happen >> because the journal story last night, also about the huge -- i think it's 7% or 6% of the market are now owned by etfs, which is great until it's not. there is a growing group of folks who are thinking if we're just buying stocks en masse, will any reversal -- like the qqq, 100 stocks effectively. but five stocksmake up 40% of the index. so that's why -- people say, why do you talk about these stocks all the time because their weight matters. >> they're so powerful within the index. earlier today, i was looking at the s&p 500, there were probably only 75 stocks that were positive on the day. by the way, the last down month for nasdaq was october of last year for the s&p and dow. it was sooner than i thought it was actually back in march. >> we should appointment out, this isn't a complete sell-off this is a day very much about rotation you've got -- >> correct. >> -- sell-offs in the momentum stocks, technology in particular a lot of those stocks are not returning to levels that are frightping at this point yet but people are buying the financials and energy stocks. which had been laggards recently and especially with the financials, because of the backup that we're seeing in yields we're seeing interest rates rise on what's happening in europe with the sell-off in the bond market there >> yeah. and your point about europe, i think you covered europe as much as anybody, know more about it probably than most of us ever knew, but mario draghi is a name we talk about. i know some of our viewers and listeners, their eyes glaze over, because my gosh, it's bad enough talking about yellen, but now you're talking about the ecbs janet yellen's version effectively. i know it's a little wonky, european central banking, but michelle, please, this is important. for the money here even if you're just a 401(k) investor living in dallas. you've got to pay attention. >> the next biggest central bank in the world besides the united states now starting to pivot >> starting to pull away. >> and starting to reduce the accommodation in the market. that's why we showed the earlier, $1.14. >> do we owe "closing bell" two minutes of start time? >> "closing bell" starts now you bet they do. no, thank you, guys. welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> better late than never. i'm bill griffith. stocks are sharply lower today we're off the lows today the dow was down about 257 points we've come off the lows of the major averages tech and consumer dischrisary hit the hardest in today's trading, while bank holding stocks are holding on to gains right now. we'll talk about their stress test results, and the dividends that they're now paying, and what's behind the sell-off could there be buying opportunities right now. we'll get to that in a few minutes here. >> citigroup up 3% where the dow was down 200 a moment ago. the white house announcing new sanctions against chinese banks in order to pressure north korea. we'll have all the details out of washington. >> and after the bell tonight, an exclusive interview with morgan stanley's ceo james gorman talking about the stress test results, good time to be talking to jim gorman next hour here on "closing bell. let's get to the sell-off on this thursday, the day before the last day of the quarter in the first half of the year joining us today, david is with us, and david elison from hennessey large cap financial funds. you know it's an important day when arthur cashen joins us. he's at post 9 with fjs services rick santelli is at the cme in chicago. what do you think of -- we gained this much yesterday now we're taking it all back what doyou think is going on here >> and it was suddenly the opening look slightly mixed, maybe even a little better, and then the tech stocks looked like a trapdoor opened underneath them techs began to plunge. that dragged everything down right behind them. you noted that the dow at its worst was down much more than this well, all day long, nasdaq's been down on a percentage basis twice as much as the dow is. so it shows you how badly the techs are there. people talk about a little sign of rotation in that the financials are up, and some of the energy stocks are up but they are up nowhere near as much as what the techs and other things are down. >> what do you think is going on with the techs this isn't the first day people have been selling them hard, but maybe it's the hardest yet >> i think there's still opportunities in tech. but it's got to be more in a consistent free cash grower like oracle, which last week had good earnings news. to the broader market, quickly, it's been between two to three times the average number of trading days to the long-term average since we've had that proverbial 5% and 10% correction we are due that alone won't give us that hiccup but when you're looking at stocks on a cash flow basis that are now back to the valuations when we had the hiccups in 2015 and 2011, it tells you in this environment a little profit taking here is where we begin the third quarter, i think that's the wise thing to do and re-buy at better valuations in the market. >> david ellison, your large cap financial funds making money today clearly with this bank rally. what do you make of this is this an all-clear signal? i don't want to make too much of one day's gains, but do you think this is the beginning maybe of a new phase for the bank stocks here >> well, i think what we've had in the last two weeks now is, you know, two reports out of the fed through this regulatory cycle that tells you that they're comfortable with the banks, comfortable with the capital, comfortable with the regulatory regime, and i think it also tells you that they're probably going to -- they're comfortable with moving rates up and moving the balance sheet i think that's good for the banks. obviously the market is, you know, not as happy about the fact the economy is strong and rates are going up, which you're seeing rate sensitivity to the banks to the positive, rate sensitivity let's say for technology to the down side. so today was an example of sort of reaffirming, reminding everybody that the economy's good, the fed wants to normalize, and this is another sign post-along the way saying we're going to do that because we can >> i'm glad you mention that rick, that's what i was going to ask you about. i think the ten-year hit almost 10.3% today. >> it's been an orderly move considering the amount of movement we had at various two and three-week stretches throughout 2017 for treasury and sovereign rates in general, yes, it has been a pretty big week. just consider last friday we were at 214. as we pointed out we hit 230 within a half basis point or so. we have one more trading day left on the week everything our guests are talking about, obviously, is spot-on. the only question is, which channel is more influential. i will continue to say if i had to sum up what's going on, it would be in two years, rates and firecrackers i think global rates moving up, just not the u.s., but global rates has really important significance for all equity markets. i think it gives investors a notion of the toll keeper of accommodation and maybe that arm is starting to go down and nobody wants it to hit the hood of their car. in terms of firecrackers, i think whether you look at the long weekend, art knows very well how traders behave when you get long weekends. in addition, this particular long weekend coordinating with quarter end and half year end is probably putting exaggeration into some of the moves. >> arthur, i was going to ask you, which of the sirens you think the markets are distracted the most by? for a time it's oil. then it's the interest rates then it's the dollar i mean, technology now seems to be the bogey man where do you see the market facing the most right now? >> i think you're going to come as the other guests said, back to the rate question, because the central banks were your friend they were pumping money in they appear to be slowing down and coincident with that, the corporate buybacks appear to be slowing down the market may have a current that's running against it for a little bit here. so it might be a little tougher to get moving up always remember how the 5th and 4th and you'll feel better about everything. >> i don't know about better or worse. is this all new, arthur? i thought this was pretty well kind of teltelegraphed. and people choose this moment to really make moves about it >> i thought it was intriguing, because what draghi said is deflation is no longer a threat and hastily tried to say it's not a reason to end the soft grades they didn't want to hear the second sentence. they stuck closely with the if irs. >> he was drowned out by the gasps. >> european developed market purchasing managers index has been moving in the right direction. i think that's being noticed by the european central bank, the same way our central bank was noticing when our pmi index was moving higher. that is the most important business number i will watch every month. >> there you are david, david, arthur and rick, thank you to you all. >> morgan stanley ceo speaks with us exclusively in the next hour of the show just on the heels of this big move in financials, and those stress test results. you won't want to miss it. in the meantime, i check in with bob pisani. >> i'm sticking with the general theme here of rotation going on. so we know what's been going on in the fang names and semiconductors, oracle another big tech name up 30% so far this year it's been drifting down lower the last few days, down about 1% they're going into banks and they're going into energy. here's keycorp, yields up in the ten-year raising the dividends in the bank stocks. they've been performing better throughout the week. they're all up today another reflation trade here is all the energy names, the worst performers on the year but they've been moving up this week as well oil starting to stabilize around $45. talking about the reflation trade, noting that this week oil is up about 4.5% copper up nearly #%. ten-year yield up near 5%. it means that that's helping the bank stocks and the energy stocks in general. finally, i want to point out, our star of the day here, blue apron here, priced at 10, still holding up went as high as $11. hit 10 a short while ago trading on the upside. healthy volume here. 35 million shares. you're way over what the original size, 120% of the offering size. a healthy demand for the stock >> not exactly the kind of market you want to come into but hey, you can't pick your spots sometimes. thank you, bob we'll see you on the close. treasury secretary steve mnuchin made comments about china and north korea a short time ago at the white house. ayman javers is there with more. >> the treasury secretary came to the briefing room to announce new sanctions involving north korea. this time on a chinese bank. the bank of dangdong, also on two chinese individuals and a shipping company, all of this he said was aimed at