tv Power Lunch CNBC August 6, 2015 1:00pm-3:01pm EDT
>> this was a stock that was in your portfolio. you got out of it. a lot of these names are just getting blasted today in the media, the likes of which you just don't see. the week of four media stocks since the depths of the financial crisis. zblits >> it's a good opportunity to buy. "power lunch" begins now. scott, gentlemen, thank you very much. this is "power lunch" on a very active day. 1% declines roughly for the dow. the s&p 1%. 2% for the nasdaq. i'm tyler mathisen. simon hobbs, stocks under a lot of pressure. >> major averages down here at the new york stock exchange, the dow is sit being at a six-month low. it is down 2.5% for the year. the nasdaq is on pace for its worst day since june 29th. the s&p breaking its 2,087 support level. if it has another day like this
it will have erased the gains of the year. courtney reagan has more on what's exactly happening. >> one trader i talked to said there is no one sudden catalyst. just a lot of things we're seeing that's making this a be generally risk-off trade. if -- we've broken through sew key technical levels. specifically on the s&p 500. the next level we are looking for is 2,067. we'll see if we break through or hold above it. consumer discretionary, health care, telecom are the biggest drags. energy is actually higher and crude oil which continues to fall. despite all the retail news and movers in the consumer discretionary names we've been uk talking about it all today, 7 of the 15 performing stocks in the s&p 500 are media stocks. it is kind of due to this reinvigorateing talk about cord
cutting. if you look at the s&p media industry, a subsector group here, having its week since october of 2008 when it lost almost 22%. you can see by that chart was level, then the steep fall-off. one consumer discretion yaerary that's outperforming, coors. there was a lot of negative sentiment going into those numbers -- >> courtney thank you. let's check where we are at the nasdaq. that actually is the biggest loser of all. kate rogers following the big movers there. >> you just said it the biggest loser of all, the nasdaq composite down 2%. as you said on track for its worst day since june 29 pth. tesla down nearly 10% after its earnings report.
actually had a narrower loss than expected at 48 cents and reported better revenue than expected but cut its sales forecast for the second time in a year which has investors concerned. keurig green mountain one of the ugliest names and one of the biggest losers in the nts 1 nasdaq 100. keurig said sales of its coffee and brewing products were down and it is going to cut some its workforce to combat some of those stocks. the last time the stock was this low was in 2014. >> thank you very much. wall street gearing up for tomorrow's big jobs report. what can investors expect? how will it play into the fed's plan to begin raising interest rates? our senior economics reporter steve leisman here with some ideas. hi, steve. >> you know i feel like i'm in the middle of you debbie downers. but this is a significant
report. wall street looks for the 58th straight month of job growth consensus for 215,000 compared to 221,000 compared to june. unemployment seemed unchanged at 5.3%. 0.2% hourly wages. if the consensus comes in as realized, this should satisfy the "some further improvement in the labor market that the fed wants to see before raising rates." but there's plenty of uncertainty surrounding the number with mixed data going into. ism manufacturing was weak. adp -- on the downside, 3 30,000 short of the consensus. ism services though biggest part of the economy, very strong. claims neutral with a 215,000 job growth month. the trend has been positive so there will be some tolerance around a weak number tomorrow to raise rates. there is another jobs report in
early september before that meeting on september 16th and 17th. >> the big conference out in jackson hole. >> yes i will be there. we'll have some newsmakers on our air. >> but miss yellen is not going. >> she will not be going. >> you'd give her a fly fishing lesson. >> i would. if she wants to make a statement in late august she's going to have to call me. >> ron insana joins us now to talk more about the markets and the fed. what do you think this jobs number is going to mean for the fed's deliberations and what do you think they're going to do? >> i wrote a piece yesterday about the struggle that the fed now faces. every time they hint that they're ready to go the indicators that they're watching collapse and undo the very process that they've begun. we've seen commodities collapse. the dollar's gotten stronger. emerging markets are getting killed. so the fed -- not that they're focused on emerging markets but almost like the temper tantrum of some years ago, every time they say they're ready, inflation expectations drop. numbers get weaker. you start to have -- >> the rug gets pulled out a little bit.
you see it that way, steve? >> you don't get words like sisifian. >> i think the economy in those other situations was more tenuous. i think right now we've had this incredible run. >> big words. tenuous. >> we had this long run of job growth. we had gdp bouncing back pretty smartly it looks like in the second quarter. looks pretty strong to start off the third quarter. looks like could be sumers ersconsumers are coming back. courtney reagan disagrees with me a little bit. but certainly auto numbers were strong. to me a focus on u.s. economy without systemic risks or much of a blow back from overseas is enough for the fed to go. >> what do you think about the market? you talked a little bit last week about a correction. do you think we're maybe heading that way? >> i certainly don't like the way individual names are getting
gutted on reasonably good news. it is not like disney or apple came out with a horrible quarter. >> you know what i had been noticing though, while the eps numbers, curiously, seem toll always beat by 2 cents, the revenue numbers which you can't massage have been coming up a little light. >> disney was affected by a strong dollar. apple is affected by china and a strong dollar. listen, apple's in a transitional quarter anyway. i don't think their businesses are broken. i think the stocks at the moment are a little bit broken. that doesn't auger well given that the leadership has effectively collapsed. the high momentum stocks have really fallen apart here. fitbit comes public and unplunges. now keurig -- >> sinli'm afraid what we're hearing is a lot of the bad news from the strong dollar but i think there is a good news story and it comes through chiefer ercheaper imports and lower prices and i think that ultimately helps the u.s. economy. >> what does that do for the fed's mandated inflation goal of
2%? steve, every time we keep saying inflationary pressures abating are transitory they again go back down they re-abate if you will. in a sissifyian way. >> every time i think i'm out, they pull me back in if you want to being corps in "godfather 3." stanley fisher's spoken about that inflation target. if you look forward over the next several months -- >> we're out of time but you have to understand that for the fed -- >> i get that. >> -- inflation works through the jobs market. if jobs are strong -- >> well if you believe that. >> -- well that's the way their model works. >> we'll learn a lot more tomorrow. >> we'll send you a list of words to study. >> simon. >> it is an education. let's get to another of the big stock stories today. mondelez shares soaring, activist investor big ackman
taking an interest. kate kelly has more. >> the purchase much mondelez international is certainly one of the largest hedge fund stakes in recent memory valued right now at $5.5 billion. the game plan to ackman's fund has for the start-up company is only starting to unfold. pershing square indicated plans to work with management and director which could include reshaping everything from the balance sheet to the boardroom. they also disclose the way in which they bought their stake which involved a combination of common stock, options and derivatives. in many cases with a stock price or put option strike price that they sold that was pegged to the low $40 range. people familiar with the matter tell me pershing square likes the confection business a lot represented through the caddurbury
chocolate division. the company is at an inflection point and big margin improvement right here is possible. the smackmaker is already helping pershing square's returns or at least seems to be. the stock was up some 10% in july and so is the hedge fund through july marking a 7% gain for july alone. pretty remarkable results so far. earnings season well under way. in fact we are looking at the back end of it these days with some -- big names already reporting this morning. seaworld reported low attendance in the second quarter but the stocks still up slightly today on this down day, up by 2%. generac down because of -- get this -- good weather. michael kors also saw its sales dip in the second quarter but that stock up more than 10%
