2015. About 25 of the constituents of that index and a third of all of the dow components now sit in bear market territory, meaning they have fallen 20 or more from their highs. By the close, the major averages all lost at least 2 of their value, the Dow Jones Industrial average plummeted 358 points to 16,990, breaking below 17,000. The nasdaq off 141 and the s p 500 shed 43 points. As stocks fell, so did bond yields. The tenyear yield hovering around 2 , the lowest in four months. Much of the selling had to do with uncertainty over the timing of a rate hike by the Federal Reserve and over concerns about growth across the globe. Bob pisani at the New York Stock Exchange has more on the selloff and what is worrying the market. Reporter groundhog day again, the same gloom and doom. Asia down again, europe down again, u. S. Stocks down again. Yet when i called around in the morning and asked for a specific reason the whole market was down 1, 2, 3 , i didnt get an answer. Tradersswontinued to cite a big sense of dread and unease hitting the market for several days now. It centers on, first, fear of a Global Growth slow down, particularly in china and brazil, weakening market currencies and could cause problems overseas. Third, uncertainty over the feds intention on raising rates. Finally, worries about the potential Collateral Damage from the commodity collapse weve seen. This concern over Collateral Damage is a real worry for traders. It ranges from concerns that highyield funds will fall further to worries traders will start selling better performing sectors to cover their losses. Today it was pretty broad. Six stocks declining. All sectors were down 1. 5 to 2. 5 . The Dow Jones Industrial represented the declines well, like merck, nike, United Health and tech names like sysco were down 2 to 4 . Im bob pisani at the new york stocks exchange. At the settlement west texas intermediate rose and as reported, todays rise is likely a temporary blip, a very temporary blip. After hitting 6 1 2 year lows, it may appear crude oil has found support at 40 a barrel. Is it for real . Yesterday triggered weakness in the dollar said to persist which is a supporter of oil. Also, a hurricane brewing down south headed towards the gulf. It doesnt appear to be a threat at the moment but these are the types of events that can rattle markets. Production is flat lining, not declining and imports were up. Leading to an inventory bill that is definitely still a bearish sign. The reality is that there has been way too much oversupply and too much excitement about the fact that the u. S. Was starting to slow down but we dont need it to slow down. We need it to drop production to bring to us a balance. Reporter its not just the u. S. Saudi arabia continues to pump 10. 4 Million Barrels a day in july. And russias dramatically weakened currency is helping lower production costs and russian oil firms are weathering low prices and will continue to increase output even as saudi arabia drops prices lower. So where do oil prices go from here and will we see that three handle soon or ever . Its possible to see a temporary upside bounce before we get thete. What is remarkable, though, analysts are saying once we go down into the 30s, we could stay there longer than previously thinking. In the Second Quarter, our markets got excited about the fact that rebalancing was happening. Demand was picking up and thats indeed been the case and supply was going to pull back. Opec, maybe, shale for sure and other supplies might see farther declines. It seems like this rebalancing process might be longer and more painful than thought. Reporter so look out, that three handle may not be far off. Gold prices rose today to the highest level in five weeks as equity fell. Gold prices helped by an easing dollar following the minutes from the last Federal Reserve meeting. We told you about that yesterday. Gold futures gained more than 2 and sit at about 11. 53 an ounce. What the heck is going on in these markets . Why now and what does it mean . We turn to our guests for the analysis. Jeff cline, chief glob balance investment strategist with Charles Schwab and michael jones, chairman at riverfront investment group. Gentlemen, welcome. Nice to have you here. Michael, thank you for joining us in the studio. Great to be here. Ill start with you. You think the market is overreacting fundamentally to both what has been happening in china and also the Lower Oil Prices that we just talked about. Why . Absolutely. Well, first of all, the worst scenario that we could have had is that china would have stuck to the dollar peg and kept a Monetary Policy too tight for too long. That could have given a definite slowing in the chinese economy and started a deflationary spiral. That gives them flexibility, starts lowering Interest Rates with Monetary Policy. Even more puzzling to me is why anyone that isnt in texas or russia or saudi arabia would be upset with a three handle on oil. Most people buy oil. They dont produce it. Meaning other countries . Most other countries and most consumers in the world. And so right now consumers are getting a tremendous added boost to their spending power as Oil Prices Drop as prices at the pump drop. That spending power right now is being used to pay down debt predominantly. Savings