tv Closing Bell CNBC January 6, 2016 3:00pm-5:01pm EST
>> great stuff. this will be an interesting final hour of trade here as we had the markets at fresh session lows. thanks so much for watching. "the closing bell" starts right now. >> hi, everybody. welcome to "the closing bell." i'm kelly evans. >> and i'm bill griffeth. here we go again. another big selloff in the stock market today here in the u.s. all the major averages are sitting near their lows of the session right now. the dow, the s&p, nasdaq now on pace for the worst first three days of the new year since 2008. the dow down 4% in the past week right now. today it's new fears about china. we've got the situation with north korea claiming to test a hydrogen bomb overnight. that has been spooking the broader market today.
>> oil prices meantime also sinking, breaking below $40 a barrel intraday. a price we haven't seen since the depth of the financial crisis. we'll take you live to the oil pits for the latest. >> that is a benchmark here that we keep going back to now. 2008 on a lot of these indices and so forth. meanwhile, netflix is now going global. shares are popping on news that the streaming service is launching in countries like india, russia, turkey, and indonesia. you'll hear what ceo reid hastings has to say about that move coming up. >> finally, chipotle getting subpoenaed. we've got the latest details on a criminal investigation now into a norovirus outbreak at one of its california locations. >> so many interesting moves in various stocks today. we've been talking about it here while we're getting ready for the show. we'll get to all of that over this next hour. we have full team coverage right now. seema modi tracking the situation with china. our chief international correspondent michelle
caruso-cabrera has the latest on north korea, and jackie deangelis is at her perch at the nymex on the oil. let's start with seema. the new concerns about china and their economy. >> that's right. the rapid decline is leading to a five-year low as policymakers continue to fix the currency lower. this after saying they weren't going to intervene as much. what's more concerning for investors is the spread between the on shore and offshore yuan. they say this is problematic because history has shown us that widening spreads occur before every major surge in u.s. equity volatility. so it could spell trouble for u.s. stocks as well as in china. those growth periods continue. china services activity falling to a 17-month low, suggesting that china's transition to a
couple-led economy is going to take longer than expected, but investors are more focused on the extension of a shareholder stock ban that was due to expire on friday. it's seen as a near-term positive, but long-term negative. analysts say it indicates china is still not ready to unwind these emergency controls and move towards a financial system that is market-based. kelly? >> seema, thank you for now. meanwhile, north korea's hydrogen bomb claim rattling markets as well here, even as the u.s. denies it. what's going on? >> the latest is very few experts in the world believe the north koreans. initial analysis indicates the data is not consistent with north korea's claims of a successful hydrogen bomb. there are two types of nuclear bombs, atomic bombs and hydrogen bombs. hydrogen bombs are much more destructive, much more difficult to construct. north korea has detonated three atomic bombs since 2006, but if they have now detonated a hydrogen bomb, it would be a significant advancement in their
capabilities. there's a number of organizations that passed on the report because the size of the earthquake or the tremor triggered by the explosion, it appears to have been too small to have come from a hydrogen bomb. in addition, historically the north koreans exaggerate their nuclear successes, and i put that in quotes. regardless of the type of nuclear bomb, there was more wide condemnation of the test. even china, north korea's biggest ally, said it would lodge a complaint with the north korean government. >> atomic or hydrogen, no matter what it is, it has various countries concerned. japan, china, south korea, of course. about their own safety, that they have the capability to launch some sort of a bomb of some kind, right? >> yeah, with ballistic capability. that's the concern, that you have a rogue nation, which we seem to know very little about. the leadership is so unclear to us exactly what is going on there. did they have control of the power that they clearly have in terms of their nuclear
capability? there's so much uncertainty. i think everyone around the world has seen this as a clear provocation by the north korean government. >> michelle, thank you. coming up, harvard university professor nick burns will speak with us about north korea and its move to regional stability in just a bit. another breathtaking decline for crude iowa. jackie deangelis, what's going on there? >> good afternoon, bill. the reasons to sell crude oil continue to mount here. we settled at 33.9. it was a seven-year low and we settled under 2015's intraday low. these are significant technical levels that you know when you start to build that momentum, it continues to the downside. but a lot of reasons to sell crude today, the first was that big build that we got in gasoline inventories this morning. sure, it means prices at the pump could come down, but we not only have a storage problem, we keep producing here in this country. the eia showing that production went up, so it's not going up in the opposite direction, and the
consensus right now is the middle eastern producers are backed into a corner. they're going to have to continue to produce as well so they can keep that market share that they have. the dollar is also a factor here. the dollar index over 99, even though it lost a little ground today. that's a bearish factor for crude and worries about china, demand growth there. certainly not positive either. this risk off mentality, certainly applies to crude as well. people that start selling crude, as they maintain this cautious approach. so whether you believe that oil is moving the market itself or the equity market is moving oil, certainly both bruising today, and it was very difficult to find a fund manager today, a trader, an analyst, that can give you a real reason why crude oil should go higher from here. >> now to dominic. >> check out what's happening here on the micro company side with apple shares around the psychological level of $100 per
share hovering right at that leve level. it did however get to $99.96. it did break 100 very briefly at one point. between it and google, that market gap closing between those two companies. back to you. >> today, joining us, keith fitzgerald from moneymorning.com. peter costa from empire executions sitting next to me here at post nine. rick santelli checking in from chicago. rick, there were plenty of reasons for the market to want to move on geopolitical concerns in 2015 and they didn't. they seem to be doing it now. gold tire, a rush to the bond market, a rush out of the equity market. why do you think it's that way this time around? >> well, think about two boxers. if one boxer takes a lot of
jabs, he gets weakened a bit. and maybe a big blow will put him on the ground on a knockout. maybe that first punch wouldn't have made that difference if he didn't have all the jabs. i think there's so many negatives from a fundamental economic standpoint at a very key junction where fed normalization is critical. and i think it's just all built up. i think investors don't have good fundamental reasons. you see so many smart people come on our channel and say the reason we're doing better than everybody else is because unlike canada, we have a diversified economy. in the same breath, don't worry about manufacturing. don't worry about a slight slowdown in a certain sector.
