tv Closing Bell CNBC October 10, 2012 3:00pm-4:00pm EDT
from whiskey to rum, do not miss our special report on bacardi's blockbuster growth. see how they turn out more than 200 million bottles of its signature rum each year. it's friday night at 9:00 p.m. eastern here on cnbc. >> thank you for watching "street signs," everybody. we have something to do now. >> i've got that one. that's mine. hi. welcome to the "closing bell." i'm in for maria bartiromo. has it begun? is this going to be a scary october? >> i'm bill griffeth. the dow is down triple digits, poised for a three-day decline. all three major averages are now down for the month. we've had that kind of a month so far. the s&p is also down 3% from its september multiyear high. and there are more worrisome stats for you in a poemoment. first, here's how we stand right
now. it's been down from the get go this morning. didn't help with alcoa's earnings last night. all kinds of other influences pushing it south. we're down 125 right now at 13,348. a decline of almost 1%. the nasdaq, which has been the lagger lately, is not so today. down less than .5% or 14 points at 3,505. the s&p is down 8-plus. september, as you know, may be historically the worst month for stocks. if you know your market history, you know october is not far behind, accounting for three of the worst ten months 1929, 1987, each of which had market crashes, and then there was 2008 at the height of the financial crisis. we're wondering whether this october will be a bad one as well. >> look at some of those declines from the worst months in the past. we're going pose that question in today's "closing bell" exchange. tim friedman of elevation, rob
of the jensen quality growth fund along with rick santelli. so all three major averages down for the month. what do you think? is this going to be another scary month for stocks? what do you think, tim? >> i don't necessarily think it's going to be a terrible month for stocks. we could go lower from here. if you look at the s&p 500 and overlay it on the euro stock's 50, we've traded pretty much in lock step with europe except for the last week. euro stocks have gone lower in the last week. it's not too difficult for me to see with the european lower, we're lower here. we're higher recently because of the ecb bond buying program and qe-3. now it's time to look at earnings and watch europe. >> yeah, rob, if we look to alcoa, that's not always that much of a predictor. last night it set the tone for today. does that mean that we're going to have a pretty rough earnings period this month? >> well, bill, i think it's going to be fairly unpredictable. the market's come a long way in a short space of time over 2012. there are some risks out there. risks that lower quality
companies and have been driven by the macroeconomic environment. we think it's going to be a shaming period. also, the risks of the budget deficit and 2013's challenges that regardless of who wins the election or controls congress is quite clear that the economy will have to suffer potentially from higher taxes and indeed reduced government spending. >> rick santelli, you heard that whole list of reasons. is that why we saw this ten-year auction today? people gobbling up ten-year government debt at these extremely low yields because they think they're not going to get much better elsewhere? sounds like people don't think there's a lot of growth coming. >> i think there's a little bit of truth in all of it. i'll bring up another point. i think october, a lot of mutual funds ahave the end of their fiscal year. it's been a good run for stocks. the spread between what the stock market is telling us and
the economy is pretty wide. the election, depending how it turns out, could have a lot of implications. to me, it makes perfect sense the closer we get to the end of the year, the closer we get to november, people are going to be lightening up. it all makes sense. >> yeah, and mandy, you were highlighting earlier oil is lower, gold is lower. a lot of the base materials have been suffering as well today. >> yeah, that's absolutely true. you know, i think what's also interesting, if it is indeed a scary october, bill, remember, buy low. if you're a long-term investor, then any kind of dip after what has been a good run up to multiyear highs in this market might be your opportunity to get in at a better price. at this stage as well, in terms of the earnings season, which will unfold over the next two to three weeks here in the states, bill, the expectations for many companies are so low and have been driven lower that there is the potential here for upside surprises, which is something that potentially could be a positive catalyst for the market. >> tim, do you agree with that?