preventing money and all sorts of goods from getting into north korea from the chinese side of the line still, though, he said this was not about punishing china specifically here's what he said. >> we look forward to continuing working closely with the government of china to stop illicit financing involving north korea. we are in no way targeting china with these actions we will be meeting with china and other countries at the g20 next week. to further our efforts to cut off north korea's illicit activities >> bill, the treasury secretary was asked twice if the united states government had given the chinese government a heads-up that these sanctions were coming, both times he declined to answer the question he said simply, i'm not going to get into of our behind-the-scenes conversations. to me that raises the possibility that in fact the united states did give such a heads-up, but with a no comment we can't say for sure right now. all of that coming before the president goes to the g20 next week where he will meet with chinese leader xi and also with vladimir putin with russia, which will be a highly scrutinized meeting. all those world leader meetings coming throughout the later part of next week, guys >> my only question is, how china might now respond, eamon. >> that's a really good question and that may be why, if there was a heads-up given behind the scenes, there was sort of a gentle push here on china, that's why you saw the tone coming from the treasury secretary today, we want to work with the chinese mcmaster, the national security adviser, talking about the relationship with china. he said we don't want to push the chinese. we don't want to use pressure against the chinese. he said, we want to work with the chinese on our mutual best interests, particularly on north korea, where he said the chinese have an interest in terms of north korea in not having those missiles within striking distance of chinese territory as well really an effort here to be gentle with china, in a rhetoric surrounding the chinese bank and chinese individuals. >> it is the middle of the night in beijing so when they wake up, maybe we'll hear something else. thanks, eamon. >> 45 minutes to go to the close. dow down nearly 150 points right now. it was down more than 200 a moment ago i'm looking to see where we were at the lows. >> 257 on the dow. >> wow the s&p down 19 right now. the nasdaq, the nasdaq is down 101 points, 1.6% decline, russell down 13. up next, nba hall of famer david robinson who has co-founded a private equity firm is going to give us his take on the sell-off. president trump expected to deliver remarks at the energy department in just a few minutes. we'll bring that to you live the moment it begins coming up on "closing bell. yoreatincn, rsin business worldwide the power of a low volatility investing approach. the 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[ cheering ] my little brain is going to explode. despicable me 3. rated pg. sell-off day we are well off the lows of the session. the dow was down 257 points at one time today nasdaq leading the market lower, down 1.5% right now. yes, that means technology is headed lower the coveted fang stocks, the fab 5 have been going lower today. we've got facebook, amazon, netflix, alphabet -- we're missing one. i can't think of who it is right now. they're down 1% and 2%. >> microsoft >> i think we include microsoft in there. >> apple is not on there anyway, dominic chu joins us with a look at the sectors getting hit the hardest. >> if you take a look at the heat map, there is not a lot of green, but there are still slivers, two of them right now financials, a story line all day. we're actually starting to see a little bit of a rebound overall in the s&p 500 just off the lows. energy as well those two sectors, the only ones in the green, if you take a look at this here, technology staples and real estate, worst performing sectors overall technology certainly one of the worst performing sectors in terms of the overall scheme of the market today and those big mega cap stocks have a big part of that. if you take a look at sol of the sector etfs at play here, the tech sectors spider, the xlk, that's the ticker, up by 1.5%. the consumer staples xlp and xlu which is utilities, these four sectors spider etfs as of about five minutes ago traded well in excess of the average trading volume over the last 90 days we're not even over with today yet. this is where the real heat is overall in the markets to put a point on that technology narrative you guys were just weaving through there, many of these mega cap technology stocks are sitting right near or even below their 50-day moving average, the trend line over the past 50 days more medium term, this is the xlk. hovering just below that trend line we could put microsoft trading below there as well, alphabet shares trading below there as well amazon, not actually a technology stock, but sitting right near its medium term trend line certainly technology and even amazon as a retail stock, ones to watch in the terms of the overall sentiment in the momentum of today's market, guys >> good stuff, dom thank you. >> thanks, dom. >> the real estate sector is holding up better than most today, but still down about 1% some of the names in the sector seeing lower here. 2-plus percent as you can see. >> our next guest is former nba great hall of famer, started an investment firm, focused on real estate after his retirement. i think it's safe to say that david robinson is one of the most admired, if not the most admired nba player in history. he joins us now from morgan stanley's multicultural conference the man they call admiral as well great to have you on the show today. >> thank you so much great to be able to visit with you guys today. >> what's the mission of admiral capital, the firm that you have founded? what do you do there >> yeah, admiral capital was borne really out of the community things i was doing as a spur i had a nice income. my wife and my family wanted to do something in san antonio, so we started schools, private schools. then we got involved, we transitioned to a charter school and so now in the last five years we've been building schools. we built basically 20 new schools in san antonio over the last five years. so that was my passion so in order to support that wonderful community passion, i wanted to extend my career in a different direction. so i went from basketball to business, specifically the financial world. admiral capital, we do real estate, so we find basically broken assets and we try to fix them up and earn some money so we can impact the communities where we invest. >> and david, how does the market day-to-day play into all that when we look at a sell-off like we're seeing now? >> yeah, no, we keep an eye on that but the basic fundamentals are always there and we're out there always kind of finding where people are moving, what are the trends, you know, what are the income levels and where are people looking to --where's the transportatio hubs all the things that have great factors for where people need to live then we find opportunity to create space for those people to find so that doesn't change we'll continue to find parts of the country, the areas where real estate is strong and is doing well and we'll continue to work in those areas. >> we have so many things we could talk with you about. i'm curious, former fellow player charles smith played for the knicks years ago he has started a group that helps players transition from their playing days to the retirement years, quote unquote, retirement years to help them from, you know -- you hear the horror stories of players who have lost all their money because they don't know what to do with themselves after they've played you've probably seen that a lot as well. how was the transition for you out of the league? i bet it wasn't nearly as bad, huh? >> well, it's a tough transition you go from being an nba player, you're playing at the highest level of your profession, you're the experts, so to speak, into a whole other world. here i am in the financial world. i'm the dumbest guy in the room every time we have a meeting a lot of fun learning a new space. finding the right people to partner with and just learning how to use my assets, my strengths to bring value to every deal. >> all right david, what would you do to bring value to the knicks here i hear they might need someone else to kind of right the ship and fix -- figure things out there. there's an opening >> there's an opening in the -- >> can i get one of the phil jackson deals? that would be great. i'll talk about it if they offer me that. >> bill russell said last week before the nba awards, the way the game has changed, it's more one-on-one, it's not team ball anymore. do you agree with that he doesn't like that what do you think? >> well, you know, it's changing a little bit i think it's also kind of spurred on by the way we're calling the games as well. we can't be as physical, we can't touch guys it's lending itself to individuals making a lot of plays. but you see the spurs and you see teams like the warriors who are still moving the ball very, very well, and they're utilizing good balance the two teams with the best record in the league were two teams that shared the ball, had very unselfish teams i still think that works and teams need to pay attention to what's been successful. but the challenge is building -- how do i build my squad to compete with the -- either the spurs or the warriors. that's where these young teams, you see teams like minnesota, some of these young teams like philadelphia are trying to figure it out and get there. >> right. >> david, we were recently reading about the '92 dream team as successful as you've been, i think it's important to remind people that you had a character that stood up to a lot of the shenanigans and whatever that your teammates were doing at the time, and it was really impressive to go back to read about it and what is it that helps you kind of keep your head down and work hard when everyone around you seems to be, you know, goofing off? >> no, that's a great question we had a little bit of dysfunction on the team when i got there. i think a lot of it, for me, it was my faith it kept me grounded and it gave me a mission, really i looked at that locker room and said how do i help guys, put them in a position to be successful, not just on the court, but off the court, making a good decision as a family, being good husbands and fathers, and how do i be a good teammate to these guys. that's how we tried to build the culture in san antonio now you look at it 25 years later, and it's a great locker room it's a place where guys root for one another. you feel like young men become men. i watched leonard become this super stud, incredible young man. i think it's because of that culture. >> yeah. i think it's clear that if you ever run a team, it's not going to be the knicks the spurs are