it was the weakest since april of 2014, and i think that trend along with manufacturing along with geopolitical is really kind of underscoring the recession and earnings and all the other variables that have caught up with us. >> we have some breaking news on the world bank. michelle, back with us now. what's going on there? >> so the world bank has put out their forecast for global growth next year and it's not as good as they originally thought. they think it's going to be 2.6% -- excuse me, 2.9%. they had originally thought it was going to be above 3%, around 3.3%. so downgrading their expectations for global growth from 3.3% to 2.9%. if you want your glass half full, that's still better than last year, which was 2.6%. why are they downgrading it? they're very concerned about the emerging markets, particularly contractions in brazil and russia due to the commodity plunge that we have all been covering dramatically. in fact, when it comes to the emerging markets, they cut their
growth productions there by 0.6 percentage points to still growth, by the way, of 4.8%. but the economist at the world bank says the emerging markets put the global economy at risk of "a severe road bump." so once again, the world bank downgrading their expectations for growth in the world this year, though it would still be higher than last year. back to you guys. >> appreciate it, michelle. another data point underlying what rick was just saying. keith fitzgerald there with a macrobackdrop to worry about. but i'm also a little puzzled by some of these moves today where you have gm and ford in the range down 4%. you have goldman sachs turning in another weak session. how would you connect all of these dots? >> they've got a lot of money coming off the table. this is all about deleveraging and risk management. it's risk management for the institution. don't forget these are all big, liquid stocks. they're held widely all over the
world. so they're simply coming off in response to uncertainty. that's the bugaboo here. it doesn't matter. if there's something a trader hates, it's uncertainty. it has been paid forward for the a long time. this is long overdue. if we get a shakeout, i'm good with that, because a lot of good companies are going to come up on sales. >> you said monday you thought the selloff was overdone based on what had happened over the weekend with the saudi arabian iran and so forth. now we continue today. twhast market's message right now? >> the message is that traders are getting scared. we will get to a point -- i hate to say capitulation, but i think we'll see a point where there's a major selloff and i think people will -- there's going to be a point where these stocks
are going to become a lot cheaper than they were two months ago. >> does it matter that volume is not that heavy today? capitulation usually happens on a lot of volume. >> usually with a lot of volume. then what happens is there's also a confirmation the following day. if we do see that, we haven't seen the volume -- yes, that's true. oil going down. we had that before. we've seen this story several different times. but i do think we're going to get to a point. i think we're a lot closer than we were two months ago. i do think that at some point in the first quarter, you're going to see that blow out. and then that's a time to really jump back in. >> you're going to 1865 on the s&p. >> what's interesting is we're hitting the lows just in the last hour or so. that fear that peter mentioned really coming to the fore, even though the north korea thing was last night. could it be oil and the trading activity there that you think
has continued to spook these markets and send them even lower? >> or maybe the world bank forecast. maybe that was creeping in here. >> my opinion is when you have a weak market on light volume, i think it's what i call the fate trade. generally speaking, everybody likes stocks to go up. when they don't, i think the last hour has a certain vulnerability to it and i think that's what we're seeing. i think we're going to continue to see lots of last hour volatility for the next couple of weeks. >> do you just wait for the dust to settle? are you seeing opportunities yet? >> i'm seeing opportunities. if you wait for the dust to settle, in the old days, you could afford to do that. but now with computerized trading, you've got to be in to win. so i'm looking across classic plays of defense. i think this is a different world now for a lot of reasons that are now self-evident. i'm very interesting in energy. i think we're going to go down to 25 bucks a barrel.
then i'm going to be looking at a strong balance sheet. as i've been saying, the weaker players get weeded out as a result of this weak oil. believe it or not, china is appealing to me on some level. the economy there, despite the fact we've got a major speed bump, is still 25 times larger than it was in 1990. it's going to double again in the next ten years. >> peter, anything you'd add there? >> other than i don't think we're going to see $25 a barrel, but if it did get to that level, i would jump with both feet in and even my wallet. >> we've been waiting for -- when did you get out? >> november of last year. november of 2014. i did find stock that i sold at the high during the summer. and that's it. i have money ready to go. i'm ready to invest. i'm just waiting for that. >> that magic number. >> a lot of people think i'm nuts. 45 minutes to go here.
we've seen markets accelerate towards the lows, putting us on track for the worst start to the year. the dow down 304 points at the moment. >> remember the bias on both the first two trading days of the year has been to the upside. we've had a lot of buying come in. we'll see if that happens today. chipotle under pressure, you've heard. up next, jane wells tells us about the new developments hurting chipotle stock. >> also coming up, the stocks that are showing strength so far this year. it's not all bad news. we put dom on the case.
all right, we've got one stock in the dow that's higher today with their selloff. that would be wal-mart, which is up almost a percent right now. but while we were in break, we got word that the first three days of this year with the declines we've had, the three major averages have essentially given up half the gains that they achieved in the fourth quarter of last year. >> and the fourth quarter was a strong one. one of the strongest in many years. >> proving that down is quicker, bob pisani. >> yeah, and we had an attempt at a midday rally. i was actually a little
optimistic. oil just kept dropping, and it squashed the rally because energy and terms and industrials just kind of fell apart right now and that's where we're at right now. i feel like we're in the middle of 2015 again. less damage in health care and consumer staples. mostly concentrated in two groups. energy stocks. i see some familiar names here. but these are notably larger declines than we usually see. 52-week lows. probably a dozen of them. and industrials. some of the big names. johnson controls. oi. all 52-week lows as well.
a lot of other of the indices are not at 52-week lows, so the mid cap, which i watched pretty carefully, about 1% from a 52-week low. the big cap indices have held up better. s&p is just a little less than 7% from a 52-week low. we do have a small buy-in balance for the close here. i would also note there's not a lot of selling panic. not a selling panic, but a buyers strike. there's nobody interested in really making these bids, even with lower prices. >> some of the heaviest volume in those oil-related etfs. thanks a lot, bob. chipotle shares are falling again after the mexican chain served a grand jury subpoena. jane wells has more for us now.
>> hey, guys. i have four press releases so far coming in this afternoon from law firms now investigating chipotle on behalf of shareholders. when it rains it pours, and bad news for the chain whose motto is "food with integrity." the biggest surprise is that federal grand jury subpoena involving a norovirus outbreak at this chipotle last august. it didn't get a lot of coverage at the time. it was an isolated outbreak. but it sickened over 200 customers and employees, allegedly after an infected employee came to work. we've reached out about the potential criminal investigation. haven't heard back. chipotle only saying it is cooperating. the biggest pain in the stock price, though, is being felt as a result of the two e. coli outbreaks. and another norovirus incident in boston in the fourth quarter, same store sales are now expected to fall for the first time down over 14%. they fell as much as 37% kuduri one week in december.
