divide at the federal reserve. but we do begin with fears about the world's biggest retailer. shares of walmart tanking right now after cutting its three-year outlook. we're currently down by 8.3% at $61.16 a share. walmart executives meeting with analysts at this hour, as we mentioned, and courtney reagan has all the details of it. >> hi there. walmart investor meeting, the analyst q&a wrapping up, the group asking for more clarify on the warning on long-term guidance but not much more clarity was given. executives highlighting that the major investments they continue to make for the earnings per share impact. fiscal year 2016. walmart now expecting sales growth to be flat due to foreign exchange impact. also for 2016, reiterating the earnings per share guidance of 440 to 470 but 2017, that's when the he have yet guidance comes in. eps down between 6% and 12% from prior year, walmart's guidance given. the impact really lies in the fiscal year 2017. walmart says it's the second year of heavy investment for the company, mainly in e-commerce and wage increases that. wage investment accounting for 75% of the eps reduction in fiscal year 2017. moving forward, walmart sees 2018 relatively flat, 2019 eps up 5% to 10% from the prior year so as a result of all that have investment basically walmart cfo holly says walmart expects sales growth of 45 billion to 60 billion over the next three years and a 20 billion share buyback. a lot of numbers to go through. >> a little factoid with you, with the lows of the day walmart lost more than $20 billion in market cap. this is the fourth worst trading day for walmart in 20 years. dominic chu has been looking at where analysts stand on the retail giant. dom? >> as we talk about the $20 billion share buyback that courtney just referred to, it's amazing to think that $20 billion at its low that has shaved offer the value of walmart overall the, so as you look at intraday, still neither lows and if you look year to date the stock has been on a fairly decent slide and of the year-to-date chart not pretty at all for wal-mart. just to put the $21 billion in perspective, if you take $21 billion and take a look at some of the companies that equates to in terms of market value, it's pretty interesting. the likes of hershey worth around that amount of money and mike ron worth around that amount of money so it's almost like you've lost that company in terms of market value. when it comes to what happened to the analysts here, on average they still say that the target price implied by analysts so far means there's possibly 12% implied upside. there are eight buy ratings, 19 holds and 3 sells. it also, again, just to kind of put a cap on this, mandy, $21 billion in consumer product terms. it's the equivalent at average prices on walmart.com of 600 million boxes of pampers diapers to put in a bit of perspective. >> got that perspective very clearly in my mind. thank you very much, dom. walmart is the biggest drag on the down as the dow is down as much as 128 earlier and walmart pulling down the dollar stores and bob pisani joins us from the floor of the stock exchange. hey, bob. >> getting a modest rally in the middle of the day. put up the s&p 500, 1994 at 11:30 for the european open or close and we moved up rather dramatically. we can show what's going on and we're in positive territory and now sitting flat. energy materials and health with a rally late in the afternoon, late in the morning at this point, right across the board. no particular movement, no particular reason for that but put up energy, materials, health care, technology and consumer staples leading the market. a lot of people are saying walmart is the reason the stock market dropped. that's part of it, but look at s&p 500. walmart announcement came out around 10:30 and we saw a further decline after that but stocks had already been declining going into that. lack at the department stores, sears, jc penney, dill yard's, nordstrom, all to the downside as well as the discount, target, dollar tree, kohl's and ross stores but, again, walmart dropping before going into the announcement >> the ipo market facing its biggest test of the year. kayla tausche reports on it from the nyse. >> hey, it is a big test, and it's a turbulent market backdrop. two debt-heavy companies are still on track to price their shares for some $5 billion in stock. it's the biggest week for ipos that we've seen all year. first you will albertson, the third largest grocery store in the country and it's hoping to put its offering between $23 and $26 a share raising about $1.6 billion at mid-point and up to about $1.9 billion and payment processor first data that wants to raise its price between $18 and $20 a share and at mid-point of that range it would value it at around $17 billion. we'll see after market close whether their advisers decide if those ranges still hold. what they will look at is the vix as a broad index of appetite and that's up slightly but still below the $20 level. they will also look at the closest stocks for albertson's, and there's kroger down 3.33% and, unfortunately, walmart as we were just discussing. you know the story, walmart down 8.5%, think first payments or fis, the only name in that bucket that is in the green. if that's companies price below the range they won't be alone. majority of deals that happened since labor day priced below the range and the average deal has traded down 3%. that's not a great return on your investment so some companies are saying we'll wait. neiman marcus is the latest to do so and for each of the last two weeks, guys, 11 companies on the calendar set to ipo in each of the last two weeks and only five happened and two behemoths are going to try to make it through and we'll learn in a few hours whether they can do it. >> federal governor daniel tarullo speaking to our steve liesman on our "power lunch" and he made news saying he doesn't think it's appropriate to raise interest rates this year and fed chief yellen said she expects a rate hike this year so are we seeing the signs of an internal revolt? too strong a word, divide at fed, steve liesman? >> one analyst stan greenhouse from btit called it mutiny at the fed. two writers saying they don't think the fed should hike this year this. comes after fed chair janet yellen saying in late september that she is among those that see the rates being raised in 2015. presidentially appointed governors that work right with the chair and here's what tarullo said yesterday. >> right now my expectation is given where i think the economy would go you wouldn't expect it would be appropriate to raise rates, but i want to hasten to add that that is an outlook that changes based on developments in the economy and our being forward looking about it. >> we'll talk about that in a second but here's what the fed governor said saying, quote, equilibrium real rates likely to remain for some time and policy options more limited if conditions deteriorate than if they accelerate, risk management considerations counsel and waiting to see if the outlooks diminished. disagreement over the timing 6 liftoff is getting much more heat and personal than i, diane, would expect. janet yellen spoke ahead of the second jobs report and it's entirely possible, folks, that both governors got a green light to make the remarks. here's the problem. yellen is likely comfortable taking october -- a rate hike in october off the table and unlikely uncomfortable taking it off and thinking there has to be a live meeting and the comments may have gone further than yellen wanted appearing the appearance of a couple of doves. >> what did dubbedly say? >> in the middle feeling that it could happen. everybody is pred dating this on the outcome. >> on the outcome. >> on the data. >> on the data. >> think about between now and december. >> have to leave it there. let's go to seema mody for a news alert. >> hey, tyler, several reports that coke and pepsi are looking at making an investment in chobani and cnbc is learning that coca-cola is not actively looking at chobani as an investment and that's according to people familiar with the company. shares higher than.07% in terms of trade. >> to housing and the number of people applying for a mortgage tumbling. diana olick with what's going on. >> reporter: all of this is due to the start of new regulations for lenders that went into effect october 3rd and had everyone worried so the big jump to get in before the deadline and then the big drop afterwards, but there is something more here. break out applications to buy a home, they had surged 27% before the rules but fell 34% after and are now below last year's levels for the first time since last february which was a very slow month for sales. quick note though, the ten-year yield which rates followed and mortgage rates headed higher. >> the big stock stories of the year, walmart. is it a good opportunity to buy the stock or should you stay away? 