumer news update. let's get over to sue herrera. hi, sue. >> hi. here ask what's happening this hour. 80-year-old vincent asaro has been acquitted of charges that he helped plan the 1978 luft tan is a heist that was retold in the mafia movie good fellows. the crime family member had remained in the shadows of the $6 million robbery that was called the largest in history at that time but was charged in 2014 after his cousin came forward to implicate him. the treasury department says the budget deficit rose in october but remains below its year earlier level. the deficit over the 12 months ending in october stood at $454 billion, about 2.4% of growth domestic product, that compares to $515 billion a year earlier which is with the equivalent of
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2.9% gdp. coming during the first general strike since the countries's leftish led government took power. donald trump's appearance on "saturday night live" last kweek averaged 9.3 million viewers, that's the most watched show since december of 2013. when jimmy fallon guest hosted joined by musical guest justin timberlake. a lot of trump. that's the c nbsz news update. the vix is higher by a point and a half and the nasdaq down 41 points. up next, a leading trader will tell us what he thinks, if he think today's downturn will stick by the close. that's coming up in a moment here. >> new stats showing more millennials living with their parents. find out if this is good for the economy when we come back. here at the td ameritrade trader group, they work all the time.
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welcome back. we are in the last half hour of trading with the dow down 214 points. energizer falling after
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reporting an earnings miss and down beat outlook for organic sales in the next year. the battery maker blaming currency headwinds. it's just not going to keep going and going and going, kelly. >> they hope that dollar doesn't anyway. thank you, bill. i'm here on the floor with steven guilfoyle managing director of floor operations for deep value. what's it going to take for this market to get its footing? >> for starters the fed can stop talking out of both sides of their mouth. we had two guys go hawkish, two dovish and janet yellen right down the middle. >> why did that upset everybody? >> because we hate uncertainty. we are on thin ice. when these guys zig and zag or sflag and zig, nobody knows what to do. >> meanwhile, you have people point to go that for weakness and also pointing to crude. are they related or separate issues? >> two separate issues. commodities are a big part of this. commodities why we are on thin ice, the fed is why the ice has cracked. >> we have 30 minutes to go. volume started to pick up as the selloff intensified.
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any reason to think if we start to hear a different rhetoric out of the fed this doesn't turn right back around or are we going to deal with this until they move in december or don't? >> december 4th is the next jobs number. if they revise october town or if november comes in lousy the whole ball game is different ones again and we go back to not knowing. so you have to play your earnings, play your macro day by day. >> we have nordstrom tonight. what would you do with the retail? >> between last night and tonight i have gotten long three retail names. i think this discount -- like ben willis said, your shopping list, when stocks are cheap you go shopping. >> and not just at the mall. bill. >> kelly. thanks, sarge. the pew research center's latest finding show that the number of millennial men and women, women especially between the ages of 18 and 34, are living at home and that's at the highest level we have seen since 1940. they may be saving more but
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their current station in life could be a big impact on, for example, the housing market, car buying and the overall growth of the economy. joining us to talk about this trend we have michelle meyer from bank of america, merrill lynch and anthony chan from chase. good to see you both. thanks for joining us. michelle, what do you make of this? there was a reason back in 1940, it was almost a tradition even still at that time for young people getting ready to save for marriage or whatever to stay at home, but it's a different concept, a different reason today, isn't it? >> it is. this is not a new phenomenon, there has been a secular shift towards living with parents longer or living with relatives longer, for the past 15 years or so. so you're right we've returned to levels we've seen in the 1940s and 1950s but it's a different story behind it, it's people getting married later, there is a greater acceptance of being able to move back with your parents, save some money and then go out and live independently. and it does to your point have
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economic implications, it means that, you know, if you have a greater amount of kind of doubling up your housing rates will be a little softer but when you do form a household you're talking about maybe a bigger property or more expensive property. >> that's true, anthony. i was going to ask you the same question. do you take this all as a sign of a weak economy or is it just a changing economy? >> i think it's a changing economy, kelly. what you're seeing is marriage is taking a lot longer, whack in the 40s you had women marrying 60% of women in that age group were married, today's it's less than half of that, and of course one of the incentives to move out is when you're getting married. one of the reasons people are not leaving the house, whether it's men or women, also is because they're staying longer in school. today it's very exciting to see that 27% of women in that age group are enrolled in college. it was 5% a couple decades ago.
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moving forward these young people both men and women go to college in greater numbers, we are going to have a much smarter labor force and are going to be able to compete more. over the near term there's drawbacks. these young kids men or women obviously they are accumulating a lot of student debt, over a trillion dollars and at the same time they are not earning a lot so guess what, they are a little more price sensitive when they go out to shop and they are going to make comparisons, that's the reason why the internet has been to popular. allows to to maker comparisons and retailers are complaining they don't have pricing power. this huge group doesn't allow a lot of pricing power. when a lot of people see that they also stop behaving the same way. i think that in the short run it has good things and bad things but i'm focusing on what it does to the labor force, makes them a lot more educated, going to make them a lot more competitive. this is a big positive in my mind. >> you do have that student debt that they are saddled with,
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michelle, that is something that's going to hold a lot of young people back. they are saddled with the kind of debt that their parents would have early on when they took out a mortgage as they started their mare i think a. they have their own personal mortgage that they have to pay off before they can even begin their financial lives here, right? >> and i think that reflects the business cycle we just came out of the great recession. part of the reason that student debt is a percent of disposable income our aggregate has increased so much is because people had to delay payments given the weakness in the economy. so i do think that this secular trend towards living at home a bit longer was set up by the recession and now we're left with ramifications, student debt is one of them, but i think to the point about the longer term, i think we should have a more positive spin is that people maybe are saving a little bit longer, when they do form their households and engage in the labor force in a bigger way they should be able to be more efficient and productive. >> on that point i've heard from
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realtors -- maybe our diana olick was reporting this, too, that that starter home might not be the first property that people are buying, they might be vomiting into a higher tier. >> yeah, it's fundamentally changed the housing stock which is fascinating in my opinion. if you look at the average size of a new single family home we've reached a new record. i think that there's a number of reasons behind that, but one of them could be this idea that if people are living at home longer it means that they don't have a starter single family home, maybe they have a starter rent tall, but when they do buy that first property it could be more of a move up property. >> michelle, good to see you. anthony, thank you. appreciate it very much. >> plus my kids don't live at home now but we kind of like having you guys home still. >> kind of nice being able to go home and have that place. the piece mentioned sometimes with the grandparents, too, the grandparents might be in a different part of the country and it's also a great thing to be able to fall back on. >> home is better. 20 minutes left in the
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tragsd session here, the dow still down a little over 200 points. after macy's earnings yesterday the industry seeing some hope with coals this morning. courtney reagan will be back and will size up the report we will get from nordstrom next. its less than an hour now on the special "closing bell" auction package at charitybuzz.com. we've sweetened the offer now. >> everybody has got to listen in. time is running out. we've sweetened it by adding art cashin to the equation, if that isn't enough to double this amount, if we get it over $20,000 the winner gets to join bill and bob for the closing countdown, we will let you close us right down to that 4:00 closing bell. >> you have until 4:33, i don't know why that's the time, but 4:33 eastern time to get that final bid in. >> we've still got a ways to go. charitybuzz.com. >> that's live, that's the bid
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right now, we are grateful. we are grateful for the generosity to this point but i know we can do better and we will. see you in a minute. >> get to it.