the silence in chipotle's dining rooms is deafening. estimates have been slashed. there's no guidance for 2016. but chipotle is buying back loss of shares. over $200 million worth in december alone. though at a price about $100 more than where they're trading right now. the company is speaking at the icr conference in orlando. analysts have lots of questions. >> i'm sure they do. heading to the close once again, you heard bob si panny say a little biased to the buy side. the dow now down less than 300 points, which right now is a bit of a moral victory.the dow now points, which right now is a bit of a moral victory. >> coming up, harvard university professor nick burns weighing in on north korea's assertion that it's successfully tested a hydrogen bomb. find out how financial markets reacted the last two times they conducted tests. >> one stock bucking this selloff trend today is netflix. you saw that earlier popping on
welcome back. look at the dow. it's down almost 300 points. this is one of the weakest starts we've had for markets since the financial crisis. the s&p down 1.5%. the nasdaq giving up another 65 points. >> but then there's netflix going the other direction, spiking after ceo reid hastings delivered a keynote tecum electronics show in las vegas. that stock up 8% right now. josh lipton was there. that must have been some speech, josh. >> here at ces, netflix launching its services in 130 countries. take a listen to what ceo reid hastings had to say. >> while you have been will being to me talk, the netflix service has been going live in nearly every country of the world but china, where we hope to also be in the future.
today, right now, you are witnessing the birth of a global tv network. and i do mean the birth. >> among the new markets where netflix is launching its services, it will include india, nigeria, saudi arabia, and russia. importantly, also suggesting that it continues to work on ways to bring that service to china. that stock moving higher in today's trade. it has been a monster. now up some 150% in just the past 12 months. guys, back to you. >> all right, josh. thanks very much. meantime, turner broadcasting is also at ces this week. they're taking a page out of the netflix playbook. in ten days, tbs will air a binge viewing opportunity, 25 hours straight of the network's new police satire "angie trib a tribeca." it features the entire first season. you can watch it five times over
that 25-hour period. >> it's part of a new strategy to appeal to viewers. joining us now from the consumer electronics show in las vegas is johnmarr tin. welcome to "the closing bell." good to see you. >> thank you for having me. >> we'll talk about binge watching and all that in just a moment. when i think tbs, i think of march madness. i think of the nba. i think of the live sports events that seem to only be getting more and more valuable going forward. how important are these contracts for you and how central are they to your strategy? >> sports is incredibly important for turner. we are in a people yum sports business. we've had long standing relationships with the nba, with the ncaa, and with major league baseball. we have those contracts well into the next decade. for us it cements the value.
2016 is a really special year for us at turner. tbs is going to crown the men's basketball champion for the first time a cable network to crown a champion. these sports relationships are incredibly important. we are great partners. we manage a lot of digital partners have. and we not only control the linear tv rights, but we also control the digital rights that will enable us to monetize these rights for a long time into the future. >> we all know that with the rise of mobile and with streaming and all the other media that are rising today, cable is declining in viewership overall. is it going to continue? where do you see cable over the next three to five years? will it continue to see an erosion of viewership, do you think? >> i don't think so, but to be
clear, our strategy -- you know, we own and control brands, and branded environments. our strategy is to make sure that our brands reaches as many people in as many places in as many ways as possible. we are leaning in to where the consumers are going. our traditional satellite providers are incredibly important providers and will be for the foreseeable future, but we're also striking deals with new non-traditional distributors and also thinking about ways to reach consumers directly if and when the time becomes viable. so as it relates to the traditional platforms that you mentioned, where it's a mature business and we've seen some erosion in household penetrations, i think that's largely due to it's too expensive for some households. and also there's a view that there's not enough value in those. because consumers are being asked to pay for cable networks that they don't care about. that they really don't want to pay for. so we as turner control the most
concentrated portfolio of must-have networks in the country. we have the number one basic cable network for tbs. two of the top five with tbs and tnt. three of the top ten. three of the five fastest growing networks in the united states. i feel terrific about our ability to make sure that we're in as many evolving packages as possible to make sure that our brands are in front of as many consumers as possible going forward. >> it's clear you guys are answering some of the trends out there, john. responding to some of the pressure on you and others, by doing these things with commercials, trying to play around with how much people dislike them. and then with this binge watching series. it's an interesting approach. but isn't a point of binge watching being able to do it on your time? why do you think people would tune in to catch it live, so to speak? >> well, i think you mentioned a couple different things. the first is one of the reasons
we're at ces is we are engaging in numerous meetings with marketers and advertisers, so that we can work together with our world class capabilities, incredible branded environments, and roi to demonstrate to them that we can be great advertising partners. you mentioned something that's really important. more and more consumers are migrating towards great consumer experiences. it's one of the reasons why, and we just talked about it earlier, netflix has been so successful. so our idea is to begin to experiment with different types of advertising messages and different ways of reaching consumers for marketers. so what we announced recently with trutv is that by the end of 2016, we're going to essentially have the amount of commercial time on trutv, but make the commercials much more relevant. and we have the ability to produce them in-house. i think there's going to be more of a blend for consumers between
what is content and what is the marketing message. i'm really excited about that. >> should be interesting. just speaking personally, don't touch turner classic movies. my favorite channel, after cnbc, of course. >> i appreciate you mentioning that. thank you so much. >> you bet. john martin with turner. >> my mom's favorite, too. >> i love your mom. another reason to love your mom. >> you can do a classic movie tour on the bus. was that ideation infused -- okay. much more to come from ces. blackberry ceo john chen speaking with us first on cnbc interviews in the next hour. you can follow all the latest developments by logging on to cnbc.com/ces 2016. >> the market coming back right now. dow down just 263 points. let's get to a cnbc news update
with sue herera. >> who also loves turner classic movies, bill. here's the news update at this hour. we start out at this point with the chairman of the joint chiefs joseph dunnford expecting troops in ankara, turkey. he met with his turkish counterpart to discuss the fight against isis and developments in northern syria. shiite muslims protesting against saudi arabia's execution of a prominent cleric. they carried pictures of the cleric and chanted anti-saudi slogans. he was one of 47 prisoners executed last saturday. the occupation of a federal wildlife refuge in rural oregon is now in its fifth day. the protesters call themselves citizens for constitutional freedom. at issue is who has control over certain western lands. and how's this for good sportsmanship? or not. a high school basketball coach caught on camera, allegedly
asaul assaulting a referee. the coach upset with that call. and here's the head butt. he was ejected from the game. luckily the ref wasn't hurt. that's the way to set an example for the students. >> wow. holy cow. >> emotions can run high at those high school games. >> i think that's exactly rights. >> basketball, lacrosse, all sorts. >> thank you, sue. see you later. where are we going? we're going to a commercial break right now. >> we've got about 25 minutes left here. even though, as we mentioned, we're off the lows of the session, still looking at one of the grimmest starts for markets since 2008. >> we're going to talk to a leading trader on the floor in a minute, as we head into the close for yet another wild market day. >> up next, nick burns gives us his take on north korea's hydrogen bomb claim and what leader kim jong un is hoping to
. this is no buy-in, no sell-in. huge volume. >> so what does that say to you? more to come? what do you think? >> i think we will see a little more to come. i wouldn't put too much either on an upswing or a downswing with no volume. >> oil again a catalyst here? we're in the $77 range on wti. >> some people are talking $30. it still has a ways to go. because of the fed, last year bad news. it was good news for the market. now bad news. so you don't see that either. >> good stuff.
