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tv   Bloomberg Bottom Line  BLOOMBERG  October 14, 2014 2:00pm-3:01pm EDT

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♪ from bloomberg world headquarters in new york, i am mark crumpton. e," the "bottom lin intersection of business and economics with a mainstreet perspective. to our viewers here in the united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines on this tuesday. su keenan is tracking the falling price of crude oil, and peter cook has analysis on
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president obama's meeting at andrews air force base by the by the islamic state, and we begin with olivia sterns, as stocks rally for the first time in four days. ia, good afternoon. greg good afternoon. equities are bouncing back after it the biggest selloff since 2011. and losses are now rebounding, and we are seeing gains in national companies and airline stocks. indexoomberg u.s. airline is up significantly. there were fears that the spread of ebola would keep people from flying. the last sixer days, its worst slide since 2009. we are also seeing a big jump in small-cap stocks, and we gauge small-cap stock, and it peaked earlier this summer.
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and we are seeing a lot of action in the treasury markets, yields going lower, the two-in yield. .ook at this, dropping below the 10-year note is down by five basis points, 2.23%. we also got a lot of third-quarter earnings reports today. what were the takeaways from the big banks? >> it is a mixed bag. let's start with jpmorgan. very good news for jamie dimon. he is in the black, thanks to rising revenue, but expenses continue to be a colquitt -- a culprit. it is about $1.36 per share. as for citigroup, shares are higher today after the bank
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posted a profit that the analysts estimates. net income rose 6.6% in the third quarter to 3.4 billion dollars or $1.07 per share. by a rise ined bond trading. also, plans to exit consumer banking in 11 markets. we also heard from wells fargo, shares a little lower. even though the bank reported third-quarter earnings that met --lysts asked him it's estimates, they were in line. fell, andge banking lending margins narrowed. i will have another update in about 20 minutes. >> thank you so much. now, let's get you right to the top stories that we are following at this hour. the world health organization says west africa could see up to 10 thousand new ebola cases per week with in two months, and they also confirmed the death rate has risen to 70%. the who assistant director
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during gains the figures a news conference in geneva. previously, the who had estimated the ebola mortality rate was at about 50%. meantime, a dallas nurse afected by ebola has received plasma transmission by a doctor who beat the virus. m was among those who care for thomas duncan, according to medical workers. the nurse was in the room of the library and man often from the day he was placed under intensive care to the day before he died last week. the german government has cut its growth forecast for this issuesd next, blaming abroad, while arguing that the domestic economy remains strong. next is at 1.3%.
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earlier, at standard & poor's, they had this to say about a possible recession in germany. >> germany has been in recession before. there were threat ratings and a long-term view, and i think when you have a recession, does not change the fundamental picture. the key strength that germany has, which is the competitive is a strongch external position to the rest of the world, that will remain intact. a major exporter, but the conflict between russia and ukraine has sown uncertainty and deterred business investment. meanwhile, vladimir putin met in moscow today as part of a regular meeting between russian and chinese leaders. apparentlylinton talked about the economic partnership and said china was in the top four countries for
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capital investment in china. local media is reporting said he wastin hoping trade between the countries would exceed $100 billion and that president li agreed and went to work on bilateral cooperation. and temporarily halting a court fight in opposition to a $7 billion in debt cutting plan, one of the last major hurdles in the municipal bankruptcy. lawyers in detroit say the two sides would try to resolve objections to the plan. they are trying to wipe out in unsecuredlion debt that the city owes to creditors, and that is a check of some of the top stories are following for you. and president obama will receive an update on the fight against islamic state militants, with
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u.s. air strikes so far failing advances,e extremist and more than 20 nations are participating in the international coalition. peter cook is at the white house with more on that meeting, and, peter, they have a lot to ask us, because the latest news is not exactly encouraging. >> they do have a lot to discuss. they are going to leave here shortly to go to andrews air force base, where the meeting is underway, and the coalition has some -- so far done damage to the oil refineries that help generate revenue for the islamic state, and they are forcing them to change their tactics, but they have not stopped there advance into new territory in syria and iraq. we have, basically, the islamic state consolidating its control over the and bar province with baghdad, several towns taken in recent days, and this is according to officials, and right now, and there are about