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[phone ringing] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. welcome back to "power lunch," everybody. i'm mandy drury. well, it's been five months since moving into the corner office of allianz. 85 million customers and 147,000 employees. they are also the parent to pimco. he joins us now in a "power lunch" exclusive. a pleasure to have you here. >> thanks for having me. >> let's address the elephant in the room and that's bill gross' their 100 million potentially plus lawsuit against pimco. does this lawsuit have merit? >> no, it doesn't. as you can imagine i'm not allowed to comment in detail on the pending lawsuit that we feel is without any merit and the more important thing it dilutes the fact that pimco has done really, really well last year since he's left, and he's spending all its time on serving clients and that's what we should talk about. >> but is it possible that perhaps maybe the culture at pimco needs to be revamped. is there anything that you would change? >> i think it's always different in culture when you have a company when after the -- compared to the time after the founders left so certainly things will change and if they are becoming more of an institution over time then culture will adapt but i don't think there's anything that has to change at pimco it. lee involve now that we're beyond the time of a founder of that institution and i think they are doing all the right things at moment and that's focusing on client and performance and nothing else. >> pimco's performance and its funds have held up, you say it's even improved and the company has lost assets, and that's a loss that's affected your asset management business. i know ceos don't live in retrospect. >> yes. >> but in retrospect, do you risch that you, allianz an pimco, had been able to work it out so that bill gross could have stayed at company, or did he have to go in. >> it's always an if, if, if and i was not involved at the time so that's not an evasive answer. i don't want to spend time on history but spend time on framgt future and delivering growth to our company. >> so let me then turn the conversation this way. pimco is a big part of your asset management operation. >> absolutely. >> the biggest by far, the fourth or fifth largest asset management division in the world butates management division for the first six months, profits down 20% from where they were. >> yes. >> how much of that decline is directly attributable to the turmoil at pimco? how will you turn it around and p.e.t. pimco, and will you ever consider selling? >> so many questions. >> you can handle it. >> absolutely no way would we sell pimco. get this question all the time from speculators. it has been a fantastic part of allianz over the last ten years. since we acquired it the company has grown 20% compound both in terms of assets and earnings. it's been a spectacularly positive story for us and it will continue. actually the outflows and the performance issues started when mr. bernanke whispered the word taper. that was long before we had the personality issues and that gets often confused in markets. investors are thinking about how they invest in fixed equities and other asset classes and if you imagine a rise in interest rates and the sore of the traditional products become less effective that's just a fact we have to deal in. that's why pimco is focusing on income products and alternatives and they are doing really well so despite outflows we see from the core products, we see inflows in the future growth platforms and that's giving me a lot of confidence that at some point, sooner or later we'll turn things on flow and earnings. >> yes, please. >> if i may just follow up. >> cutting people and cutting costs, we really want to focus the team and the team wanted to focus on service clients and really driving performance, and when the time is right we'll adjust to the different operating environment. >> a question on acquisitions moving away from all of that. there's been quite a lot of m & a and deal making going on, lots of activity here in the u.s., health insurance sector in particular. any acquisitions on the horizon for you, allianz in. >> we always look for investments and if an attractive opportunity arrives we'll go for us. >> you can tell us, we won't tell anybody. >> of course you won't. we're very disciplined in terms of what we're looking at, particularly in the property and casualty industry, and the second thing is we look on to acquisitions that really happen into markets where already we have a strong position, where we have a strong management team that can manage intergrags and we try to make sure to overpaying and some of the tells we've seen recently wouldn't meet the criteria >>i know you have a question but as a further on my question, geographically is there an area of the world you're interested in. >> it's an ambidextrous strategy. looking to grow in the markets and also in europe where there's a lot of room for consolidation and for the last five years we've done many more bold acquisitions and right now we're the market leader in turkey, a country with as many people as we have in germany. by the way with the same market share in turkey as in germany. >> let me get a question in as an observers of the global and germany's economy. what's been going on at volkswagen, how damaged is that brand and has this trickled over and affected germans? >> the second question i don't think so. i think that that's an isolated case and i would see it because germany has a great each utation in terms of corporate governance. we have a great reputation for high quality product and have a great reputation to take care of our clients so i would call this an extraordinary event in many ways but also the good sense that i don't think that you have to worry about made in germany at all. now, obviously we don't like what we see and we hope it gets fixed very, very quickly because people think about us as being part of the community and i'll tell you the business community didn't like what it was seeing. >> okay. thank you you so much for being with us. >> thank you very much. >> thank you very much. >> naoki meeting with analysts said, its stock up 30% this year. how does the athletic giant plan to just keeping doing it? nike's ceo will join us in just a little bit. where. it's been smashed, dropped and driven. it's perceptive enough to detect other vehicles on the road. it's been shaken, rattled and pummeled. it's innovative enough to brake by itself, park itself and help you steer. it's been in the rain... the cold... and dragged through the mud. introducing the all-new mercedes-benz gle. it's where brains meet brawn. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? 