>> this the scene in north korea. meanwhile, earlier today, as the news anchor announced a successful test of a hydrogen bomb. citizens of the street watching in awe. the explosion set off an earthquake as well as a wave of fear that rippled across the globe and through markets. nicolas burns is professor of diplomacy and international relations at the harvard university kennedy school of government. he held many state department positions and joins us now with this first on cnbc interview. it's great to have you with us. today, i guess the u.s. and others are saying based on their tests this couldn't have been a hydrogen bomb. it wasn't powerful enough. how important is it that this was or wasn't -- or what is the significance in your view of the bomb test, period? >> it's a very significant and troubling event that north korea would once again test a nuclear weapon. and very significant that it claims to have a hydrogen bomb and apparently it may not have been a hydrogen bomb.
hydrogen bombs are highly destructive. atomic bombs are very destructive. hydrogen bombs can cause even greater damage. the distinction is important. it's important now that the united states lead and try to secure universal condemnation of the north for what it's doing. china and russia in particular have to join the united states as they did today in new york, not just to condemn this, but china is the one country with some influence on the behavior of pyongyang. it has to exercise that influence to try to contain this problem, because it's a growing problem. >> it is a growing problem, but to this point, not much has been done about that. we all assume that they're bluffing in many cases. whether this is a hydrogen bomb or not. we don't have any leverage because we don't have any sanction capabilities. we don't have any trade with them at this point. so it is left to china to do something. do you think this latest test, whatever they were testing, is enough to bring china into this picture in a more concerted way
this time? >> i'm not sure. because china i think has been frustrated by kim jong un.reaty the other hand, the chinese don't want to see the collapse of the north and the emergence of a unified korean peninsula with a capital in seoul and a unified korean government aligned with the united states. so the chiens have always been reluctant to impose truly draconian sanctions on the north koreans. i think it's up to us, to the united states, to the south koreans to insist that they use some influence. if they don't, there will be repercussions in the u.s.-china relationship. within the next decade, it is possible that the north koreans could develop a missile capacity that would allow them to strike at the western part of the united states. certainly in hawaii and alaska,
other american territories. and that's obviously something we cannot abide. and therefore i think this issue becomes for the final year of the obama administration, certainly for the next american president a priority front line issue. >> i just wonder to what extent china is abiding it. at some point, north korea is a humanitarian issue. that's been raised in the past. somebody is doing that right now. at what point can you pull that lever, try to further choke off the country without perishing its citizens in order to put more pressure on a government that's not bowing to anything else? >> it's a very cruel choice, you're right. in the past, the united states has consistently provided food aid to the u.n. world food program so that those poor north koreans don't face shortages.
china wants to be a recognized power, not only in the asia pacific region, but globally as its military power increases, as its economy grows. here's a test for the chinese. great powers in the world need to take responsibility to put out fires and deal with reckless outlaw states, and that's what the north korean regime is. i do think president obama is well within his rights to get on the phone with president xi jinping and insist that the chinese contain this problem. >> professor, thank you for joining us. >> thank you very much. all right, we've got a little less than 15 minutes left in the trading session here. most of the major averages are stabilizing, but what we've been seeing the last few days is really a buyers strike, as bob pisani likes to put it, because even with this selloff, you're not seeing a lot of volume. and that's again what we're seeing today with the dow down 250 points right now. up next, 3 for 3.
dominic choo will highlight stocks in an extremely tough start for markets so far. and later, apple shares hit the skids again today, briefly going below $100. this is nudging its dividend yield above rates for some of its corporate bonds. we'll discuss what that could mean for apple investors down the road, still to come.
welcome back. some shares are actually gaining ground for a third straight day. dominic choo is taking a look at these silver lining plays. >> kelly, bill, if you take a look at the overall s&p 500, 500 members, fewer than ten have actually been able to post gains for three straight days. that really speaks to whether or not investors are trying to either cover their short positions in those shares or take in some at least buying biases and maybe try and find some value. the only green stock today in the entire dow jones industrial average, today. wal-mart. wal-mart, if it stays in the green like it is now, wal-mart one of the only stocks in the entire s&p that's been up for three straight days.
so again, remember, a big loser in the dow last year, so perhaps a little bit of short covering is part of that story. a little bit of fundamental value buying. take a look at other names like jewelers. that's also a big one right here. one of those handful of stocks that have been able to do it. and then one other one that we haven't talked a lot about today, but certainly a media company that's got a lot of focus. time warner shares. they are up three straight days to start 2016. you can see here, up by nearly 6%. of course, we just had the turner broadcasting ceo on with you guys a few minutes ago. one of those names that's starting to get a little bit of a bid here. a handful of stocks, kelly. for some of these names, it is about a reversal of some real down trends to end the year. maybe a little bit of short covering. maybe a little bit of value buying. but those are some stocks where we've seen relative strength to start 2016. back over to you. >> sure enough. thank you. >> very, very interesting
outliers, the ones that we've been highlighting today. speaking of which, again, for the third day running, we've got buying coming into the close here. art cashen just pointing out that the imbalance is to the buying side to the tune of $600 million. we'll see if that has a further impact as we head toward the close. the dow down 263 points. >> by the way, that's off the lows of the session. we are down more than 330. but still, one of the weakest starts we've seen since 2008. >> what could happen to this skittish market once earnings season kicks off next week? oh boy. we'll talk about that next on "closing bell." a bathroom? a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away
seven minutes to go with the dow down 280 points. amidst all the headlines, now we get earnings started next week. what do the expectations look like at this point? >> a continued story. headline not gipg to look so good, if you exclude the energy sector. just the energy sector. it's the same story we dealt with all 2015. now it's carrying over to 2016 with crude oil $34 a barrel. >> how much further does this market weakness last? are we going to continue to
depend on what happens with crude oil? >> it will -- obviously, crude oil is going to go to $25 in the next six months. nothing is going to change in marketplace. but if you look at the market in terms of fear and greed, let's translate that to current circumstances. it's momentum versus valuation. it went sideways all year. we had the major downdraft in august. that broke the back of momentum, so now you're searching for a bottom based on valuation. the s&p trading 16 times forward earnings. if you get closer to 1,900, that's 15 times forward earnings . we're kind of starting to like the market here. >> last year, buy the dip was a hallmark of this market. buyers are sitting on their hands the first three days of this year. a different psychology now. >> they are. a year ago, the market was down 2% to 3% in january.
you're seeing a reevaluation of all asset classes. year end, corporate bonds are down 4%. high yield was down 10%. and yet the stocks were down less than 1%. so stocks on a relative basis are doing very well. maybe they're giving back a little bit of that immunity. but we still think it will be a valuation story when everything is said and done. >> corporate credit off to a great start, so that's something for people to hang their hats on. >> thanks, bob. we're coming back with the closing countdown in just a moment. another crazy day. >> after the bell, the consumer electronics show out in las vegas. you're watching cnbc.