today. we got it all covered right now. morgan brennan on seaworld domini chu on generac, and courtney reagan on michael kors. >> oh good. michael kors is one of the leaders of the s&p 500 today so it is a good place to start. they set a pretty low bar. analyst expectations and sentiment was pretty down beat. but it is a surprise to the up side like some of the other premium handbagmakers that we saw. crushing through those eps sentiments. there is a lot to like here but profit is down year over year and we saw the second straight quarter of negative same-store sales. comps of 40%, 30%, those aren't sustainable in the long run but negative comps are not exactly a sign of strength through the brand. again this was the second in a row that we've seen it. kors does see international opportunity. what i found interesting on the conference call, the company says asia is a strong point for
them and they're seeing strength in china, southeast asia and japan calling it breathtaking. so they still think that there is room to run when it comes to overseas, both in asia and europe. we talk a little bit about kors being potentially oversaturated here in the united states. it happened fairly quickly but the company thinks at least that it is not where it could be overseas. they see international opportunity in the longer term. back to you. >> very nice gain today on a down day, courtney thank you. generac stock powered down today after reporting than expected sales. what happened here? >> good weather happened. so you got when catastrophic weather events happen generac sales surge because people lose power because of snowstorms, they lose power because of their rainstorms or anything else like that. this time around they said it flat-out on the conference call and in a statement -- the good weather there,ment less catastrophic power outage
environment made for a very very tough comparable. last year we had a lot more of those events. this time around the first half we don't see as many. the real key here is about whether or not you'll see any kind of a boom in the second half of the year. they're not expecting it which is why generac is lowering expectations for the reftst year as well. they think if the sales pace keeps up in the second half as it did in the first half they'll see possibly net sales declines of 10%. that's a pretty big drop in sales year over year. but silver lining one positive if you will it is not helping the stock a lot. they did say they're going to buy back $200 million of their own stock, a stock that's been on a pretty decent slide over the medium term. generac shares as much as kors is up on the percentage side of things, we're losing it on the generac side. >> down 13% as of today. really a troubled stock. speaking of companies having some troubles seaworld would be one of them. >> seaworld would be one of them. to be honest this earnings --
it's not going swimmingly for them. we saw earnings per share came in 17 cents below estimates, that represented an 84% decline in profit versus last year. seaworld has been seeing a lot of blowback ever since that 2013 documentary that negatively portrayed the company anticipate treatment of captive killer whales. it's been a huge issue. it is the reason why the company has been slash rging its admission prices for parks and why it rolled out a big ad campaign last summer. numbers declined nearly 2% last quarter. it was an issue, however the company cited three reasons for that. the lingering brand effects in california tied to that documentary. also bad weather. heavy rain in texas. and an earlier easter holiday. easter is a high time for theme parks like seaworld. but stock is up today. stocks up about 2%. >> why is the stock up with all this bad language -- not bad language in that sense, but you
know what impea'm talking about. >> we've seen the stock up because on the call today the company's new ceo reiterated are earnings guidance for the full year. that suggests that maybe some of the hemorrhages we've seen for seaworld financially are stabilizing. >> it's also been a bad down trend for that stock, too. >> very bad. very bad. going back to the documentary and all the bad publicity that surrounded it. courtney and dom and morgan thank you very much. simon simon, to you. to the wildfires ravaging the western part of the united states. dozens of wildfires continue to burn from california to washington state. nearly 10,000 firefighters are working now around the clock to battle back flames that have already destroyed tens of thousands of acres. the so-called rocky fire north of san francisco has already burned up some 68,000 acres, destroyed 40 homes and forced evacuation of thousands. meanwhile, hundreds of residents who haven't evacuated from their homes in roosevelt,
washington tuesday night due to a wildfire are now being allowed to return home. it is a sell-off here on wall street. the dow down triple digits. a number of stocks in the dow in correction territory. are they a buying opportunity? the best big-cap stocks to buy now next. you're krachgwatching cnbc, first in business worldwide. music: etta james "at last" (plays throughout) sometimes, at last doesn't happen at first. ♪ your dad just kissed my mom. turning two worlds into one takes love. helping protect that world takes state farm.
beermaker molson coors sales are hampered. jpmorgan moving more than 2,100 jobs from manhattan to new jersey. the company receiving $90 million from the garden state in subsidies to make that move. and jerusalem-based car technology company mobileeye reporting better than expected second quarter profit with revenue increasing 57% from the previous quarter of the year. tyler, over to you at headquarters. the dow hovering at around six-month lows. the s&p breaking a key support level of 2,087. energy a bright spot in today's sell-off. perhaps curiously. dominic chu drilling down on that sector for us now. >> i see what you did there. "drilling down" on that sector. if tuyou look at the s&p 500
intraday, it's managed to get a bit of a bounce. the only sector in the green today, up by over 1%. >> why? i thought oil was down today. >> oil it down today. that's the curious part about it. a number of stocks are really driving the action. it's a wide swath. different types of energy stocks. energy stocks overall, year to date gains in energy are also interesting. we got to put that day in context with the overall down trend we are seeing year to date. energy stocks have taken a beating which might explain a partial piece of this story that we are seeing a bit of a relief rally here because of oil prices lower. >> or in some cases they are dividend plays. >> there are people who are buying on the dip possibly. some of the names that are holding up and propping up today's trade so far, they're interesting in that they all represent a different part of the energy sector. chesapeake energy. natural gas play. it was down -- >> disaster yesterday. >> it was a disaster yesterday. that's the reason why. right? we had a disaster yesterday getting a bit of a bounce today, 12%. maybe a bit of a relief rally
there. maybe a bit of short covering. but that's natural gas. transocean on the drilling side of things, that's up. that's an earnings story up 10%. transocean shares. again in the broader context of the year's moves it is still down compared to where it was. so a bit of a rally there. newfield exploration up 5.7%. the energy sector overall, you've got a decent i guess cross section, if you will of companies that are kinds of propping things up today. notable, gas drillers refiners exploration and production. these ones here are kind of leading the game so far but what's curious, oil prices continue to go down and they are continuing that down trend. you wonder whether or not these gains will hold if that energy sector overall keeps going down like it is. >> dom chu, thank you. simon, over to you. i ma have any have an explanation
later on in the show for you. media stocks are clearly getting crushed right now. a huge sell-off there continues. what you need to know about this sector in the months ahead. plus it is a red-hot biotech ipo today soaring 50% right now. could this company have the answer for those who suffer from peanut allergies? the company's ceo will join us in a first on cnbc interview. i can help you choose the right portfolio. monitor it. and even rebalance it. i've been called innovative. revolutionary. and just plain smart. i'd blush at the compliment if i could. but i can't. so. i won't. say hello at intelligent.schwab.com
our lows currently down 123 points on the dow but clearly it is a triple-digit loss today. the nasdaq also slammed. one group getting hit hard today in its media stocks they're now down 4%. julia boorstin is tracking that action from los angeles. julia. >> simon when investors look back today may be remembered as the day the market decided the tv bundle is dying. leading the carnage viacom shares off nearly 14%. this morning the company reported a accelerating decline. fox shares also plummeting after reporting declining revenue and earnings. the stock is now down over 7%. it was down more than 9% earlier after lowering its profit expectation for the coming year. a $5 billion buyback failing to calm investors. threats the tv business were front and center on conference calls.