rates are rising because no one believes that low oil prices are going to last. With the analysis that you just saw from the citi Group Analyst that we agree with, we think the bear market is going to be here a long time. The longer it lasts, the longer people will spend the extra money. Jeff, why dont you react to what michael just said, specifically on oil. But also address the question of whether what were witnessing today in the market is the kind of spasm we saw factoring in the taper tantrum a couple years ago and whether its long lived or not. Michael made excellent points and i agree with all of those points and, in particular, around oil, even emerging markets are more consumers than producers of oil and these days there are exceptions to that but thats generally true. Today was a dramatic day for investors but this has been the most widely anticipated return of volatility i can think of when the fed got closer to hiking Interest Rates, markets would begin to react in a more erratic fashion. Thats what were experiencing right now. What were not seeing is a dramatic slow down in Global Economic activity. Its hard for individual investors to keep track of every economic statistic around the world as much as they try to help them with that. One of my favorite things to watch is the citi group surprise index for the g10 countries. Data on average has been beating expectations. So for the individual investor who has a longer term high, is today something they should put aside and take the longer view and maybe look at stocks that are out there that today saw 2 or 3 deck cline . Absolutely. First of all, we should recognize, today was a bad day technically for the market. We broke through the 200day moving average. Thats going to take time to heal. This pull back may extend further. We see really strong Technical Support about 1977 on the s p but we would absolutely consider that to be a very good buying opportunity. Im going to echo something that jeff said. Volatility has been well anticipated to be coming back to the market. Quantitative easing in the u. S. Is over. When the fed is printing 80, 90 billion a month and using it to buy safe assets, its a tail wind for the equity markets that kept volatility low for years. Yeah. That is over. And so with quantitative easing in the u. S. Over, volatility is back in u. S. Markets and as long as the fundamentals remain strong, its a buying opportunity. Michael says be very cautious, jeff, on energy, materials, those kinds of shares right now. Give me a sector that you like if someone wanted to put some money to work after todays selloff. I think the Financial Sector looks attractive here. Technology as well. Particularly in europe where youre seeing earnings picking up over the last few months. Even as prices for stocks have come down, they are down about 8 over the last month or so. That means valuations are down and they are looking attractive. Tyler, you mentioned the taper tantrum back in 2013. This echos that as the fed was looking to end qe and as stocks get volatile, pull back a little bit, have a bottom and rebound. Financials was a better performing sector after that in 2013. Gentlemen, thank you so much. Michael jones, jeff cline with Charles Schwab. To the economy now. The number of americans seeking benefits rose slightly last week. 277,000. Despite the increase, its consistent with an improving labor market. Separately, a measure of Manufacturing Activity in the philadelphia area came in stronger than expected suggesting that the sectors moderate expansion should continue. Sales of existing homes rose to prerecession levels, climbing for the Third Straight month. The National Association of realtors reported a gain in sales of 2 in july but along with the higher sales came higher prices and with all of the attention now on the Federal Reserve and Interest Rates, diana olick explains why the Housing Market could be the turning point. Really priced incredibly well for this market. Reporter there is definitely demand for housing. I think were good. Reporter so much demand that bern bernadette and reid were afraid to put their home on the market. I would find a home that i really liked, i looked again and it was gone. So it was pretty disappointing because i kept thinking, i dont want to put my house on the market and then be homeless. Reporter that fear from moveup buyers is exacerbating tight supplies pushing prices higher. The median sales price nearly 6 higher in july, according to the realtors. That was finally enough to make the reids put their home on their market, hold this open house and make a risk on finding another to buy. Even from january to even april, it seemed like the prices had gone up even higher. So i thought, you know what, if were going to do something, we need to do it now because itsau going to go up again. Heres some information on the house. Reporter higher prices are hitting firsttime buyers especially hard. They made up 28 of the market in july. Far lower than their usual 40 . The firsttime buyers are getting frustrated, first in terms of affordability, prices rising too fast in relation to income and furthermore, in relation to the income. Reporter buyers are getting more concerned about affordability and the possibility of higher Interest Rates