just inside the two-minute mark heading into the close. the two-minute warning, as it were, bob pisani. the dow down 240 points. we didn't even mention we had minutes from the fed that came out at 2:00 eastern. didn't really move the market, but then it led to that selloff there. oil, though, has been the catalyst again. a seven-year low for crude oil, wti below $34 a barrel on the settlement. $33.97 right now, a decline of 5.5%. the ten-year yield setting lows going back to october as they
continue to buy the treasuries. we're at 2.17% now. and look at the vix. i asked them to build a one-year chart of the volatility index, the fear index, which is now at 20. but even with this selloff, we are nowhere near where we were in the august selloff. >> we've got three days of mild -- what seems like mild panic, but it's not being reflected either in the volume, or people going out and buying protection. the vix representing people buying, put some calls in the s&p 500 the next 30 days. it's not there. i call the desks. i say, you busy? no. bob, i'm telling you, you know, this is more like a buyers strike than people panicking coming in and saying i want to sell. we're not seeing that. as you know, one of the hallmarks of the capitulation bottom, we can see okay, this is the end of it for now, selling. >> and the vix is not indicating people are desperately rushing
off. >> so we're going well-off the lows. we were down 300 at one point. down 250 right now. "the new york times" is ringing the closing beat the new york stock exchange. stay tuned. much more coming up on the second hour of "the closing bell." see you tomorrow, kelly. >> thank you, bill. welcome to "the closing bell." i'm kelly evans. another down day on wall street. the dow giving up almost 250 points. the only thing you can say is that it could have been worse. it was earlier in the session. we were down more than 300. still, another decline, as we're in the third trading session of the year. for the nasdaq and the s&p as well, we are putting up a string of declines that looks to be the deepest since we started the year in 2008. that is a 1% drop across all three major averages today. and take a look at oil. many people pointing the finger right here for a lot of what's happening.
further pressure across the wti benchmark and brent as well. we're talking about the lowest since 2004 for that contract. lowest since 2008 for wti. they're below $34 as we look at it today. we do now have our own mike santoli here along with carol roswell. also guy adami and chris constantinos. >> it's kind of amazing, the pattern seems to be in the first three days, the world under stresses from multiple directions. they sell overnight, into the morning. we have this low in the -- when the european close happens here. and then you get busy late into the day. i don't know if this is something we'll be able to rely on. but to bob's point, nobody seems in a hurry to buy, but also you're not seeing any kind of real downside. so if we need one of those, we're not getting it yet. i would point out a couple of little things. really not a huge washout in
terms of the number of stocks down versus up. again, you're seeing some of these pockets of at least firmness in the market. and the dividend yield on the s&p 500, 2.2%. treasury yield on a ten-year 2.1. when that has happened, it usually means people start looking for some value in equities over the last few years. nothing magic to it. >> mike mentioned that we're looking for that downside flush. we're certainly not seeing it in oil yet, even though we're having another horrible session today. look at what's happening with gasoline. these should be such great spots for the u.s. economy, but it doesn't quite seem to be coming to the fore. >> i've always been the cuddly bear, if you will. i've been the one contending that the oil slowdown is not a good thing for our country. so this is not particularly a surprise to me. as i look at the overall situation, what concerns me the most, and i understand we've got some things going on in the middle east and the like. to me, the china situation is
really the big issue here. and i think that we're starting to really feel like their experiment -- you know, can they get the middle class to become this consuming class. can they really sort of transition their economy until the communist and capitalist country -- it's coming to fruition that that probably isn't the case. when you have that going on, and then us heading into earnings season where it's beginning to be a spectacular earnings season by any means. i don't see what the catalyst is to begin to push this market higher. certainly, there are some names that have gotten taken down with the fray. there are bargains across the board. >> guy, the points about china here. i think window would get the hard things right. look how weak the export numbers were this morning. >> carol is a lot smarter than me and a lot better looking. because i agree with everything
she just said. everything wants to talk about this move in oil being some great thing for the consumer, and i get it. i've said it 100 times. it's great going to the gas station and only pay $40 instead of $80, but that's where it ends. it's extraordinarily destabilizing. you're starting to see it around the world. china is a huge problem. what really infuriates me and is making me laugh at the same time, the same people talking about china as this great growth engine a year ago are now saying it's not a big deal. you can't have it both ways. it is a big deal, and they say one other thing and then you can come at me with whatever you want. the worst fear, somehow using a bad word. can't be scared. there are a lot of things in the world to be scared of. i'm not trying to be some fear monger. don't take it out of your
vocabulary as some sort of bad word. it's not. >> the dow and s&p, more than a 3% drop. the s&p has given up more than 50 points. the odds of positive returns, though. let's try to get some context around this. are actually still quite high. let's bring in eric chemi. what did you find? >> a lot of markets worrying about the start to the year. we ran the numbers, and found that the market could start and stay negative for many months, and still be expected to end in positive territory for the year overall. this is going back four decades.
more surprisingly, look at the orange line. it says negative january still leaves the door open for a big double digit gain. there have even been times when the market was negative into the third quarter but still ended up positive. there's not so much to be afraid of the rest of the time. >> at least just yet. for now, thank you so much. >> does that give you any comfort that we could be negative through march and still finish in the green? >> well, yeah. i don't typically put a lot of stock in those. on a day like today, i think it's really helpful to sort of close your eyes, take a deep breath and focus on what really
does for the markets in the long term. the two areas of the world we still like, which is arizona-japan, actually were two of the bright spots in terms of positive earnings growth. fear can be a good thing because it causes market dislocations that players like us can take advantage of. we're kind of actively looking for opportunities here in the coming weeks and months. courtney reagan has details. >> macy's putting up two different releases. there's a lot of information. i want to let you know what we know now. we thought it was going to be rough, and it turned out to be a rough holiday season for macy's. macy's is cutting its fourth quarter and full year 2015
guidance, fairly severely for both of those. so that is really sending the stock price lower after hours. macy's is also announcing job cuts. there are going to be 3,000 associate positions eliminated. 50% of those will be other positions. they're closing a st. louis call company. they're continuing to pursue the idea of value from the real estate. they're continuing to update shareholders on that. we'll jump back on when we find more important notes. back to you. >> i guess in a way, as we get past the holiday season, wii going to start to see the shoes fall. >> we are. i think it's a time that we're seeing all of this come out.