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-- they are about 20 miles from syria. this is right along the turkish border, a kurdish community. like kobani can fall, as well, in a matter of days. this is not the success they were looking for. seen that our airstrikes have had an impact on targets in serious, with the tolity of iso--- isil command and control. at the same time, i do not think anybody wants to leave you or anyone else with the impression that because of the airstrikes we are going to dramatically reverse the situation on the battlefield overnight. we will not. we have been very candid about that this is a longer-term
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proposition. >> a longer-term proposition ground,l involve on the and syrian rebels will be drained over time to take the battle on the ground. and then there was the joint chiefs martin dempsey, and the president will be there shortly, expected to speak afterwards, a pep talk as well as anything else to try to get the coalition to turn the tide. >> peter cook joining me from the white house. thank you. i am joined by indira in washington. is it working? do we have tangible evidence of that, and have the strikes inaged to roll isis back iraq? >> well, of course, that is the billion dollar question, whether the investment americans are butng is going to pay off, isis controls about the same amount of territory that he did before the campaign began, so officials say really they want and abilities,
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and that means command and oil fields and refineries, and apparently, they have done that, and in iraq, we have seen there have been advances, thanks to the coalition, and both of the iraqi dams are back in their hands, but iraq has forces on the ground, and that is a date difference. this is even though there have been mixed results, and we are hearing from and bar province right next to baghdad that isis now controls 80% of that process . that is incredibly troubling, because it would give the militants a straight path from qa to baghdad and beyond, and we have heard the chairman of the joint chiefs, general dempsey, saying they are using low-flying attack helicopters to keep them at bay.
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the u.s. coalition started the airstrikes in syria. talk to us. are the airstrikes tougher? >> i think they are. that is because unlike in iraq, we do not have the ground forces or the indigenous forces on the ground, engaging in the urban warfare that is needed. to takeknow it is going at least a year if not more to train 5000 or even more moderate rebels from syria, who are supposed to have boots on the ground to fight against isil. now, if we try to figure out what is a measure of success, they said judging by whether or not the u.s. is stopping isis from threatening u.s. interests at home and abroad, that is a negative. did we prevent any attacks from happening? we do not know that. >> all right, joining us from washington, thank you. coming up, the u.s. midterm
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elections. we would get a preview of the issues facing democrats and republicans over the next four weeks. line" continues. ♪
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>> welcome back to "bottom line ." areu.s. midterm elections four weeks away, and they are facing twin october surprises. a strategist at potomac research group has more than 30 years experience covering washington for institutional investors, and he joins us from our san francisco bureau. welcome back. >> great to see you, mark. some good surprises and some not so good surprises. what should they be bracing themselves for? what you might think that the number following would help, but number one, there is a feeling
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that perhaps this administration could do more about ebola. sure why, but that is out there as a concern. number two is isis, and we see fanatic troops marching on baghdad, that is not good for the party in power. a does this play into republican mantra that has been going on probably from the reagan years, that democrats are weak on national defense and weak on national security? >> i am not sure it is fair, but whoever said politics is fair? in the last 24/48 hours, we have seen a shift in the polls, and in north carolina, kay hagan, who had been ahead by several points, now is trailing by one point, and in new hampshire, another state that can be pretty is now, jeanne sheehan barely i had, so the polls are starting to move. >> which part of the electorate controls the air fate next
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month? hispanic americans? african-americans? >> all of the above. i think it is really crucial, mark, for turn out to meet expectations, and that is an area where democrats have some hope. they have plenty of money, and they have pretty good ground games. as good sure it is not in the nonpresidential election, but i think their ground game will make a difference, but all of the trends i have seen seem to be moving towards the republicans. >> you know, it is interesting, because i guess in the last couple of presidential election cycles, the thinking is that democrats took a page from the karl rove playbook, and now, the republicans are taking a page laybook andmocrats' p getting that ground game running, getting that social media up and running. >> yes, and i think a lot of this boils down to each party has the most motivated voters, voters who want to send a