only makes that worse or does it . Some argue that higher rates would be a result of a better economy and a feeling from the fed that housing is finally out of the woods. If rates are going up, youve got to ask why. Is it for the right reason . And, from our perspective, if its a 25 basis point hike, will that derail demand for housing, absolutely not. Reporter the reids home sold quickly and just to be safe we put a contract on two homes just to make sure that we if we lost one, we had another backup at that point. Reporter they also increased their budget to steal a deal. For nightly business report, im diana olick in washington. And the president of the San FranciscoFederal Reserve issued a warning for the Housing Market today in a speech John Williams said that raising rates is an effective way to cool off the Housing Market. But that it could come at a cost if the broader economy isnt strong enough. However, he also believes that if the housing sector and overall economy are both doing well, then a hike in rates may keep Economic Activity from getting too hot. And in greece, Prime MinisterAlexis Tsipras is stepping down after losing some support from within his own party over that countrys bailout program. In a televised address, he said he negotiated the best deal possible. Elections will most likely be held next month. Still ahead, the billion dollar pharma deal that is raising some eyebrows. Today, hewlettpackard revealed its quarterly earnings. Tonight, hp posted a 13 drop in earnings. They came in at 88 cents a share. That was, however, 3 cents better than estimates. Full year adjusted profit would be below estimates. Revenues came in a bit light marking the companys 15th revenue decline in the past 16 quarters. And the stock was volatile in afterhours trading. Bertha coombs has more on the result and the one positive in hps report. The one positive take away from hps resolve is that the faster growing enterprise sector was the best performer during the quarter. Thats where we saw the revenues actually exceed expectations, even as the full companys revenue fell short for the Third Straight quarter. Enterprise revenues were stronger, so were the services, both stronger than analysts were looking for. So as the company prepares to split into two firms, the enterprise and the slower growing printing and hardware business, it appears that the Enterprise Business may be on track. Bertha coombs, nightly business report, new york. We begin tonights market focus with more lateday earnings. Cloud computing sales force reported better than expected revenue and profit and raised the full Year Revenue Guidance citing increased demand for the sales and software. Shares rose initially in afterhours trading but fell to 67. 82. The retailer gap reported a decline in Second Quarter profits because of weaker sales and Banana Republic stores. The company did, however, maintain its guidance at the old navy branded stores. It did not move much. The stock fell 1 to 33. 66. Sears posting its first quarterly profit in more than three years. The company sold hundreds of millions of dollars in real estate throughout the Second Quarter. But it did see its sales continue to fall. Sears ending the day down over 1 to 22. 97. And the Clothing Company perry ellis lost money in the quarter but revenue came in stronger than expected. The retailer saw the inventories drop and margins grow and in turn it has raised its full year guidance. Shares surged more than 7 to 25. 18. Time warner down graded today by bernstein to market perform renewing concerns about the state of the television business. The analysts there said the way the companies are being valued has to change along with the transformation is happening within the industry. Disney fell and was the worst performing stock today. Time warner shares fell 5 and the rest of the sector was dragged down along with them. Madison square garden, meanwhile, reported strong Second Quarter results. The Company Saw Revenue growth in the entertainment group. The Company Announced back in april its intention to split its media and sports brands into two separate entities. The stock fell today along with the Broader Market down 4 to 73. 32. The drugmaker eli lilly reports that the experimental diabetes drug performed well during the trial. The drug cut the risk of heart attack, stroke and death among patients. The announcement sent shares of the pharmaceutical giant up over 4 to 87. 33. And pepsico feeling the heat with the recently formulated diet pepsi online. Pepsi announced back in april that it was rejiggering the recipe to remove the sweetener aspartame and replace it with splen da. Finishing at 97. 