>> you know, i don't necessarily see huge gaps lower in the marketplace. i think it's critical investors look at implied correlation indexes right now. it's nothing short of staggering to see how much those have moved lower over the last two months. >> what does that mean? >> s&p risk, the vix, if you will, the way investors look at price moves going forward is a function of the individual stock volatilities in addition to the correlation of those stocks over time. the forward-looking mechanisms we have that price that every single day have gone from 85 to 47. >> wow, wow, wow. i'm going to interrupt you because it reminds me of a physics class. rob, what do you think at this point? >> well, as we talked about, there are risks, but we do see a lot of value in high-quality, high return on equity companies we favor at the moment, particularly because they have what we call all-weather business models, and they've demonstrated they can make money for their shareholders in good times and bad. for example, companies like
accenture, proctor & gamble, the power house has over 25 brands, and something a little bit unusual like lamp corporation, which is one of the country's leading medical diagnostics businesses. common characteristics, very strong business models, high return on equity, and of course lots of strong and growing free cash flows. we think there's a lot of opportunity there over the long term. >> playing it safe, as a lot of people are right now. thank you, all, for your thought on today's market. see you later. >> thank you. >> so we've got about 54 minutes before the closing bell. the dow is lower by 134 points. the nasdaq is lower by 16. >> don't go anywhere. a lot more to come on this very busy wednesday edition of the "closing bell." watch. coming up, limited exposure. can your portfolio take a major hit if china's economy continues
its slowdown? we'll show you how to protect your bottom line straight ahead. plus, home improvement. which company has a better foundation for growth, home depot or lowe's? we break down the numbers. and fly in the ointment. just when you thought a bipartisan group was going to do something constructive to solve our fiscal crisis, one senator tries to derail the process. who and why are all ahead on the "closing bell."
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weeks. as you can see right now, it's off those lows, down 114. all the major averages are now in negative territory for the month. the nasdaq has posted the biggest declines so far this this month. >> general motor, caterpillar, applied materials. what do these three companies have in common? they're just a few of the names that could suffer major blows to earnings in worries of a big slowdown in china proves to be true. even if you don't own those names, a hard landing for china could hit your bottom line. how do you protect yourself? >> bruno tells us why he's buying yum brands to protect himself in china but he's avoiding 3m. lee money son sunson says he's caterpillar. >> there's no question the growth in china is decelerating, but having said that, it's very
difficult to come by growth really anywhere in the world. in our opinion, china will continue to be the driver or the biggest driver of global growth in the world for years to come. >> but when you say you're buying yum brands and avoiding 3m, i'm guessing you're going after the consumer sector of china and avoiding the major industrial part. is that a good summary? >> yes, any of the companies that have significant exposure to the domestic consumer in china, those are the areas we prefer. we're a little bit more cautious with the expert-driven economy, construction economy, companies such as 3m. a little more defensive there. >> lee, if, in fact, we're talking about slowdown in production but a rise in consumption in china, why would you buy caterpillar right now? >> well, first of all, i think
we have to remember you look at a yum brand that has 40, 45% of their earnings coming from china. caterpillar has a very low amount of earnings directly from china. everybody on the street agrees that caterpillar moves with our expectation of how good china will grow. but caterpillar is just starting that growth stage versus yum. it already has so much riding on the chinese economy. the other guest, i hear you. if you think that deceleration is not going to be a problem, that's fine. i would rather go with a company that has a game to win versus a game to lose. yum is extremely dependent. that company structure is dependent on china working out. i wouldn't necessarily disagree or agree with having that stock. but caterpillar has much less of their actual earnings coming from that middle kingdom. so if we have a hard landing, if it's worse than we expect, caterpillar will still be a going concern if, you know, less chinese buy their product. yum, serious structural problems if there's a major shift or slowdown. >> it's doing pretty well today.