still number one in your heart. a thrill to have you with us today. thank you for your time. >> thanks so much for having me today. >> you bet nba hall of famer david robinson. >> my dad had his poster in our little weight room in the garage only one incredible. >> good guy to emulate, that's for sure. >> morgan stanley ceo james gorman will speak to us exclusively that we just spoke to david robinson at what more investors can expect >> always enjoy having james on the show heading to the close over the last half hour of trade, the dow down 150 points right now. president trump is expected to deliver remarks on energy policy in just a few minutes at the 'lbrg ato u veent. wel inth tyoli as soon as it gets under way. their experience is coveted. their leadership is instinctive. they're experts in things you haven't heard of. researchers of technologies that one day you will. some call them the best of the best. some call them veterans. we call them our team. (b♪by crying) minutes old. ♪ a baby's skin is never more delicate. ♪ what do hospitals use to wash and protect it? ♪ johnson's® the number 1 choices in hospitals. >> thank you thank you very much. [ applause ] >> thank you thank you, everybody thank you very much. i want to thank everybody on stage. they are really a terrific team. we have some of the real winners in the audience, too, that i can tell you, some great, great people i want to thank vice president pence, as always he's right there and he has really been a help to this administration. we have big things happening today, and we have some very big things happening over the next month. i guess i can probably say over the next eight years, i suspect i can say that [ applause ] it's wonderful to be here with so many pioneers with america's energy industry. great industry i want to thank the leaders of our great energy companies for joining us today and supporting our efforts, to bring true wealth and prosperity to our people i also -- that's true. come on, give yourselves a hand. you deserve it [ applause ] you deserve it you've gone through eight years of hell, and actually, i could say even a little bit more than that you deserve it i also want to express our sincere gratitude to the labor union leaders and members who have joined ustoday. thank you, fellas. thank you. thank you. [ applause ] you workers embody the skill, grit and courage that has always been the true source of american strength they are great people. they break through rock walls, mine the depths of the earth, and reach through the ocean floor to bring every ounce of energy into our homes and commerce and into our lives. our nation salutes you you're brave, and you are great workers. thank you very much. thank you, fellas. [ applause ] before turning to the topic at hand, i want to provide a brief update on two crucial votes taking place this afternoon on the house floor. very important these bills are vital to public safety, and national security, and i want to thank chairman bob goodlatte for his efforts. bob has been working very hard and really for a long time first, the house will be voting on kate's law, legislation named for kate steinle who was killed by an illegal immigrant with five prior deportations and lots of bad things on his record. the second is the no sanctuary for criminals act, which blocks federal grants to cities that release dangerous criminal aliens back into the streets, including the vicious and disgusting and horrible ms-13 gang members and we're getting them out we are getting them out. they're going fast [ applause ] general kelly and his whole group, they've gotten rid of 6,000 so far we're about 50% there. we're actually liberating towns, like on long island where i grew up we're liberating towns those people are so happy to see our guys and our guys are a lot tougher than the ms-13 characters, that i can tell you [ applause ] liberation and i'm calling on all of them to put the safety of american families first and let's pass these bills through the house, through the senate, and send them to my desk i will give you the fastest approval, the fastest signature that you have ever seen. right, mike? we will get that signed so fast. [ applause ] and so when we get back, the first thing i'm going to do is, how did we do on the vote? i expect good things, otherwise i wouldn't be talking about it right now, to be honest with you. i don't like losing. i don't like losing. neither do you folks every member of congress should vote to save american lives. many great members of congress are here with us this afternoon. some great people. some great, great people thank you very much. not only are they working with us on border security, but they share a desire to unleash american energy. i especially want to thank secretary perry for his tremendous leadership in this department he has really done a terrific job. he's also a cheerleader. he's really a cheerleader. i watched that in texas. the thing i loved about him, he was always saying how great texas was. and if you don't say it, i don't know, you've got to say it, right? and you're doing great now with energy >> thank you. >> that's true along with secretary of the interior, ryan zinke, and epa administrator scott pruitt we've been through our battles, scott, not with each other, with the world. now the world is starting to say, i think they're right they'll find out we have no doubt but all three of them strongly believe in putting america first. which is what i believe in, which is why i got elected it's called make america great again. that's what we're doing. make america great again we're here today to usher in a new american energy policy, one that unlocks millions and millions of jobs, and trillions of dollars in wealth for over 40 years, america was vulnerable to foreign regimes that used energy as an economic weapon americans' quality of life was diminished by the idea that energy resources were too scarce to support our people. we always thought that and actually at the time it was right to think we didn't think we had this tremendous wealth under our feet many of us remember the long gas lines and the constant claims that the world was running out of oil, and natural gas. americans were told that our nation could only solve this energy crisis by imposing draconian restrictions on energy production but woe now know that was all a big beautiful myth it was fake. don't we love that term? fake what we've learned about fake over the last little while fake news. cnn, fake. [ applause ] whoops, the camera just went off. okay you can come back. i won't say -- i promise, i won't say anything more about you. i see that red light go off, i say, whoa. the truth is, that we have near limitless supplies of energy in our country. powered by new innovation and technology we are now on the cusp of a true energy revolution. our country is blessed with extraordinary energy abundance, which we didn't know of, even five years ago and certainly ten years ago. we have nearly 100 years worth of natural gas and more than 250 years worth of clean beautiful coal we are a top producer of petroleum, and the number one producer of natural gas. we have so much more than we ever thought possible. we are really in the driving seat and you know what? we don't want to let other countries take away our sovereignty and tell us what to do and how to do it. that's not going to happen [ applause ] with these incredible resources, my administration will seek not only the american energy and dependence that we've been looking for for so long, but american energy dominance. we're going to be an exporter. exporter [ applause ] we will be dominant. we will export american energy all over the world, all around the globe. these energy exports will create countless jobs for our people, and provide true energy security to our friends, partners and allies all across the globe. but this full potential can only be realized when government promotes energy development -- that's this guy right here, and he'll do it better than anybody -- instead of obstructing it like the democrats they obstruct it but we get through it. we cannot have obstruction we have to get out and do our job better and faster than anybody in the world, certainly when it comes to one of our great assets, energy this vast energy wealth does not belong to the government, it belongs to the people of the united states of america [ applause ] yet for the past eight years, the federal government imposed massive job-killing barriers to american energy development. since my very first day in office, i have been moving at record pace to cancel these regulations, and to eliminate the barriers to domestic energy production, like never before. job-killing regulations are being removed, and vital infrastructure projects are being approved at a level that they've never seen before. as you all know, i approved the keystone xl pipeline, and the dakota access pipeline in my first week thousands of jobs, tremendous things are happening and by the way, i thought -- i take a lot of heat i didn't take any heat i approved them and that was it. i figured we'd have all sorts of protests we didn't have anything. but i have to do, whether it's protesting or not, i have to do what's right but people celebrate those two transactions as opposed to protesting but sometimes you have to go out and just do it and you find out, whatever happens, happens but you have to be right for the american people. [ applause ] thank you. i'm dramatically reducing restrictions on the development of natural gas i canceled the moratorium on a new coal leasing, and you know what was happening the new coal leasing on federal lands, it was being so terribly restricted now with ryan, with a group, it's going to be open. and the land will be left in better shape than it is right now. is that right? better shape [ applause ] we have finally ended the war on coal and i'm proud to report that just here with us today, opening a brand-new coal mine in the state of pennsylvania, the first one in many, many, many years. stand up come on. [ applause ] congratulations. congratulations. [ applause ] employing a lot of people. and we're putting the coal miners back to work, just like i promised just like i promised, when i went through ohio, west virginia, wyoming, all the different places i see bob back there congratulations, bob he's in great shape. right? you in good shape, bob right from the beginning good you just take care of yourself, all right? we're ending the intrusive epa regulations that killed jobs, hurt family farmers and ranchers, and raise the price of energy so quickly and so substantially. in order to protect american jobs, companies and workers, we've withdrawn the united states from the one-sided paris climate accord [ applause ] and i won't get into it, but believe me, that really put this country at a disadvantage. number one, we weren't playing on the same field. it kicked in for us, and it doesn't kick in for others