after hours trading down about 3%. i believe in this management team. i believe that they have a plan to turn this around. they're getting into the off price retailing. i think that this is potentially the entry point, whether this company ends up being bought, merging, something. i think if you are a long-term investor, this was the point i was looking for, and again, that is my call on that right now. >> chris, would you feel the same? >> in terms of that particular stock? >> yeah. >> you know, i can't speak specifically to that particular stock. we don't own it. but i would say that our view on u.s. retailers has actually morphed somewhat. certainly we think the chief oil diffident will continue to filter through to the u.s. consumer.
we're not major investors, but that to me seemed like yesterday's story. >> mike? >> that's what you're left with. it's about figuring out what actual value is there. you would have to think there's substantial value. there's real estate. there's the brand and everything else. but for secondary players and specialty retail, i do think you're kind of in that mode. and then you have to ask the question, are the capital markets in a condition right now that can accommodate a lot of value out of these things? that being said, they're definitely cheap on almost any screen. >> guy, what do you make of the moves, the announcements in macy's future here? >> this is really bad now, because i'm about to do it again. i happen to agree with everything carol just said. if you look at macy's on monday and tuesday, monday started off as a rough day. macy's closed higher on monday and had a great follow-through day yesterday.
now getting sold off in the after market here. to carol's point, the valuation on this has become rather compelling, a huge selloff. and the weather is a component as well. i see what they did with guidance, but this cold spell is going to help macy's, i believe. so if this stock can somehow manage to open positive tomorrow, i wouldn't be surprised. >> you should do like a tap dance. i love it. we'll leave it right there. much more coming up. and chris as well. really appreciate it. the "fast money" crew, guy, and the rest will be talking more about this big market selloff top of next hour. "fast money" at 5:00 p.m. it was another rough day for apple stocks, meanwhile. shares hovering only around $100, and the company's dividend yield is now higher. up next, we'll look at why that could be a bullish sign for the stock. and then we'll head live to the consumer electronics show in las vegas for a first on cnbc interview with blackberry ceo, john chen. 6
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the company's stocks pushing the dividend yield higher than the rates for corporate bonds. mike santoli will explain. >> it's not reason one, two, or three to buy apple stock, but it's definitely a marker of exactly how beaten down the stock has gotten and really how the market is viewing the shares, as really a no-growth prospect. so the math is they have about $2.08. there are several issues of apple debt that are out there that yield less than 2%, let's say three to four to five years maturities. the ten-years are yielding 3%. it's saying the stock market is not paying much for future growth. a bond is going to have its principal guarantee. there's nothing that says you have to have this be a cushion at this level. but it really just does tell you that there are a handful of big cap stocks where you have this dynamic theory. the overall market is not there yet. the ten-year treasury -- rather, the ten-year corporate bond is much more like 3.5%.
so it definitely shows you that the market is taking a dim view of apple on fundamentals. >> the market is telling them they are not frivolous with their cash. there are a lot of competitors that make all kinds of crazy acquisitions or are innovating in ways that many of us think probably will not come to fruition. and getting really incredible multiples because of that. but for whatever reason, because they are conservative and not making those crazy decisions with the cap, they're actually getting penalized. >> well, they do get penalized. and honestly, i think there's a reason for that, at least theoretically. $200,000 in cash is too much to do anything with. it does show that financially speaking, it's a battleship. it's going to be there a long time. >> and one to watch. the consumer electronics show is
kicking off in las vegas where companies are showcasing their latest gadgets. our john forte is joined by john chen. >> thank you, john, for being with us on "closing bell." what we're talking about here is the qnx operating system that operates in cars. got a software upgrade to that operating system. how important is that? you're said don't expect a big boost in the near term, but years down the pike. >> it's important, because we have a pretty good footprint, so we provide software. roughly about six million cars running around. now the next generation is to really get more of these components, resources in the car
tied together in a secure manner. so today we announced two different new products. the accusic improvement management systems. so all these things are beginning to be building basic fundamentals of how a car of the future is going to be designed. so it works. we also announced that we joined in with ford on the so-called stl. it's a protocol for how companies should talk to each other. and our software also sets the need that could be compatible with the apple car play or google automotive initiative. so it's a pretty powerful set of software that every car will need going forward. >> we were just talking to your friend ralph, who had mobile and business solutions at at&t. they also have a deal with ford to enable your phone to control
what's happening, checking how much gas is in it, etc. that all needs to be secure. security is your thing. especially now. it's not so much yes, you have your own devices, but securing other connective devices. how do you make more of a business for that? because there are more devices than ever. >> right. so everything we do -- if you think about this. it runs on foios. it runs on google, android. it runs on blackberry and windows. it's really how it applies. it's not so much whose fault is it? for ralph, he needs partners like that. we talk a lot. we lo to work together. so what ralph wanted to do and
what we wanted to do are complementary to each other. >> mr. chen, speaking of apple, it certainly has the world's attention, apple does lately. what are you seeing in terms of trends in the mobile phone space? is it done? is it over? is it saturated? is there another leg of growth still? is it time for people to start thinking about the next tech gadget of the future? >> i think it's becoming a very personal item. is it done? no, it's not done. i think we'll find it harder and harder to innovate and harder and harder to make money. that said, the features and applications are getting more
robust. so this morning, for example, we made an announcement with a company called share care. who have 30 million records for decisions/patient innovators. and they want to measure the emotional response, stress response through your cell phone, or through the wearable. we're providing the technology to it. so i think they take a different form, whether it's the wallet, whether it's the next generation fitbit. just making calls and surfing the web. it's a little bit over with. but they're going to have a lot more new features. >> one more question. if that's the case, you mentioned encryption. and this was your hallmark. security professionals are upset about how they can't get access
to what's happening in these devices. can encryption stick around? what kind of work throughs might there need to be to make sure we keep people safe amid this proliferation? >> good point. we have a very strong position on that. we don't really provide any content. we help track down bad situations. it's very debatable. everybody weighed in on that. we land on the side of helping keep society safe. we will assist on gathering information regarding some of those communications. >> it seems to me like there
hasn't been that much of a coordinated response between the big names in security. apple. google, blackberry, samsung. people getting together and saying here's our position. individually you've been speaking out, but not as much coordinated response. am i missing something? is there a reason for that? >> i think this job, you are correct. you're not missing anything. some of us feel stronger than the others. i think it needs to come from an organized effort, and maybe the government -- this is a private/public sector conversation. eventually, the government will have to step in and say, instead of demanding and assisting, we just had a good interchange with the pakistan authority, where they wanted to retreat from the country. i think we finally arrived at a
reasonable place together. again, we're not going to share any content or data. this is going to be a much more private public sector effort. >> john chen, thanks as always for sitting down with me here on "closing bell." coming up, we've got more. the chief investment operator of spotify is joining us. >> thank you, appreciate it. let's send it to seema mody. >> december sales decreasing, but raising its guidance. earnings of 45 to 47 cents a share, so it's that up beat guidance that is sending shares higher by over 12.5%.