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[ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive. it's active. that's the power of active management. welcome back to "power lunch," everybody. i'm mandy drury. it's now time for the power pitch with two entrepreneurs who have only 60 seconds to try to convince a panel of experts that their business has what it takes to make a big swing for tennis lovers. let's listen in. >> hi. i'm lavie. >> and i'm sergei feingold. >> knowing how many tennis balls you hit won't improve your swing and knowing how many steps you take and we're focusing on improvement rather than results. >> this lets you see swing data on your racket as well as the phone and the challenger is just as versatile as you are, can you take it anywhere and attach it to anything. we've raised over $100,000 from poem who shared our vision. i've been a certified coach for seven years and have played all my life and see a need for instant and actionable data. have it on court and check progress and share and compare data with players everywhere. we're not only a tennis company. we're building an entire ecosystem for courts. you can put it on your bike, snowboard, golf club or even your car. >> welcome to today's power pitch. you saw the guys take a swing at pitch and let's meet panel. joining us is the board member of the new york angels and advises and invests in over ten startups and from the bay area david wu from maveron and the firm's portfolio includes ebay and group orrin and in san diego we have former pro tennis player james blake who has won numerous titles and championships and even reached the semifinals of the 2008 beijing olympics. first question goes to you. >> you're not first to market so how do you compete against big names like sony who already have similar offerings out there? is one of the big key differences that we have is the screen, right in the screen gives us instant data and as a coach myself that gives us a big advantage because now you can fix strokes on court. you can kind of build credibility with your players and really gives you a better way to share data. >> david? >> i played competitive tennis in high school and remember one of the coolest things was at tournaments training camp they actually tracked a few of my matches at at shot-by-shot level. almost all of the actionable insight came from overlaying that shot-by-shot choice on top of which points i won and lost. how soon are you going to be able to integrate in context actual data? >> you hate great shot that's a winner and maybe spin the racket and hit the racket and tap the bott bottom, some non-intrusive way to say that's a winner. at end of the day you say what did i do on my winners technically, what kind of shot was it and what helps you there in. >> and challenger helps with multiple challenges, playings doubles or singles, two or four on the court and they can all communicate with each other. can you see what you did and you can see who reacted to it and how your stroke affected their response. >> james? >> it this really going to be marked the towards pros or those looking to get to the pro level? >> not necessarily trying to go up to pros and say this will take you from number 50 to number 1 but looking at that market of people trying to improve actively no matter what level they are at. >> one thing to be on the shifls, another thing to have consumers proactively go out and want to find you. how do you spread the word about your product? >> one thing that's helped us is that there's competition there and they have helped pave the way for people to go and search tennis sensor and tennis tracker and we can kind of rely on that. coached a few teams in aroundo and if one person knows about it several other people with. >> if this is $200 playing with this device and it breaks every time it his it i'll be reluck tonight buy it again. >> it cwill be incredibly durable. >> i think that this is a really cool product and i also love the idea of empowering consumers with data but i'm really concerned about the competitors in the space, especially big names like sewny that already have extensive research and development, a lead into market and lots of marketing spent so i feel like i would need to see more data with them out in the marketplace and for right now i'm out. >> david, what about you? >> i think they are, would go on all the right things but i'm not sure their v-1 product has enough there yet to move the needle so i'm not ready to invest yet so i'm out for now. >> jaimts james? >> i think it's a cool product works have loved to see it and seen some of my information, how hard i'm using it and what kind of spin rate but i just don't know if the marketplace is big enough for enough top junior players or top level players that would make this profitable so for right now i'm out. >> what's your reaction, three outs but, you know, interesting feedbacks rback as well? >> negative feedback is more positive feedback because it lets us know what we need to improvement we'll keep working to improve it and get to where we want it and make it useful for players everywhere. >> that's a great attitude. thanks to all and that's today's "power pitch." >> what about you? do you agree with the panel? let us know if you are in or out on "shot stats. tweet us using the #powerpitch or tweet me and more on power pitch. >> the goldman sachs has been hired to help the company find a buyer according to a bloomberg report. fairchild semi is in potential discussions with suitors including on semiconductor and infinion technologies this. follows yesterday's report that the sandisk, another semiconductor player, is exploring athe possibility. gold trading at levels mott seen say way back on june 30th at 1,179, up 1.25%. moving on to silver, copper, palladium and platinum all in the green for a change today. that's 4 for 4 there with silver up 1.3% and copper up a percent and palladium up 2% and platinum up 1/2 of 1%. dominic? >> with all the metals are included up. like you said. if you look at some of the names like, all up around the 5% mark in trading, the were iners are winners as part of the gold ticker gdx, up about 4% on the day as well so gold miners following gold prices as they, tyler, typically do. >> dom, thanks very much. economists can be all over the place trying to predict key economic data month to month. we'll tell you about a more accurate way to forecast economic performance in realtime. plus, while walmart struggles fellow dow member nike just keynes doing it. the stock is up 13 minute. the company's show joins us live right after he finishes. you wouldn't take medicine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck. hi, everyone. i'm sue marrero, and here is your cnbc news update. russian foreign minister sergei lavrov says the u.s. refused to meet with the russian delegation to coordinate military actions in syria. he told russian lawmakers in parliament that the u.s. declined to send a high-level military delegation to moscow. london and tokyo becoming friendship cities after the leaders signed a cooperation deal. london's mayor and tokyo's prime minister agreeing to spend their money on culture and tourism. kohl's is expanding its same day delivery service to six cities. it's teaming up with an uber-like startup that contracts startups for those deliversries. and lawyers for a new york city woman who sued her 12-year-old nephew for injuring while excitedly greeting her says connecticut law forced her to go to law over her medical bills. yesterday a jury rejected jennifer connel's lawsuit seeking $127,000. the lawyers say the nephew's parents insurance company only offered her $1. that's the news update this hour. back to you, ty. >> the story behind the story. >> absolutely. >> connecticut state law requires that i file suit to seek those funds back. >> all right, sue. thank you very much. is there a better way to do economic forecasting. bob pisani has a special guest at new york stock exchange. bob. >> thank you, ty. a lot of applied ma schenck and now to even economic forecasting. the ceo of nowcast joins us. gisele, we do pick -- what's wrong with the way they do this? >> there's basically no science. we're using machine learning and paying data. >> what's the secret sauce? how do you actually go about getting economic forecasts and getting numbers that compete with wall street? >> well, we have a very sophisticated algorithm and econometric pattern and we're looking at human behavior to try to determine their consumption and spending behaviors. >> people look for inflation, the word inflation when they are concerned and you've turned this into an algorithm to get an estimate. >> we look at internet searches, ambient web, news, social media, blogs. >> a couple of forecasts recently. the floor was watching you very carefully on september 0th when you had an estimate for chicago pmi and put up the number, 53.4 forecast and the forecast you had was 48.1 and that came in at 48.7 which got a lot of attention on you. i want to put up the august income number, the consensus was up 0.4% and yours at 0.3 and you've had a few hits recently. i guess the question is longer term how does it go. the cpi, an estimate for tomorrow, basically in line with it down 0.2%. is it your contention that the way you're