the money that we had to pay was enormous it was not even close. and maybe we'll be back into it some day, but it will be on better terms, it will be on fairer terms, not on the terms that we're the people who don't know what we're doing. we'll see what happens but i'll tell you, we're very proud of it. when i go around, there are so many people that say, thank you, you saved the sovereignty of our country. you saved our wealth because we would have a hard time getting to this new-found wealth and it's not going to happen with our country [ applause ] today i'm proudly announcing six brand-new initiatives to propel this new era ofamerican energy dominance. first, we will begin to revive and expand our nuclear energy sector which i'm so happy about, which produces clean renewable emissions free energy. a complete review of u.s. nuclear energy policy will help us find new ways to revitalize this crucial energy resource i know you're very excited about that, rick second, the department of the treasury will address barriers to the financing of highly efficient overseas coal energy plants ukraine already tells us they need millions and millions of metric tons right now. there are many other places that need it, too and we want to sell it to them, and to everyone else all over the globe who need it. third, my administration has just approved the construction of a new petroleum pipeline to mexico, which will further boost american energy exports. and that will go right under the wall, right? it's going under right? [ applause ] go down a little deeper in that one section, a little like this. right under the wall fourth, just today, a major u.s. company, semper energy, began negotiations for the sale of more american natural gas to south korea. and as you know, the leaders of south korea are coming to the white house today. and we've got a lot of discussion to do but we will also be talking about them buying energy from the united states of america and i'm sure they'll like to do it they need it thank you. [ applause ] fifth, the united states department of energy's announcing today that it will approve two long-term applications to export additional natural gas from the lake charles l & g terminal in louisiana. it will be a good deal a great announcement finally, in order to unlock more energy from the 94% of offshore land closed to development, under the previous administration, so much of our land was closed to development we're opening it up. the right areas, but we're opening it up. we're creating a new offshore oil and gas leasing program. america will be allowed to access the vast energy wealth located right off our shores and this is all just the beginning, believe me. the golden era of american energy is now under way. and i'll go a step further the golden era of america is now under way. believe me [ applause ] and you're all going to be a part of it in creating this exciting new future. we will bring new opportunities to the heartland, new prosperity to our inner cities, and new infrastructure all across our nation when it comes to the future of america's energy needs, we will find it, we will dream it, and we will build it american energy will power our ships, our planes, and our cities american hands will bend the steel and pour the concrete that brings this energy into our homes. and that exports this incredible new-found energy all around the world. and american grit will ensure that what we dream, and what we build, will truly be second to none we will be number one again all the way. we'll make america great again thank you. god bless you. and god bless america. thank you. thank you very much. [ applause ] thank you. thank you. >> president trump speaking about unleashing american energy during this energy week. let's get some reaction from our eamon javers at the white house today. eamon? >> the president there a little more soft-spoken than we've heard in recent days but making the point that the golden era of american energy is under way. and also laying out some of the campaign themes that he had in terms of bringing back coal jobs and energy dominance for the united states of america the president taking a moment to take a swipe at the media there, and also taking a moment to joke about the wall, saying that new energy exports to mexico will go right under the wall, he said. the president injecting a little bit of humor, and campaign rhetoric about some of the energy priorities, kelly. >> yeah. now, i'm just saying, there's plenty else going on today. >> yes, there is. >> he talked about fake news again. i don't know how he expects us to really focus on energy when all that's happening. >> i tell you what, we just had the white house briefing from deputy press secretary sarah huckabee sanders who sort of laid out the defense of the president's tweets this morning. the president, for people who don't know, the president tweeted a criticism of some morning news anchors this morning. saying that one of them came to mar-a-lago and was bleeding in her face because she had plastic surgery recently that tweet was condemned widely by republicans and democrats on capitol hill as simply too personal simply too cutting of a remark to make. sarah huckabee sanders said, look, this president, the american people knew what they were getting when they elected donald trump she defended that tweet by saying, that the president is a fighter, and when the president is hit, he'll hit back ten times harder than he was hit all of that begs the question of why the president needs to punch back at cable news anchors, right? he's got a massive legislative agenda that's in trouble up on capitol hill, particularly his health care bill this week he's got wars overseas the north korea situation. he's got the president of south korea here in town today so the president's got a lot on his plate. other than fighting with cable news anchors and a lot of the folks up on capitol hill on the republican side said they were frustrated with that, because it would block -- it would distract attention from the legislative accomplishments and prevent him from reaching out to some of the moderate senators who he really needs right now on health care the concern among some republicans about those tweets today. >> eamon, thank you. >> you bet >> nine minutes left we're seeing lower pressure with the dow down 152 points. nike's earnings will be out after the bell tonight and when we come back, we'll debate if it's also a winning stock for your portfolio (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings) welcome back after the bell, nike is said to report its earnings. earlier this month it announced plans to cut 2% of the global work force and focus on reaching the customer directly. joining us to debate the stock, stacy is from sw retail advisers, and john let's just begin with why you don't see any confidence in this company and what's the problem with the climate >> yeah. so, if you look at nike, it's an odedos right now now they have 11%. there's no reason they don't get to 20 here where does that come out of? that comes right out of nike's pocket the second thing is, nike has grown their same-store sales largely somewhat through average prices, through asps that's largely behind us i'm looking at the stock here and i think there's further down side and look at the future numbers that will be the key here. and i expect them to die down when they report after the bell. >> all right meantime, john, it says you're a bull here. how bullish are you on this company? >> i'm not wildly bullish in the short term, kelly, but i am bullish on the stock i think 7% in the decline in the u.s. dollar versus the euro is big for nike that's one of their big markets over in europe i think also, that many of the competitors, whether it's lulu and the athletic side or under armour, these two stocks have both moved up by about 20% in the month of june. and basically, nike is flat. so i'm not looking for huge outperformance i'm just thinking that they have a good quarter, and then the thing they didn't talk about last time when they talked about digital, they never mentioned amazon, this time i think amazon will be a big part of the call as to whether or not they have their own store on amazon after this >> stacey, it sounds from reports like they're going to be selling direct on amazon within a couple of weeks. what is that going to mean for the company? is that enough to give them another leg higher here? >> you know, nike right now has very small exposure to direct. it's only about 26% of the business so they're very much still beholding to that wholesale channel which we've heard so much about being in the mall the fact that they're going on amazon direct is a positive. they're able to get rid of all the third-party sellers and noise and promotions but while that's a positive here, it's also considered, you know, very mass distribution you have to watch out how the brand is controlled. john brought up europe, which is where i'm based right now and i would suggest while everybody's obsessed with the wholesale channel in the united states being very promotional, i'm seeing incremental promotions in the channel here over in europe. that's something to watch out for on the call. >> john, you get the last word on why this is a good name to own? >> well, the brand-new lebron shoe, for instance i have a copyright here. >> oh, my god. it looks like a western -- what is that made out of? >> stacey was asking me what i was wearing today, and i told her boots. i'm not a big nike, under armour or anybody else, but i think their guidance is going to be very strong. watch that today, kelly. >> that is the craziest thing i've ever seen thank you for showing me that. john and stacey, arguing over the future of nike we'll get the earnings just after the bell thank you both bill >> kelly, thank you. we're going to go into the close here two minutes left in the trading session. so many moving parts and pieces today, so little time. let's just stick to the highlights here. you know, there are two trends we're watching traders are wondering if it's the beginning of a longer term trend. the tech stocks, big decliners today. the nasdaq 100, now down about 5% from the most recent peak the question is, does this lower trend continue it started with a tech wreck two weeks ago, and they've struggled since then we're wondering if it's going to continue bank stocks, sharply higher today. you know the story, stress test results allowing more capital back into the markets here healthier banking system is this the beginning of a higher trend for the banks that remains to be seen. ten-year yield, bob pisani, we've got rick santelli pointing out 226 is a key level for him to watch if we can get above that, it could mean higher yields down the road and then a story i think was undercovered today, walgreens falling off the acquisition of rite-aid >> didn't get the 180 stores they had >> and not going to sell rite-aid stores, down 20 plus percent today. >> i see a bit of a reflation trade, your yields have been moving up. that helps bank stocks oil stabilized that's helping energy stocks the overowned semiconductor and fang names have been having problems in the last couple of weeks. i think this is the end of the first half event but i think it's overall still very healthy i noticed the s&p was down 34 points it's almost in half. that shows you there's an underlying bid to the market still looking to buy lower that's the key point. >> going out with a decline of 165 points yes, alrin, coming up. see you tomorrow, kel. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. a tough session across wall street today, especially in the nasdaq let's look how we're finishing there with big declines. the dow closing lower by 168 points about .8 of 1% remember, the dow closed above 21,500 not long ago. the s&p 500 down about the same amount to 2419 also the russell 2000, down. nasdaq shedding nearly 1.5% of its value today. 6144 a lot of the pain concentrated in the big cap tech names. we'll have much more on all of that and what may be behind this sell-off big names reporting earnings after the bell ni nike, and outdoor brands will report their results we'll bring them to you as soon as they're out morgan stanley announcing a 45% dividend increase after a second round of bank stress tests james gorman will join us to respond in an cnbc exclusive michael san tolly, also with us is paul hicke with the focus investment group, and stephanie is here on set as well guys, quite a day. whik al, what do you think is going on here? >> a bit of a jarring shift. too many people kind of run from one side of the boat to the other. you kind of knock around a little bit that seems to be what's happening. obviously, mass exit from a lot of the big large cap growth fang type stocks. that's okay. everybody's talking about how this very delicate and kind of impressive rotation has been going on for a while it's just not dollar for dollar working. the overall indexes were down. i think that the yields going up are okay they're helping the banks. you're not necessarily getting the sense everyone's positioning for some kind of rapid acceleration in economic growth. it's all kind of happening in a way that you can accept. maybe it's time for the overdue 5% pullback in the overall market i think on a one-day basis, it seemed like the market got its legs back under it but it was a little too much coming out twice the normal volume in the qqq. >> let's show what happened with facebook, amazon, netflix, alphabet today is there a catalyst that you would identify is that anything to do with the increase of the rates we've seen ever so slightly, but still meaningful here? >> it could be but i think in the last couple of weeks, we've actually been hearing a little bit and feeling more of a tone change in the market more value, a little bit more volatility, a little bit more cyclical there's only so long that the fang-plus stocks that could account for 60% of the returns that's what happened for this year so you have seen a shift i think this week the biggest chain was draghi's comments, even though he tried to pull them back. hawkish comments are hawkish comments that's what impacted rates and that impacted our rates. and, therefore, the banks started to act well. then energy started to act well. so it all started to kind of circle around. now, we're at the end of the quarter, end of the month. a lot of people already on vacation so don't read too much into it i think that the one group that has sold off tech, good earnings there's going to be places where you want to pick your spots to add to them. >> we're going to get to that in a couple of weeks' time. paul, meantime, looking at blue apron today, i think it barely held its $10 pricing level, the lowest end of the range it was looking for. it was a tough day in the markets. what would you read into that? or the broad activity we saw here >> i think blue apron is a stock specific story some people say it's lucky they got out. we've been very spoiled as investors, especially tech investors, today the fang, the five fang stocks that make up faang, closed below the moving average since february 2016. that's more than a year. these stocks have gone nothing but up recently. it's natural to see a pullback in them. from the tech perspective, what you've seen is we just ended the nasdaq 100's third longest streak 50-day moving average when the streaks are broken, it's been negative for those tech stocks overall. but while we've been focusing so much on the large cap tech stocks, there is other participation there. since the tech sector peaked in june, the s&p 500 was actually up coming into today. >> by the way, worst in 14 months for the nasdaq. down about 1%. hasn't had a negative one since october. on that note, we have an earnings look from micron here let's get to adi di roy. >> that's right, micron, the semiconductor manufacturer beat on both the top and the bottom lines. the stock, though, is down a touch, about .54%. let's start with the top here. record revenues, 5.57 billion compared to 5.41 that's 20% higher than the previous quarter they're saying that's because of a 14% increase in the average selling price of dram chips. bottom line, 1.62 is what they came in, versus estimates of 1.51 per share so a big beat there. the company previously had seven straight earnings beats. this would make it the eighth. analysts had pretty high expectations for the company here i read the research reports, all of them had a buy in that column, because of favorable pricing conditions as well as restricted supply of some of the chips that they sell driving prices higher. some of the other metrics, like guidance, growth margins and we'll dig deeper to see if we can't find out more. >> thank you micron is a phenomenal story over the past year trading at 10 bucks a share last year the pc cycle and everything else, it's basically tripled since then to your point about there being good news priced in. >> absolutely. the question with cyclical stocks in general, do you buy them when they're expensive or buy them when they're cheap when they've peaked actually, the multiple has contracted since the last earnings report 20%. they've beaten the last quarter. >> that's what really got attention about thousand there were fewer players in the space right now. >> no doubt about it they're getting the benefit of more content from auto and ai and that sort of thing however, is it all priced in is this the peak does it get any better i don't think it is the peak but i think we kind of have to go through this push/pull here in the short term. let the stock settle before you get back in there. >> michael >> it's not really far off that the highs. it's not as if in this huge pullback we've had in the last couple days, some of the techs and semis, it's not really leading to the down side some people think the full momentum story is okay. >> going back a couple days now, some of the names were getting whacked. i think also still the semis today were down about 3% >> oh, yeah. >> more high octane semis. >> semis are considered like faang type of high growth sort of thing as you see, earnings are good. visibility seems to be pretty good you pick your spots, like i said, in technology, i think. >> paul, as we head into the second half of the year here, how are you reading the things the way things are lininging up for the market >> it will be dictated on the earnings season. we've seen lower than normal earnings, warnings from companies. and we've seen more analysts lowering estimates on the companies they cover it's not as extreme as we've seen in prior quarters it's still more skewed to the negative than the positive what earnings we have seen, there's only been a few reports over the last week and a half or so the companies that are beating estimates, and revenues, are reacting well to their -- in terms of their stock prices. micron, we'll have to see how that plays out i'm not sure where that's trading now. but overall, i think the setup is more positive than negative heading into earnings season. >> you guys mentioned how look at how the banks performed in this market. i mean, i'm interested to see exactly what was happening there in the close big moves for names like citigroup. all of this kind of -- they're not dragged down with the sell-off >> no. >> as you put earlier, perhaps they were part of the reason why we're seeing kind of this movement into different sectors. >> they're the other end of the see-saw in all of this the beneficiaries of the macro stuff that i think the rest of the market has to try to absorb, which is the outlook for central bankers to get a little bit tighter. and also, i think you've had this big burst of volatility in the currency and fixed income markets as you had this sort of shift in perception out there. some of that will make itself felt in equities but banks, because of the better than expected news on the dividends and buybacks last night, i think have enough to sustain them the vix and equity volatility index -- >> it's over 11. >> but it was over 13 earlier. 13 is like this line between, oh, we're still in a really calm market and maybe we have to brace for something worse. it kind of went up and down again. it's having a hard time maintaining altitude. >> it will need to be up there more than an hour if they want to show different trading results, i guess. >> they did well up until march 1st. the trump trade, if you will, kind of rolled over and rates and energy and the whole thing they're trying to find the bottom here, at least in the range, the bottom of the range i think the results came in last week and the reactions to be down was very surprising to me so i think this is just a catch-up i think it's good news i think the stocks are very good values if you continue to see this rotation, this value trade, they're the ones that are going to benefit the most. >> american outdoor brands is now out with its earnings. let's get over to susan lee with the details. >> formerly smith and wesson, down 7% on decent volume let's quickly run through the numbers in the earnings. beat on earnings per share, 57 cents. revenues coming out ahead of estimates as well. the guidance was weak for the next quarter, and the full year, for the next quarter it looks like american outdoor brand is 7 cents to 12 cents. analysts were looking for 31 cents. for the full year, this is a wide miss, $1.42, $1.62 is the range they have given us analysts looking for $2.36 as you see coming in half the number we do have the stock down over 10% over the past 12 months. it's really underperforming the rest of the defense sector, trading at 20 times earnings american outdoor brands sitting at ten times forward earnings there. back to you. >> susan, thank you. michael, i don't want to oversimplify it, is this the trump phenomenon doing well under president obama, fearing he would crack down more