Transcripts For CNBC Power Lunch 20141001

The russell 2000 is now in correction territory down 10 from the july high down about 1. 1 on the trading session. That sent money down in the bond market but it is significant to note the yield is 2. 41 . Transportation average down almost 200 points to the down side. A bit of a bounce in the crude market perhaps not a surprise how it was crushed yesterday. Up about half a percent on brent. And if you were ahead of the drop today and you bought inverse etfs you are doing pretty darn well. Lets take a look at that board. Psq is inverse of the nasdaq 100 and shorting mid caps you buy myy. It sounds like morse code. It is another language for a lot of investors. When you talk about the inverse etfs these outperform because they give positive returns when the market goes down. It is a vehicle for traders. When you talk about right now if you look at the overall picture for stocks those etfs are on the upside. This trade today you noted about the dow industrials. We are at session lows down about 210 points. If you look at where the strength has been people have been buying the ten year note. They have been bidding up and forcing yields down about 2. 4 mark. We call gold and dollar. I threw crude oil in there because it was on a down trend. We call it a little bit of that certain assets may be perceived as safer. As you look at outperformance and under performance for the overall stock market it is the intuitive ones, utilities and consumer staples, the ones that pay heavy dividends. So utilities here are the only sector on the upside today and up by about 1. 25 . Staples still down by half a percent. Look at materials and industrials. The more economically sensitive ones with the prospects of the overall economy fairing the worst in todays trade. Talk about the volatility index. We did see a spike in that earlier this morning and volume. We have back a little bit. That volatility ooiissue is interesting. Some of the worst market drops and biggest market gains in the history of the s p 500 have come in the month of october. And if you have that kind of view going into the Fourth Quarter a lot of data coming up, big jobs number. Fed is tapering. Meets on Interest Rates and a lot of catalysts that could be out there thadicate send shock waves through the market. Up 4 today. Well see you in a few minutes. The nasdaq the biggest loser of the three major averages in september and down more than 1 today on the first trading day of october now down 1. 3 . Some of the stocks getting hit the hardest jet blue, pacific sun wear, agile therapeutics and netflix with significant losses. There are winners, however. Angies list, pharma, papa johns pizza and lakeland industries. Lakeland winner on the day ngeys list is up. Will this mean more volatility in q 4 . Chief Investment Officer of Atlantic Trust and doug sandler at riverfront investment group. Nice to have you here. Dave, i start with you. Obviously not a good way to start october for the bulls. On the other hand in talking to guys a short while ago this may be that pullback that allows individual investors or longer term investors who missed some of the run up to get in. How do you feel about that . I think that is right. Our operating assumption for a while is that we are in the mature phase of a bull market. Doesnt mean a bear market but means lower returns than what we have experienced and more volatility. We are seeing that today. So we believe we are in a bull market which means there are opportunities when we have setbacks in the market like this. So selectivity is extremely important now, paying attention to valuations is extremely important now. So we think there are opportunities created by these pullbacks. What are you watching right now . What tops your list of elements in this market that have you concerned or willing to step in and put money to work on a day like today . Sure. So we are sort of walking this 1 to 2 gdp growth rate. It doesnt feel so good because it is not a clear expansion territory. I think it is really important to remember that we have bumpers on either side of this. So if the market gets too excited we think we are going right back to regular recovery the market will take care of it and hold the returns down. On the other side we have Monetary Policy that tends to step in and act as a bumper. So we are watching things, valuation has been the big one. We have been overweight really for the last five years. This summer we took a significant amount of money out of the u. S. And into international markets. We thought we needed good news to justify valuations where overseas they were priced for bad news as long as news didnt get significantly worst markets were discounted appropriately. I will say the pullback we are talking about right now so we are only about 3 or 4 into it is making the u. S. Look more attractive than it would a couple of days ago. I think it is kind of an exciting time. I think it is really important to keep the big picture in your mind. The big picture is you have to be in productive assets. The penalty for owning safety stuff is huge. Inflation is running at 2 and you are getting about a 2. 