i don't know. >> caterpillar? >> no, yum. >> oh, absolutely. >> but do you want to have that -- i mean, you look at yum, 45% of earnings. you look at something like ford where a third of their unit production sales were from kmcha last month. >> i get that, but are you saying you would not want to bet on the chinese consumer? i mean, i get that industrial production may be slowing down there, but what about the consumer s consumer? they don't seem to be slowing down. >> i think this is the big is e issue. it's not that i'm concerned or not concerned. investors need to look at their portfolios, look at what they see are their domestic u.s. names and say how much of earnings are coming from china. if you're a china bull and you think it's cheap, i personally think china is cheap as a whole. then you might want to have exposure to that. if you're concerned about the hard landing and have seen what we've seen for the past few day, the investor needs to know how much yum is really coming from china versus how much
caterpillar in earnings is really coming from it. that's the main thing i want to stress. >> can we broaden this out a little bit and talk about october? how worried are you about october? it's so legendary for the tough days that have occurred there historically. >> yeah, we've obviously had a huge run out through the month of september. there's some amount of profit taking happening right now in the market. still some uncertainty around europe and whether that's resolved or not. we're very optimistic that the situation in europe will resolve itself. we'll see volatile markets ahead of us, but we're not concerned about the equity markets. >> you're optimistic europe is going to work itself out? like, when? >> well, it will eventually. >> but he sounds like soon. >> he sounds like a patient man. >> by the time i'm 50 europe is going to work itself out. i think investors need to realize. we could see 1400 on the s&p. i don't think it's going to happen. i think as long as the s&p just holds 1400, even 1420, where it could come down, it's a buying
opportunity. october, you know, the other 11 months have problems too. >> i take it you're not 49 1/2 then. >> i'm afraid not. thank goodness. >> bruno, what are you buying right now? what do you like? >> well, i actually do like china. as i said, that's one of the few areas around the world you're going to get a significant growth. it's reasonable to see that, as you go from $1,000 gdp per cap to to over $5,000 growth. that's what happened in places such as taiwan and south korea. we're very bullish in china. global diversification is important, crossing merging markets. we do see opportunities in europe as well. >> gentlemen, thank you both. interesting discussion. talk to you soon. >> thanks. >> heading toward the close, about 45 minutes left in the trading day. >> home depot downgraded. uh-oh. what that might mean for the
entire economy. and is lowe e's a better place? also, the ceo threatening to close his company and fire thousands of employees if obama wins re-election. he joins us exclusively later on "closing bell." and you won't believe what a man was wearing that got him arrested at los angeles international airport. this outrageous story is coming up. >> remember, that's los angeles too. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. which can withstand over three and a half tons. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation.
the industrials near the low of the session, down 130 points at this moment. 13,342. the nasdaq is lower by more than 14 points. the s&p lower by nine. oil prices also falling following opec cutting its demand forecast. sharon is here with the details. >> the energy information administration did the same thing today, michelle. we are looking at oil prices that are weaker, both for u.s. oil prices and brant, but particularly the wti contract. we know u.s. oil supplies, the pumping is going on at like a 16-year high. we're expecting to see another increase in supply in this week's report from the energy department that's due out tomorrow morning. meanwhile, the supplies of brent are rather tight. we have all the middle least tensions. the result has been extreme differential in prices. of course, we are looking at prices that are highest since
october of last year. we'll have the live report tomorrow on the oil inventory. back to you. >> thank you. meanwhile, home depot shares have been lower today after a downgrade. the firm said the stock is getting a bit of ahead of itself. so it lowe's now the play in that arena, or should you avoid both of them? on the technical side, rich ross. on the fundamental side is peter wallstrom. you don't like either one of these. >> no, i don't. home depot for me is one of the most compelling short sales. let's look at this weekly chart. you'll see this is really a bearish allegory for the broader market. we have a stock that's up over 100% just over the last 12 months. we see this well-defined trend channel. just last week we break out of that trend channel. that's your exhaustion. that's your climactic move. that's re-enforced by this week's textbook bearish
reversal. brings us back into that trend channel. we think that's the death of the bull that's generated a confirmed sell signal. we think the stock actually retraces 50% of this entire move, brings you down to $46. that's over 20% downside from current levels. >> so you're looking at the same thing oppenheimer was. what about lowe's? >> we see some symmetry. we're in the same business here. pullback is a little sharper. 10% pull back in home dee popde. 20% pull back in lowe's. >> i can see a double top coming there. >> you see where i'm going. v-shaped reversal into key resistance. we're overbought. we're into resistance. that's no way to go through college. you want to sell the stock at $32. we see downside to $25. once again, over 20% downside. sell home depot first. make your way to lowe's, sell that one second. >> okay.