than he would. under president trump maybe they've pulled forward a lot of that demand? >> that's the way the stock trades well below the pre-election day levels it's not necessarily the business that's going to follow exactly along those lines. but yeah, i do think that basically, the threat of tighter gun control was some of their best marketing and they're now without that. >> paul, anything you would add as we wrap up this market day? is this the kind of day that has you looking for further declines we mentioned how some of the things were trading below the 50-day moving averages what makes this more significant to you >> i don't know how much significance i would place on it tomorrow is the last day of the quarter. i think most of this is happening today, you're seeing a lot of that repositioning, selling. the stocks down the most today were up the most coming into today on the year. i think there's a lot of rebalancing here ahead of the end of the quarter and going into the second half. >> all right paul hickey, thank you, as always morgan stanley boosting its dividend 25%, adding $5 billion to the buyback program after passing a fed stress test. ceo james gorman tells us exclusively about his bank's financial strength plus, the nike results are due out any moment now we'll bring you instant analysis as soon as they're out we want to hear from you contact the show on twitter via facebook or send us an e-mail. you're watching cnbc, first in business worldwide attention homeowners age sixty-two and older. one reverse mortgage has a great way for you to live a better retirement... it's called a reverse mortgage. call right now to receive your free information kit with no obligation. it answers questions like... how a reverse mortgage works, how much you qualify for, the ways to receive your money and more. plus, when you call now, you'll get this magnifier with led light absolutely free! when you call the experts at one reverse mortgage today you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home... and here's the best part... you still own yohome. call now! take control of your retirement today! welcome back a broad sell-off today the dow closed lower, 167 points it was down more than 250 at one point. financials were the best performing sector, on the back of yesterday's stress test results. ceo james gorman joins us from the morgan stanley multicultural leaders conference melissa? >> thanks so much, kelly and james. i know you're busy on a day like today with the conference going on. >> great to be here, melissa, thank you. >> let's talk about the markets. we had seen a sell-off we closed off the lows of the session. but what has happened in the week or so as you know is global bonds around the world have been down for three straight days yields have been higher. do you think that that is the cause of the market jitters that we're seeing right now >> there's obviously some connection with what's going on in the equities market and bond yields we've had incredibly flat yield curve. i think this is now beginning of the perhaps more normalization it's a small move in the greater context, but it's been a move. >> and it's been a move, pretty startling move in just the past week, when you think about the standards of the bond market to have the u.s. ten-year yield go up by 10 or 11 basis points in a matter of days is a pretty big move you had hawkish commentary coming out from the ecb, the bank of england, bank of canada, the fed indicating it's going to tighten further. do you think investors may be too sanguine with the rising rates? >> it's all a question of where they're rising from. we've had extraordinarily low rates around the world the fact that you're seeing a path toward more normal rates, i don't think that's a reflection of being sanguine about it we've all been waiting for this. it's not totally clear that we've got the adjustment, but we've been waiting for some action the market, as you know, incredibly low volume, low volatility we've been trying to reconcile, obviously the equity markets relatively expensive, but corporate years are phenomenal on the one hand the flat yield curve, and conflicting messages from the various monetary regimes around the world so we're now coming into this period of real volatility. people are taking positions. and we're seeing that action in the market. >> for instance, in today's market action, we saw the volatility index jump. >> i saw that. >> up about 14 at one point in the session. do you think that's just sort of a precursor of what's to come given what's happening in the markets? >> look at where it's been we've had the most inactive three or four months for a very long time. so this is now moving back to people taking positions. the market having a view melissa, we've had a very unusual situation. the global conomy, if you add up what's gone on in the u.s., china, japan recovering, europe actually has done remarkably well given all that's been going on the global economy is doing well the uncertainty has been the political and geopolitical uncertainty. investors are trying to reconcile that the absence of obamacare being repealed and replaced, the absence of a tax reform program coming through, the absence of various other initiatives coming out of the administration, people are waiting for something to happen. and we're starting to get to an inflection point where you have to engage in the market. >> you're not worried that the rising rates we've seen around the world, that that's the start of some sort of tantrum part two? >> i don't think so. if we have a healthy correction here, that wouldn't be all bad watching cnbc today, anumber o comment taters talked about we're due for a correction you've seen what's gone on in the so-called faan stocks. they're off again today. there's a rotation there's a roigs into financials. i'm sure we'll talk about that in a min. >> yeah. >> these are healthy adjustments to the market. markets shouldn't be moving in a straight line. am i concerned about this? no am i surprised not at all >> let's talk about the stress test results morgan stanley today up nicely better than many of its peers in the market as you well know. because you watch the stock very closely. what does this tell us about the health of the bank stocks and banks as an investment, particularly when investors are grappling with how much they should be paying for bank stocks when it comes to tangible book value? >> step back for a minute and here we are eight, nine years from the financial crisis. the capital levels, the level of liquidity, the change in leverage ratios, has been historic everybody should declare a little victory here. the regulators have got the capital position of the banks into an incredibly strong position in this country not everywhere in the world, but this country what you saw was 34 banks came through. >> yes. >> that's a great testament that the banks are sufficiently capitalized. with that came in many cases significant increases in din dends and buybacks very healthy dynamic do the banks represent good -- we increased the dividend again, a number of banks did. the yield on these stocks is around 2%. the yield alone, and then they're trading in many cases still at discount to book. >> there's a lot of talk about the potential for deregulation even aside from deregulation, a lot of bullish bank investors will make the case that it's just the notion of a lighter touch when it comes to enforcement that could really help the banks do you feel under this administration the handcuffs are off, so to speak, that you're in a much more favorable environment for your industry? >> nobody wants handcuffs to be truly off. the last thing anybody wants to do and certainly any of my peers would recommend is that we move back to the deregulation that we had prior to the financial crisis that did not end well. we've had a painful decade of rebuilding the banks capital on that on the other hand, eight, nine years of continuous regulation, supplemental leverage ratio, tier one capital ratios, and i could go on forever, there's been a lot and let's consume, take a pause now, and there are clearly some areas that need to be dialed back a bit. >> on the point of slr, and lcr, liquidity coverage ratio, there has been talk among the administration officials easing up on those two ratios in particular, and secretary mnuchin said easing up on lcr could unleash or free billions if not trillions of dollars in liquidity. how could that impact morgan stanley in the banking industry? >> i think it's bullish for the banks, to be honest. if you look at -- just take the supplemental leverage ratio, if you look at the securities held on the balance sheet, they're not risky securities this is not what we should be protecting against we should be protecting against the risky assets i think some of the adjustments that came out of the white paper from treasury, they make good common sense and other regulators and leaders around the world have been talking about this listen, the u.s. economy is recovering the banks are extremely well capitalized. we now need to take some of that capital to help grow and accelerate economic growth in this country and grow jobs. >> what would morgan stanley do if that happens? i'm also curious about the impact you see on the system there's some argument if you free up the billions if not trillions of dollars in liquidity, it could have an offsetting impact to fed tightening on monetary policy. >> i honestly don't think there's going to be a dramatic shift. this will happen very gradually. there will be a reassessment of some of the regulatory rules which is coming. certainly we would not advocate throwing out dodd/frank and starting again there is sensible adjustments. this is going to take place over a measured period of time. i don't see a flood of new liquidity coming into the market. >> last question, james, because we're just about out of time how do you rate or grade the environment for banks for morgan stanley today versus, say, two, three years ago? >> oh, my goodness it's so much better. we've done the hard yards, getting our houses in order. in our case we've sold or shut 10 to 15 businesses. we bought smith barney we now have $2.2 trillion of clients' money that we're managing around the world. much more stable well capitalized strong liquidity and prime for growth now, you're seeing that in higher return on equity. you're seeing that in some of the changes taking place in the regulatory regime. you're seeing that in the impact of interest rates. if we get a more normal yield curve, i'm bullish on the bank stocks >> james, thanks so much for joining us i appreciate it. >> great, melissa. >> kelly, back to you. >> good stuff, melissa melissa lee speaking with the ceo of morgan stanley. anything jump out at you, mike >> pretty much as expected i think the tone he would take in terms much the positioning of morgan stanley as a firm i think he feels a little redeemed by going