40 on bonds. Dave, you know the reach for yield has been impacting this market for some time because Interest Rates have been so low. How dangerous is it in a market that is starting to get back to somewhat normal volatility to reach for yield . I think what has to be extra careful in that regard. There are a number of enhanced yield strategies out there. The opportunities of those attractively valued is narrowing. Things like emerging market debt and high yield corporate. There are areas that look attractive. High yield municipal area looks attractive. And higher dividend yielding high quality global accounts look attractive. Selectivity is the watch word. Dave, thank you very much. Appreciate it. To kate rogers for a market flash. Shares of alibaba falling to an alltime low. This is a far cry from the first day of trading when the stock nearly broke 100 a share. There is no need to worry. Alibabas market cap is 224 billion. Back to you. Texas governor rick perry expected to speak about the first u. S. Diagnosed case of ebola recently arrived from liberia now receiving treatment in dallas. Dr. William shafner is known for his work researching and fighting infectious diseases. Welcome back to cnbc. Should america be worried about this . I dont think america should be worried but should be proud that our Health Care System can care for such patients and our Public Health system will track the contacts, work with them, keep them under surveillance and not permit ebola to spread. Ebola is not going to be spreading in the United States. That is a very declarative statement there. How do you know that and how does it spread . It is spread, of course, when people become sick and not before. And then only through contact with their blood and other body fluids. So in very specific ways. It wont spread here because we are very different than west africa. We have many more both Public Health and clinical facilities that can care for these patients safely and appropriately. I dont know how to ask this that was a very clear explanation. How would you know if you had ebola . Well, if you came from liberia and came here and then developed fever and feeling really badly and started to have diarrhea, perhaps nausea and vomiting, those symptoms ought to be suggestive of ebola. It could be other things but you would certainly put ebola at the top of the list. I dont know how this individual came back into the United States. I dont know that his identity has been released. But i assume that they would be looking at the individuals who might have come into contact with this person, i believe it has been identified as a male, who were either in the airport with that individual, on a plane with that individual, et cetera. Well, lets back off from that a little bit because while this person was traveling, he was healthy by all reports. And that doesnt concern us, really. I could have been sitting next to that person on the plane. I would not be concerned. He was not ill, not yet communicable of infection. So that is not hazardous. I would have not had contact with his blood or body fluids. Public health is going to concentrate on the people who had close contact with this individual when he became sick, starting with his family members and working out to others who had lesser contact with him. Thank you very much for taking down the anxiety level. We appreciate it. Hope to see you again soon. We just hit a new low in the Dow Jones Industrial average. We were down 215 points on the dow. That is 1. 25 . S p 500 is down 1 . We are down 1. 3 in the nasdaq. The dow looks like it may be challenging that. The transports down 19 points on the trading session. There is a lot of pressure in this market. I can tell you it still feels pretty orderly. The pressure is there. China is cracking down on protesters in hong kong using media blackouts. If you want to protest how do you stage an uprising when the government shuts down the internet. Josh has that part of the developing story. Reporter you can think of it as the new messaging app that is shaping the world. The fire chat app is surging in popularity in hong kong right now. We will talk to the man behind that app when power lunch continues. Your pocket right now . Y do you n i have 40, 21. Could something that small make an impact on something as big as your retirement . I dont think so. Well if you start putting that towards your retirement every week and let it grow over time, for twenty to thirty years, that retirement challenge might not seem so big after all. If energy could come from anything . Or if power could go anywhere . Or if light could seek out the dark . What would happen if that happens . Anything. Welcome back to power lunch. One of the best performing stocks in the s p 500 today is the chicago based Power Company expanding to texas. This comes at a time when power demand in the rest of the country remains stagnant. Shares trading up at around 3. 5 . Huge crowds taking over the streets of hong kong once again today. Today marks chinas national day. Typically it is a big celebration, big shopping day there. Chinese government has been cracking down on coverage of the protests by blocking media and the internet. So how do you stage an uprising in these modern times when the government shuts down the web . Josh lipton on the west coast with the answer. Reporter im here with the cofounder and cto of open garden, a Company Behind the fire chat app, a messaging app surging in popularity. 