doing this is superior to anything else that wall street is doing. we're using signs and big data and there's no way a human being can react fast and if you want more information go to tradertalk.cnbc.com and the full article just up on the website. >> we love tom brady talk. thank you very much, bob. let's take a look at what's going on in the markets. we can see the dow is being dragged likely lower by walmart, currently at 17,mark and this is after we got some disappointing news from walmart. brad, starting with mal mart why do you think their forecasts may actually be spined as good news? >> well, i think if you look at way walmart has changed their operations reasonsth recently, one of the big components there is that they are giving people raises. their hourly workers across the board and they have announced they will pay people more. i don't think they are doing this because they will give them the money and the workers will have more money to spend and since think spend the money that will be a multiplirg 'fect. >> reporter: do you think this is good news overall and that maybe people are feeling more comfortable, maybe they have more wages and didn't have one before. they can maybe move a little bit further up the change >> the good news, if you will, is that a lot. issues pertaining to walmart is i had sin kratdic and structural and company figure, but there is news relating to the retail sector, the u.s. and that's what we've been depending on, consumer disregulars ry. so the good news, there's bad muss in some of this bodes well for the broader sector. the seams number today not have favorable and this bull market is long in the tooth and has been resting heavily on the consumer in the u.s. for the global economy, much less a domestic economy, and the it remains to be seen if there's enough left. the current earnings season is starting out mod raft. the top line numbers not very favorable. >> sounds like -- we've got to go, rich. sounds like you're retaining -- >> take a look at nike. it's the number one per formerer on the dow. so far up 30% and now management meets with investors to man out how it plans to keep the momentum going. we are live from the nike investor day with nic e's ceo. that's next. like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. prge! a manufacturer. well that's why i dug this out for you. it's your grandpappy's hammer and he would have wanted you to have it. it meant a lot to him... yes, ge makes powerful machines. but i'll be writing the code that will allow those machines to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world. whyour boss?ork for? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. you know, it's been a volatile year for the stock market and one company stands out as the top performer in dow for 2015. that's nic, up 30% so far this year. niemi holding its investor conference out in oregon today where the company is laying out its plans for growth. our sara eisen joins us with nike's ceo. >> good to see you, tyler, and it's good to be back in beaverton. thanks for having us, mark. >> absolutely. >> let's start with the news you just made on investor day. $50 billion by 2020. >> yeah. >> that's an ambitious goal to add 20 billion in sales over the next five years. >> absolutely, and we're not shy about being am pishs with our goals, whether it's product or the business. we feel very confident and our place here in the youths and around the world. >> what's going to drive that because it actually took more than ten years. >> yeah. >> to add the last $0 billion in sales. this is some super fast growth you're looking at. >> ultimately the consumer votes every day and we need to make sure that it's the best it can be. i'm -- the product with have in the pipeline and leading up to the rio olympics is extraordinary, the best we've ever had so i feel confident in the product and i also feel confident in how we're connecting to consumers. the brand is resonating around the world and we're investing a lot in servicing and really tlk for the consumer, connecting the consumer not only to nic but also to each other. a lot of positive opportunities for us. >> as you say this, we watch walmart shares plunge. they were down as much as 10%. is that another dow component, another globally exposed consumer giant? is that the problem that they are not connectinged with the consumer and you are and is there a bigger takeaway about the health of the global consumer right now. the brand is resonating and consumers are voting around the world and we have a great growth story. $50 billion is a doable goal. that's a number built up looking at every measure. >> can you take a look at chart like walmart today and for those who look at it and say maybe the u.s. consumer isn't in such great shape. yes, nike is a growth story but what are you seeing in front of the fundamentals of this recovery? >> we're not seeing it. we're seeing the consumer in the u.s. responding, you know, much like china. it's been a noteworthy i think is nike's performance in china, how we've done quite well and i think a lot of concern, not within mikey and within the overall market. >> not seeing any of the slowdown in the chinese consumer. >> we're not seeing it. in fact, our brand is accelerating. china's interesting because it's a massive opportunity in the sense. it's a mobile connections community. the growing middle class in i don't know is extraordinary and there's -- >> 30% revenue growth you saw last quarter that's. >> we've set the marketplace over the last few years so the foundation for growth in china is as strong as it's ever been. >> emerging markets were a weak spot in the results. i know you're dealing with currency issues there and some slowdowns. when do you see that turning a corner? >> as we move into rio and beyond we think that things are stabilizing and that things will start to the actually pick up a bit. >> even in brazil. >> it's all relative n.brazil we'll start to see the appetite as the market hits reset, much like has happened in china. we think that the opportunity in brazil for nike is exceptionally. >> i would say over the in the -- we've seen double digit growth for the emerging markets and that's over the course of the next year. nor north, nike still growing, what are your projections? >> not all 1% is created equal and the growth for north america for america is quite exceptional. we have a strong category of offense in play. we have great relationships with our wholesale partners, our e-commerce business ask doing quite well. >> have a new target on e-commerce that you wanted to share. >> yeah. we projected today, we're sharing with the investment community, that nike expects to grow our e-commerce business to $7 billion by 2020. it's at. >> a lot of that is coming from mobile? >> snowmobile where we're at and that's what we plan to do and we want to the connect them all to one access sgloint what else have you been doing digitally? >> you've been relatively quiet since no longer working on hardwares and wearables. >> there's a lot going on. digital for us we see as one of the most and enable technologies that help us create new products, from product creation all the way through. >> i always ask about apple and your relationship with tim cook on the board and you say there's things in the works and tags a good arelationship what. are you holding out for? >> we don't have anything to announce today. i know there's expectations today and i will say as we look ahead over the course of the next year, even today, we'll be announcing new partnerships that will be quite interesting to seem that we're very fun -- it's one in which -- to deliver more innovation and -- let's talk about you in just a moment. haven't learned from you since we heard phil knight is retiring and are you ready to step up as chairman in. >> first of all, it's not a done deal, so to speak, i feel very appreciative of the confidence in me. i've been in this role for almost ten years now. i know the company quite well and i'm very can have comment what i'm doing and incredibly confident in nike, our position, our management team so i'm ready. >> all right. >> i'm ready. >> thanks very much. thank for. >> nike is holding its investor day in beaverton and we'll send it back to you in new york. >> nike was the only brand that my 12-year-old wanted, resonating with 12-year-olds. there's a divide within the fed. does janet yellen face a leadership crisis? more on that story still ahead and a look at sectors right now. energy is currently the biggest winner with a gain of 1% and consumer staples is the big loser down .8%. you're watching "power lunch," cnbc, first in business worldwide. understands the life behind it. for those who've served and the families who've supported them, we offer our best service in return. ♪ usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life. ♪ welcome back to "power lunch." i'm mandy drury. here are this hour's power points. walmart shares falling after cutting its outlook. cnbc has learned they are not looking at chobani as an investor. >> after this quick break, the next time you order food it may be delivered by uber. we veal that one next. strategy the same way to create a financial plan built to last from generation to generation. we'll listen. we'll talk. we'll plan. baird. you ppremium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it? 