98. The canadian drugmaker is acquiring privately held Sprout Pharmaceuticals after sprout became the First Company to win approval for a libido pill for females. That is raising eyebrows, sending shares 6 lower in trading today. Meg terell looks at some of the questions surrounding this transaction. Its been called the female viagra and today valiant kwa pharmaceutical made a bet that it will be profitable. In terms of what this can do from a revenue standpoint. Reporter sprout showed the third time is a charm when it cleared the fda after two previous rejections. The drug is approved for female hsdd, or hypoactive sexual desire disorder. Some wonder if the market potential will be limited by its side effects and question the billion dollar price tag. Safety concerns include low Blood Pressure and fainting which can be exacerbated by alcohol. Some say that could pose problems for a medicine taking chronically. Women must take a pill every day in order for it to work. Thats one reason that the female viagra is a bit of a misnomer. Viagra is taken only when needed working on blood folow. This approval comes with controversy after claiming sexism at the fda. Now questions about how it will be marketed. It wont run commercials about the drug for 18 months. Its not uncommon to see companies not engage in direct Consumer Advertising for a erd poo of time after an approval and we see this more and more with the Agency Concerned about a drug launch being too fast out of the gate, if you will, too many people using the drug right away. Reporter sprout will focus the initial efforts on communicating with doctors and communicating with patients about what the drug should be prescribed for. As for insurance, thats the next question. The ceo of sprout says she doesnt anticipate a problem from insurers. In conversations weve had with them today, they are covering the viagra medicine for men and we expect parity coverage. Reporter its expected to be available in the fourth quarter. Coming up, pipes burst, dams break and its all because of our aging water infrastructure. Tonight, in our series, the big fix a look at what is being done to make sure you get the water you need. Two senators are urging takata to immediately recall all airbags. Blumenthal and edward mark key both say their call was prompted by an accident that involved a 2015 volkswagen. Federal investigators have already launched a preliminary investigation into the accident and to see whether takatas new airbags has the potential to send shrapnel flying when deployed just like the older ones did. Americans drove more miles in june than they ever have before. The federal Highway Administration said there were nearly 4 more drivers on the road than a year ago making it the fastest growth rate since january. Cheaper fuel and improving economy and Summer Holidays are some of the reasons why more people are getting behind the wheel. All week weve been looking at our nations aging infrastructure and whats being done to improve it. Tonight we focus on water, and a sector under pressure from water main breaks to leaky wells. Jane wells is looking at our series the big fix. Boy, i tell you what, that pipe is really going here. Reporter if the 20th century was about harvesting energy, the 21st is about managing water. Clearly the United States in general is way behind on infrastructure. Reporter there are nearly a quarter million water main breaks every year, according to the water works association. 2 trillion gallons of drinkable water may be lost in large part to likes. Nowhere is that more visible and more concerning than california. Where a drought means every drop counts. The solution, new pipes and a whole lot of money. Were living right now in a development that people when they built this city so its now our turn to come in there and replace that upgrade it and make it to last for the city. The Department Said they would take 300 years to replace all of the pipes in the city with investment they hope to cut that time in half. Reporter then theres the time and money being spent to upgrade americas ports where trade accounts for one in 3 of gdp. Instead of one dock worker on one crane, in the future, one dock worker will work several cranes tackling the number one problem at americas ports, congestion. Half a billion dollars is being spent on scifi robotic cranes which moves eight times more cargo and spending 2 billion to build a fully electric automatic terminal. As important it is to the economy, taxpayers may not want to pay. Finally, theres a dam problem. There are 84,000 dams in the u. S. And the American Society of Civil Engineers report card on infrastructure gives dams a d. Now the largest reservoir in the San Francisco bay area is getting a half a billion dollar makeover to replace the 90yearold original located 1500 feet from an active fault line. I think we need to recognize that we inherited a lot of infrastructure from previous generation and its our responsibility to maintain that and to see that future generations can share in that benefit. Reporter all it takes is money. For nightly business report, jane wells, fremont, california. Tomorrow, our series the big fix looks at improving the nations bridges in which 10 are considered structurally deficient. Heres another look at todays selloff. The major averages lost 2 of their value. Dow jones industrial average plummeted 358 points to 16,990, breaking below 17,000. Nasdaq tumbled 141 points and the s p 500 shed 43. Well see what tomorrow brings. What a day it was. Yes. That does it for nightly business report. Im sue herera. Thanks for joining us. And thanks for me as well. Im tyler mathisen. Have a great evening, everyone. Well see you back here tomorrow. Announcer a kqed television production. Its like sort of old fishermens wharf. Like family discount. A little like jeangignon the calories its like an investment. Oatmeal with a touch of wet