fox and viacom ceos both saying the companies are well positioned to withstand tv subscriber declines. disney, time warner and cbs shares are also down today, though not quite as far. disney has the advantage of being diversified and having powerful brand and time warner and fox's ceos talk of their direct to consumer offerings. cable companies are also suffering on these concerns about subscriber declines. all of those guys charter cablevision, time warner cable down between 3% and 5%. in sharp contrast netflix shares are soaring, still trading around an all-time high. dominic chu has a "market flash." >> still moving to the downside shares of genworth financial, off by about 8%. the stock has been falling all week. it reported earnings and revenues earlier in the week that missed analyst estimates. the company also announced that
it's not going to be selling its entire life insurance business or annuities business. it's now down about 30% just for the week alone. genworth certainly an area of weakness in addition to media stocks. to kate kelly, we have some breaking news. >> the renowned oil trader andy hall having a heck of a july according to reuters reports citing a recent letter from hall on behalf of his hedge fund. apparently down 17% for the month of july leading the fund down 15% year to date through july overall. hall telling investors in the letter again according to reuters he frankly, did not anticipate the massive shift in the crude oil market sentiment and that there was a "disconnect" between perception and reality in the market. unquote. this is not inconsistent with what hall's been saying in general. he said as recently as june in a letter he expected to see oil at about $65. we're obviously far below that now. i know he's been a long-term bull and generally continues to
be and thinks that the concerns about over supply are really overplayed. so unfortunately, that didn't serve him well this past month. we'll see how it fares going forward. >> four years into a bear market in commodities. let's send it over to the new york mercantile and catch up with oil now, jackie deangelis. >> goldman sachs seems to think we're going to see more pressure on oil prices saying there is risk to the downside here. we're looking at prices right now trading at $44.70. we're paring some of the losses on the day. . intraday low was $44.20. recall -- earlier i would have thought we'd hit a key technical level but as we get into the close it could get dicey. traders are telling me the fundamentals haven't changed. they do think we're going lower from leer. we had a rally yesterday, then we sold it very quickly. that's not typically a good sign either. we will watch to see what happens with oil at the close but right now down about 50 cents. a check on the bond market aled of the jobs report tomorrow. rick santelli with us from the
cme. hi rick. >> many many traders are debating what the catalyst is. i know there's fundamentals but maybe it is more macro than that. is this nervousness about fed normalization? nervousness about so few big data points like tomorrow's july unemployment report. the markets are all somewhat on the same page so fascinating. look at an s&p future versus 10-year note yield for 24 hours. look at the chart for one week. granted, they're not 100% correlated but obviously they are moving in the same direction. now, let's substitute 10-years and put in the dollar index. one week of the same chart. whether it's the dollar slipping granted not necessarily in the same percentage terms, yields moving down, they all seem to be motivated and in line and forced in their direction by the weakness in equities. are the markets throwing a bits of a hissy because of normalization? is the fed going to notice this? is this going to change the path of tightening? all i can tell you is, another
market that would be in sync with this is a small rally in the fed fund futures. the number strong or weak tomorrow we'll have more clues exactly what is bugging investors. simon, back to you. let's look at where we are on the s&p heat map. a snapshot of the market overall, the broad market more accurately accurately. it is a sea of red. the health care sector be with the consumer discretionary sector. winners for the year that are negative today, though consumer discretionary is broadly due to the media stocks. certainly the index itself the s&p 500 breaking key levels. you have to ask yourself the question -- is this a buying opportunity? small caps and mid-cap names are also getting hit. we'll drill down on the biggest movers here. you're watching cnbc, first in business worldwide. hi my name is tom. i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom.
they could have little to go on. a vague description. a single piece of evidence. a partial plate number. with an app from ibm officers can now access over a billion police documents to find hidden connections and identify potential suspects. ibm analytics helps one hundred thousand officers work smarter every d
california received 12,000 pounds of cocaine valued at $181 million from a semi-submersible vessel in the pacific ocean. some 200 miles south of mexico. it is the largest drug bust of its kind in coast guard history. four suspected smugglers were arrested. a suicide truck bomber attacked provincial government offices in eastern afghanistan killing at least eight people. 12 more were injured prp. the taliban claiming responsibility for the bombing. apple says more than 11 million people have signed up for a trial of its music streaming service since it launched on june 30th. the three-month trial membership is free. but after that individuals can pay $10 a month. it's $15 a month for families of up to six people. and jennifer aniston and justin author rowethoreau have made it official. the couple exchanging their vows before family and friends at
their home. that's your cnbc news update at this hour. what a handsome couple. >> i wonder how many magazines that wedding will sell. >> oh. >> thousands. thousands. >> a lot. we wish them many many many happy returns. >> we do we do. let's talk about gold. they probably exchanged a little gold there at the wedding. we're going to talk about gold prices right now, up $4.20 on this down dow for equities. people may be moving into gold a little bit but what a ride it has been for gold and not in a good way for most of the year. silver copper palladium and platinum round out the metals that we follow here at this hour. 3 out of those 4 are higher by just a little bit, silver up 1% on the day. dominic chu has a "market flash." >> shares of herbalife rallying today, beating inging analyst estimates. raising full-year earnings guidance even in the face of a
stronger dollar. but herbalife has been a roller coasterish trade but it has been showing signs of life in the past six months. a very controversial multi-level marketing company. let's look at the broader picture. the markets overall trading lower today as investors look notably at the latest earnings. certainly of that media stocks have noticeably pulled down the s&p as you can see. in addition to that the dow is not doing very well. dow is down 2.5% for the year so far. the s&p is above the flat line. but if we have another day like this it too, will raise its losses for the year. oil is trading near multi-minute lows. though some of the energy stocks are doing reasonably well. brent crude hitting its lowest point since january 30th. west texas at $44.62 for more on the markets and where we now stand this lunch time courtney reagan is here at the nyse and kate rogers will join us from the nasdaq in a moment. courtney, you kick us off. >> we're seeing the dows off the
lows of the session. we're still about 27 points below that six-month low. if we stay here that's where we're going to close. we're seeing volume slightly heavier than normal with about twice the declining volume to the advancing volume. if you're a bull it is probably not your favorite day. we're seeing that fear index, the vix, actually really spike. the highs of the week for sure also pretty much near the highs of the session, just perhaps off a little bit. 23 of 30 dow stocks are lower. we've actually improved in the last 37 minutes or so here. disney microsoft, pfizer nike home depot among the biggest drags. only positive names, chevron, exxon helping to lead those names higher. apple and mcdonald's are about flat for the dow but those media stocks are the one thaegs taking the wind out of the sails today. >> kate how are we looking at the nasdaq? >> ugly day here at the nasdaq. the xoscomposites down more than --
21st century fox is down more than 6%. another media name getting whakd ingting whacked. it had a mixed quarter. many cable names getting hit over the cord cutting talk. apple just slightly in the red. again today. but for the week it is down around 5.5%. josh lipton was told today apple signed up 11 million trial members for apple music in the first five weeks since its launch. the company is in its three-month trial phase. no users are yet paying for the service. we should also mention that the ishares nasdaq biotech ebb is down 3%. just an all-around ugly day here at the nasdaq. kate thank you. let's get some animalalyst
input. should investors buy, sell or stay put in a market like this? correct me if i'm wrong, had he not told people to stay fully invested? >> yes. if they have a long enough time horizon, they should stay fully invested. >> what do you tell them when they say hey, i've lost my gains for the year. >> for many investors they may actually have a high cash position. so this could be an opportunity -- >> you told people cash is not the place to be be fully invested. didn't you? >> yes. and we are saying that we should see a very choppy august with a downward bias. but that's okay if you have a long enough time horizon. just hang in there because we're likely to see improvement in the market by the end of the year. >> in the long term we are all
debt. etfs are more nimble. i wonder if you regret telling people to be fully invested when the market continues to fall. >> absolutely not. because what investors need to do is not worry so much about these short-term moves. that's often where they lose the most money is by not being fully invested because they often don't get back in when the market starts to roar. >> dave what's your take on what's happening here? >> well we came in to the year with the view that the bull market would continue but with a much lower return trajectory, narrowing leadership and more volatility. that's pretty much what we've seen year to date. >> but hang on david. i'm sorry, david, that simply isn't true. if we have another day like this we will have erased our gains for the s&p 500 and we're now in august. that's not the continuation of a bull market surely. >> i think we want to move away from what's happening on a given day in the market when we look at trends for the s&p 500, you've obviously seen very substantial gains going back to
2009 and we expect that we will end up this year for the s&p 500. again, more of a single-digit result as opposed to the double digits we saw in prior years because the conditions for a bear market are simply not in place. the economy continues to grow at a respectable pace. we think recession risk is quite low. we have a positive slope to the yield curve and while the fed, yes, is getting ready to raise interest rates a bit they're starting from zero. policy is going to continue to be quite accommodative for quite some time. it's not a feel-good bull market but it is a bull market and there's money to be made. >> i guess the question is -- you very accurately described so many variables. i'll put the question to christina, whether the fed delivered those gains early but deflating the quality of the asset markets and we had the gains that arguably we would be having now as the fed raises rates from 0% so on so forth. what would you say to that? >> what i say is what we've actually seen is some delivery early on but that doesn't mean
that's the end of the delivery of the gains. they are likely to be slower choppier going forward. but the fed is still really -- >> why will we get gains? at what basis when we are at 17 18 times earnings? >> we'll get gains by finally seeing some revenue growth. certain sectors are delivering more revenue growth than others. technology, health care going forward, valuations are relatively attractive. this is when active management matters and we can't be passively invested in the market. >> but it is health care and technology as far as you are concerned. >> yes, large by will you there are opportunities in other sectors as well. >> we'll leave it there. thank you both. go to powerlunch.cnbc.com right now to see why christina says we need to watch the debt problem in puerto rico. that's powerlunch.cnbc.com. here's a stat for you. the dow tracking now for its
sixth consecutive negative day. for the first time since a six-day losing streak that ended back in -- last october. october 16 to be precise. meantime the russell 2000 small cap index down nearly 2% today. biggest winners and losers in that group next. you're watching "power lunch" on cnbc, first in business worldwide. here at td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade.