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>> reporter: brian, from the 12 federal reserve districts and the beige report, if you will, looking nationwide at the economy in august to october they see moderate expngs continuing and there are concerns about manufacturing. they special click say it's weak and noted are adverse effects due to the energy problem and the strong dollar restraining manufacturing activity in a number of districts. consumer spending described as moderate. auto sales very strong and non-auto spending growing at a moderate rate. housing and commercial real estate improving and prices and sales volume up in almost all regions. commercial real estate stronger in all 12 districts. banking and finance described as positive, lending activity and loan quality improving. labor markets tightening with wage growth remaining subdued. in at least three of the fed districts, four, new york, philadelphia atlanta and kansas city there was actually a decline n.cleveland, chicago and san francisco weak demand for steel due to the strong dollar and competition from china weighed in on the manufacturing there, a little more xampt on the wage picture. san francisco actually had a headline that says this is -- prirl due to the increase in the minimum wage over the last year raising the wages for unskilled workers as well. price pressures described as contained and still climbing, primarily because of the discounts, if you recall, because of energy. >> better hohampton, thank you . let's bring in steve liesman. they did highlight auto sales and retail sales being okay. isn't it by nature auto sales are good? >> auto sales are more than okay. >> they are good, but rest of ret retailers are okay but they go together. if people are buying cars, probably not buying jeans. >> yeah. i mean, we've talked about over the years. my take on the beige book it's in line with and maybe just slightly stronger than some of the tenor of the data that's been out recently. what we eve seen, you know, some palpable concern and you heard about the economy going into recession and today's retail sales number coming in lower thanks pectations. these are all anecdotes for the 12 districts and seems a touch stronger than what we hear and we know the dollar has hurt parts of the economy and like tushism in new york and those are areas being impacted by the stronger dollar and i want to talk about something that's not been discusses on our air after that. several economists have been waiting that the number has been quite stronger than indicated by the top line number which as you know is a nominal new. it's not inflation adjust the. what do you think, brian, is happening because of the stronger do theary to things like retail import prices and other prices in the economy right now? they are going down, so what happens when you put the negative inflation number in there to will nominal sales, they go up. wall street companies like jpmorgan saying, you know what, we may be on a track of a 3.5% third quarter consumer spending which is quite strong. >> you point it out. >> you're missing the forest here. >> what you pointed out here is so important and it's one of the reasons that you and i have sort of discussed why i believe this sort of crazy fixation by the fed on inflation or at least a tenth of a point from 1.9 to the 2.0 their target is ridiculous because there's all these other measures which are impacting inflation, not just the idea, that yeah, health care costs are up and flat panel tv prices are down. >>i see your point but i'll tell you what the fed thinks about what you're saying and maybe i'll say brian sullivan said this next time i get to talk to them. >> and they will say who, who? >> no, no. here's the thing. they see what you're seeing and that's the reason why yellen calls it transitory. it's the very reason why she thinks that these issues of the stronger dollar are going to work through the system. the trouble they have is that they want to wait and see and make sure there isn't a gathering momentum to the downside of inflation but they do concur with that forecast that these impulses going through the inflation, through the economy right now are going to work about. think about the stronger dollar and think about this time next year the effects will be compared to the new numbers. >> the best brady bunch is when they wanted to buy a row boat and found these tickets and the girls goes on one side and the boys on another and now the it out with a card game or something, right like the fed is right now, starting to fracture more and more. the opinions seem to be getting stronger. >>-degree. >> and we're starting to seat bradys come to blows. >> three girls and three boils in the brady bunch. >> and the girls won because -- >> there are five governors and seven presidents. >> not a gender thing. >> just a brady bunch analogy. >> this is like brady bunch times two. >> the brady hawks and brady doves because they are all fed pigeons. >> and some feds have pigtails and some don't. there's an interesting eruption here in public and we don't know how to characterize it and we talked about this idea, dan greenhouse calls it mutiny at the fed and others say things are getting personal out there. pretty interesting this development. dan tarullo, two doves on the committee. >> that's the point i was trying to make with my bad brady analogy the fractures seem to be getting louder, seem to be having a little -- >> and maybe that's a focus of the idea that the they are about to get in the station waggen o take a strip. and that's when you expect the agreements to become more in public. >> don't wear the tiki, man. >> dan greenhouse is coming up in a few minutes. >> yeah, the tiki one i thought was the best episode personally. walmart having its worst day in 15 years after announcing sales for fiscal 2016 will come in flat. let's bring in oliver chen who reiterated a market perform rating on the stock. great to have you with us. >> great to be here. >> how much of this can be read through to other retailers especially given that management said positive traffic and momentum traffic in the u.s. will likely continue. >> that's a nice positive for the consumer, traffic is a hard metric to get and i would there is a retail revolution with the transformation and the big headline is wal-mart guide their guidance down 6% to 12% and the power is really shifting to the customer and walmart has to offer allotted more convenience and doing that costs money so that's the story for why the stock is so weak. >> why did you stick with your price target here? mean, you reiterated your market rate on the stock, but the $727 price target remains whichism place 25% upside from approximately where the stock is trading right now. given they lowered their growth forecast and their eps forecast, how can the price target possibly stay the same? >> well, we still have a lot of caution on the stock, melissa, and what i would say is walmart, really think in the long-term these are good decisions, they will really leverage bricks and clicks, over 4,500 stores as well as 260 million customers and think about the dividend yield, an excessive 3% and think about repurchases, too. i do acknowledge the caution and would advocate names like coast co-and limited