>> thank you, seema. >> michael pearson hospitalized still from severe pneumonia. but could this be about more than an interim job? that's next. that's still ahead. 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.
we've got nor breaking news on macy's. let's get straight out to courtney reagan. >> macy's did release its holiday same store sales, down 5.2%. that is the comparable sales for macy's on an owned basis. owned plus license basis, comparable sales, and 4.7% for november and december. also cutting guidance pretty sharply for both the fourth quarter and the full year. shares are now higher for macy's. ceo terry lundgren says that 80% of the weakness in the comparable sales for the quarter came with winter goods, scarves, abouts. that is contributing to the weather.
orders actually improved 25% over last year. macy's shares are higher after the bell. >> maybe they were listening to guy and carol. >> we knew that news was coming. we had to get it out there. and nowe can start anew. meg tirrell is here with more. >> you are seeing valeant rising on this news. a little certainty beginning forward. mike pearson was hospitalized on christmas with severe pneumonia. and last week they said they were appointing the office of the ceo plus three people on the board to oversee that.
there was some criticism. now they're saying he's still hospitalized. they are pointing immediately an interim ceo and their former cfo. he left the ceo post pretty recently. people still want mike pearson in the ceo role and nothing would make them as happy as seeing him back there. some folks think, though, investors are saying maybe he's not going to come back. not buzz of his health, necessarily, but maybe he just doesn't return to the ceo role. >> likely to continue. >> i guess given that there's scrutiny of accounting and the rest, you wonder if the industry wants him to be running on an
independent length of time. this company was all about pearson, his strategy. >> wasn't he a big part of making the acquisitions, of bringing up the prices, shall we say. >> there's also a question if schiller would want to be the ceo on a more permanent basis. maybe they have to turn to research. >> time now for a cnbc news update. let's get over to sue herera. >> here's what's happening this hour. a short time ago, the los angeles county prosecutor says he will not file criminal
charges against bill cosby. this stems from two allegations of sexual misconduct. in a separate case in pennsylvania, -- the funeral for a chicago woman shot and killed by police the day after christmas was held today. investigators call the incident a on 55-year-old betty jones an accident. she leaves behind five children and ten grandchildren. her family has filed a wrongful death suit against the city. a wal-mart supplier is recalling nearly 90,000 pounds of beef patties. the recall involves sam's choice, black angus beef patties with 19% vidalia onion. no injuries have been reported. take a look at that. there he is. prince george starting nursery school today. the duke and duchess of cambridge releasing two photographs to mark the occasion. the prince, as you can see,
standing in front of the mural outside the school in norfolk, england. what a cutie pie. that's the news update. remember when we were debating what the name was going to be for the royal baby? and now there he is beginninggo start today. >> is that normal? >> i think you start them any day there. he will soon be the most eligible. >> everybody has to pitch in, you know. >> thank you, sue. >> up next, what potential threats could have a bigger impact on markets, china's economy or north korea's latest nuclear test. plus, will spotify change its business model change to appease artists? we'll hear from their chief revenue officer later.
welcome back. some breaking news on morgan stanley. david faber has the details. >> thanks very much, kelly. about 20 minutes ago or so, i'm told morgan stanley employees received notice that greg fleming, who has been running the wealth management business of the company the last six years will be leaving morgan
stanley on the ascension of colm kelleher to president of the entire firm. one would expect momentarily to be shared with the rest of us through a press release or an a.k. filing if one has not already come. a significant move certainly in the upper ranks of management at morgan stanley. where mr. gorman remains. and likely remains for quite some time to come. one key takeaway would seem to be cementing mr. gorman's position as ceo many years to come. why? he had been thought of as perhaps somebody who could take over. being that he's 52. mr. gorman is 57 or 58. but mr. kelleher is older than mr. gorman, hence the sense that while the board may have asked him to get a number two in place and perhaps also said we want you to stay on for many years to
come. it was not that he chose to take that place. many people are familiar with his ambition to potentially be a ceo. and he's now looking to do that. not running the wealth management business of morgan stanley. 40% or so remember the acquisition. it was a large -- it is a large business as morgan stanley sort of tried to change its composition of that. to more of a productable model, if you will. it was a difficult year last year. and for the stock in the stock market. it was last fall that ted pick was promoted along with a number
of other people. they also put in a new cfo. pruzan took over when the cfo left to go to google. this generation, this mid to late 40s, would seem to be poised to be the people who conceivably will be looked at to succeed in five to seven years. perhaps when he decided to give up that position. he has been in the job for some time. if he were to go another seven years, he'd be ceo for over 14 years. interesting that while the ten-year ceos have shortened, the likes of a blank fund at goldman sachs, and perhaps james gorman at morgan stanley keep these jobs for a very long time. a job that it would seem mr. fleming had wanted will not be getting at morgan stanley and perhaps will be looking elsewhere to fill. back to you. >> thanks, david. stay there for a moment. >> i wonder if there's any signals to be read here by the fact that kelleher obviously
running institutional business about morgan stanley's ongoing ambitions in that part of wall street. in other words, are they not going to further pare back. >> i think that's a good question to ask. and i don't know the answer. and i'll be curious to see what messaging they give once the story is sort of widely circulated. it continued to be important. my understanding is it's not going to be run in the job, which is interesting also. that is the wealth management part of the company. and, you know, it's a valid question. trading hasn't been particularly good, although ted pick did get promoted given what they felt was at least sort of a
resurgence of fixed income. >> i wonder if there's anything else you glean from this. andrew brought up a point that, to see the shares of morgan and geldman down almost 3% today. with everything that's happening with interest rates. the rhetoric from bernie sanders. interesting to see the ten-year for some of these ceos. >> yeah. i think that is notable. there's always questions as to whether he would remain in the position for another two years, in which case perhaps mr. fleming still saw an opportunity being his roughly six years younger. clearly not going to be the case. kelleher not seen as an heir apparent in any way. the board does now have its number two, in case something should occur to mr. gorman, not that we're in any way suggesting it will. but you need to know what your backup plan is. now they have a generation of leaders from which to pick
perhaps for the future. but that future could be many years away. none of those guys seem like they're going to be giving up the reins. >> we'll see about his next chapter. we know him well around these parts. wish him all the best. thanks a lot, david. >> sure thing. >> we have a news alert on tim cook to get to now. seema mody joins us. >> that's right. apple ceo tim cook's executive compensation for 2015, $10.3 million up from $9.2 million in 2014. that according to an s.e.c. filing. remember, shares of apple losing over 5% of the year of 2015. back to you. >> what do you think? >> i think it's a bargain.