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message, and i think clearly, that is republicans right now. win controlblicans of the u.s. senate, and if they will, how will those in the business community react? >> i think you have to look at specific issues. first and foremost, republicans have a shot. device a big lust for a manufacturer. i think they're going to try to move that in january. the keystone pipeline, they might approve that, but i am not sure that can survive and obama veto. the gas tax could survive and obama veto. but as we get into winter, the reform.issue is tax i think paul ryan and others are looking to move quickly, especially on corporate tax reform. that would be a big issue for the markets. >> i am speaking with a chief political rather just. you and i have talked about what the media likes to call a civil
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war within the republican party with the conservative base. is that something that is going to play out in a couple of weeks? >> you bet, and i think the choice is quite start. on the one hand, you can take the tape crews prescription, which is really very militantly opposed to all obama, precipitating a fight over the debt ceiling at the end of the winter, or you could look at the pragmatists, people like john boehner and mitch mcconnell, assuming they will win reelection. they would prefer an agenda that is more moderate, because their goal is to show the country they can govern ahead of the 2016 election, and they know they have a tough fight against hillary. i think the last thing they want to do is get real confrontational. saying peopleere were underestimating just how grim the deficit picture is and that we will actually even see a surplus in a few years. if the economy is improving, why are the democrats not getting any credit? >> it is the damnedest thing. i think you can say the main
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reason is that most americans, especially people with big families, are seeing no increase in their disposable income. they look at purchasing power, and it has been stagnant since 2007, 2008, and the deficit is falling, the unemployment numbers look good, the economy is growing about 3%, and people look at their lives, and they do not see any real improvement in disposable income and purchasing power. >> it is interesting. it is almost like politics is local and these things happen in your own home. one minuteve about left. let's talk about wall street. stocks have been rising, but the rally comes after the worst selloff since 2011, and more than $1 trillion has been erased from u.s. equities since october 8. are the markets on edge, or are the markets over done? >> you could argue it is over done, and i know people say that at this time of year, they get a little nervous, but let me make
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a few quick points. i think the positive here is the interest rates, giving the housing industry a shot in the arm when it needed one, and the other one is giving the whole country a de facto tax cut that i think is going to be very stimulative. research group, joining us from our san francisco bureau, greg, it is always a pleasure to see you. thank you for your time. >> you bet. >> tonight, another edition of bloomberg politics, "all due ect," at 5:00 p.m. eastern, 8:00 p.m. pacific, with new articles every day on, and a reminder, "taking stock with at 5:30. is olivia sterns will be back with another on the markets update
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when "bottom line continues in just a moment. ♪
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>> welcome back. we are approaching 26 minutes past the hour, and that means bloomberg television is on the markets. once again, here is my colleague, olivia sterns. are rallying, bouncing back after we saw the s&p 500 see its worst selloff since 2011, the s&p up about nine points, the dow up 48 points, the nasdaq up about 23, 22 upnts, and for the year about a little more than 2%, and what we want to show you is amc network shares up, on news that more people tune into the season dead"re of "tghe walking football, andght it was the largest in cable tv history, and domino's, shares trading at an all-time high after the country's second-largest pizza chain reported profits and sales that topped analyst estimates, and the company is enticing customers with deals such as two pete says for five dollars 90
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nine cents each. let's take a quick look at what is happening on the treasury markets. and this is 2.2%. look at that. with mark"m line after the break. ♪
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♪ >> welcome back to the second onf-hour of "bottom line" bloomberg television. i am mark crumpton. my colleague su keenan is joining us from the newsroom. >> good afternoon, mark. this is a very sharp close for oil. west texas intermediate down for the fifth time in six days, and in the final hours, a freefall, now down more than 4.5%, below the $82 mark. it is dramatic. we will be continuing to follow