brands in terms of stories we like better right now. >> where's the consumers going to instead of walmart? >> the consumer does have extra money but the consumer is thinking about paying down debt, buying a car, could be investing in their house and thinking about experiences, too, but honestly walmart really understands that and they are also price investing so 75% of the eps cut was due to a really better sense. the balance is partly due to e-com and partly due to price investing meaning walmart will try to give consumers the everyday low price strategy. >> oliver, we'll leave it there. thanks for joining us. oliver chen of cowan. brian. >> what we want to know is what think. here's the poverty day. do you think walmart's weak guisance is a walmart problem or consomer problem. to weigh in realistic we'll see the -- meantime the let's bring in nbc contributors and i've got a piece up on cnbc.com where i said is the walmart news actually good news? i listed four reasons why it might be. am i an idiot, or do you agree with any of it? >> i actually agree with you. it's good news for the u.s. consumer and not bad news for the u.s. economy. i think that walmart is raising wages. that's got to be good. >> biggest private employer in america getting a raise. talking about operating costs going up. they will be spending a lot of money with a lot of vendors. >> and one thing we haven't said much about, not only are they paying more to people, they are bringing in more people to make this buy online pickup in store work and work better so they are actually investing in head count, not just in wages. that's also a good thing. >> yeah. >> but they are trying to make the business work a lot more efficiently. they are trying to own grocery. they want to own grocery as far as buy online picketup and store and really want to own the whole concept. right now we have tour, in order stram's and macy's and walmart haents to be that good at it the. >> one of your four points might on something and when i sent you my piece it's point four is the only one that matters. with respect to the announcement there's a lot of people in the consumer area and not as much as people expect but a lot of the weakness has to do with investment and not some sort of deck lar decline in consumer spending, and i think if you wanted to make the argument that this was about the consumer or more importantly the economy they didn't provide too much fodder and it's walmart trying to wage itself and that didn't tell us anything too much that we didn't already know about the consumer. >> dan, do you believe this is a bad or a good sign for the u.s. consumer or just a walmart sign that has nothing to do with anything else? >> i don't really know how i feel just yet. i mean, listen, i think the issue for the consumer has been for several years now one that there's no wage growth and ultimately declines in gas like prices while hopeful are not always spent to the degree of what we'll call a permanent increase in wages might actually be spent, and i think that's really the biggest problem that the consumer has been dealing with and even as the lash market has improved, wage growth hasn't picked up. it's not surprising that in that type of environment the consumer is not going gangbusters. >> again, the piece that i wrote is up on cnbc.com or my facebook page. read it an see if you agree or whatever, blah, blah, blah. live poll, 56% say it's a walmart problem. jan, is there also an element of trading up here? a lot of people love walmart but some think i'm doing a little bit bert. maybe i'll check out a kohl's or target or maybe i'll move up. >> that does happen. >> you look at dollar general news and wonder the same thing. >> i don't think that's what's happening. walmart didn't say anything was wrong with sales. they did say sales won't be quite as good as originally and that was all because of currency and that's because we think we're going to do 3% per year going forward, that's the best number they have said in a long time and that says they think they have a healthy consumer that they will be able to put more money to the bottom line going forward by make all these things and growing the top line, so walmart's putting really hard push on, and they believe it's going to result in higher sales. they wouldn't believe that if they thought there was something wrong with the u.s. consumer. >> the and if i could just add real quick. let's not forget walmart has $500 billion in sails annually. that is a very large number that is probably never again going to grow 5%, 6%, 7% so the low to mid-single digits with a company that large with sales that have magnitude is one anybody should reasonably expect. >> when walmart says we'll do a lot more sales and will pay for a it by reducing our gross margin, in other words, investing, somebody is going to lose a lot of sales, and somebody is going to lose a lot of gross margin. no wonder other retailers have reacted negatively. >> sure. >> i don't think it's because the world thinks sales are going to be tougher for everybody from the point of view of the economy. i think they just heard walmart say we're going to make the world tougher for everybody. >> all right, guys. we'll leave it there. thanks for your time, dan and jan. time now to lock into our vote and the we asked you guys to vote realtime and what's behind walmart's weak forecast, a walmart specific problem or u.s. consumer specific problem? 52% of you said it was, in fact, a walmart specific problem and only 48% blamed the u.s. consumer. bri. >> kind of split. melissa, thank you. news is nice but we try to make this show about actions so let's give you some actionable advice around the walmart news. according to our data partners since 2005 there's been 25 occasions when walmart stock fell 5% or drop in a week. of the 25 times shares of costco gets hurt as well falling 12% during the same time as walmart and they weren't the biggest decliners. other reat the same timers, that, according to history doesn't mean that won't happen again and when walmart gets whacked and the company that gets hit the most is junesco, parent company of brands like murphy's and dockers. not necessarily a direct retailer and they fall an average of 7% and getting head when walmart does, costco, down 4%. nordstrom, macy's and kohl's all falling in sympathy with walmart so if indeed this is a wal-mart problem to and not an overall problem, one wonders if this selloff is overdone. all right. up next, we're hating the road to talk the future of self-driving cars with gm vice chairman and former vice chairman bob lutz and we'll get his take on the growing vw diesel sandal. also, the democrats declaring war on wall street during last night's debate we'll do a little fact-check on exactly what was said. later on some small caps with big dividends. one wall street pro says it pays to own these three names and those three names are -- you know what. we'll doe it when "power lunch" returns. [announcer] through sunday at sleep train, get up to 48 months interest-free financing on tempur-pedic. save $300 on beautyrest and posturepedic. or choose $300 in free gifts with stearns & foster. the triple choice sale ends sunday at sleep train. are self-driving cars closer than we think? a few days ago tesla ceo elon musk says the version 7 software with autopilot goes to wide release on thursday, end quote. the former vice chairman of gm, former vice president of chrysler and cnbc contributor. bob, welcome. still in the testing stage. i want you to pick a year, if you can. throw it out there when we'll be able to go out to a lot, buy an autonomous car and have it drive us home. when does that happen? >> that's probably seven to eight years away but what's much closer is what icality super crews and that's the official gm news for it. that we can expect next year really from a lot of the high-end manufacturers, and that's merely a slight extension of today's radar operated crews where you don't have to work the brake and throttle pedal and you do have to steer so the next logical step is to take your lane departure inputs and put them into the electric grid of power steering and basically once you're on the freeway starting next year and cadillacs and other cars, possibly tesla on the freeway, you can hit the super cruise button and the car will