can your business deliver? folks, let's do an s&p check right now. it is plunging so let's look at some of the sectors. dom chu to do that. as you pointed out just a few moments ago, the only one that's moving positive is energy. >> one sliver of green, that's energy. on the worst end of things health care stocks continue to be one of the laggards here. they've been the source of strength for the market for the last one, two, three years almost. overall the picture here we want to also focus on what's happening with the small and mid-cap stocks as well. they are showing some signs that perhaps maybe things aren't as good either. the s&p 500, look now at the s&p
mid cap also down by about 1% as well. just off its worst levels today. if you look at some of the stocks that are kind of drichg the action here for the s&p 400 mid cap stocks there are some interesting ones that come to light. you look at 3-d systems, sun edison. two of the bigger movers. 3-d systems's been kind of on a real steady down trend for quite some time. if you look at the russell 2000 small-cap index, these are some of the stocks moving here as well. weight watchers. generac. some of the outside gains and losses coming with some of the mid-cap stocks but still clinging on to some of these marginal gains for year to date. >> something's changed here. obviously something's changed. but look at the percentage moves we're seeing here. it is not just these. tesla last night.
green mountain! massive moves. >> those are interesting, too. they tend to carry a lot of weight in the market just because of their general market cap, their size. they are bigger right? these are smaller companies and they'll tend to move a little more volatilely. 3-d systems and weight watchers have been volatile plays around earnings and they have been for quite some time now. we don't expect to see maybe modest gains or losses with these guys. still if you look at these names overall with the small and mid cap stocks we are seeing a little bit more of a swing here. on average though they're just about in line maybe a little below where the overall large company market is. we'll see if those gains or relative gains, flattish gains hold for the rest of the year. >>. time for some wisdom some experience and some clear talking down here on the floor of the nyse. ben, what's going on? >> you're seeing momentum stocks getting crushed. you're seeing the media stocks
getting crushed. but part of inside baseball from what we're seeing is that there are large pension funds that have relieved management of their duties. so the stocks that they have held are being sold. that's why you're seeing the stocks that have been losers over the last eight months under even more pressure because i believe what we're seeing is a liquidation of portfolios. they'll reset and take a look -- give the money to somebody else and see what else they're going to do. >> are you hearing that from a size that would move the market? >> yeah. these are big players. they're benchmark to the russell 2000 for the most part which is why you particular see the russell underperforming today. you see the health care issues again within that group. those stocks that have not been taken over. part of the play there was to be taken over. when they haven't been taken over. so you are seeing some significant pressure. >> would they be closing short positions which is why some of those energy stocks got -- >> the hard part for the energy stocks, i said last time i was on i'd be a buyer. with the stock market down explaining to your customer why
you are paying up 50 basis points to buy an 1$11 -- $11 stock. >> i would disagree but that's not unusual. ben's got his handle on a lot of customers, a lot of clients. but we're not seeing that forceful reallocation. we are seeing some movement into the energy stocks because they're cheap. that's it. there's nothing really more complicated than that. >> what about the media stocks? >> media stocks were high flyers for a while. any time -- i think you might have mentioned this earlier -- any time you have some of these stocks that are trading at these massive multiples and they miss their numbers they're going to get trashed. it is just typical. it's been like this for probably 75 years. if a stock is $185 and millssses its number it goes down 10%. >> is it significant that we get this the day before we get the employment report which may determine whether we get a rate
rise in september? >> i don't think you can link it through. i think what you are seeing is figure head stocks. apple with cook disney with iger. tesla with musk. i think the pressure on tesla also took down the solar stocks. they're all tied together and the group that trades those momentum stocks. same thing with the media stocks. ipger started to admit they are having some weakness. the entire media group. all the stocks dominic chu was talking about are all part of the momentum trade particularly in the solars. >> i will agree with that one. i do think there is a lot of pressure around it is pressure from the top. >> time for a drink. thank you very much nice to see you both. disney just mentioned a moment ago extending its losses dragging the dow down with it. media giant down nearly 5% today but is this an opportunity? the best big-cap stocks you may want to nibble on down days like this. you're watching cnbc first in business worldwide.
♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. i heard i could call angie's list if i needed work done around my house at a fair price. sure can. so i could get a faulty light switch fixed? yup! or make a backyard pizza oven? oh yeah. i can almost taste it now. tastes like victory.
and pepperoni... no student's ever photographed mean ms. colegrove. but your dell 2-in-1 laptop gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance laptop bundle for only $399. office depot officemax. gear up for school. gear up for great. while every business is unique everyone is looking for ways to cut expenses. and that's where pg&e's online business energy checkup tool can really help. you can use it to track your actual energy use. find rebates that make equipment upgrades more affordable.
even develop a customized energy plan for your company. think of it as a way to take more control over your operating costs. and yet another energy saving opportunity from pg&e. find new ways to save energy and money with pg&e's business energy check-up. ♪ whoa what are you doing? putting on a movie. i'm trying to watch the game here. look i need this right now ok? come on i don't want to watch that. too bad this is happening. fine, what if i just put up the x1 sports app right here. ah jeez it's so close. he just loves her so much. do it. come on. do it. come on! yes! awww, yes! that is what i'm talking about. baby. call and upgrade to get x1 today. ♪ pay attention. here are this hour's "power points." number one, stocks selling off
with a dow down triple digits and headed for a sixth day of losses. the s&p 500 and nasdaq are now down for a fourth time in five sessions. number two, media stocks leading the move lower with viacom, 21st century fox, time warner and news corp. weighing on the market today. . three, oil slipping again with west texas intermediate down more than 1%. if you missed any of those big stories in the last hour go to our site powerlunch.cnbc.com. simon, let's talk about the yahoo! finance question of the day. oil prices continue to fall on supply. low prices the new normal for oil, 36% say yes, 36% say no. 28% say "i hope so." there you go. apple premiered its music streaming service one month ago. if you look at a chart of apple, it's been a rocky month for the tech giant until today. up just a little bit, three cents to be exact. we'll bring you all the best nose r news and the worse o'news
on all things apple straight ahead on "power lunch." 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town
the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs.
because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day. we have a big hour ahead on a big market day, including more on the dow's big drop. nearly everything in the red. oil down again as well. it was under $45 a barrel.
but sometimes lower prices mean better opportunities. so as always we're going to work to help you find some values in this market. that's why cnbc is first in business worldwide. tyler and simon, you guys make it that way. guys, back to you. it's been one month since apple's streaming museic was unveiled. josh lipton is live in los angeles with news. >> reporter: tyler, overwhelmingly positive. that is how eddie cue, apple's vp of internet software and services describes the feedback he's getting from apple music. apple says there are 11 million trial members of those who signed up for apple music. the question is how many of those can convert into paying subscribers when the free trial ends. there take been some criticismfunctionality
of the service. they are addressing it as fast as they can. the service is important for broader strategic reasons to investors. if it is successful, it could strengthen the loyalty and commitment of apple's big fan base. apple gave us new numbers on the app store. in july the app store did a record $1.7 billion in transactions. a lot of that momentum is because of strength in china. he says the app store set a new record for transactions in july. one big reason apple stock is down hard since it last reported earnings is because of concern that its growth in china could slow. eddie cue is signaling business there continues to show real strength. >> josh, thank you very much. folks, thank you for joining us for this first hour of "power lunch." thanks to you, simon, for joining me today and all week long. now to brian for the second
lour of " hour of "power." it is now nearly 2:00 on wall street, 1:00 in houston. the dow down 140 points. oil can't get a break accept a break below $45 a barrel at $44.38 a barrel right now. hi, everybody. i'm brian sullivan. melissa, as always is at the nasdaq. that's where we'll start because it is also a sea of red in tech land. >> we are off the session lows right now at the nasdaq, down by 87 points. we see two big sectors driving the markets lower here. media stocks the losses all started with the comments from disney's ceo about skinny bundles. then it continued with viacom cbs and fox all reporting, stocks all sharply lower in today's session. biogen and amgen, it is down by 21 prgs 21%. momentum stocks getting the steam taken out today. back to oil. oil cannot get out of its own way. prices falling again. production staying high.