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welcome back. getting closer here with the dow
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moving lower as we do approach the closing bell, it's down 235 points, 1.3%, the worst performer of the three major averages, the s&p giving up 26 and the nasdaq 52. macy's earnings yesterday causing concerns about the upcoming holiday shopping season. >> retail watchers still hope that positive signs this morning from kohl's could continue this afternoon we will get numbers from nordstrom. courtney reagan with details str san francisco. >> good afternoon. this quarter's retail earnings results move you better do your homework while shopping for retail stocks. macy's has been an outperformer while coals and jcpenney have lagged. kohl's beat wall street estimates and earnings revenue and comparable sales. on the conference call executives reiterating prior guidance for the full year. the they said back to school sales were strong with late october sales helping to offset
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a weak september. kohl's did concede weakness in cold weather goods given unseasonably warm weather this fall. still both its mrs. and juniors apparel logged a positive comp for the first time in quite a while. leave yies, carters, nike and fit bit were all merchandise that sold well for kohl's. higher in department store nordstrom has been an outperformer. the street is looking for earnings of 72 cents that would be down slightly year over year on revenue of $3.73 billion which would be up 7% year over year. analysts are looking for comp sales growth of 3.6%. we will find out in 15 minutes if those are the numbers we will get. back to you. the ceo of hudson's bay which owns lord and taylor and saks fifth avenue will tell us what he's seeing for the shoving season in the next half hour of this show. don't miss it. 15 minutes to go, dow down
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227 points. >> art cashin standing there, i'm expecting a signal from him but he's coming up in just a moment because we have a special appearance with the one and only mr. carbon after this. stay tuned.
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all right. dow down 225, we are at 17,475. joining us to talk about the market among others things eddie perkins is with us at post 9 and so is mr. arthur cashin. i was expecting hand signals on the imbalances but i forgot you were coming on here. >> last i looked $300 million to sell on balance, not adding as much pressure as oil is. oil even after the oil market closed continued to weaken, we are at the absolute lows of the day. there's a chance coming in tomorrow you might if you have a bad day see them break 40, maybe you are looking at a 38, 39. >> wow. as soon as tomorrow. that's when the intensity eddie, tell you even as we're dealing with the fallout from the move that's lower in crude oil here this could open a new chapter. how are you playing it? >> i think we spend to be
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defensive quality oriented managers, within the energy sector we do own oil stock but favoring those with a stronger balance sheet that can play offense. we're staying kerv sieve and not trying to call the bottom in the oil prices. >> defensive is the play. it's a risk off kind of a market. >> it feels that way. we were defensive and we recommended being defensive in the spring when the market sold off over the summer i think that was the opportunity for long-term oriented investors to put some risk into their portfolios but that's over now. we have had the rally and now it's back to the play gook book of staying defensive, favoring that sectors like utilities which those will be good sectors to own. >> rt a, same question just going back to energy. what do you think the fallout could be if we go back below $40 a barrel here? >> i think it could be a real problem, but on the other side
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it may cause the fed to rethink. look at the commodity prices, copper is getting crushed, zinc, i mean, all the base metals are getting hit. it's tough to see where inflation is going to hold up. it was a shaky move toward 2% and i think the next couple of looks they get maybe going the other way. >> macy's notwithstanding, a lot of people have been looking to the consumer and playing that, the consumer stocks. are you playing that at all right now? >> we're favoring the defensive part of the consumer so that's the consumer staples, food companies, tobacco, retail we own a couple of names but small positions and managing the risk in those parts of the market because they no of 10% a day on very little news. >> finally, art, tomorrow when we start to look at the way that selling has picked up here, the volume has picked up here, i'm sorry, as the sell off has continued can you see that tell you anything at all?