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these numbers. for these numbers to settle out, it will take a bit, but brent crude falling to the lowest level in about four years. a bearish forecast from the iea, saying oil demand will expand this year at the slowest pace since 2009, and that report is really brent, and a sharp drop in you're seeing now, down more than 5% at the close. for the fourth month in a row where the iea has cut the demand forecast, and they are now warning about a staggering decrease in price. this poses tremendous downside risk. and this is at a time when the aboutas been talking fracking, and at the same time, global demand is falling, and it is affecting salaries, iraq, to cut prices, and that is raising concern. opec members will now compete
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with one another. let's listen. are in a the uae different category. they are very small countries with a small population and huge wealth. so i think as prices start to slip down, they will start curtailing. >> curtailing output. are hoping forey to stabilize price, and an emergency opec meeting is looking to be called at the end of next month. for metals, it continues to be a safe haven, gold at the highest in almost ever your weeks. and this is clearly a shot in the arm for gold, especially after speculation about the fed keeping interest rates low. wheat extending yesterday's gains, and there are continued concerns. the harvest had been declared a record crop, and now we are seeing it dropping even after
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the close as all those contracts are being calculated. marco? >> su keenan joining us with the commodities report. thanks. and the u.s. centers for disease control said it is going to reconsider its infection control protocols and plans to increase health worker training after a nurse caring for and ebola patient in dallas tested positive for the virus. joining the for in san francisco is the president of the national nurses union and the president of the california nurses association, and from washington skype is a professor of global health law at georgetown university. welcome to you both. thank you for your time today. let me start with you. ec sent ebola guidelines to they sent ebola guidelines to hospitals.
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where the nurses trained to deal with ebola? guidelines were received, but they are probably still in somebody's desk or are , and our studies clearly show that nurses are not being given the training they need at the hospitals by our own surveys, so we are extremely worried about the situation. >> why do you believe they are not receiving proper training? >> well, the cdc guidelines are merely guidelines, and when you have over 5000 hospitals in the united states that can choose which guidelines they want to implement, you have sort of a free-for-all, and that is what we are concerned about. we would like consistent, mandatory standards for all of the hospitals to follow. >> professor, the executive director of trust for america's health, a nonprofit focused on disease prevention, he told my colleagues here at bloomberg news, quoting here, while it is
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important to find dollars in the context of emergency, it is just as important to sustain our capacity to respond. how would you classify the country's capacity to respond to the ebola virus? >> well, first of all, i do not think there is going to be a major outbreak year, so i just want to calm some fears about that. on the other hand, the case in dallas was really an apparent breach in the protocol in almost every respect, not just the infection of the nurse but also the quarantines of the four contacts of mr. duncan, and it was very badly handled, and i think we actually need to do better with our public health capacity. the funding has been cut. state and local health departments have been cut, and i think this just exposes our vulnerable underbelly. burger, treating ebola
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patients in africa, some health care workers have become sick, and some have quit due to fears infected.g our medical professionals in the united states answering that call in great enough numbers to make a difference? >> it really does not feel like the medical profession has been responding in adequate numbers. it is interesting to note that cuba has actually set more medical health professionals than the united states, and i think we really need to step up to the plate, because if we do not stop the spread of ebola in west africa, it will spread globally, and what the nurses want to say is we do not want to spread fear. we want to spread readiness and education, and we are trying to make sure that we can hold our employers accountable to providing that education and training. >> professor, let's talk about that readiness, and, specifically, about airport
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screenings. would screenings of passengers work, or are they a take charge approach designed to lessen people's fears without yielding any tangible results? >> well, i think what we have introduced is reasonable. it is measured. it is affecting 150 people per day who originate from one of the infected countries, but having said that, it probably won't work. it will make the public feel duringy safer, but even sars, where we did math airport screenings in canada and asia, there were hundreds of thousands of cases, and we actually never found a real case of sars. we probably will not find a real case of ebola either. malaria, those with and we are also coming up on