200,000 new users in hong kong and just in the last 48 hours. My first question about fire chat app is about the technology which is interesting because it doesnt depend on cellular or internet connection. Phones when they are nearby connect to each other directly and direct connections dont depend on cell towers or wifi infrastructure and pass messages over the connections. We are talking about the app launched. You have seen the surge in popularity in taiwan to iran. You said you have never seen anything like hong kong right now. The surge in hong kong is 20 times the size the surge in taiwan. And that surge you are seeing, what do you attribute the popularity of the app to . I think people saw it works and have come to rely on it more. Reporter do you think when you think about the app, are there potential pit falls . Im thinking about rumors, the spread of misinformation. How do you think about that . We are helping to use so that people can know that a person is legit and dont misrepresent themselves. Reporter how do you feel when your company is having this direct real time impact in hong kong right now . How does that make you feel . It feels exciting and great. I hope that we can help these people. The revolution happens on the ground. Thank you so much for your time. We appreciate it. I will send it back to you. So with the protests gaining momentum will there be a Market Impact felt in asia or here in the u. S. Joining us is Asia Focus Fund lead manager. Nice to have you with us. Pleasure to have you here. Hi there. Where do you think you will see the impact . Lets start with hong kong first. What types of companies or Financial Institutions do you think might be most impacted by this movement . I think we should emphasize that this at the moment is very much a local movement and impact should be measured in local terms. At the moment it is businesses that are directly impacted by the protests whether that is retail stocks, hotels, tourist arrivals. People who cant get around in hong kong because of the demonstrations. Does this type of movement threaten hong kongs reputation as a Financial Center because it has always been kind of the steady rock, if you will, of asia. I dont think it will, curiously enough. I can see that the stock market has fallen this month. We have seen the dip. The nature of the protests has been very restrained and very ordered. It has been government missteps on sunday and heavy handed Police Action that did damage but the protests themselves i think do hong kong great credit. I think we should also bear in mind that this is not necessarily just an uprising against china. There are pressing local issues that have caused major dissatisfaction. We have serious income inequality in hong kong. The richardsthere is a massive. The top 10 richest are 18 times richer than the youngest. There is a feeling that the present government kind of in the pockets of the tycoons and that is one of the elements why these protesters want to be able to choose a genuine candidate, somebody to address local issues. I guess the bigger question is does beijing care . Beijing cares enormously. Why . It is a difference of opinion. I have heard from other people that beijing basically has turned its head the other way and there is very little room for movement by the local government in hong kong. Why do you think beijing is paying such close attention to this . Beijing is paying close attention because clearly hong kong is the gateway to the world and it is a financial gateway to china. But what beijing does not want to do and individual members of the beijing government do not want to be seen to be dealing with this crisis in case it does go wrong and certainly dont want to bear responsibility. From a Leadership Perspective their attitude is it is a hong kong issue to deal with and they will take a back seat. They will not be leaving this to no interests. I suspect we are seeing some involvement from the mainland chinese representatives in hong kong and the way this plays out is that the current chief executive of hong kong will pay the price for this. He will probably retire early and it will be main land china that sorts out the problem. At the moment Hong Kong Government have little room for movement. Thank you so much. We are down 223 points on the Dow Jones Industrial average. New low. Very rocky start here. Triple digit losses on the dow. 16 s p 500 Companies Trading at new 52week lows. That has been the pattern for the week. The volume and the breadth as been strongly negative. There have been showing you about 50, i guess, 75 stocks in the green. That is all out of the 500. Discretionary financials leading the decline. Prices five year lows, gold about to close. We will give you a full update next. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. A Research Tool on thinkorswim. You just have to win 70 of your points at net. And keep unforced errors under 10 . On the ibm cloud, the us open analyzes 41 million data points from 8 years of competition to uncover key insights. Data can help show you how to win, no matter what business youre in. Today theres a new way to work. And its made with ibm. We are in for kind of a rocky session today. As you can see the Dow Jones Industrial average touching a new session low as we speak down 1. 3 . Very weak start to october and we do have decent volume on this selloff. Major averages down for a third down. Lowest level since mid august. We have the s p 500 down better than one point on the trading session. 