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all the sectors are in the red, what are the next levels you are keeping an eye on? >> not only did you take out the previous lows earlier in the week you took out the 200 day moving average in the s&p which was at 2064. so i think you're going to look at maybe the area of 2042 to 2044. we're getting awfully close to that right now. >> yeah. >> speaking of getting close, the bidding will end, we're getting close to that as well for the charity auction, we are up to -- we are at dow levels right now. >> i will try to get the dow to rally. >> see what you can do this. the bidding is at $17,250. you have been very generous in offering your time for the person who wins the auction to join us here at the new york stock exchange, watch us do "closing bell" and then spend some time with you as well afterwards. >> we will go across the street and mare nate some ice cubes, i think that will work out well. >> anybody that doesn't know art holds court across the street
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there, there is a long time organization known as the friends of term en tags of which art is the grand pooba i guess. >> the standing chief. >> so you will hear wonderful stories there as well. >> 40 minutes let to get your bids in, charitybuzz.com. art and eddie, thank you both. we have a news alert on hulu. seema mody stepping back in. >> a potential media deal in the works. dow jones quoting sources as reporting that hulu is seeking to sell a stake to time warner, a deal that could involve cash and content licensing. now, this potential deal according to dow jones would value hulu at around 5 to $6 billion we are seeing some of these media stocks move including netflix which just hit session lows, down about 3.5% on the day. bill. seema, thank you very much. we will be back, we've got the closing countdown here in just a moment. >> after the bell nbc's upcoming live telecast of the whiz isn't
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the only adaptation of the "wizard of oz" people are talking about today. yahoo ceo marissa mayer took her management team over the rainbow at a cost of $70 million. you're watching cnbc, first in business worldwide.
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the dow down 254. this is the dow today, selloff on the open this morning and it just continued the stair steps lower. we are sitting on the lows of the session right now. other markets we have highlighted that have been part of this selloff today, crude oil as art cashin was mentioning now down to $41, down 3% today on wti crude, as art said what they're watching as we get back to the low end of the trading range we've been in for a while, 45 on the high end, $45 on the low end, if we break down $40 who knows where crude oil can go from there. copper another thing we often use as an economic indicator, that today down 2.4%, bob pisani. >> i will tell you what i find odd about this. the markets seem to be implying that there's tremendous deflationary pressure in the world and mr. dudley from the new york fed today said this is the missing piece in the puzzle. they don't have the deflationary picture that fits in with the ready of raising rates but he
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did get on to say generally the economy is showing clear signs. so you do think the deflationary pressures would keep the fed from actually raising rates may be a factor yet we don't see it. today look what's going on with banks, which would do better in a higher interest rate environment the kre which is the regional bank index has been terrible all day and is closing on the lows down 2%. this is not an index that indicates that the market believes that rate hikes are coming right now. >> banks -- typically are going higher when they expect that because of the impact it has on their profit ma jins. >> this is what i find puzzling, the market seems to be implying that we are not expecting rate hikes coming and yet the deflationary environment here also would argue in it. you would think the stock market would be a little bit better hoping that there isn't going to be a rate hike. >> charles evans in his feature we had five speeches by fed officials before noon today, it
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was -- we got an earful from the fed today. charles evans saying how bewildered he is by the low inflation but the strength of the dollar is what is helping to keep prices lower right now. >> evans of course generally associated more dovish over all and he remained in this dovish camp. dudley came in basically where everybody thought he was going to be and made a case for why they should raise and said inflation is the missing component. we are at a cross current here. in theory the market telling us that it's unlikely the fed will raise interest. >> i forgot about the earnings coming out. here is the do dow down 250. i will show the wires. we can quickly show what's going out after the bell. cisco. he will pollo loco and nordst m nordstrom. they will break the tie between macy's and kohl's.
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>> nordstrom has nordstrom rack, a big discount arm that's an important part of their growth, i think they will highlight that to a great degree. >> thanks, bob. rawlings sporting good ringing the bell at the big bort, at the nasdaq the children's museum of manhattan. stay tuned, we will get those earnings coming up on the second hour of the "closing bell" with kelly evans. see you tomorrow. thank you, bill. we will welcome to the "closing bell," everybody. i'm kelly evans. let's given with this session and the markets today. the dow going out with a decline of 254 points giving up nearly 1.5%, the s&p down 29, the nasdaq down 61. oil as art cashin told us as well back at lows of the session. investors bracing for a wave of big earnings. jon fortt covering cisco, courtney reagan watching for nordstrom's result and seema mody ready for el pollo loco and
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party city. joining today's panel we have our very own mike santoli and stephanie links, also with us "fast money" trader dan nathan and lindsay bell from s&p capital iq. welcome, everybody, it's about to get crazy. let's begin with the market first. what happened today? >> the market had too much time to start thinking about things. we were having that general pull back. the problem is we got this rally, got this fast because the glamour grow stocks kept going up and you had energy and materials contributing a little bit just by lifting off the lows. well, oil keeps going down, we can't get a lift and the glamour growth stocks for one day didn't go up. the one issue is now that we're back at these levels people will say that chart looked like it was a chap when we got up to the highs. the 2011 model for how this might go would suggest you had a november selloff, i think we made too much of the ajs but that's out there. >> i think it has been
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disappointing to see oil and the dollar going a long way. we got excited in october and that was a nice rally that we saw. by the way, valeant stocks as interest rates moved higher as oil moved higher, as the dollar moved lower, all of these things are changing now and reversing and we will have to see if this is a new trend. >> right. >> but that is what i think is really behind this. you are losing a lot of the leaders that they had which was energy and financials, that happened and those rallied in october. so you're losing those lead rs, you have a very mixed consumer bag at this point, clearly macy's was disappointing, kohl's a relief rally but not great. >> and biotech down eight days in a row. a lot of this stuff is for sale right now. by the way, rate hike hopes have been an aid to the market not a hindrance. today it is a little more of a muddled picture. >> this is the first time that's been the case in some time. >> when you are up at these levels the market needs the growth to quick back in.