making the case there on the te technical side. what about fundamentals? >> we agree that it home depot is a little rich here. the company has executed extremely well. they've done quite well from a supply chain standpoint. we do see lowe's has struggled. we see more upside to lowe's stock at this point. we've got a $34 fair value estimate. your technical analyst is right. there's a lot baked into the stock at this point, particularly as you look into next year and what might be baked in in terms of a housing recovery. >> how about that? we build this as one or the other, a competition between home depot and lowe's and they both lost. good to see you both. >> dow is down 132 points. we have about 37 minutes before the closing bell. senator chuck schumer poisoning
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welcome back. a top democrat has injected a bit of partisanship ahead of talks for a bipartisan tax deal. eamon javers is this washington to make sense of it for us right now. >> so hard to tell the difference between partisanship and bipartisanship sometimes. new york senator chuck schumer really shook up this debate that's going on quietly mind the scenes in washington this week about tax reform in remarks at the national press club yesterday. what schumer said was that 1986-style deficit neutral tax
reform just won't work today. >> the tax rate for the highest earners should probably return to clinton era levels and stay where around there. this will come as heresy to some of these on the other side who not only wish to extend the upcoming rates in the lame duck but also hope to cut rates even further in tax reform. >> schumer is really laying down a marker in these negotiations for those on the left who don't want to compromise with republicans who say that taxes ought to be lowered or at least overall taxes ought to be net neutral after tax reform is completed sometime next year after the fiscal cliff debate. what schumer is going is a washington technique called protecting your flank, which is you set down a marker from where you're going to be on the left, and that way later if you have to compromiscompromise, you cant to your republican colleagues just how far you've come to the center when you're negotiating.
the republican, of course, are going to be doing the same thing on the other side. that's why you see these markers getting set down. they're often very far away from each other as these negotiations begin. that's what we saw yesterday. >> here we go again. all right. thank you, eamon. so with voters clam moring for both sides to work together, will the partisanship be blocked out? with us now is david callahan and justin safies with the romney campaign. did senator schumer help or hurt the chances of a deal? david, let me start with you. >> i don't know whether he helped or hurt it, but he's making a good point. i mean, the other thing that schumer said was he'll willing to talk about a grand bargain. he's willing to talk about cuts to entitlements, but there has to be more revenue on the table. the democrats are not going to roll over and let, you know, the solution to this budget deficit be that it mainly in cuts that
hurt the middle class and not raise taxes on the rich at all. that's just unacceptable. >> justin, where do you suspect the marker will be from the conservative standpoint as we begin negotiations on the fiscal cliff? >> well, i think the marker probably will be on tax cuts and not wanting to -- excuse me, on tax increases and not wanting to raise taxes while we still have unemployment that's still way to high in the united states. i think senator schumer hurt the process because it's typical washington gamesmanship trying to put pressure on the gang of eight, a bipartisan group of republicans and democrats that are trying to solve this problem in a bipartisan way, and he's out there trying to position the group and trying to put pressure on them from the outside. i think -- >> david, i didn't understand that at all. why is he talking at all at this point? >> right. >> david? >> well, just to be clear, the gang of eight doesn't have a proposal yet, but it's likely to look similar -- >> that's not the spirit of the question. they're working on one. already he's trying to interfere before they get started, right? >> it's likely to look like the
gang of six proposal back in july. that was an unacceptable proposal. there was almost $3 billion in spending cuts and just $1 trillion in tax hikes. after this big, long binge of low tax rates, the bill comes due, and the gang of six, now the gang of eight, wants the middle class to largely pick up the bill through cuts to spending. that is unacceptable. that's not the basis for a good faith negotiation. that's the basis for a complete republican victory. >> justin, i would assume that a good faith republican coming into these negotiations would accept some sort of compromise on the revenue side. i don't hear anybody saying that, and i don't hear you saying that right now. >> well, no, because i don't want to do what senator schumer has done. i want to give the gang of eight the widest possible mobility to come to a resolution. it's a mistake for anyone to be laying down so-called markers.