16 hitting new 52week lows. Some include viacom and fossil. In the financials affleck also on the down side better than 1. 23 . Last traded down 2. 5 . And in terms of the transports we are down 200 points on the transports. We did see money flowing into the gold market although not as much as you would expect given the degree to which equities are selling off. The gold market up about 4. Copper market bouncing back as silver. Platinum is down about 0. 1 . Lets go to chicago where Rick Santelli is tracking action in that and currencies which have been Major Players and movers. Over to you, rick. You said a mouthful. Down here they dont think of it on a day like today as money flowing into treasuries. They think about it as money looking for a home because it wants out of equities. The natural hedge to weak equities. The treasury market, the boon marngt. We are getting close to double digits down close. Open the chart up to Early September havent been down this area on a closing day and the first time we slice through that significant 2. 45 this is what happens. You want to watch that level as you have resistance above the market. Why is it important . It was early in the month that created low yield and closed at 90 basis points. Influenced by what happened at 8 15 eastern here. You can talk about adp being better than expected. The response was clear in the fixed income markets. Yields dropped. Maybe it was the equity bias. Looking towards fridays number. Back to foreign exchange. 24 hour chart. All these big moves are going on. One of the reasons look at the dollaryen. Much earlier on this 24hour chart for the first time in over six years we violated 110. It is a Good Foreign Exchange market but today all about avoidance of the risk on and that is the equity market. Back to you. Clearly explained. Triple digit loss on the dow. This is october 1 and there you can see the dow very vivid there. There is not a single dow stock that is positive for the day. The biggest loser over there is still Johnson Johnson and home depot, the lucky are down about 0. 3 . Is todays Market Action a sign of things to come . Microsoft unveiling the new windows software. It is going straight from windows 8 to windows 10, skipping 9. What is behind that . Can it take on android. Power back in two. Whenwork with equity experts who work with regional experts thats when expertise happens. Mfs. Because there is no expertise without collaboration. Ugh. Heartburn. Did someone say burn . Try alka seltzer reliefchews. They work just as fast and taste better than tums smoothies assorted fruit. Mmm. Amazing. Yeah, i get that a lot. Alka seltzer heartburn reliefchews. Enjoy the relief. Watch this. Sam always gives you the good news in person, bad news in email. Good news fedex has flat rate shipping. Its called fedex one rate. And its affordable. Sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. Great. More good news its friday woo [ male announcer ] ship a pak via Fedex Express saver® for as low as 7. 50. [ male announcer ] ship a pak via Fedex Express saver® sea captain theres a narratorstorm cominhe storm narrator that whipped through the turbine which poured. Surplus energy into the plant which generously lowered its price and tipped off the house which used all that energy to stay warm through the storm. Chipmunk theres a bad storm comin narrator the internet of everything is changing how energy works. Is your Network Ready . Welcome back to power lunch. Stocks are plunging today. Here is a check of the biggest loseers. United rentals, under armour and Delta Airlines all in the red. Kate gave us the low down on stocks. We are testing our lows of the trading session with the Dow Jones Industrial average down 223. The nasdaq down almost 1. 5 or 63 points to the negative and down about 1 on the s p 500. Lets get to the trading action. Just talked to a couple of traders and they said the selloff seems to be orderly but nobody seems to be stepping in to do buying. There may not be a lot of reason to step into the market. You have a couple of big mac rocatalysts that could have a real impact on the way that risk is perceived in the market place. Tomorrow the European Central bank, what kind of tone will it set and the nonfarm payroll number coming out on friday. On the heels of what we saw today and weakness in the ism readings and construction spending. If this is a move to the down side some traders are not going to want to get in the way of that knowing that there are some issues down the line that could pose a real threat. Thank you very much. Joining me now cnbc market analyst kenny pulkari. Kenny, what about this . It seems like an orderly decline. Nobody is stepping in and we keep testing. It is an orderly decline and the buyers are there. It is not that they are not there. The buyers are being much more choosy, picky. They are not being aggressive. There is no reason to be aggressive. The momentum feels like a down side so they are testing the will of the sellers. They are bidding lower to see at what point the sellers exhaust themselves or start to get nervous and start to toss it up. I think there is a real chance that you test the lows back at the 1915ish level. What do you think . I guess that is why the buyers and sellers of the market. Part of the reason it is orderly is that there is no bids to hit. I went around and talked to every guy