remember, many of the heavily indebted oil companies simply have to keep pumping to either fund their operations or keep creditors at bay. let's get the latest price check with jackie deangelis at the nye nymex. >> it can't get out of its own way. we're down a lit moretle bit more than 1.5%. what traders are telling me right now is the fundamentals haven't changed here. they think there is bias to the downside to that $43, $42 mark that you and i have discussed. goldman sachs with their note this morning saying that there's risk to the downside certainly not helping matters. but right now we are trading 76 cents lower. quick check on brent, $49.23. staying under $50 as well. reminder folks, oil may not be the only reason that stocks are down today. a lot of stuff going on but it is likely at least a big reason. keep this in mind. in the past 27 trading sessions oil and the dow have traded in
the same direction 20 of those times. in fact, it's about a 70% correlation. in the very near term it is even closer. in fact it is 90% in the past 11 sessions. oil and the dow jones industrial average have traded in the same direction 10 of those 11 times. as oil falls, so do oil jobs. latest estimate of layoffs hitting close to 200,000 jobs. with another round of capital spending cuts likely more layoffs could be on the way. morgan brennan has more on that. >> 173,473 jobs. that's how many energy related jobs have been or are in the process of being lost globally since oil's plunge last fall. according to energy consulants graves and company who's been tracking layoffs and maintains that the estimate may still be low. one-third of those losses have been announced in just the past three months alone. graves says it represents another wave of layoffs after
deep cuts that we saw earlier this year. the biggest losses to date -- oil field services. more than 87,500 jobs have been lost there, including a combined 27,000 at baker, hughes and halliburton ahead of their proposal merger. that's double expectations for those two companies. some of the biggest cuts recently have been exploration and production companies. 24,200. you can see that there. also drillers which have slashed some 35,500 companies. these positions, including 6,500 at royal dutch shell, and 1,500 at chevron, those were announced last week. the pain's also rippling out to service and support industries. there have been 23,700 jobs can be about, that have been lost in those industries including layoffs at law firms. we've seen layoffs at trucking fleets lodging companies that house oil workers. also steel factories that manufacture products for drilling. tomorrow getting the non-farm
payroll report. in the mining sector which includes oil and gas, has dropped by 71,000 positions. we'll expect to see more of those negative numbers in july brian. >> it's tough times and it is not just job cuts. there's a lot of pay cuts as well. i talked to a guy a couple months ago, his pay got cut by 25% lateiterally overnight. courtney reagan is at the new york stock exchange. >> i'm watching the dow right now. we are least off session lows but still about 43 points below a six-month low. if we hold here or get worse we're definitely going to close at a new six-month low. volume slightly heavier than normal with the declining volume double what we're seeing for advancing. not a great day if you're bullish. 23 of 30 dow stocks are lower. positive names -- chevron, exxon, caterpillar, but it is
really a broad sell-off. 9 of 10 s&p sectors are lower. despite macro concerns associated with crude oil, priceline, what i know you talked about earlier, energy equities are really bucking the intraday trend at least and moving higher. the s&p media index is down 5%. all of those big media names are down substantially today. and through the week. and you can't get away from them because those media names are in the dow, they're in the nasdaq 100, and of course they are all wrapped up in the s&p 500. we keep hammering it home but it is because it is an important point, media really dragging the day lower. that bundle could be busted. that's really the problem here today. >> thank you, we'll stay on the broader markets here. things have softened lately but leer is the thing. dom chu has found eight stocks in the dow that are in correction territory. he's breaking them down bracket style because many out there are saying maybe if prices are down there's value in the market. you are supposed to buy lower and sell higher. right? who are the finalists?
>> so those eight stocks we picked eight of them that are in correction territory. we couldn't get all 13 or 14 given today's moves but let's see what happened here. right now apple and intel. apple won that match-up. maybe no surprise for many of our viewers here. caterpillar and exxon-mobil. exxon-mobil won that battle. between those two, apple ended up winning. it came down to this. you viewers, you tweeters you readers of cnbc.com you voted on all those platforms and it came down to apple beating exxon-mobil. maybe not a surprise for many but still having given the way exxon-mobil's been trading down so far. on this side of the bracket, you had american express and procter & gamble emerging from this particular bracket. a amex and p&g. in the end it was procter & gamble that won this particular
bracket. our finalists when it comes to these dow stocks that are in correction territory is apple versus procter & gamble. what's interesting about this match-up, one of them a big growth company, the biggest company in the world, one of them is hit near two-year lows in today's trading. a big dividend payer, not as big a dividend payer but again a lot of dynamics emerging here. we'll have the winner of this particular segment here coming up on "closing bell." so again tweet in to us use the hashtag buy the dip. go to cnbc.com vote for your pick. we want to see what viewers from a crowd sourcing standpoint think of these stocks. we'll pick one current member of the dow that's in correction territory that viewers think is the best value at current levels. again, apple versus procter & gamble. get in there and pick brian. >> there are so many ways to go with this. looking forward to that heavyweight match-up. somebody's going to get swifed.
two managers joining us to weigh in on those two dow components that are left standing. high- hugh, do you like either p&g or apple and if you had to pick, could you. ic a favorite? >> this one is very clear to me. i own apple. all of my clients own apple. periodically we've been buying apple but we've been buying it on weakness when it shows up and it does show up periodically. there's using very very conservative assumptions on revenue growth taking it down to say 4% from the 15% to 20%-plus that we've been seeing taking margins down from 35% to say 30% for 2016 fiscal year you still get a stock that's undervalued. so i would continue to do what i'm doing right now. which is buy apple on weakness. now keep in mind my worries about valuation. so don't be too much in a hurry. the stock market's got to go lower. apple may go a little bit lower with it but apple clearly is the
whipper. not procter & gamble. >> hugh isn't the problem summed up by the first two sentences out of your mouth and that is you own apple and all of your clients own apple. there's no incremental buyers even when we have this pullback and that's why the price action in the stock has been so bad. i guess one question is where do you see overall markets? if the overall markets are going to head lower, probably apple is. >> yeah. well, i think the overall market -- i hope i cross my fingers -- is going to go down by another 5% the s&p 500 down another 2000,000. apple will be a little cheaper under those conditions. there, more skeptics and people will sell apple. that's probably from a timing point of view to buy it. it will be cheaper then it's just fine. the big worry, concern, that i think apple is reflecting now is china. i think we all know that but i don't think china -- you've heard that report earlier on your program. i don't think china is going to turn out to be nearly as bad for
apple as everybody expects. apple is clearly the winner. >> the other way to spin it though, david, in this market environment is that the stocks that have had significant run-ups and been trading well then they somehow disappoint in some way, the markets are really unforgiving. i'm thinking of a name like apple. a name like facebook. a loott of these -- disney. a lot of these stocks have had terrific run-ups in their earnings, then you disappoint on one metric and bam, it seems like it is game over. is that the kind of market we're in? >> it is a treacherous market out there so we would not be buying companies in front of their earnings unless you have tremendous conviction. we would be very wearily of some of these high-flying momentum stocks because you are precisely correct. we were talking about a number of gas stocks that have done poorly, we think you can look at that group and there are a lot of things that will do well over the next 6 to 12 months.