let the group do what they need to do without interference from outside folks. that will give the best chance of this group to actually get something done that could help avoid us going off the fiscal cliff. >> justin, this feels so bizarre to me. we've been through this three times. this group of eight is going to do what bowles-simpson is supposedly doing but nobody seems to want to acknowledge. we've done this over and over an over again, yet they never follow the proposals. what's the point? >> plus, they have a much shorter time window. >> right. they have a shorter time window, which is why i'm glad they're starting this before election day. there are very significant difficult challenges. we have a $1 trillion deficit as far as the eye can see. hopefully democrats will be willing to give something on entitlement reform and republicans will be able to compromise on some of their issues as well. but this is not easy. this is not easy at all. that's why i think we all ought to give the gang of eight the widest possible latitude to come up with some type of a
bipartisan compromise, but it won't be easy. >> handicap it, both of you. are we going to solve the fiscal cliff before we get to january 1? >> i think president obama holds all the cards here because basically if congress does nothing, the bush tax cuts are going to expire completely. and by the way, that would solve many of our fiscal problems over the next decade. let's remember, those bush tax cuts were meant to be temporary. temporary. >> you'd have to get rid of them for every single income level. >> i was just looking at percentage. >> we cannot afford them now. >> so you would raise taxes on the middle class as well? >> realistically, i think those bush tax cuts have to go in their entirety. >> wow. so you finally admitted that the spending we have on the table -- >> i'm not admitting anything. >> you can't take 100% from the wealthy. you wrareally have to dig down the middle class. >> i'm not admitting anything. i've been saying that for two years. >> you have to get rid of the
bush tax cuts on everybody. that's the middle class. >> they were unaffordable then. they are unaffordable now. >> i've got to go, guys. i'm sorry. justin, i apologize. talk to you later. thank you both for joining us. >> you know what tax revenue did under ronald reagan? it went up 100% even though they cut taxes dramatically. tax revenue doubled in eight years. don't forget, you can catch the vice presidential debate tomorrow night here on cnbc beginning at 7:00 p.m. eastern time. >> let's go to jackie deangelis with this market flash. >> good afternoon, guys. taking a look at shares of walmart. of course, it hit record highs earlier in the session. coming off just a little bit. despite the fact that earlier the cfo reiterated fiscal 2013 sales guidance, maybe investors were looking for him to boost that up. he did reduce cap ex spending for 2013. the new reach, 12 to $13 billion.
that could have something to do with it as well. the stock still higher on the day. just a little bit of a selloff. bill. >> i think those costco numbers helped the retailers today as well. a lot of the big box retailers doing well today. we're headi ining toward the cl. about 25 minutes left. we're hovering near the lows of the session with the dow down more than 130 points. >> the latest big company raising its dividend. why isn't that money being used for hiring? we'll look at it next. later, we'll speak exclusively to international paper ceo and find out whether the higher dividend is coming at the expense of adding new employees and more. stay tuned. first, before we go to break, the dividend. which company stock has shot up the most this year? kb moment, smith & wesson or u.s. airways?
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airways? now the payoff. smith & wesson, which has jumped about 135% year to date. look at the markets. if you're just joining us, a down day. alcoa set the tone last night with the earnings. we've had energy prices going sharply lower today for a time. that's not helping this market, which seems like it feels like it's in correction mode anyway. >> absolutely. you see interest rates moving lower, oil moving markets moving lower. sounds like a recipe where people are afraid of growth. >> we don't fear growth. we fear it's slowing. >> exactly. what he said. >> what's next? >> the nasdaq on track to close four days straight. there's one bright spot, apple. seema mody with the details. >> apple rebounding today. the recent selloff in shares of
apple creates an especially attractive entry point and iphone 5 demand is up. earnings very much in focus here at the nasdaq. costco hitting a week after beating estimates on its top and bottom line fueled by higher membership fees. that's some of the action we're seeing today. costco up roughly 2%. bill, back to you. >> seema, thank you. >> international paper, the latest company to announce a dividend increase. other companies are raising their payouts this year as well. coach, kla, marriott. >> so should we be putting work into these dividend paying stocks? rich, this is a favorite play of yours right now, isn't it? >> it has been for quite some time, bill. the line i always use -- i realize i'm here with somebody
who follows technology a lot. since nasdaq's inception in 1971, utility stocks have outperformed nasdaq. >> and they play big dividend historically. >> exactly right. >> so bottom line you should keep buying them even though this has been a favorite play for a lot of people? >> dividend strategies are getting expensive. they're not the cheapest strategies anymore. they're not so cheap anymore. what that means, instead of stretching for yeield, you want to take a lower yield and be more conservative. >> it's about dividend growth right now. this is what corporations are doing. >> the cash thing is the big question here. it's going to be not just a stock market ipd cndicator. saw a neat trend over the last month. companies that push cash to work did a little cap ex, that kind of thing. they did very well in september. it's something very interesting to keep watching.