i don't think there's a lot more than tim cook could have done. it's too big to succeed versus anything under his leadership. i certainly have no problem with it. >> a nice pay bump for tim cook there. shares of schipotle. coming up, we'll weigh in on how they can win customers back. artists like taylor swift and adele refusing to put their music on spotify's service. we'll hear how that's affecting business next. isn't major medical enough? no! who's gonna' help cover the holes in their plans? aflac! like rising co-pays and deductibles... aflac! or help pay the mortgage? or child care? aflaaac! and everyday expenses? aflac!
welcome back. music stream services in the spot light after artists like taylor swift and adele have publicly resisted streaming their new albums. how does this impact those business models? john levrick on a first on cnbc interview. >> let's start off, there was a rumor a few weeks ago that spotify was considering adjusting its model so that certain songs might be available on paid services, not on free. was there anything to that? >> no, it was a rumor. we haven't made any changes to the way we think about our
models. that continues to be the case. >> talk to me about the impact of the beatles. looks like a huge percentage of the people who are streaming, the 65% of listeners are under the age of 34. more than 670,000 play lists on spotify got updated within a couple of days with baeeatles sopgsopg -- songs. what has been the impact? >> the beatles have not been on any streaming service until december 24th of last year. they put their entire catalog, includiing free side and the pa side. we've seen them on the top 200 billboard charts, which is pretty incredible.
the impact is it's really bringing the beatles to a whole new audience that hadn't been buying the music, which is 33 and under. so it's really been well received by us. i know the beatles management are quite happy to have their music listened to by this new audience. >> so when you get big releases from taylor swift, from adele, the conversation turns to behavior, not putting their music on spotify, at least to start. what impact does that or doesn't it have on spotify? people say if i'm paying this $10 a month for spotify, i expect to have every song in creation on here. does that slow down the curve? does it have no impact? >> at the end of the day, we're talking about a less than 1% exception. more than 30 million tracks on spotify. so we don't really have the globalc catalog of all music. when they can't get that on
spotify, they're not necessarily -- they'll be looking for it elsewhere. i think what's interesting is taylor swift, as you mentioned, but adele did release a lot of tracks that she did put them on spotify. and "hello," her top hit globally, is also on spotify and it's number four globally after justin bieber at the top three. >> thanks for sharing that insight about streaming and spotify. certainly the times, they are a-changing. >> they are. i'm going to have to go look for that adele song now. you can follow all the latest developments by logging on to cnbc.com/ces2016. the fast casual chain sales down 30% in december. what can the brand do to recover? joe bastianich has his take next. come on in pop pop.
for a heart attack. i take brilinta with a baby aspirin ...no more than 100 mg. as it affects how well it works. it's such an important thing to do to help protect against another heart attack. brilinta worked better than plavix. and even reduced the chances of dying from another one. don't stop taking brilinta without talking to doctor. since stopping it too soon increases your risk of clots in your stent, heart attack, stroke, and even death. brilinta may cause bruising or bleeding more easily or serious, sometimes fatal bleeding. don't take brilinta if you have bleeding, like stomach ulcers. a history of bleeding in the brain, or severe liver problems. tell your doctor about bleeding, new or unexpected shortness of breath, any planned surgery and all medicines you take. i will take brilinta today. tomorrow. and every day for as long as my doctor tells me. don't miss a day of brilinta. welcome back. more bad news for chipolte today and the stock falling about 5%. as the company announced a grand
jury subpoenaed the chain over an investigation in a noro virus outbreak. sales fell 14% in the fourth quarter and 30% in december. joining us, joe bastianich, with his season premier tonight. >> and it is very unfortunate. no good deed goes unpunished. this is in a cyclone of negative things and what is causing it is directly sourcing products. because these galtal products grow -- these agricultural products grow in soil and i feel for them. >> we had a discussion with two guests. one said they have to double down on the strategy and improve their heathine but say the message is what it is, about the locally sourced products. the other guy said no way. they can't keep doing this.
they are digging their own grave. they have to get fundamental with their strategy. >> it is what the company was started as and for them to go back on it would not be something positive for the stock price or the growth of the company. i think they are right, you have to double-double. just because you wash your lettuce in one facility is any different, it is the processes of food safety. they take into account the fresh locally sourced ingredients. and i don't run a 500-chain restaurant so i don't know the logistics. >> yet. >> but they have to figure it out. but they are going to take their lumps because today's news was tough. >> do you think they could wait it out and no new announcements and the customers will be there to come back or do they have to do something? >> i look at my son miles and he still goes to chipolte 45 times a week. the roto virus is not deterring him so i am convinced there are
more behind him. i think this news hurts a bit. and people forget in this country and fundamentally it is a great product and game-changer. people have loved it. and they'll figure out their problems and i'm sure they will be back. >> and you say you are friends, and so you might be biased, but what about the way they handled the communication. and since you are friends, is there something that should have happened or what should another company learn from this? >> i've been in a couple of situations, with crisis management and it is one of those things you get in the vortex and your head is even at and you wind up saying things that are mistimed and irrelevant. and you should wait until all of the dust settles until you get to the bottom. it is difficult to do. people want comments and that feed the fire. that is a very difficult position when you are in the eye of the hurricane like they are right now. >> try to avoid it in the first place. >> or what you are you going to do? not say anything?
they had to respond and it probably didn't help. >> if your son changes his eating habits, let me know. >> he's on five days a week chipolte steady. and he's in good health. >> thank you for joining us. >> thank you for having me. >> good luck. that is joe. tune in tonight at 10:00 p.m. eastern for the reason premier of restaurant start-up here on cnbc. and volatile day for stocks. the major indices suffering the worst start to a year since 2008. we'll talk about if we could see any relief rally come tomorrow right after this. and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.
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as things setting out here it looks like the dow and the nasdaq have the worst start. the s&p 500 managed to slightly avoid that. p and the question is what do i watch from here to see if this will continue. >> you watch the entire world overnight. we didn't have something breaking coming into the news. and if we don't get something overnight, we are prime to bounce. we have something washed out. >> assuming you don't win powerball tonight. >> half a billion dollars. >> and whether it is north korea or pakistan, pick a country, i
think that china is what you need to be watching here. both in the short-term and the long-term. and in the long-term, earnings. that is a very telling thing for us. >> and it all ties together. thank you for joining me. carol, mike santoli. that does it for us on "closing bell." "fast money" begins right now. "fast money" does start right now. live from the nasdaq market site overlooking times square. i'm melissa lee. the traders on the desk. tonight on "fast," apple shares briefly falling below $100 a share. what is going on in america's biggest tech company. we talk to the ceo of a key suppliers to get the inside scoop this hour. plus the collapse in commodities has everyone nervous and one company could trigger a major market credit event. we'll tell you what it is and why investors are so worried. >> if you can't take the heat. get into three stocks. the three that do well in a turbulent market. >>