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the vix at 25, maybe then the market pants the fed to go easy. >> nay tan, what parts of the market do you like right now? >> when you talk about what these guys are just kient of en caps lagt here, think back to that september fed meeting when the fed -- you know, their message was dovish and they were not going to be able to raise rates in october because of the fear of global growth just not getting things done the way they need to do it. so here we are right back in the same thing. it was this reversal in energy and basic materials and stuff. in october you had the kind of dash for trash, it was a bet at that trade, catch up trade when the market was down in late september it wasn't the sort of stuff that spoke to in my mind the rally broadening out. you have to factor the highs and they failed there. when you look at on the year the s&p is down just about 60 bips here and you have basic materials, energy, industrials, they are sucking wind, down on
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the year and that's the stuff that's going to make this market and economy break out to new highs, in my opinion you just don't have it. >> lindsay on the earnings front what signals are we getting there? >> looks like earnings will end up being negative growth for the third time since the third quarter of 2009. what's leading, though, in consumer discretionary still has the best growth at 16% despite these fix mixed retail earnings we're getting. the 20% of the consumer discretionary sector that's left to report will mostly come from the retail sector so nordstrom will be important tonight. >> amazon and netflix are in the consumer discretionary basket they must be a substantial amount of the earnings growth that we're seeing. >> the interesting thing about them is they certainly are the large majority of the market cap for the sector but the earnings dollar values very small. they don't tlibt that much to earnings -- >> it's interesting to see the media stocks repound on the numbers that kind of got overdone to the down side. media, housing, auto, those earnings were actually all very
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good in consumer. so within consumer you have to be very careful. maybe not the discretionary, not the retailers but housing, auto and those kinds of things. >> it is fascinating to reflect on what we were seeing, a few weeks ago when we had the blow out results from the tech companies, amazon, alphabet, apple, facebook, it was a picture of a brighter outlook for at least that segment of the consumer wallet which is growing. what's been happening with auto sales, even the financials which were really bid up as we started talking about rate hikes. is all that off the table? >> it's everything at a begin price. when the s&p was gone up 12% in a month you start to have the threshold for getting excited and i don't think -- you can look at this market and say we are retracing some of this rally, back toward the 200 day moving average if that matters to people and you get somewhere close to thanksgiving and all of a sudden the seasonals are your friend again. i don't know that we're writing it off but it is a muddled
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picture. >> if we get a couple of good data points from the economic side of things i think we will feel a lot better, maybe you will see interest rates then turn a little bit, maybe you will see stabilization in oil, but we have to clearly analyze and get those data points. >> so fascinating right now and it's up for debate, it gets to the crux of this whole market. tom mcclen len was saying the s&p 500 and oil were closely correlated from 2009 to 2012. now we see the s&p 500 maybe u.s. strength, maybe the better jobs market in oil and some of the other commodities perhaps more attune to the collapse in the commodity super cycle or slow down in china but that has to be the case otherwise what is happening with oil and copper and steel and aluminum and zinc, wouldn't that otherwise tell you that the growth just really isn't there? >> sure. listen to what draghi said today, he wasn't all that buld up at all.
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they're talking about going more in terms of qe. clearly they have their ieds on what's going on over there and it's not that great. the u.s. really does have to do better to offset what we're seeing that malaise internationally. >> we have cisco's results hitting the table. let's go to jon forth. >> it looks like a beat on the top and bottom lines. the $12.65 billion consensus came in at 12.68. nongap earnings per share came in at 59 cents, better than the 56 expected. to my eye gross margin also looks stronger than expected, i had scene the street looking for somewhere just north of 61.5%. total gross margin came at 63.2%. so that is pretty good. the stock reacting negatively after hours, still got to comb through the report and see why that might be, perhaps it is in the commentary, but at least on the top and bottom lines and their gross margin number, initially looks pretty good.
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>> jon, thank you. don't miss tomorrow a first on cnbc interview with cisco ceo chuck robbins. that's on "squawk on the street" at 9:00 a.m. eastern. >> i would say that expectations weren't high, the stock is down a dollar, they guided down a couple cents for the fiscal second quarter. i haven't seen the revenues guidance but you have to remember the last time this company reported was august 12th. the pboc had just devalued their currency so if you look at the dixie, the dollar index, it's up a couple percent. cisco gets more than 50% of their sales from outside the u.s., china is a big gross area. the whole fear about waning global growth and the currency war that we are in and the dollar there is no other way for it in the near term to go up this is going to weigh on u.s. multi-nationals. a stock like cisco has been trading between 25 and 29 bucks basically for the last six months i expect it probably finds its way back to the
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midpoint somewhere in the mid 20s but remember -- >> go ahead. i'm sorry. >> this is a cheap stock, a 3% dividend yield and i just don't expect this thing to get absolutely trashed. >> lindsay. >> i was just going to say that this company hasn't missed earnings since the second quarter of 2001. the current quarter beat is not a surprise. >> the second quarter of 2001. >> 2001, yeah. >> they know how to communicate pretty effectively. wow. >> stephanie, mike. >> so this has been a safe haven. i think if you wanted to talk to other pms, i know ourselves at kref kind of were hiding in this name mainly because balance sheet valuation, yield and that sort of thing. i would say we've gotten negative data points on enterprise so i'm not surprised they're guiding lower. you also have a new ceo who is probably seeming pretty conservative. not surprised that it's down. if it is down you may want to look to buy it after it settles.
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>> john fortt rejoining us. >> a color on that guide low. hoping for q 2 to come in close to 5 p. rs better growth wise on the top line and as mentioned cisco guiding 0 to 2% growth year over year. the nongap gross margin rate they're guiding to is about in line with what the street was expecting but that top line growth not kwooity there. we are going to have to listen in on the call to understand exactly which regions and products. >> and we will have more on this in just a bit. for now, jon, thank you. we have an earnings alert on nordstrom. courtney reagan, what can you tell us? >> so nordstrom we have an earnings per share of 42 cents, we are trying to figure out if that is immediately comparable but we know earnings per share of 42 cents, revenues of $3.3 billion, that is softer than the street had been expecting at $3.37 billion. comparable sales for the quarter up 0.9%.