actually, some of the high dividend payers underperformed a little in september. like i said, just a one-month trend. the natural extension, that's a confidence question. >> the cash they had available, instead of increasing the dividend, they decided to invest in the company with equipment purchases and things like that. >> or stick it on their balance sheet, as we've seen them do. >> do you think it's because people are thinking, if you haven't invested in cap ex, you're not going to get growth in the future? >> that would be one thing. i would be leery with the uncertainty of the tax structure in the future. i think that was part of the capital expenditures thing that companies want to make invest in that direction rather than just leaning on the dividend. >> jeff's making a good point about the capital expenditures. look at a company like walmart, for example. they pay an average 2% dividend. this company is spending a
fortune investing in basically the grocery industry. small box stores, they're moving into a urban environment. the whole conference today was very, very successful with analysts. that's one of the things they emphasize. obviously it's a better idea to buy a company you think is investing in growth opportunities than just a dividend. >> that had for long not been the case. this year it's been about cash. >> can we underline a different point we were just talking about? dividend payers may be the sector of the market that have the biggest stake in this election, right? the tax structure from one candidate to another on dividends is huge, the difference, isn't it? >> it is huge. i'm not sure the health care companies really agree with your characterization. >> they have a lot at stake too. >> i think you're right. i think what people forget is that all equity income is not dividends. for instance, reits, part of that is not a dividend they pay out. part of that will not be taxable under this new situation.
mlps don't pay. closed in fund. your mlp etf pay dividends. the mlp itself does not. >> what do you do with the more traditional income-paying stocks when we consider the potential tax treatment after the first of the year? >> one of the key things people have to watch at the beginning of the year is what happens to the dividend tax versus the capital gains tax. if the dividend tax becomes higher than the capital gains tax, it might pay to sell your stocks and get your income from selling 5% of the corpus of your portfolio as opposed to taking a 5% dividend. these are the type of issues i think people aren't really thinking about when it comes to the changes in the tax laws and what should we do. we're all just searching for income. it may be you want to take capital gains. >> i do think a lot of these questions are going to be head winds for the market. i think, you know, overall when you do have a lot of this
uncertainty about how are my investments going to be treated, i think you can see a lot of people just start to pull money off the table, except maybe where you see companies that are actually showing some enthusiasm that we see a possible pattern. >> if i could point out the alternatives here, guys. we didn't talk about buying back stock. there's evidence that may be a very effective investment strategy as well. i know this has been a big play this year, but companies have been buying back a lot of stock. >> another usage of cash. >> can i add one thing? there's usually various things you can do with cash. you can pay dividends. you can do capital expenditures. you can buy back shares. or you can do mergers and acquisition. we know corporations are boarding cash. that does suggest that corporate america overall is underinvesting right now. we could argue why that's happening, but i think that's happening. in a year or two years f the
economy continues to strength, we're going to find they have underinvested for growth. they're going to be buying other companies. you could have a huge m&a wave. >> you could also give all your employees raises. >> or hire. >> that's cap ex, technically speaking. >> got it. >> human capital. >> but the existing capital you have, right? you could give them a raise. you're welcome, everybody. thank you, guys, for joining us. rich, see you later on the countdown. by the way, don't forget we'll speak exclusively to the ceo of international paper on whether their dividend increase could come at expense of hiring new workers at ip. that's next hour. >> still about 15 minutes before the closing bell. the dow jones industrial average off the lows, down 127 points. the nasdaq lower by 13. >> looking for ways to profit from an ugly october? one of our guests say its stock keeps going south. there's a way to make money on that. plus, this ceo says if president obama keeps his job as
well, it's only wednesday. it's already been a tough week on wall street. the dow looking at its third straight day of losses. monday, tuesday, today. now down 131 points, as you can see, at 13,342. >> even worse, the s&p and nasdaq are both look at their fourth consecutive loss. right now you can see they're off by more than 1% or 2.7% for the week. tough one. >> let's see what's dragging down the averages right now. the dow with the biggest laggards. the biggest laggard down about 20% so far this week. >> dragging down the dow this week, hewlett-packard, intel, alcoa, home depot, and chevron. that's pretty broad. that's the whole economy there. >> despite the declines, there is some green on the screen.