by the smith barney buy he's cautious about the direction of the markets. >> i thought he seemed almost giddy for james gorman at the end of it, a nice smile, saying it's so much better now than it was. >> i think the environment's better his stock is better. >> yes undeniably maybe if you go back even five or six weeks when the financials had sold off and before the stress test results -- look, we know the trading environment in the second quarter they repositioned themselves he talked about $2.2 trillion in assets sold the shuttered 10 to 15 businesses. >> morgan stanley is one of the firms that did get a little bit of pushback from previous stress tests by the fed and did not this time. i do think that probably is why he's in that kind of a mood right now. >> all right that was james gorman speaking with our melissa lee meantime, nike earnings have come out let's get to susan lee with those numbers. >> nike higher in after-hours. this is after we have top line and bottom line, beating expectations eps coming out 10 cents ahead of what analysts forecast also revenues topping estimates as well. in line with the trend we've seen so far this year. the north american weakness, slightly this time going above estimates, whereas emerging markets revenues were slightly below. the trend so far is the opposite the emerging space in europe making up for the slowdown we're seeing in north america. it looks like that trend may have reversed. also, we saw inventory gains in the quarter. this might be, i would say probably the weakness in the report card, up 4% the previous quarter they reported a drawdown in inventories of 8%. don't forget in a few weeks we have nike direct selling on amazon as they've been trying to cut 2% of their work force >> thank you, susan. stephanie back with us you're a shareholder you're still kind of holding your breath here >> holding my breath that comes on the conference call but overall, i think expectations were really, really low for the stock headed into the print. i think everybody expected a miss everybody expects them to guide for fiscal '58 for 2.40. i think we think this is the last bad quarter inventories are up 4%. that's a good ratio. sg & a is better than expected if you look at emerging markets, up 18%, china up 16% averaging the whole area, up 6%. north america up 1%. i don't think that's a disaster. what was not great, gross margins. more than people thought we have to kind of get clarity on that. i don't expect that to get better the guidance is going to be the key driver to the stock. >> it's interesting. the street basically took the announcement a couple of weeks ago about the restrek tur. the amazon news, we have to brace to see if they really downscale expectations now the stock is above that level a couple of weeks ago before they had the restructuring announcement maybe the street in general misread the signal. >> that's a fair point nike up 3.5% to 55 a share. >> retail is so hard, right? everyone wants to kind of be contrarian macy's and jcpenney and nordstrom. i think the apparel guys will continue to do well. pbh, they've been able to hold in quite well, do better than hold in, they've done quite well i'm a buyer whether it's down or up i think this is the last bad one. >> you think this still could move lower if they don't say the right things on the call >> guidance is going to be key 2.40 is the number i think if it's lower than that, the stock might give back some. >> stephanie, thank you for sticking around for us stephanie link a news alert on netflix. what's happening, sue? >> basically ak filing, netflix is disclosing that the resignation of neil hunt who is the chief product officer was accepted at that point he has now been replaced by greg peters mr. hunt resigned effective june 23rd of2017. greg peters taking over that position kelly, back to you. >> all right not much action in netflix shares on that thank you, sue a big down day for all the major averages today the nasdaq was hit down the hardest, down about 1.5% bob is here at the new york stock exchange to recap some of the action. >> a big down day. with this move here today, the nasdaq now on pace to break a seven-month winning streak it's ril i been the large cap today. they saw trading that was three times the daily average volume on this sell-off a lot of it coming from kid stocks which had been the big leaders, now seeing that great rotation, if you will, out of the tech sector and leading that today lamb research has been selling at all time highs now down for the month after being one of the leaders this year. apple as well, a big drag for the month, having one of its worst months since last year, april in 2016. some of the usual suspects have been following along causing a drag one of the big ones today, bucking the trend was walgreens after it ended its merger with rite-aid that was a near $9.5 billion deal now doing a smaller acquisition of just stores for just over $5 billion. >> bertha, thank you more on that in just a bit bob, also keeping an eye on the ipo today. >> yes important thing is, the rotation bertha is right. look at the s&p, we were down as much as 34 poiptsd we practically cut that in half. that's partly because of rotation we saw a lot of sectors actually in the green today so take a look at the banks, for example. the yield's bottomed this week moving up slowly we've been getting higher dividend yields, all moving to the up side today. energy stocks, oil stabilizing around $45 maybe a little bit of reflation going on oil stocks fall in the green today. retail stocks, this is another underloved beaten-up sector for the first half of the year many of the names were in the green today. also, the market leader, second market leader health care stocks also did fairly well today fractional gains for most of them some of them down slightly, but overall that's a pretty healthy move blue apron, okay, $10. that was the low end of the range. it opened at $10 it got as high as $11. it closed right on the button at $10. they got it done it didn't drop below that ipo price. kelly, back to you. >> dillard's up 5% bob, thank you very much bob pisani coming up, the british government delaying fox's takeover of sky news what that means for murdoch rupert's media empire. the power of 100 of the world's top companies. the power of a proven 15-year track record. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. welcome back it is time for our cnbc news update. thank you very much. hi, everybody. here's what's happening at this hour the white house says president trump will meet with russian president putin at the g20 summit next week in germany. it did not say whether the president intends to address accusations that russia interfered with the 2016 presidential election. iran says islamic state leader al baghdadi is indeed dead the isis leader has frequently been reported either killed or wounded since he declared a cal a fate to rule over all muslims from a mosque in mosul he did that back in 2014 that mosque was retaken by iraqi forces today. greta van susteren is out at msnbc. the two sides have agreed to part ways. she will not appear on her show this evening and will be permanently replaced by ari, the network's chief legal correspondent and host of a show on msnbc on the weekend. the justice department is giving up the legal fight over the washington redskins name it sent a letter to a federal appeals court conceding that a supreme court decision on trademarks last week means that the redskins would have prevailed in a legal battle. you are up to date that's the news update kelly, i'll turn it back to you. >> there's a lot going on there, sue, thank you. >> i know. there were a lot of stories today. >> that's -- wow, okay sue herera also this, 21st century fox hitting a potential speed bump we'll get you the details next republican senators are working on the bill to replace obamacare, and considering keeping a key part of the legislation, and a lot of investors may not like it. a tax issue. those details coming up. 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(upbeat dance music) (upbeat dance music) (bell ringing) a usedwhat should i watch? show me sports. it's so fluffy! look at that fluffy unicorn! he's so fluffy i'm gonna die! your voice is awesome. the x1 voice remote. xfinity. the future of awesome. welcome back a sharp decline on wall street today. the dow down at one point more than 250 points. decline of about three-quarters of 1%. about the same for the s&p 500, which was down 21 today. the russell 2000, look at the nasdaq, the biggest decliner in the big cap tech names in the middle of all the action 6144 on a 90-point decline for that nasdaq. the vix also jumped up nearly 13 today. certainly over 11. checking on shares of blue apron, that was the ipo today. after hours it fell below the ipo price. $10 unchanged for the moment that's where it closed at 4:00 p.m. it did just move below that point a few moments ago. executive chairman rupert murdoch's takeover of sky. british officials calling for british investigations after the media secretary found the $15 billion bid could give the murdock family coverage over the media. it feels like this has dragged on for years i thought they would get a go-ahead in ireland. how much of a surprise and setback was this >> we heard they might refer it to the competition market authority. basically another regulatory scrutiny period. it's going to take about six months before we finally have clarity. as you say, this has been going on for a long time it will be more than a year actually by the time we finally learn the fate of this deal. whether or not it's going to go ahead or not. >> is this really about market power, or is this about politics >> i think it's really about politics we just had an election in britain. it was pretty inconclusive the ruling party, conservative party didn't have enough seats to form a government had to do a deal with a smaller party to get a working government it's not popular at the moment in all likelihood there might be another election in the next few months the country's still pretty raw in the aftermath of brexit this is a big case of kicking the can down the road for sure >> what do you think the odds before today's announcement is for today's deal >> i think it still looks more than likely it will go ahead we have to remember the political climate. the labor party, if there's a snap election in the labor power that ends up winning power, there's zero chance that this deal goes ahead. they've already spoken out pretty vocally in terms of their opposition to the deal because of the power it gives rupert murdoch, the extra influence it gives members of his family. >> matt, what makes it such an attractive asset for the murdochs >> highly cash generative. it would certainly boost the bottom line of 21st century fox. there's a lot of synergy there it's the leading pay tv company in europe. frankly, it's also technologically at least