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influenza season, so it is a reasonable thing to do. i am not a dense it. but i do not think we can expect to keep us safe. what will keep us safe is strengthening our public health infrastructure in america and also getting the reservoir of infection totally out of control in west africa under control. burger, when it comes to self monitoring of health care workers, what standard protocols can be followed, especially in emergency rooms, which, are the first point of entry for ill patients? >> i think that is the problem we are dealing with right now, which is it is pretty much hit or miss when a patient presents in the hospital. in sacramento, we had a case where a patient sat in the emergency room for up to two hours before they actually himged the patient and got in the isolation room, so what we really want to make sure is that people in the health care is,d know what the drill
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know how to do it, and can implement it at a moments notice, because we even have computer online booking of appointments, so patients can show up anywhere. cdc director the tom friedman is rejecting calls from some members of congress to ban travelers from guinea, liberia, and sierra leone from entering the united states. what right does a united citizen have -- united states citizen have to reenter the country even if they have that? >> i think it is a horrible idea to ban travel. i think it would make us much less safe, because ebola would just grow out of control in the region, and that would put us at i think it is a very, very good idea to rejected that plan. >> i agree, actually, myself. i think we cannot wrap this
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country in saran wrap and expect it not to be exposed, and i think preparation and education is actually the key to stopping the spread. let me let. burger, you have the last word. we have about one minute left. have you been in contact with any nurses or health care professionals who have been on the ground in the affected areas ? >> no, i have not been in contact with them, but we're making sure tomorrow that we have a call in show, where nurses can call in and ask questions and get support, and we will see what happens tomorrow. president ofrger, the california nurses association, and the professor with the global health georgetown law joining us this afternoon, thank you so much, both of you, for your time and your perspective. we appreciate it. when we come back, we will have the latin american report, and
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fresh polling numbers for the presidency in brazil. ♪
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>> welcome back to "bottom line ." let us show you how the equity markets are doing on this tuesday, october 14, stocks rising, led by that rally in small caps, and this after the re-day selloff that my colleague, olivia sterns, was telling you about a few moments ago. right now, the s&p is up, trading at 1888, and the dow jones industrial average also rising on this tuesday. it is up one third of 1% at 16,003 hundred 75, and the nasdaq composite index rising as well, up about two thirds of 1% at 4291, and su keenan was telling us a few minutes ago that oil is settling. rent crude falling to the lowest
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level in almost four years, -- brent crude falling. this is at the slowest pace since 2009, crude now falling, and it is dropping. and it is time now for your latin america report on this tuesday. and the latin american president is tied with the opposition aecio neves, rousseff, and the candidates are starting to cast doubt on some of the public opinion polls used to measure voter preference before the election by the media. candidatesveys for and their campaigns as well as for media groups. and a harvard university said argentina will
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likely default on their debt -- will likelyla default on their debt, and they say the venezuelan economy is so bad that their capital gross domestic roddick is 2% below gross domestic product is 2% below 1970 levels. up, taking the stand. we will take a look at bitcoin. i will be talking to my colleague trish regan. we will be right back. ♪
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>> it has been an uphill battle for fans of bitcoin. the digital currency has split in value in 2014 to as low as about $300 from 800 $50. detractors say they have been vindicated, and supporters say
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it would lead to a more efficient virtual economy. my colleague trish regan joins bitcoin.r more on >> yes, it has lost a lot of its value, but interestingly, this is becoming increasingly sophisticated. are now tryinge to find more and more ways backd tracing been going to its original user, so there is something out there now called the dark wallet, and the dark wallet that is being developed right now in an open source code environment will enable people to really try and make this anonymous. right now, the way bitcoin works is it is not entirely anonymous, because at some point in time, it is going to get tracked back to an ip address somewhere, so what you are seeing is increasing people online making the push to make it fully anonymous, and in society, you could operate on a cash basis,