today, walmart, wouldn't you know, hit an all-time high. >> they had big analysts presentation, by the way. >> costco had good numbers. that helped set the toene. it is up 1.68%. >> look at that chart. it's had a great december. >> for one shining moment, an all-time high. think about this. nobody has a loss in walmart. >> there you go. but in light of today's losses for the broader market, the dow and s&p are both negative for the month now. take a look. what has investors running so scared? >> i think it's all expectations about earnings, the fiscal cliff. we're coming to the end of the year. we've been talking about the fiscal cliff for a long time. now we're getting to the point where we're going so send signals out they have some sort of framework that's building. yes, the gang of eight is starting the negotiating process right now, but we need to see something more. as you've pointed out earlier,
we've seen this movie before. >> i would add another layer to all the things you said. look at all the expectations for growth around the world. if you had weakness in the united states, well, you've always got china. now you don't have that option. europe is looking worse and worse. >> that is your area of expertise. also, europe and the debt crisis, the eu meetings are next week. >> forget that. growth is going to stink. >> that's the bottom line, but if they can get their act together on the spanish debt crisis and get greece to tow the line better, that will improve chances for higher growth down the road. >> but a long time from now. >> it will take a while. >> in the meantime, it's going to be tough. >> whenever that one guest we had turns 50. i don't know when that is, but it didn't sound any time soon. the dow is starting to move lower. i was looking at the buy and sell imbalances. they're almost equal, but a little lower. might see a little more selling going into the close. we are just about the lows of
the session right now. >> one of my favorite sound bites of the day is coming up. >> jamie dimon, he's ready for the fiscal cliff. listen to this. >> we'll be prepared. jpmorgan will survive a fiscal cliff. i just think it's terrible policy to allow it to get close. >> find out just how badly the fiscal cliff could affect your investments. >> that isn't the sound bite i was thinking. we have more coming up. >> yes, we do. >> plus, are banks in danger of going bust? a new report finds a shocking percentage would not pass stress tests today. the author of that report tells us which banks are most at risk later here on the "closing bell." turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪
td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. inside the four-minute mark before the closing bell. let me give you a recap of what happened today. the tone was set last night when alcoa said aluminum demand is slowing and they turned in a loss when maybe a slight profit was expected. here's what happened this morning. a selloff, and it never looked back. it started moving lower. that really was a tone for the market today. energy was also another feature to the downside.
crude oil did get up to $93 and about 83 cents. about the 50-day moving average and pulled back. especially late in the day went lower. opec is forecasting lower oil demand down the road. that didn't help. that was another feature today. the dow followed suit as a result. it just continued lower. a lot of the alcoa selling here. a lot of the oil selling there. we're going out about the low of the session, about 140 points. as we pointed out, there were some bright spots today. among the dow components, wall mart hit an all-time high today. they're raising their sales forecast. that holiday layaway plan they implemented is apparently on fire. costco's numbers were very good this morning. a lot of the retailers did well today. on the other side, energy not so well. chevron, for one, among the dow components down more than 4% today. what did do well today? how about treasuries? that ten-year note auction did
very well today. people are still willing to buy treasuries even though the yield is down to 1.68%, a solid ten-year note auction following on the heels of a record three-year note auction yesterday. sectors today, financials eking out a gain. banks did well today. you saw them almost break even there. matthew, why are we selling off for three days in a row here? what's going on? >> we needed an excuse to sell off. we've been so negative for so long. alcoa gave us the excuse this morning. oil, above 90 is giving people pause. there are a myriad of reasons why we're selling off. it's just a matter of time and if we bounce off these lows. i don't see it coming. i think we're going lower. >> rich, financials are known for their dividends as well. do you like financials here? >> well, we like domestic financials.
i think if there's one thing in your report you just gave two seconds ago, most of the things are doing well are more domestically oriented. the things that were not, energy and the industrials companies you named. they're more internationally exposed. that's where the weakness is here. domestic operations are okay. they're not stellar, but they're okay. the real problems are outside the united states. anything that's global now, energy is a perfect example, it's getting whacked because that's the big issue. >> what's the next -- what are you looking for right now? what's the next big moment you're looking for? >> obviously we're going to look for jpmorgan on friday. that's a big one. after all they've been through, if they come out with a decent number, maybe it stabilizes the market a little bit. i don't think it's going to help overall. sentiment is way too negative, which is usually a good thing. we're looking for an excuse. >> good to see you both. we're going to go out here just off the lows of the session.