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that is quite below what analysts were looking for, they were looking for a comparable sales increase of 3.6%. even the company's nordstrom rack stores, those comparable sales were also disappointing, down 2.2%. inventory up 8% at the end of the quarter, the company basically saying the quarter itself was below expectations, they're ut canning their full year guidance. softer sales trends consistent across channels. so a kind of bummer of a quarter for in order syndromes if i can say that which is a bit uncharactersist i can of what we've seen as of late from the retailer. their shares dropping sharply after hours in response. kelly. >> courtney, thank you. in order syndromes shares down almost 16% after hours on these results. stephanie. >> so i think that people thought they were going to kind of be able to handle the situation, this tough environment better than others. right, but it's very clear that the department stores are having a big, big issue, you are not seeing traffic, you are not
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seeing ticket, you are see competition from the internet. none of that is a surprise. what is a surprise is this company just spent over the last five years a ton of money upgrading their supply chain and people thought this is going to be the year to see positive operating leverage because you will start to see better sales and much better systems. we are not getting it unfortunately. this is just gd going to add -- i would say one thing, the off price retailers benefit from macy's, kohl's, nike, in order syndromes, the inventories that are so high, the off price guys will be the winners. >> a couple more highlights, they're pointing the top performing merchandise category was cosmetics, there was strength in the northwest and southern california for them relatively speaking but again their shares are down 15% after hours. courtney has more. >> we're just looking at those earnings per share again and we now do have a comparable. we think the 42 cents, add back in 15 cents from the credit card portfolio sale and so now we have a 57 cents earnings per
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share compared to what analysts were looking for at 72 cents a share. so another disappointing metric for nordstrom. as you were saying they did point out strength in cosmetics for a top performing category, but again, they said right at the top of the release, softer sales trends nearly consistent across channels. one other thing of note that i thought was interesting was it said that coat sales were strong, if you dig into the release which is the opposite of what we might have expected after hearing from macy's and kohl's that it wasser tough to sell those cold weather goods but they to have different concentrations in different areas of the country so that could be a factor there, too. >> we're also keeping an eye on other shares in the retail space. let's have a look at jcpenney and others which appear to be under pressure after hours. quite likely on this report. the last two, three trading sessions we have seen, what, jcpenney coming out beating expectations, macy's a big miss that was a bigger for a sell off
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across the space, then you're going back to maybe a pocket of strength, nordstrom this afternoon. >> it leaves us with the idea that with clothing retailers it's at best a zero sum game. the category in general is out of favor, people are not impulse browsing anymore and i do think you are looking at areas like home improvement auto related all those things are doing fine and it's the big overstored areas of apparel that are having a hard time. >> dan. >> i would just say i would go back to macy's if you're going to try to catch a falling knife in this space it's probably this one. we know there's activists there, they're commit to go figuring out how to monetize that real estate that's likely worth more than than their current market cap. they're going to have $27 billion in sales this year, that's about a quarter of what amazon is expected to do. so i would expect some consolidation in this space, very quickly, and i would also expect some sort of activity on the real estate and macy's. this one could be interesting. >> i understand there are people
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who will say this is a cycle that the consumer is buying houses and cars and other things right now, but when you look at the online space and some of the changes here they might be sticking which would be more trouble for these guys. dan, thank you for joining us. be sure to stick around to catch him coming up on "fast money" at 5:00 talking solar stocks getting hit again today. they will talk to the ceo of sun power about how he is weathering the storm. now we have a news alert on during pharma. meg terrell, what's happening? >> a rather unusual earnings report coming out from a private company that's turing pharmaceuticals, you probably remember them as the ceo whose ceo came under fire after they acquired a drug that was approved in the 1950s and raised the price by 5,000% overnight. now in a move looking to probably deflect some of that criticism of what's been called profit tiering by some they are releasing their unyou had a dated financial statements for the third quarter. saying they had revenue of $5.66
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million, they spend $6.97 million on research and development and reported a net loss of $14.6 million. they do say these are unaudited results. they acquired that drug daraprim in the middle of august. that's for the three months ended september 30th. i did talk with the ceo by e-mail yesterday, he said the reason they're putting these out we're trying to demonstrate we are a research focused company and daraprim is not as significant of an asset to us as people think. they say going forward they expect to spend at least 60% of revenue on research and development for the foreseeable future. a lot of things in the research about the affordability of this drug nothing about lowering the list price of it which they said they were going to do over a month ago. >> no word on that still for the time something. meg, thank you. our meg terrell with the latest there. mike, savvy move on their part? >> seems like a desperate move. if you want to show losses you can spend enough money to show losses anytime you want. i don't think anyone has in
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their mind what would this be as an economic entity we just don't know. obviously pr. >> fair enough. cisco shares moving lower after weaker than expected guidance. will these numbers come in our next analyst change a hold rating on the stock. also youtube launching its stand-alone music app today. you're watching cnbc first in business worldwide.
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more earnings this time from el pollo loco. seema mody has the results. >> shares down about 4% after hours. here are the numbers. el pollo loco reporting earnings of 18 cents adjusted versus the 15 cent estimate. a little light on the top line. revenue of $89 million versus the $90 million of estimate. it did narrow its 2015 earnings guidance, lowering its 2015 comp restaurant sales as well. keep in mind el pollo loco was one of those high flying ipos in 2014. of the crazy chicken is down about 40% year to date and again you can see the stock falling after hours by 3.5%. kelly. and still some concerns across other fast casual
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competitors, shake shack, take a quick look at those shares, down 1% after hours. of course, we know about chipotle's struggles, those are company specific, but el pollo loco coming in after hours. shares of cisco moving lower. lower guidance, of eric from j & p securities joins us. >> i quite frankly am surprised because you've got to believe that this was one of the most carefully managed transitions in management that we've seen in a long time for cisco for them to be lowering guidance after the first quarter i would not have expected that. >> maybe they have to. >> i think that's apparent that they did need to. there's also the possibility that they have product transition where they move away from traditional perpetual license to subscription so that can lead to better bookings but lower revenue. there could be some explanation but still it's a surprise. >> mike. >> how should an investor be looking at cisco broadly
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seeking? they guided to a 0 to 2% top line, they're growing slower by that measure than nominal gdp in the world. what is this company -- what can it deliver over time? >> this is an interesting time for cisco. this transition in ceo and the entire -- of a very large portion of the management team is a period where they need to be very careful. i think, one, they are setting conservative expectations but this is also indicative of some execution challenges, i think. the markets they have international exposure which has been a bit of a challenge as well but this is definitely a period where execution is at risk. >> when do you think we're going to get that big m&a from this company because they have been saying for the last couple of years but most recently with this new ceo he has been really focused on the m&a, finding growth particularly in security. we haven't heard anything to move the needle. do you think we're ever going to get that? >> i do. i think, one, it was an interesting partnership, they just announced with eric son, i
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think that's indicative of efforts to transition more towards software, i think that's where cisco wants to go. i would imagine that we could see some sizable acquisitions in the more software centric space over time. >> something big, though? are we going to get something that's going to move the needle? >> i think this is a company that recognizes that they need to redefine the way they build the business from here and i think a transformative acquisition is not out of the realm of possibility. >> you brought up this partnership with eric son it's fascinating. i wonder -- they could have gone for the deal, they did not, the partnership has a lot of elements of combining these two companies anyway, this he may be cross selling for one another, they're looking for krost synergies, why would they pursue this strategy? the ceos seem to into he will a big deal wouldn't be economical for them. maybe there wouldn't be regulatory approval. what do you make of a partnership like this.