i know and asked about buy books. So we are going to test this is a gut check for the market on the buy to dip mentality and right now it is not there. Bull markets dont die of ebola. They dont die of demonstrations in hong kong. They die of recessions and they die of rising Interest Rates typically. You were out in chicago with a bunch of economists. Do they see this bull market as vulnerable to those two things that are usual sort of fatal tell tales . It is worth qualifying my answer to that question. This group of economists who we poll regularly have not been optimistic about the market as it is. They have been under shooting where the market ends up being so from their standpoint it has been overvalued from a level perspective. They generally see better Economic Growth ahead. It seems to be the consensus. We are looking at 3 growth even after the construction disappointment this morning down to 3. 1 for the current quarter. That is Pretty Healthy coming off the 6. 1 . We are looking at a good growth of expectation of better growth ahead which comes with higher Interest Rates and the underlying growth. We will know more about the state of the economy on friday. I want to turn back to kenny or ben down there. Why has the russell 2000, why are small caps under performing so much more markedly than large caps . As we make a new low of 233 points to the negative side. It is the dollar. It is almost a direct inverse relationship of the dollars ascent to the percentage decline. Why would small caps be vulnerable . Because their ability to raise capital and the impact on the dollar to their bottom line. Basically the major s p 500 is about 54 of revenue is u. S. Based as opposed to 80 or more. That is where the growth is right there. And the markets are flush with capital. They are flush with capital. Its the access to it in particular which is why if you look at something for sale, look at the regional. It is starting to come back to where it was earlier in the year. I think that if you believe that you are in a corrective state of the russell 2000 where you buy a 10 correction and take a look at the kbw Regional Bank index. I dont disagree that they should be bought because it has a correction but in an explanation of why it was i think it is an easy chart to show. It put pressure on the dollar sensitive economy that had been previously last year the leader. The russell is right here. 1084 is the august low. It has to hold here. Listen, on the other side the high risk names, ones that are less liquid that people move into something more stable. Along those lines you have been looking at the defense stocks, right . If you take a look at one area or one Industry Group not just about sectors you drill down to the defense names and it is an interesting story because the majors. The lockheed martins, biggest defense contractors in the world, general dynamics, all of those are down by between 2 and 3 on the day. And just one other point here. One more point i talked to a number of traders who are maybe more bearish on the market who say the small and mid cap under performance is indicative of the underlying weakness in the overall stock market. They say with Larger Companies sometimes they are able to get away with being part of a more murky economic environment but when it comes to the small caps and mid cap companies, the ones that have most leverage to the way the economy works that is the tell tale sign why a lot look to those as a leading indicator. I want to ask you about oil. The price of oil has come down a lot. I bought gasoline today for 2. 99. Where . Route 46. Give me the address. Thats unbelievable. A very nice guy. They pump your gas . They pump your gas in new jersey, not like new york. It is higher evolution. Lower gas prices helps the american consumer, right . That is accurate. It is a tax cut because it helps the poor more than it helps the wealthy because a larger share of income goes to that. We are getting up to the christmas selling season with lower gasoline prices. People dont make changes in spending right away. It takes time to get there. By the time people realize the gas bill is lower they are ready to spend for christmas. All of this should be bullish. If you are spending 50 to spend your tank maybe you are spending 40 and that is real money for particularly people whose incomes are at the lower end of the spectrum. We hit another new low on the Dow Jones Industrial average down 246 points on the trading session. How much does europe matter to this market . Because we have had three Money Managers on in the last week who have said europe is headed back into recession. What does that mean, ben and then kenny, to our market if anything at all. That is the whole pricing mechanism. You go back 30,000 feet it is the Central Banks of the world moving the market. United states being forced to raise rates which is driving dollar higher while europe continues to slide behind. Every indication we get is they continue to fall and yet to find a bottom. Today one of the negative stories on the impact is they may consider buying leverage loans from greece and the like. That is not a very good indication in the global sense and a reason to put pressure on global stocks. If you look at the tale of the tape this morning the market sort of woke up on the bad side and that came from overseas Economic Data from asia and europe. I