stare and break automatically. >> in a straight line on limit the roads. has limited functionality. >> not a straight line. it will follow the freeway. >> that's what i mean. >> you're going to be on 75 going through gaylord, michigan. >> that's exactly right. >>led next step which is the car that comes to your house and picks you up and drives you to the freeway and takes you on to the free way and then it goes to the final destination and goes away and parks it investment that's probably five or six years away, general motors has announced and has a whole fleet of autonomous cars basically operating day and night at the gm tech sector and there's a lot of cars, rail rod crossings and curbs and see if it works out. thereto's really no reason these cars can't be on the market at five years in the sglast being in a self-driving car is a pretty amazing experience and had a chance at carnegie-mellon and that was unbelievable and can't imagine what the technology is now. we tend to leap at end and where the car will pick you up and drop yourself off and it will go to a slow creep and there will be an additional feature, additional feature and then we're at self-driving car stage. do you think that insurers, for instance, have dealt with this idea of that slow creep of technology which is part of the march towards self-driving vehicles and not quite there? >> they will have to deal with it and they will because the self-driving car is inevitable. electronics will make start-stop decisions and find -- realizing the light is green. electronics will realize that about five times faster than the average human driver, so traffic clowe is going to be and it's inevitable that it has to come. lawmakers and insurance companies will deal with it and so far it turns out that all of the accidents have been driving with self-driving cars have not been caused by the self-driving cars. >> bob, i'm sorry this is sort of the legal stuff coming out. let's say i'm on my bicycle eating an ice cream cone and get hit by a self-driving car because the software went nuts, screwed up and i get hit and break both my legs. who is sflibl do i sue google? >> first of all, i'm not convinced that that's going to happen because the self-driving car has the sensors and sees the cyclists. if it's a software error i suppose if it's an individually-owned car i would imagine it goes to that owner's insurance but, again, i don't see why any insurer would be reluctant to also insure self-driving cars which already have a better have a better safety record than human drivers. will there be accidents but probably 0% of what we have today? >> yeah. listen, a good discussion and lawyers are going to get involved. >> former vice chairman. appreciated it, buddy. >> always do it, lawyer you. >> what do you think of the self-driving car. seriously. >> i thought -- no, not at all. you're talking to somebody who doesn't drive herself anywhere so being -- >> always in a self-driving car. >> not too much of a difference. coming up next, three small stocks that pay mighty big dividends and those names ahead. heading tout break, a lot of red on that board. you're watching "power lunch" on cnbc, first in business worldwide. all right, america. tonight be sure to catch an all new episode of "jay leno's garage" and tonight jay kicks the tires on some vintage japanese sports cars. take a look. >> the interesting thing is these cars really with the exception of the dassun were not that popular. that then and this is now. >> the neighbors love that. >> wow. loud, brash and pink. doesn't get any more japanese than that. be sure to catch it at 10:00. i'll definitely watch it. a quick personal note. the datsun was a bre standing for brock racing enterprises. my dad, i don't know if he's watching, but my dad pro rallied that datsun built by pete brock back in the oat 70s. two sullivans watching tonight. morgan brennan is live in washington state. morgan, that's a long way. >> reporter: yeah, hey, brian, that's right. check this out. this is a brand new just delivered from the factory tank car, a d.o.t.-120 and mart of a much bigger push by one energy company into crude buy rail and expanding that kind of infrastructure. we'll get all the detames on that when "power lunch" returns. stay tuned. technology empowers us to achieve more. it pushes us to go further. special olympics has almost five million athletes in 170 countries. the microsoft cloud allows us to immediately be able to access information, wherever we are. information for an athlete's medical care, or information to track their personal best. with microsoft cloud, we save millions of man hours, and that's time that we can invest in our athletes and changing the world. >> hi, everyone. i'm sue herera. cnn says last night's democratic debate drew over 15 million viewers easily making it the highest rated democratic debate ever, but it was lower than both republican debates. the previous democratic debate record was set in 2008 when hillary clinton and barack obama squared off on abc. that debate drew 10.7 million viewers. the first lawsuit in the "el faro" cargo ship tragedy was filed in florida. lawyers for the family of lonnie jordan filing a $100 million suit against tote services, the owner and operator of the ship that sank in the atlantic ocean during hurricane joaquin. a group of chilean miners who spent more than two months trapped underground in 2010 visiting with pope francis at the vatican today, and they showed the pope a framed picture of the piece of the underground wall where they all signed their names. all three restaurants in danny myers union square hospitality group will eliminate tipping saying he hopes to be able to raise pay for kitchen workers without hurting servers' compensation. no changes were planned at shake shack which was spun off from the restaurant group. that's your nbc news update this hour. brian, back to you. not as a journalist or as a consumer do you like that move? >> i think he's trying to equality disparity between the front -- >> front of the house and the back of the house. >> because the chefs and people the in the back of the house have not been making as much money as those in the front of the house. >> can't have service go downhill. >> going to be an interesting experiment. >> you and i, you're on. >> check it out. >> have a manhattan together. >> and expensive, too, sue. thank you. >> time now to talk oil and let's go down to jackie d., of course, you're invited as well for an imaginary dinner. >> i'll see you at the dinner. oil prices coming off the session lows. they finished at $46 and change so slightly lower on the day. most traders waiting for the api numbers tonight and also the department of energy numbers tomorrow morning. they are delayed because of the columbus day holiday. the expectation is to see a 2 million barrel build, seen numbers higher than that and we'll see what we get. having said that do a quick check on gas prices. $2.30 is the national average according to aaa. only down three cents from a month ago. remember, we're looking at $2 by month's end and if oil prices don't go the down substantially not sure if we'll get there. >> thank you very much. try to keep it actionable. any big-cap oil companies worth your money. let's bring in stuart glickman. we did a thing two months ago where 500 billion, billion in, market cap had been wiped off these big-cap stocks in just the last 12 months. are they finally getting to a point where they are just too cheap to ignore? >> there are some selections within the energy patch that are worth investment. the larger companies should fare better. we prefer more a defensive position. i would argue exxon mobil which we have as a four-star ranking is worthwhile. looks to generate extremely strong and free cash flow even in this kind of environment with crude prices walloped compared to a year ago. my comparesson chevron, we only have a hold opinion or three star rankings. >> what's the difference between chevron and exxon? >> so, to us chevron is a bit of a riskier player with a lot of balls in the air right now. they are trying to grow their production about 20% by 2017. they are trying to support a fairly hefty dividend, and they are trying to manage some supply chain reorg at the same time. not impossible to accomplish all of those, but we think it's a riskier