caterpillar which lost in your face-off in the first round we think is great over the next months. we think procter & gamble is a very good hold. we like energy stocks exxon included in that. weep wouldn't chase momentum. we'd be buying on the dips in the market and buying on the dips of some of these high-quality businesses that are paying nice yields at low valuations. >> it seems like you own both procter & gamble and apple. that's the match-up. forced to choose what would it be? >> we're one of the few people that don't own apple. >> you could be the incremental buyer. >> not for a while. when we're buying it people aren't going to be saying nice things about it. we think apple will win the vote but we like procter & gamble better. lower risk and it should do well over the next year. we don't have enough conviction on apple's short-term -- >> you think in the furt we'll start to see people move back into these -- i hate to use the term boring but you know what i mean these slower-growth stocks
that act more like annuities. >> we do. a lot of these had a short-term sell-off because of earnings slowing down from china. we think that picks up as the year progresses. company like united technology, same thing good business attractive price. >> i had no idea who the two finalis were. you guys didn't know as far as i know so you rolled with this segment. perfectly. that's why we have you on. you're pros you and david. thank you very much. putting on the ritz. that's what bill ackman is trying to do. he's amassed a $5.5 billion stake in mondelez. let's stick with this and ask why so many hedge funds are buying up food stocks. the team over at flowpoint capital thinks many of these names are performing one of them says like internet stocks but for the price of a pop start. flow point's lead manager, charles, welcome to "power lunch."
you like the food sector as a whole. you own some of the stocks. you do not own mondelez. how come? >> well at 16 times ebitda there's a lot of pressure for mondelez now to have something happen to get sold or to undertake a massive restructuring or accomplish their own significant m&a. we like the staple sector first of it all, because it is very defensive. all the things you've been talking about in the last few months really play to why the staples are popular today. these are national or oftentimes global companies that are all high-profit margins, high cash flows, balance sheets aren't levered. so to your viewers that might remember first data in 2008 and why kkr lbo'd first data eight years ago, very similar setups
in a lot of staple stocks. for example, we own general mills, gis. this is a bore inginge inging yogurt and cereal company. seven years into the bull market staple stocks like this can guest astronomical valuations and they're doing all the right things they want to do general mills. they bought annie's, they're selling off -- >> let me get back to mondelez for a second. i know you can't go into bill ackman's brain, but when you look at all the food stocks, mondelez is not only the best performer over the last number of months it is also trading at 20 times forward earnings, not exactly a bargain price for a slow-growth company. why do you think he went after mondelez when there are many other food companies whose stocks thus price, are not as high and have lower valuations? >> probably went into mondelez not for price but for probability of success because he already has another agitator
another activist in the stock with him that can really force the company to do what's best for equity shareholders. so it is not the valuation at mondelez that is so attractive today. in fact the fact that it is 16 times ebd ebitda ackman may be on to something. margins are lower and the growth is slower and so it is more of a fix-it which we don't do an expensive fixer-upper. >> charles, the last time you were with us you had made a good -- a call that seemed hard at the time which was to sell apple. that was back in march at the time the average price of apple was higher about $15 from where it is here. that turned out to be good. are you looking to get in now that it's in correction territory? >> no.
melissa, when i was on in march and we discussed apple, it was right on the -- right before the launch of the apple watch. our thought was at the time unless this watch tells me what time oil's going to stop going down, wall street doesn't have an interest in it. and today apple's volatility -- i heard josh brown a minute ago talking about stocks' volatility in the last two months. apple is trading at about 3% per month volatility today. the s&p is about 1%. we're very much risk/reward equity investors. the risk in apple is there. i don't mind taking risks. at ten times earnings apple may work out but the volatility is just too high. there is too much of an argument going on right now about apple. by the way, nobody's even mentioned the fact that they have completely whiffed on the next big thing. the venture capital industry wanted us to believe that wearables was the next big thing. as far as the stock market. i'm a doubter on that. and -- >> in fact, you are a he a very
smart guy, clarlsharles. there was a tweet this morning that the google search results for the apple watch were roughly the same as for the ipod and for a blackberry. take what you want from that. your point is well noted. charles, we got to leave it there, buddy. thank you for coming on. do appreciate it. >> thank you. champs made pa bunch of money when he dumped apple in favor of the hmos. what is he buying now. you can find out, go to powerlunch.cnbc.com for more of some of the other stock picks we simply didn't have time to get to in this segment. vote now. "power lunch," six hours. so much more to do on this busy thursday including a potential road block for uber. we'll tell you about the lawsuit that could be big trouble for the company. and if you are allergic to peanuts or other foods, a hot new ipo is working to solve this huge problem. we'll speak with the ceo. up next herb greenberg has been warning for years about keurig green mountain. that stock getting crushed today. hearn will be on to perhaps take
female announcer: you're on the right track to save big during sleep train's triple choice sale. for a limited time you can choose up to 48 months interest-free financing on a huge selection of tempur-pedic models. or choose to save hundreds on simmons beautyrest mattress sets. you can even choose $300 in free gifts with sleep train's most popular stearns & foster mattresses. the triple choice sale ends soon at sleep train. ♪ sleep train ♪ your ticket to a better night's sleep ♪ your stock disaster dujour has to be keurig green mountain. the company announcing layoffs, unfortunately, suddenly every analyst on wall street hates the stock. but herb greenberg has hated that stock for a long time. in fact three years ago on a show formerly known as "street signs." he talked about it took some
heat. herb back on june 15th, why keurig's troubles have just begun. since that time the stock down 35%. 27% of that of course is coming today. you were on the conference call last night. you were slamming them. what is keurig doing wrong right now and do you see any hope of a turnaround? >> it's not what they're doing wrong. it is that they're in a market that's kind of matured. what they did wrong though what they did horribly wrong was try to lock out the competition with this new keurig 2.0. that's been an absolute disaster. companies like treehouse foods that do private label and other companies out there that are private companies that do private label, they lost customers that went back to green mountain because they were forced to go back to green mountain because they were afraid they were going to lose customers. then treehouse and others found a way around the lockout and made that not such a big deal. so now you have treehouse out there, even today on their conference call saying they're winning back customers.
so now you have green mountain in a really tight space because either their customer -- they're going to lose customers or my guess is they're going to have to lower prices to keep customers. the entire market -- i'm talking about consumers, customers of green mountain everybody's confused. they create great market confusion. but i have to tell you, brian, when i was doing research for that june 15th report i called somebody i know who's really great in the appliance industry who knows this industrial and who i called several years ago and said to this person what do you think about green mountain? years ago, three years ago, he said they got a huge runway ahead of them, talking about the brewer market and what's going on. this time i said what do you think about the brewer market? he said it's over. they have 24%, 25% of the market. it is flatline. now you are starting to see that. so i think you have to look and say, they have a problem there, they also have a problem with cold which is not going to be hot, and which i think is -- look. you've got an issue going on here. >> you know how tv works, i've
got to leave it there. >> yeah i know. i could go on and on. >> we're giving you credit herb. you called it. but back in naymay of 2012 you talked about it the stock tankd, only to come back another 50%. you wonder if the traders might get back into this name because it is a trader favorite name. we'll find out. >> no -- >> we've got to go. >> you're going to miss the best part. >> what's the best part? >> i'll see you later -- look if coke were to come back and buy more stock, which i done think they're going to do that would be the one risk to anyone short the stock or anyone owning it. if they're going to buy it you think they would be stepping up right now. i don't see them stepping up. >> watching coca-cola and keurig, herb, thank you. good call. as we head to break, some of the other disasters are the media companies. our industry. disney and viacom they're getting wamget
ing whacked are. you are watching cnbc and we are first in business worldwide and we are back right after this. no student's ever photographed mean ms. colegrove. but your dell 2-in-1 laptop gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance laptop bundle for only $399. office depot officemax. gear up for school. gear up for great. you're driving along having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second...boom you had your first accident. now you have to make your first claim. so you talk to your insurance company and...boom you're blindsided for a second time. they won't give you enough money to replace your brand new car. don't those people know you're already shaken up? liberty mutual's new car replacement will pay for the entire value of your car,
plus depreciation. call and for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch to liberty mutual insurance and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?