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right? you could walk around and live on cash as much as you wanted to. why shouldn't you not be able to do that online? the reason why, mark, is because there are a lot of things you can do on the cash, whether it is on the streets of new york or whether it is online. >> i was looking at something online, an article a couple of days ago that says the rise of bitcoin, and the subtitle is is it real money if it does not come from a mint? is that what is at the back of people's minds, that it does not, from a mint? it as atimes, using form of tender to engage in transactions for stuff that you do not want to have any fingerprints on, and you clearly cannot use an american express card if you're trying to buy a couple of grams of crystal meth, whathat keep in mind that they originally found a home in, you think of silk road, and
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which was effectively an ebay for drugs that would shut down by the feds, and the mastermind behind that is awaiting trial. he is making the claim that he had a certain expectation and right to privacy, part of his fourth amendment, and the federal government is making the point that he did not have a right to privacy because his servers, if they were, in fact, located in iceland, so this is an ongoing battle. on.\ >> yes, he is the new york superintendent of financial services, and he will be joining us to talk about digital currency and all of that, and we will also talk about what is happening with the cyber hacking at some banks, like jpmorgan. >> all right, "street smart" is coming up in about eight minutes. stay with us.
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another check on the markets is on the other side of this break. ♪
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>> get the latest headlines at the top of the hour on bloomberg radio and streaming online at i am mark crumpton with "bottom line." thank you for joining us. on the markets with olivia
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sterns is next. i will see you tomorrow. past the56 minutes hour, and that means bloomberg is on the markets. i am olivia sterns. we have about one hour before the close, and the dow is up 35 points, the nasdaq up by 22 points right now after three days of losses, the biggest drop for three days on the s&p 500 in three years, and we are now seeing a little bit of a rebound led by industrial stocks, by banks after earnings, and also by small-cap stocks. individual names that we want to point out for you. and the first is intel, the chipmaker reporting earnings after the bell today, and ahead of that, shares are rising by the most in two months. let's also show you what is happening to advanced micro devices. 28%stock is down more than over the last month. speaking of tech, joining me with more on the semi conductor space is the head of the equity
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research at s&p capital iq. that afternoon, scott. thanks for joining us. a big correction in semi conductor stocks. the semiconductor index off by about 14% over the past month, of it eat in the middle september. it really seemed to me that the penny dropped when margaret -- microsoft came out and issued the warning, and we saw stocks fall 7% last week. >> i would say not really. this is a significant part but only a part of the overall sector. there is no question that as you mentioned microchips, the kind of mixed message when it comes to an inventory buildup and pending correction, it really has affected a variety of companies. what we are suggesting to folks is that they should focus on
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maybe some of the larger cap, better diversified semi conductor names, but also look well beyond that particular area , perhaps some later cycle areas, like software services, as well. >> so what are some of those names? >> we are definitely recommending intel. uy recommendation on that. we think if you look at their exposure from a global perspective, and you look at what is going on in terms of pc's, we think that is a good name to be involved with. edison,qualcomm and son a smaller name but really a good proxy on solar and really a structure whenf it comes to different types of asset classes in that particular area. >> ok, so overall, some of these toh names, it is possible separate the wheat from the
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chaff. getting back to that profit warning from microchip. be an industry correction for semi conductors overall. what is the reason for that? where is it coming from? >> really, the source oftentimes a really the seasonality, miscalculation, and right now, microchip, which, by the way, is a very diversified company in terms of the global footprint and industries, it really comes down to reducing too many chips, having two of many on hand, and having to cut prices and maybe take write-downs -- having too many no hand. and also europe probably had an impact, as well. but they get some revenue. that does it for on the markets. "street smart" starts now. ♪
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but welcome to the most important hour of the session with 60 minutes to go until the close of the session. within the hour we expect an cdc on ebolahe crisis. wells fargo sees it mortgage revenue droed


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