think the selling is accelerated here in the United States not to a great degree but to an extent in part because the u. S. Data was okay. I think our legitimate fears of how much chinese weakness effects the u. S. Economy. If we continue to be weaker is the fed all of a sudden going to come up with some new Quantitative Easing Program before christmas . If that happens there is a credibility issue. Absolutely. I wanted to point that out. Absolutely. Appreciate it very, very much. Back to kate for a market flash. The New York Times plans to eliminate about 100 jobs. The fear of ebola sending Airline Stocks lower. Why microsoft skipped a number and went straight from windows 8 to windows 10. What is wrong with 9 . Mr. Daniels. Mr. Daniels. Look at this. Whats this . Clicks are off the charts. Yeah. Yoshi, were back. Yes, sir more shipping more shipping [ beeping ] [ beeping ] goodnight. Goodnight. For those kept awake by pain the night is anything but good. Introducing new aleve pm. The first one with a sleep aid. Plus the 12 hour strength of aleve for pain relief that can last until the am. Now you can have a good night and a. Good morning new aleve pm. For a better am. Know that chasing performance and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Welcome back to power lunch. The dow is down 251 points. Lets get a check of biggest blue chip losers. Shares of Johnson Johnson, dupont, boeing and 3 m leading the way lower. As we hit new lows ebola fears sending Airline Stocks lower. Take a look at delta, american, southwest and jet blue in the red today although it is a very negative day on the street. Shares of ebay lower after a downgrade from jp morgan a day after the Company Announced it would spin off Payment Processing unit, pay pal. Pepsi launching a lower calorie product. Cocacola in the process of launching a similar product. Cocacola announcing it would scale back its executive compensation plan. September auto sales out. Phil lebeau with the latest. When you look at the numbers last month almost all auto makers close to what the street was expecting. Gm leading the pack up 19. 4 . Chrysler close behind. Honda had a decent month. Toyota and ford down a little bit. They had relatively strong septembers last year. The average transaction price tops 31,000 last month and continues to edge higher and higher as people are paying for more content in their vehicles at the same time incentives we did see growth when it comes to trucks and suvs. You look at the auto makers and production rates gm said inventory increased to 81day supply from 72 a little bit higher. It is when it gets up around 100 day supply that people get worried. Sales pace is expected to come in fairly even between 16. 4 million. Take a look at shares of gm, ford and toyota. We look at them over the last three months a few people emailed me and said what happened with gm going higher while ford and toyota are lower today . Keep in mind gm is holding an investor and analyst day giving guidance over the next five years and fairly aggressive comments about wanting to grow in china and europe. Overall all of the guys are back. You looked great in that truck yesterday. Thank you. Microsoft windows making an announcement on the new operating system called windows 10. They have gone from 8 to 10. They forgot how to count. No number 9. We will get to the question of why 10, not 9 in a moment. What is different here and who are they aiming this product at . Remember windows 8 which was not notably successful. With windows 8 all of the people buying ipads and they were trying to go after the consumer market. Saying we are trying to bring some of that along with the classic windows interface. They are trying to pitch this as the next upgrade for companies that have tons of windows pcs . What is different is they have taken some of the touch interface and some of the bells and whistles from windows 8 and made it less radical, more of a simple change to those familiar with the old interface while having the benefit Going Forward of having the new apps that are more like apps we download on our phones and tablets. Why no 9 . That is a funny one. I think microsofts case is that it is such a big upgrade that they skipped a number. I think they wanted to put as much space between windows 8 and the next version. I think they are trying to buy themselves a little space and get some excitement around the operating system. Thanks very much. Sue, down to you. Meg, give us the latest. Reporter just hearing from governor rick perry trying to reassure people that they have this under control and can contain the spread. He did say some School Aged Children had contact with the patient confirmed with ebola here and are being monitored at home but emphasizing the children have been identified and that they are being watched very closely. Interesting information coming out of this press conference. We learned from officials that that patient had come in on friday and was diagnosed on sunday but had been released on friday and they had asked that patient whether he was traveling in west africa and he said he had been apparently but that information hadnt been communicated to the treatment team. And so he was initially released. And so a lot of questions about how that happened and why that could be when the system is in place. The governor really trying hard to reassure folks that they