director of research with albert fried and company. rich, it seems like all of this started off with disney's earnings and bob iger's comments about the bundle. did those comments wake up investors to a reality that perhaps profitability in the media sector is going to be talentened by these skinny bundles or is the market overreacting today? >> i think the market is overreacting selectively. i think iger came off his very establishment with several of the comments he made. maybe looking past some of the changes disney needs to make looking ahead to take advantage of the new opportunities before us. if you look at the action today, many of the names that are getting hit the worst were companies we'd call network centric media companies. like viacom for example, that gets a lot of its revenue
generation not from one specific channel or one specific piece of content but by bundling the whole thing. so the big bundlers are getting hurt the worst. >> so you would agree with a sell-off you are seeing in viacom. what are some of the other ones that are being sold off that you think maybe the sell-off is unwarranted. i'm thinking cbs is also getting hit today. yes, they have to invest more heavily in order to transition to digital and to build out the show time app but are they better positioned than maybe some of the other more bundle-centric networks? >> absolutely. so we like anc. we like cbs. we like anc because it is content offered we think will get very robust in the very near future with the new introduction of "the walking dead" tv show. in terms of cbs, what you said, they only have the two networks. they don't compete with each other so at the end of the day
they are very much well positioned and set to benefit. i think investors are probably taking a look at time warner. like jim cramer said this morning, the report wasn't that bad. it is a great company with tremendous cash flow. tremendous opportunity. you look at all these companies. anc today generated $191 million in ebitda. that's more money that netflix made in the last two years. >> rich we'll leave it there. thanks for joining us. by the way, on this day where media stocks are getting clobbered, netflix shares are higher by 1%. michael kors also bucking the trend up 10% today but it's still down 40% this year. is that slide over? the ibb which is down right now but just about 3.5%. biotechs also weighing on the markets. oil a drag as well. final trades for the day are crossing. we'll led live to the nymex. stay tuned. hi my name's josh. kelly. my name
is raph. steve. my name is anne. tom. brian. krystal. and i am definitely not a robot. i'm one of the real live attorneys you can talk to through legalzoom. whether it's for your business or your personal life, don't let unanswered legal questions hold you up. because we're here. we're here we're here and we've got your back. legalzoom. legal help is here.
ten of the victims were members of the saudi security forces. investigators believe the bomber was wearing an explosive vest. an explosion in the gaza strip killing four palestinians and injuring 30 others. the blast occurred in rafah, a town near the egyptian border. the blast destroying the home of hamas leader. a new report from the cdc says 2 out of 3 high school students fail to get sufficient sleep. both it and the academy of pediatrics recommending a school start time of 8:30 a.m. or later in order to ensure health safety and academic success. most states begin school about a half-an-hour earlier than that. today marks the 50th anniversary of the signing of the voting rights act by president lyndon johnson. the reverend martin luther king was among those in attendance. the act banned racial discrimination that prevented minorities from voting. quite a historic day. that is the cnbc news update. back to you, brian, i believe. right? jackie?
>> 50% -- i guess 33% chance of being correct. you got it as always. >> i wasn't sure whether i was going to jackie or whether you were going to jackie. i can be jackie but that would be develop unfortunate for the viewers. >> no don't do that. >> let's go down to jackie deangelis at the nymex. where is the price of oil right now? >> good afternoon, brian. oil closing at $44.66. down about 50 cents on the day, so under that critical level of $45 a barrel. brent crude under $50 as wale. these are key technical levels that traders have been watching. they think downside pressure is going to continue even speedespite the weaker dollar today. something a trader pointed out to me saudi arabia issuing $27 billion in debt. when we talk about saudi winning the price war or having sustainability to be able to endure low prices i would really question that at this point seeing a headline like that. back to you. >> they don't borrow money much. jackie deangelis thank you.
dow's down 121 points but it is not all bad out there at least for one stock. at least today. michael kors stock doing very well today. earnings beat estimates. though profit fell for the second straight quarter it fell less than analysts had expected. stacy, even with today's bump i checked right before the show. michael kors still the worst performing retail stock in the united states this year. is there any sign of a real turnaround of this company? >> there's not. i would take profits on today's gains. because if you look at the company, we're finally in negative comp period for kors. brand has fallen out of favor. they're talking about wholesale pressure. that's half of their business. that's just starting to decline. when these stores fall out of favor, a fashion story, operating margins down from mid 20s down to 20.
we're not there yet. >> what happens here now that the best days are behind it potentially when it comes to things like comps. maybe the fashion edge is lost for now. >> in terms of comps, we've got negative comps declining growth compressing margins. that's not typically something we want to be invested in. on the fashion side there is a whole lot of sameness out there and think consumers are getting tired of the same handbags. i think money is moving back into apparel foreign policy handbags. >> what do you need to see at kors in order to make you think things could be turned around? >> i need to see, first thing i need to see, when i walk into the stores i need to see fewer markdowns. we've seen more and more and more progressively. i need to see comps start to turn positive. one of those metrics has to start to turn positive. >> is this a trouble company or is it just literally a fast growth company that commanded a high-market multiple that no longer deserves that multiple. it is still a good company but
it has to find the right price in terms of the stock, not the handbag. >> the stock looks like it is trading ten times but it's not because we're just starting the margin compression here. the company has said we don't want to promote, we don't want to damage the brand so we're not going to play in a promotional gain which to me means market losses are just showing. i would argue spending so much time in the uk that the brand there is starting to hit the wall so nobody's even factoring in that part of the story. >> two dislikes there, a hold rating do not buy says stacy. rick stacy, thank you both very much. now to "trading nation." today we're going to focus on the energy sector. many of these names are trading at multi-year lows as oil, coal and nat gas all sag. but does that make them a bargain? gina, sometimes low prices don't mean inexpensive. sometimes things are cheap for a reason.
is that the case with oil and energy stocks or are there really some bargains growing out there? >> look it depends on your horizon. right now i think they are cheap and there is a lot of pressure that's going to keep oil prices low. but eventually that price will rise. here's the problem. is saudi arabia and other opec nations are place by playing a game of chicken with shale players but they've had a disastrous outcome which is the surprising news that shale players actually got really really efficient and they've been pushing their production costs down and that's pushing the break-even price for oil down. now that was not an outcome they expected. they expected to get them out of the market and to have oil price come back up and they can make more money but in fact they have actually ended up pushing the eventual break-even lower than it should be. i would say actually that the outcome for oil at this point is not as rosy as it could have been after we got out of the supply glut. but we still have a massive supply glut and that's not going
away for a while. >> let's use the xle etf was a proxy, rich ross. how is that -- i know it's looked weak. any sign of support or a turnaround? >> well i'll tell you this. we have energy as the best performing sector on the day. in fact it is the only performing sector on a very dreary day here. but one day does not a bottom make in energy especially the way we've been trading of late. i'm open to the prospect for a potential turn but to call this a more meaning it will bottom i think it is far too premature. i'm going to game plan this a little bit for you. the first chart is that short-term chart. you can see this impressive down trend. brian, we have a bear market here just since may down 20% alone. you see that key break below the low 70s there. you could see a tactical move back to the up side here but to play for anything like that very high risk high reward i'd rather be late than early on this trade and this chart speaks directly to that. if you pull up the weekly real quick, i think this is where it gets potentially interesting. we have set up here a potential
weekly reversal here at a fresh new multi-year low. the selling is pervasively bearish, as is the sentiment. if this weekly reversal holds here, once again you could set the stage for a tactical rally but you have to manage your expectations here and you have to manage your risk, keep your stops cloepsse. this has been a train wreck here on the way down. difficult to get too excited but when you see a chart this per vasively bad it doesn't provoke are the contraryian within. >> some of the first lien secured debt from some of these companies is starting to trade at 70 cents on the dollar. the bond market is telling maybe even a worse story for some of these companies. gina, rich thank you both very much. if you want more "trading nation," because i know you do go to tradingnation.cnbc.com. rick ross will stick around for more analysis. back in two.
ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay. one day pay, only from aflac. shopping online is as easy as it gets. wouldn't it be great if hiring plumbers carpenters and piano tuners were just as simple? thanks to angie's list now it is.
we're making hiring anyone from a handyman to a dog walker as simple as a few clicks. you don't have to be a member to buy their services directly at angieslist.com but members save more on special offers. angie's list is revolutionizing local service again. visit angieslist.com today. technology empowers us to achieve more. it pushes us to go further. special olympics has almost five million athletes in 170 countries. the microsoft cloud allows us to immediately be able to access information, wherever we are. information for an athlete's medical care, or information to track their personal best. with microsoft cloud we save millions of man hours, and that's time that we can invest in our athletes and changing the world.
as the market has come down the last couple of days, the s&p 500 breaking what some call a key technical level, below 2,087. what is that next level to watch? rich ross of everycore -- he cannot hear brian sullivan. you may be the only one who's ever said that anywhere in the world. rich ross, can you hear me now? going once twice -- rich ross sold to you. we'll try to bring back rich ross once we get him in. it is a rough day to go public but shares of a immunicipal. i joined facebook. we're back after this.
[ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and virtually no referrals needed. join the millions who have already enrolled in the only medicare supplement insurance plans endorsed by aarp... and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment
we've got rich ross back. generally i'm so loud people don't even need a microphone to hear me across the river. chart the s&p 500 for us a key technical level broken. what are you seeing about the market? >> as we know the s&p has been mired in an historically tight six-month trading range, bounded by roughly 2,040 on the low end, 2,130 on the high end. we are flirting with that critical support at the 200-day moving average once again. our options team put out a note this morning, the divide between the 200-day and that all-time high is at its smallest. that's telling you volatility is contracting and we are poised for are a big move. i still think the next big move is higher. clearly the chart of the s&p does not tell that tale of the tape, given the winners and losers within and across sectors.
i think the strong sectors -- yes. >> isn't it concerning that it the two other indices, nasdaq as well as the rug sell 2000 are also breaking down in terms of they are at key moving average as well. not only is the s&p threatening its level but also the russell as well as the nasdaq doing the same. is that more risky then? >> certainly. look risks have gone up here. there's clearly reason for concern out there. we've been in this bull market now for over six years and we're showing some cracks. but i think there is enough structural strength in those key sectors -- health care technology discretionary, staples, financials to really keep this market going forward. august and september is historically a weak period seasonally. volatility picks up. traders would rather be on the beach than on the bid. but i think we have what it takes to collect ourselves and the next meaningful move in this market should be higher.
melissa. shares of immune therapeutics jumping nearly 60%. the biotech company working on a peanut allergy treatment sold 10 million shares at $16 a piece at the high end of the range. shares the high end of the range. shares are fairing up 45%. first up is the ceo, dr. dilly. great to have you with us. >> thanks so much. >> your proprietary product is ar 101 which is an immunotherapy. meaning what? it will decency tied people to peanut protein? >> yes. this is a treatment that gradually over the time will build up desensitization. >> so for instance you eat something that was processed in a peanut factory or that had exposure of some sort you won't have the same allergic reaction eventually? >> exactly. thinking about sitting in the airplane seat and someone was eating peanuts or left residue
or movies baseball game. it's that kind of level of exposure. we don't want people to eat a peanut butter sandwich. >> right. do people have to take ar 101 forever or this desensitization, does that last once you've gotten it? >> no this is a long-term treatment. what we're working on is how to make it as easy as possible for as long as possible. the real unmet need the 4-year-old trial about to leave home and go to preschool. that's when the unmet need starts. get them on treatment as early as possible after that and through the at-risk years. >> more and more people have allergies. growing up i didn't know too many kids. now it's fairly common. in your s 1 the allergy increase has been at a constant growth rate of 10% between '97 and '08. do you think that will continue? >> the short answer is we don't know. probably not continue at that rate. there is a huge unmet need.
there are 2.5 million people in this country with significant peanut allergy. 1 million is kids. 1 in 100 kids has severe peanut allergy right now. >> what is the latest in terms of fda approval? >> the latest in terms of fda approval is break through designation. >> we got that in june? >> we got that in june. we're about to move through the clinical trials. phase 3 we'll start in the new year and will take us 18 to 20 months to execute. >> looking at 2017 hit the market kind of timing. >> late '17 submission. early '18 would be a safer bet. >> dr. dilly, thank you for your time. the c of aimmune. >> opportunities in this down market. i have three words for you. let's be friends. i've bitten the bullet and joined facebook. literally, almost no content there. i hope to fill it with good news.
there's a bill brian sully advance. find me at facebook.com/sully. same as the cnbc. facebook has jumped the shark. i love social media. we're back right after this. music: etta james "at last" (plays throughout) ♪ sometimes, at last doesn't happen at first. ♪ ♪ your dad just kissed my mom. ♪ turning two worlds into one takes love. ♪ helping protect that world takes state farm. seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur.
and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day. when a moment spontaneously turns romantic why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's 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. 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 for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision
or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? good afternoon, everyone. i'm sue herera. russia launched a sophisticated
cyber attack against the pentagon's joint staff unclassified e-mail system. it's now been shut down and taken offline for two weeks. according to the officials talking with jim mitchly chef ski, it affected about 4,000 military and civilian personnel that work for the joint chiefs of staff. it happened july 5th. u.s. officials telling nbc news that russia had launched a stowe physician at this dated cyber attack. >> thank you very much. even on down market days there is time to find opportunity. better opportunity and that's why we do street talk every single day except the days where we don't do it. >> profound. >> analysts calls. the first one is american tower. august research reiterating a buy. $112 target implies 15% up side.
revenue jumped 14% last year. they bought nearly 4200 international cell phone towers just last quarter. >> emerging markets a big story. second stock we're watching tesla obviously under pressure after lowering full year guide dance. concerns about cash. here's another concern a capital raised bear analyst. his question about an equity offering on the conference call got a no comment from elon musk. while it would eliminate an overhang strength on the balance sheet, it could mean dilution of shareholders of 3 to 5%. >> amazing car but a volatile stock. finally today's under the radar name. cut it short. endologix. jpmorgan underrating it. boosted to 17. that's 40% up side. i called it a trouble stock. been down 20%. analyst chris pasquale had been cautious. the company's product is called nelux, an aneurysm sealant.
he has gone positive. >> up 3%. >> there you go. shortened street talk. the market's lower across the board. got all kinds of stuff out there. bring in a guest to talk about why we're doing it. steven gillfoy. deep value here. steven, if you had to point be to one thing is there one thing you could point to about why the dow and the s&p and nasdaq are not doing well lately? >> certainly there is. around lunchtime there was talk that a couple of pension funds were being forced to sell their positions. that's about the time that we bottomed out and we started to rally a little bit. maybe by the time we heard it the damage was done. >> we don't know just to be clear if that's true. >> we do not. >> we know the media stocks are down. somebody was selling. we don't know if that's true. that's what you were talking about. >> that's right. if there's rumor, that usually exacerbates the direction we're moving in. it did. we regained 2081. let's see if we can catch up to
2087 by the time the day is over. >> here's the thing about the crazy market we've had the last few years. if we get a bad jobs number tomorrow, stocks might go up. the fed will be on hold. you get the whole point. if we get a good jobs print tomorrow morning, is that good news or bad news for the stock market? >> you know i can't promise. i think it's good news. i think if they raise rates it's also good news. >> steven news is good news again? >> hopefully with an asterisk. good news is good news unless it's not. we're going to find out. we have the big monthly jobs number tomorrow morning. steven, we appreciate you joining us. thank you both very much. you heard that a rumor, only a rumor about some big fours selling in the media names. that space has been weak. the dow has been low. $45 a barrel. they're boring. watching the oil bonds if you can because even some first tier bonds are starting to look weak. unsecured has been pretty much wiped out. watch those names.
thanks for watching "power lunch." check out melissa -- there you are. >> i was stalling. >> brian, if you say my name i will be there. tonight on "fast money" at 5:00. sun edison the implosion in the stock down 40%. what's behind the implosion tonight at 5:00. >> magically appeared. magically delicious. closing bell starts right now. hi everybody. what a session we have here on wall street. welcome to the closing bell. i'm kelly evans of the new york stock exchange. >> i am i bill griffeth. the nasdaq hit the hardest down nearly 2%. oil breaking below $45 a barrel for a time. we'll discuss whether this is a dip worth buying. that's sort of our theme today i guess. >> in particular media stocks getting slammed again. cord-cutting fears scaring investors out of viacom which is down