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>> cisco is shoving towards software and subscription and air i can son is in the same camp where they're hardware centric. the the two companies are trying to move in this direction i don't think it would serve cisco to take on hardware centric products. >> you mentioned the surprise of having lower guidance with the f. irs quarter with the new ceo. does this make you more cautious and bearish on the shares. i know you have a hold now. >> yes, this is indicative of probably challenges earlier than i would have expected. i would stay on the sidelines on this one, i wouldn't be in a rush to pick it up even on some weakness hoo err. >> eric, thanks for joining us. >> thank you very much. could youtube's free new music app take a bite out of rivals like apple and pandora? and yahoo is supposed to be doing a reorg so why did ma ris can a meyer maker are execs dress up like wizard of odd on a
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pricey photo shoot? eeep breath and . . . exhale. . . aflac! and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just one day. ahh! so he had your back? yep. in just one day, we approve and pay. one day pay, only from aflac. [duck snoring]
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in just about five minutes the bidding is going to close on a visit to the "closing bell" set and drinks with me and bill griffeth and art cashin. it's to benefit the lulu and leo fund, we did manage to get the total well above the dow today, 24,000 and counting. your last minute bids you can submit right now. the winner will get to play in
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the closing countdown with bill and bob. you will have a lot of fun with that. we appreciate the donations. we have an earnings alert on fossil to get to. >> three quarter earnings of $1.19 that's a 6 cent beat on the bottom line. revenue disappointing at $771 million versus the estimate of $794 million. keep in mind guidance for the q4 coming in disappointing, earnings and revenue. there has been growing concerns about heightened competition that fossil is facing from the tech firms and wearables. announcing a small deal buying miss fit for $260 million. fossil shares down 14% after hours now. let's switch focus to yum! it's china's division october same store sales are out, growing 5% compared to 6% in december.
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in terms of where it saw growth, kfc saw a jump of 10% but an estimated decline of 9% at pizza hut. i guess you could see yum! doing well with kfc in china but not pizza hut. shares up 6% after hours. >> thank you very much. yum! brands is 6% higher. you are thoughts? >> not surprising. mcdonald's had pretty decent china sales but chair sons are easy. we know what they have been going through for the last couple years. kfc is where they're focused on. >> it is interesting compared to el pollo loco moving lower. >> it seems like that class is maybe one of the worst ever. i do think people got overexcited about the entire category and there was a shortage of ways to play it. i'm actually more surprised that fossil they are still 15% to come out of their stock. >> huge move. and especially after the
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weakness the last couple days in retail. >> and we've heard from macy's and kohl's and they all said watches were kind of weak it's not that surprising. since it's already down so much you would have not not so much. youtube is launching an unlimited free music app today. let's get out to julia boorstin about what is it is. >> the stand-alone youtube music app launches today, there is a free ad supported version featuring music videos plus tools for music discovery but if users subscribe to red, the $10 a month ad free service they get ad free access plus the ability to listen to music off line and they also get access to google play music. today's app launch showed google stepping up competition with spotify, but apple music and pandora. music draws such heavy use on mobile devices it's considered a key battle ground for consumers for advertising as well as
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subscription dollars. youtube's music app comes on the heels of two other targeted apps from youtube, we have a video game app and also a children's content app, kids app which shows youtube moving towards a portfolio of app strategy similar to what we're seeing from facebook as well. >> have you used it, julia, by the way? >> i have checked out this one online but i haven't downloaded it to my phone yet. i'm not sure if i want to pay another $10 a month. >> i know. >> i also subscribe to spotify, i use a free version of pandora. there are a lot of options out there. >> it is crowded. julia, thank you so much. time for a consumer news update with sue herrera. hi, sue. >> hi. here is what's happening this hour. an islamic state group is claiming responsibility for two suicide bombing attacks that struck is shiite suburb in southern beirut. at least 37 people killed, dozens more wounded. the bombings came minutes apart.
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a federal appeals court has upheld california's death penalty reversing a lower court ruling. more than 900 people have been sentenced to death in cal but only 13 have been executed. federal prosecutors have filed court documents saying they will seek a 12.5 year prison sentence for former subway pitch man jared fogle who has agreed to plead guilty to child pornography and sex crimes charges, sentencing is set for november 19th. and gop presidential candidate marco rubio spoke to a gathering at the south carolina chamber of commerce on hilton head island. later he answered questions from the press saying some undocumented immigrants will have to be deported and that he will enforce immigration laws. that is the cnbc news update this hour. back to you, kel. >> the immigration bill that never was. sue, thank you very much. apple cake taking aim at paypal's peer to peer payment system.