streets ahead of most of the pay tv companies here, the cable and satellite companies we have here there's a lot fox could learn from all of sky in terms of user interface, in terms of customer management, customer retention, those sorts of things. when you look at what's going on in the u.s. in terms of cord cutting and getting direct to consumers in the way that media companies are now trying to do >> we'll see if they do end up being able to make this acquisition happen matt, thank you. >> thank you. now, one of the republican parties' main goals is to cut taxes. now it may not be repealed we'll have the details right after this [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock. oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. tget ready.... oh, no! run! for the breakout event... [ minion gibberish ] of the summer. we're going back to villainy. despicable me 3. rated pg. welcome back there's one obamacare provision some senate republicans are advocating to keep in their bill that will replace the aca. it may not go over well with investors. kayla? >> kelly, some republican senators are talking about preserving the affordable care act tax on investment income it's a 3.8% charge on dividends, capital gains, et cetera, for individuals making more than $200,000 conservative critics, though, say it doesn't repeal obamacare if you leave it in but doing so could defuse the democrats' argument that it's a tax cut for the wealthy, could win over moderates looking for offset for insurer subsidies, and opioid epidemic, and cut by 35% in a decade leading to 2036. that's deeper than expected. the cbo says this income investment provision is one of the parts of the aca with the largest budgetary effects. providing revenue of about $17 billion a year senate finance chair hatch told reporters he opposed the move and wants the bill to save money for taxpayers, not justify more spending the senators corcoran and rubio say they're open to the idea, and collins said it was a step in the right direction. >> that is worth something like $172 billion and if that were plowed back into the health care system, that would make a difference >> multiple republican senators say they're still working toward a compromise by friday, as unlikely as that may seem. but it would still need a cbo score. john cornyn said as a practical matter they hope to finish health care by the august recess kelly? >> you know, kayla, especially after warren buffett's comments about the relief for the rich act, it's clear that the tax cut was not the main point but i wonder if it stays in place, and it looks more like obamacare than anything to repeal it. does it lose the conservatives that it has to go to the house to be voted on again >> interestingly, members of the house freedom caucus say they might be open to actually keeping this in there. so that's a sign that maybe the house would be a little bit of an easier hurdle than maybe the senate would be at this point. the prevailing issue has been, how do you have compromises that win over both the mad rats in the party as well as the more conservative members it seems you would basically have to offer them two very different packages to win their votes. it's unclear whether this would be the way to get there, although it seems like one of the higher priority options. >> kayla, i know it's probably too early to tell how this would spin into the tax reform possibility. if it would help the deficit effects of the health care bill, would that give more room to play with for tax reform, or would the increased revenue from keeping these taxes in there, essentially be spent as part of the health care bill >> mike, i think it would actually probably be the latter. but the cbo did say in terms of the deficit, one of the single biggest indicators is this investment income tax. $172 billion is the effect on the deficit. so that is a huge pot of money that senators are trying to figure out how to work with. and if they can have that to acce access it seems the moderates would like that to go towards offsetting some of the areas they want in this particular bill and not necessarily set that aside for tax reform. >> all right we'll see, kayla thank you. meantime, us millennials apparently can't get enough avocado toast. one company is hoping it will entice them enough to apply for a mortgage coming up on "fast money," tech's had a rough month a top technician said the wreck is just getting started. hanas u ll you wt meyo need to watch out for. t mail and packages. t mail and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ all right, it's time now for today's fast take and the first one up is the collapse of walgreens effort to buy rite aid. you have a stock down 26%. granted, we're talking about a decline of $1 because that's about how much the lower the company is trading were they correct to block this deal >> i don't know if it's correct. clearly, the numbers say it would create dominance if the deal were to go through and there was a tremendous amount of questions about whether it would be allowed before. >> it's a $3 stock now >> it's a highly levered situation. their going to get 5.5 billion dpl cash from walgreens. the half for store base and then the break up fee $7.2 billion in debt so, $7.2 billion in debt and the market is saying, so that's why i think there's a weird bright side to look at it stock's down by a quarter today, but the business is going to be had as big as it is. >> so it's down 12.5%. i don't know if we can call that a silver lining. maybe the termination fee is another one. next, met life is well, ditching the life part in its spin off calleded bright house, the new move was just approved and will make prudential the largest. still, the end of an era >> it is metlife abandoned the snoopy thing, which was its consumer facing brand which was related to this line's business. so they're saying there wasn't a lot of logic to keep it attached to the international business and employer based >> are low rates to blame here >> i think it's partly low rates, the fe dush yar rule that's coming in in terms of how financial products are sold. and also, a look at the business as it was and say like they don't necessarily feed one another. and i think spin offs of this time, they have a pretty good record >> i told you, i went to all these insurance conventions and snoopy used to be my favorite toy to get amc will offer an ad free version on comcast network for $4.99 a month. this means you could see walking dead at the same time as everyone else, but ad free i don't understand in terms of timing how that's going to work. >> in other words, the duration of the show is not going to match up what's on the air the. >> appeal of this is that i can continue to flip through the cable channels like normal if i pay for it, if it starts at 7:00 and ends t what time? is there a filler? >> if they're going to have to maintain the suspense for people watching >> exactly >> or paying a premium to -- >> what's interesting are the economics of these apps. 4.95 a month i think amc gets 40 cents per sub from the cable network i doubt an individual sub is worth five bucks a month to amc as it is now >> if they sign up a bumpbl of people this way, it couwould be quite lucrative. we can't resist this one sofi is is going to deliver a month's worst of avocado toast for a month if you buy one of their homes. will this millennial gamble et work >> qulant imagine it's going to work beyond us giving them a lot of attention first of all, the it's a loaf of bread in avocados. they're not giving you avocados. it's not going to be a prepared meal >> again sofi relatively you know, bright as marketing scheme but look, they really need to build out this business more than they have to the state. now, as everybody know, they originated byi offering ivy league students a bet erat rate. it needs nor traction. i don't know whether avocado toast for a home mortgage is really going to do it. >> expect bring attention to maybe millennials are interested in buying homes and avocado, too. >> all our fault for covering this story all alopg zblnchs james gormen sitting down with melissa lee this hour. here's what she had to say >> if we had the healthy correction here, that would feel bad and watching cnbc today a number of commentators talked about we're due for a five plus percent correction weather seen what's going on in the so-called fang stocks and they're off again today and there's rotation >> these are healthy adjust ms market shouldn't be moving in a straight line. am i concerned no am i surprised not at all >> well. >> not surprised i guess nobody has been around markets long enough to be too surprised by this little p pullback also, volatility helped parts of morgan stanley's business. >> is this connected, viewer just pointed out we spoke with kayla and how they're not going forward with the repeal of tax on income. froms. >> someone focused on the tax implications, maybe you'll get a bill down the road was going to say now is the trigger it was a lot of those nondividend paying stocks that god sold off the hardest >> it did get up to 15 wow. netflix down about 2%. alpha get beth down about 2.5% let's look at the movers nike, we're still waiting on the call to hear more about guidance, but the first reaction from earnings is investors cheering shares up about 2% different story for smith & wesson, down >> nike, sbresing to hear the sbins and how the stock adju adjusted still an expensive premium valued stock 21 times next year's earnings. it's got to kind of grow its way and deserves that, but what i'm interested in is the psychological set up now the street is as cool on nike as it has been in a long time you only have less than 60% of analysts recommending it b obviously, the it's a show me stock. so i think the call will be interesting and have implications >> by the way, we had h and measuring and conagra. we've had plenty of earnings to get through this week. next week, we're going to start to turn back towards those first indicators and i think that tells us whether this whole fed tightening thing is going to happen >> if the markets are going to be okay with that, that the economy is on a higher glide path, jobs next friday, a week from friday. that will be one of the ways >> michael, thank you so much. that does it for us today on "closing bell. thank you, again, everybody for tuning in. "fast money" begins next "fast money" starts now. live from the nasdaq market side overlooking times square i'm melissa lee. your traders are -- tonight, the chart master says it's showing signs of slowing down. plus, happy birthday to the iphone turning 10 years old today just how far the smart phone come in a decade tim has a special report and later, nike and micron are on the move but first, we start off with a sell off in the markets and while the tech wreck grabbed the headlines, the real story might be manager bigger. check out the ten year the selling in the bond ma