have a good system in place saying they dont expect this to spread and they are well equipped to contain it here. Thank you very much. We have more market coverage with the Dow Jones Industrial average down 243 points, just touched a new low on the dow moments ago. And one of the interesting things is it keeps retesting the lows of the day and it doesnt get much of a bid underneath it in any three major market indexes. We have the nasdaq on the down side leading the percentage loss. Now the russell is leading the percentage loss. And that is in correction territory now. We are going to talk more about the markets. The volatility index is spiking today, as well. Its now well above the 16 level. A lot of people are buying some protection by buying volatility today. That is moving up better than 6 and up above the 17 mark. That is the high of the day. We are back in two minutes time with more on power. Big day . Ah, the usual. Moved some new cars. Hauled a bunch of steel. Kept the supermarket shelves stocked. Made sure everyone got their latest gadgets. Whats up for the next shift . Ah, nothing much. Just keeping the lights on. laugh nice. Doing the big things that move an economy. See you tomorrow, mac. See you tomorrow, sam. Just another day at norfolk southern. Means keeping seven billion ctransactions flowing. G, and when weather hits, its data mayhem. But airlines running hp endtoend solutions are always calm during a storm. So if your business deals with the unexpected, hp big data and Cloud Solutions make sure you always know whats coming and are ready for it. Make it matter. Everyone is looking for ways while to cut expenses. S unique, and thats where pg es 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 es Business Energy checkup. Welcome back. In a sea of red we found green today. Take a look at utility sectors. All up more than 2 in todays trade now to washington for a developing story. We are getting our first comments from secretary of state john kerry talking about the situation in hong kong, those expanding democracy protests going on in hong kong. Secretary kerry is Standing Shoulder to shoulder here at the state department in washington with wong ye as he delivers these remarks on hong kong. As china knows we support universal suffrage in hong kong according with the basic law. We believe in open society with the highest possible degree of autonomy and governed by rule of law is essential for civility and prosperity. The Chinese Government disagrees with the sentiments expressed by john kerry. A sensitive situation here in washington. Thank you very much. Appreciate it. Casino mogul isnt shy about sharing opinions but rarely shares them on tv. He made an exception for jane wells who sat down with him for an exclusive interview. It was hard getting that interview. We got it. Shares jumped on positive china news. Now in this rare interview weighed in on hong kong unrest which he thinks will not Impact Business and will be worked out. Even though most Company Revenues come from china does not plan on relocating overseas. Quote, our revenue is asian but we ran american company. We are American People and proud to be so. He does not agree with what is going on in washington. Potential punishment for the companies which are moving overseas and doesnt like about anything else coming out of the white house, immigration, foreign policy. I have been a democrat more than a republican. I am stunned at the immaturity of this Administration Since 08, stunned. I have never seen anything like it. I know a lot of guys who were in the administration and they talked to me privately and they dont believe it. They said it is unbelievable. We elected a man as president who had no experience at anything, nothing. What did you expect . Do you think that anybody can do your job . Could someone sit down here for cnbc and run this program or be a producer of this show without any experience . Of course not. More right now on cnbc. Com. Sue, back to you. We are looking at a new low on the Dow Jones Industrial average. We just tested down 257. The interesting part is we look at the dow down 252. S p 500 down about 1 on the trading session and the nasdaq composite down almost 1. 75 . They are testing lows on the trading session. We have violated some Technical Support levels in not only the russell but also the s p 500. As we turn to our street signs gang which is also down here on the trading session you are following the market cell off. You know the volatility index has a spike in it. Hard to believe one more day like we are seeing today and the dow will have wiped out all gains for the year. That puts it in perspective. Being down here it still feels pretty orderly. I was talking to some of the guys that say there arent very many buyers stepping in. The s p 500 is up about 7 on the year. The Broader Market is still done fairly well. Maybe im just weird but i dont think im in the camp where a correction is a negative thing. Down about 3 from the alltime high. Something is going to happen on the show. Paper index is heavy. That is going to wrap it up for us. Mandy and brian pick it up right after this break. Your customers, our financing. Your aspirations, our analytics. Your goals, our technology. Introducing synchrony financial, bringing new meaning to the word partnership. Banking. Loyalty. Analytics. Synchrony financial. Enagage with us