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shark tank he is kevin o'leary will tell us whether this is a big problem for paypal's future. stay tuned. at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
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welcome bark. the window has been extended by a few minutes. for the charity buzz auction,
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charitybuzz.com the lulu and leo fund is auctioning off a chance to visit me and bill here on set to have a drink and now that we've gotten well over 20,000 to also participate in the closing countdown with bill and bob and art cashin has agreed to join us for the drink after the show. love to see the number get to high. the lulu and leo fund is a phenomenal cause, one that's close to our hearts and going to be great to see what they can do with the funds. a few more minutes left. if you think you can top that, hey, watch out we're hot on your heels with this one. let's take a look at how we finished the day on wall street. the dow lost 254 points, a cuff session across the board, declines of 1.2 to 1.4%. the s&p 500 reaching the 200 day moving average to the down side, oil a lot of attention, art cashin said he thinks it can go back below 40 as soon as tomorrow. it's been a busy session for after hours earnings. cisco conference call just
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beginning, we will bring you the highlights coming up. apple is reportedly in talks with u.s. banks to career a peer to weir payment service. kevin o'leary has been critical of paypal on the past. kevin, this is interesting, you've been critical of paypal and apple shareholder but not always pleased with some of these moves. talk a little bit about whether apple moving into this space is a lights out moment for paypal. >> i think it's a big moment for anybody in the payment processing business because there's a question you have to ask now, is payment processing an application for is it a feature. what apple is about to do incorporate it into an operating platform and make it a simple feature. i don't know if you want to go back in time, when a company called word star which just did word processing was larger than microsoft. there was a company called lotus 1, 2, 3 that just did spread
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sheets and microsoft said these are just features and bundled them all together. is that the future of paypal because how do you define a whole company around simply something that becomes incorporated into everybody's operating system? so i don't like this as a developer paypal. there's no way you can spin this as good news. >> what do you think, mike? >> i don't ng you spin it as good news. the question is exactly what these features or whatever this is going to become they still have to be overlaid on top of the actual infrastructure of a banking like function or visa like functions where they're checking do you have none in your account. i just don't know where that line is going to be drawn. paypal the usage is pretty tremendous and definitely going to mean it doesn't go away very soon. by the way, none of this comes particularly as a surprise to paypal. they are now an independent company, they are going to try to pay as much as anybody. >> i know the first time i heard
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about it i was able to use it it was like, thank you, this is so much easier for people who are splitting bills, doing things with groups, paying -- in a lot of other countries you can already do this so much easier than you can here, but that first mover advantage how do they protect the mode against these new entrance. >> you have to get customer acceptance, merchant acceptance, the bank's acceptance, you have to get a lot of acceptance. this is going to take time. it's not going to be overnight for apple but they do have an advantage given their operating system. this is the reason why paypal has not done well since it spun out from ebay, because you have had these concerns about competition. their margins are half of what visa and mastercard are and the bull side was, well, they will get them up over time. not going to happen as to the degree people expect if in fact you have this kind of competition coming. >> and maybe kevin can speak to this. you know, kevin, you mentioned those other past single product companies that got absorbed into something else. the levin there might be for investors nobody really gets the
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great benefit of this, right? an apple shareholder is not going to see a bow nan za from this even if over time they dominate the market. maybe it will be a benefit for consumers and nobody is going to make a mint on it. >> that's what i'm concerned about because that's a margin crusher and at the very least a pe compressor for paypal. paypal has a great brand, we have articulated that, that's correct, it has fantastic management. when it came tomorrow market an institutional investors looked at it and said should i add my my allocation to financial infrastructure if i hold vees a is a or mastercard they forgot they don't return any capital to shareholders. they tried to spin it as a growth story that doesn't pay a give a depend. you can tell by the share price it has no floor. i just look at this i think this and say to myself apple with its balance sheet can make this a loss leader sold in the same way that a grocery store gives you milk at its cost, maybe this is
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a way to gather customer information aptd monetize it a different way. i don't z this as being good news for anybody that wants to blah i in payment processing. i think you're going to see other large platforms like facebook, we know is looking at this, google the same thing. it's just a feature in an operating system. bad news for any single product. i hope i'm wrong, but paypal is starting to smell a lot like word car these days or lotus 1, 2, 3. >> bad for margins, great for the consumer for not at least. kevin, thank you. kevin o'leary from o'leary financial group. let's send it back over to seema mody for an earnings alert. >> we have a big mover here after hours, planet fitness reporting earnings that came in at a beat, 10 cents adjusted versus a 9 kept estimate, revenues higher than expectations at $69 million for the third quarter. guidance topping wall street consensus for the full year and a system wide same store sales up by 6.9%. again, you can see the stock up by 12% after hours.
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a big winner here. another company that ent radioly went public. >> maybe they can put them in macy's. thank you, seema. up next, details of a major corruption scandal in venezuela involving the drug trade and the family of that nation's president. and nordstrom after hours, we get the view from the front lines with gerald storch. stay tuned. when you're not confident you have complete visibility into your business, it can quickly become the only thing you think about. that's where at&t can help. at&t's innovative solutions connect machines and people... to keep your internet of things in-sync, in real-time. leaving you free to focus on what matters most.
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but it is not the device that is mobile, it is you. real madrid have about 450 million fans. we're trying to give them all the feeling of being at the stadium. the microsoft cloud gives us the scalability to communicate exactly the content that people want to see. it will help people connect to their passion of living real madrid. welcome back. the window for this auction to
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visit us on the set of "closing bell" was supposed to close ten minutes ago. if new bidders get in it gets extended by a couple of minutes. now that we are at 37,000 and change i would love to see it go above $40,000. anything could happen if new people keep getting in and keep bidding. go straight to charitybuzz.com. venezuela facing a major corruption and drug scandal involving the family of the president. michelle caruso-cabrera has the details. >> two venezuelans are expected to be in federal court in new york city today. why are we interested in them? because they are one, either, the nephew and or godson of jen zul la's first lady. they were arrested earlier this week in hate tee for trafficking 800 kilos of cocaine, the ult mast destination the united states. the ap quoting somebody who has
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been briefed on the investigation says the two were carrying diplomatic passports and traveling in a private plane. we don't know what all this means. could mean those connected to the elite in venezuela feel and act that they are above the law, it could also indicate that high level people in venezuela amidst the economic crisis there are using the drug trade as a way to make money and bring cash to the strapped economy. we should let you know there have been leaks from u.s. investigators to the u.s. media indicating they are looking into whether highly placed politicians have been involved in drug trafficking, money laundering and straight on corruption in venezuela connected with the country's oil industry. guys, you know this from your experience, this kind of bust, discovery starts to happen at the courthouse, details start to leak out that people never thought would come to light. this could be an important moment for venezuela. >> and the beginning of many for chapters to come. michelle caruso-cabrera. nordstrom shares sink after
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hours on earnings we will speak include civil to ceo gerald storch to overseas brands like saks fifth avenue and lord and taylor. marissa mare facing backlash for a costly photo shoot that had her execs dressed up as characters from the "wizard of oz." those details coming up.
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well dock back. it was macy's that got killed welcome back. nordstrom sinking after hours on its weaker than expected earnings. down 15% almost 16%. what might this mean for holiday shopping and retail stocks this year? joining us is the former chairman and ceo of toys "r" us. welcome. >> good afternoon, the question, if i may is what kind of trends are you seeing for saks and lord and taylor? >> it's way too early to call the season. the sky is not falling. some had difficulty in the third quarter. it was definitely a warm quarter. there's a lot of issues with international consumer. we've got good numbers out of
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kohl's and penney's. i wouldn't generalize what comes out of one or two retailers. >> take us inside your store. what are you seeing? we heard from macy's three-pronged weakness. they talked about the tourist traffic not there the weather was warmer, and those core store parts weren't selling as well. are you seeing any of those or experiencing any of those three things? >> we haven't reported sales yet. i can give you some ideas. first of all, we are diversified company. about 1/3 of our business is in germany. about 24% of our business is in canada which leaves about 43% for the united states. also we operate luxury apartment stores. we operate better department stores. saks fifth avenue, lord and taylor. we have over 90 hudson's bay
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stores. it's different everywhere it was just veterans day yesterday and it's way too early to project what is going to happen on christmas. christmas always comes. >> how do these companies increase their traffic? how do they change the behavior of these consumers that you now starting to lean more towards e-commerce versus actually going to the stores? how is this industry going to adjust? >> that is a great question. what we've seen is the evolution of an all channel model where customers relate to the brand any way she chooses. sometimes on the internet, sometimes in the stores. for a long time now, this didn't just happen this month, traffic to malls and stores has been gradually declining. that doesn't mean that the store sales have necessarily declined
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precipitously. they come with a focused shopping intent. the model that combines the internet with the stores is a viable, healthy model. this is not the death knell of the modern department store because a few companies have a tough quarter with warm weather and the euro at $1.07. this is a long-term trend. there is a great way to play this so that you grow the internet even as you keep the store sales pretty flat. even the company, keep in mind, that reported bad sales, we are talking about down a percent, down 2%, the good ones are up one. penney's was up 6%. it isn't a draconian sudden shift like i read in some reports that came out. this is a gradual process been going on for a long time. the key for retailers is to be fantastic on the internet. those are going to do just fine, thank you. it's not going to evaporate
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overnight or change to internet-only model. stores have profitable ways to do business and work very well with the internet. >> what has been draconian and dramatic is the market's response to some of these. it seems as if the market is virtually begging for some kind of consolidation or rearrangement of this industry. in past cycles, private equity was never able to resist entering retail. do you see a period of consolidation coming or are we getting ahead of ourselves? >> we are big believers in that. hudson bay, we are a global roll-up of our business. our company was built through acquisition. the team actually started with lord and taylor, purchased hudson's bay, purchased saks fifth avenue, and we own the largest department store in belgium. it gives you those economies of scale that allow you to be
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fantastic on the internet and make the investments you need to make there, even as you are superb in your stores and keep them contemporary and great. in this environment, the customer has choices and she won't come to the store unless the store experience is great, which requires more investment. all that drives a push towards scale and a push towards consolidation. we have been leading the pack doing that. i believe very strongly in the offprice segment. that's why our saks on fifth concept is the most rapidly growing part of our business world. we are adding 15 to 20 store as year in the united states. we've been bringing saks on fifth to canada starting next year. we'll bring saks on fifth to europe as well starting with germany. >> jerry, thank you for joining us. my mom has been a card holder for decades at lord and taylor. really good to have you here. appreciate it. >> super. >> why is she dressing up
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company management as characters from "the wizard of oz?" surprise!!!!! we heard you got a job as a developer! its official, i work for ge!! what? wow... yeah! okay... guys, i'll be writing a new language for machines so planes, trains, even hospitals can work better. oh! sorry, i was trying to put it away... got it on the cake.
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so you're going to work on a train? not on a train...on "trains"! you're not gonna develop stuff anymore? no i am... do you know what ge is? at ally bank no branches equals great rates. it's a fact. kind of like ordering wine equals pretending to know wine. pinot noir, which means peanut of the night.
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hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday. i can help with that too. watson, i like you.
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there is no place like yahoo. last month the ceo decided her company should dress up like characters from "wizard of oz." of course this cost $80,000 in costumes. >> did see the posters. didn't think a whole lot of it. >> is this itself tone deaf? >> i think it's silicon valley lightheartedness. >> i don't know. if you want to improve morale, pay them more. deliver on fundamentals. >> i think mike wishes he participated. we've done that for him. the lion.
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>> don't recognize myself there. >> thank you, both. "fast money" begins in moments with melissa lee and the gang. >> thanks, kelly. "fast money" does start right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tonight on "fast," one group of stocks could be signaling a big slowdown. it's not retail. chances are you know them well. we'll explain. comments from john malone that could make you a lot of money. >> solar stocks have been taking a beating. sun power upping its guidance for next year. we'll hear from the ceo in this exclusive. >> stocks closing at the dead lows of the session. s&p 500 negative for 2015. materials and energy leading us lower.

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