play relative to exxon, and chevron looks to be pretty water on free cash flow next year. >> anybody else on your horizon that you think is worth our viewers' and listeners' money, stuart? >> moving over to the oil services side, schlumberger, the behemoth, we think is a great long-term play and i think, that you know, north america certainly has had its share of difficulties over the last month month, especially in oil services because al of the upstream customers are tightening the purse trainings and schlumberger has a stronger international orientation and i think they will do well in the long haul. >> schlumberger, exxon and a hold on chevron. stuart glickman of capital iq. >> the refiners aren't the only group benefiting from the crude oil slide and now the company is making a big bet outwest. morgan brennan is live in the port of vancouver with the story. hey, morgan. >> hey, melissa, that's right. even with crude, u.s. crude stuck below $50 a barrel tesoro is doubling down on what it proved will be one of the big rail by facilities. the refiner is looking to build a $210 million oil terminal here at the port of vancouver, so this will receive up to 360,000 bafrlts of crude per day, much of that come from the bakken and will be taken off trains and loaded off tanker ships and headed to the west coast refineries. >> it's incredibly important to the west coast because we don't have pipeline access. we have no other transportation means, so when you look at where the crude oil through the shale oil revolution is actually coming from, we don't on the west coast have the logistics capabilities to get it the to our refinery centers. >> so the oil production in alaska has dropped to about 500,000 barrels per day for more than 2 million barrels at its peak. west coast refineries have had to turn to imports from the middle east and elsewhere to make up that decline, so by decreasing crude by royal capacity it could cut imports by 30% plus and supply refineries with a light sweet crude that's easier to process and better on the environment and basically creating anotherarket and boosting demand for domestic crowd i'll. back over to you. morgan brennan, thanks very much. cool stuff. just a reminder stocks are at session low is down 180 points. keep in mind it's a tough day but kind of a fakeout day because somme so much of what you're seeing in terms of the market's drop on the dow is walmart. remember, it's a price-weighted index and when the stock goes down there's movement. a lot of dow stocks are up. still, we're down 180. time now for trading nation because traders do trade better together and today let's talk about the bank stocks falling today. jpmorgan's did i appointing issues and andrew. >> hey, brian, i would cat glaze the earnings broadly speaking okay. analysts have been taking their numbers down pretty aggressively over the past couple of months as rate expectations have been pushed out. we got the ebb and flow of the banks and the financials over the last couple of years where rates start to creep down and expectations start to fall and the banks start to underperform, you know, the ten-year is back below 2% and there may be more pressure and we think we're probably a little closer to the floor in terms of bank relative performance so overall i think the group will be okay, underlying lending activity, especially for the regional banks, should be okay. we know trading revenue is pretty tough for the big banks, but i expect some pretty tough results. >> how do the charts look? >> i would disagree with andrew. take a look at the ten-year interest rate, does act as a leading indicator for where financials are going and the ten-year yield has dropped into summer lows bloat 2% and when you lay that on the xlf, we've not yet broken nat summer 2015 rates and let's fast forward, goldman is testing a $175 level. if that exists and we were to break through. >> i would say financials are heeding the warnings given. >> andrew, todd, thank you. for more trading nation go to our website. >> regulating wall street, certainly a topic at the democratic debate and what the candidates said about it. the stock market nears session lows. you're looking at dow. intel, due pond the, merck, pfizer, ibm and coke and now nike are all higher. it's actually walmart's fault. >> there's an investing strategy called the dow theory that says the transportation stocks can either denier or confirm a market trend but it's -- be sure not to rely on the same strategy when making an investing decision. hillary clinton trying to walk a fine line last night in the presidential debate talking about new rules for wall street and the financial system. eamon javers with more on this. hi. >> hi. >> last night the democrats and wall street was the target of a lot of democratic criticism and the most heated exchange was probably this one between bernie sanders and hill hi. take a hissen. >> in my view, secretary clinton, you do not, congress does not regulate wall street, wall street regulates congress, and we have got to break off that fact. going and saying please do the right thing. >> no, that's not -- i think dodd/frank was a very good start, and i think that we have to implement it and prevent the republicans from ripping it apart. we have to safety consumer financial protection board which is finck finally beginning to act to protect consumers. >> the nuance here is that hillary clinton is the most pro wall street candidate of these democrats who are running last night who were among the major candidates here, but she has to appear anti-wall street because of the anti-wall street feeling among the democratic party base since the 2008 financial crisis and couldn't go as far as bernie sanders has done saying she wants to break up the big banks and couldn't call for a reinstatement of glass/steagall which o'malley did but was able to get some anti-wall street sounding rhetoric while not moving off his positions and that's the look ahead to the next couple 6 weeks. john harwood and carl quintanilla, october 28th, republican debate and meg now with a news alert. >> hey, you may remember controversial drug company, well, it still hasn't made any visible move to lower the price of a 622-year-old drug after a dramatic increase that sparked outrage in washington and around the country. that company is turing farm southeast calls and purchased an old drug called daraprim. led ceo said he would lower the price and they are still reporting the price at or above the number that caused such controversy of $750 a tablet and now the company is out with this press release announcing when it calls improvements in daraprim saying those reason medicaid already get the drug for $1 a bottle and they also referred to patient savings programs and for many the out-of-pocket costs will be less than $10. the statement says the company's goal is to provide ready and available access to anybody who needs it and there's no statement on the actual price of the drug. we're calling to see if the price is remaining the same. turing has not yet responded to our questions. >> thanks so much, meg. this company sort of touched off a firestorm that ensighed when hillary clinton sent out that tweet that roiled the biotech sector. the biotech etf as well as a health care etf in anticipation of the ibb and one pharmaceutical company in the crosshairs and still being sienaed to get more information about drug rallying after yesterday, up 6% so far. >> a lot of people are using clips or photographs from our interview of martin shkreli. shout-out to meg for getting that interview. i know you're unhooked over there but good job. a retail stock that's fallen 10% in october alone is this your chance to buy or take a loss? 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[phone ringing] but a little less crazy. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. time now for "street talk." every day, we comb through analyst research so you don't have to. stock number one, oracle. downgrading it to a market underperformed. and has a $31 target on it. so about 15% downside. pressure from services. >> amazon web services is talking about these new products. that's a concern. this analyst also downgraded just yesterday on pretty much the same concerns about competition from aws. stock number two here, dollar general. we talked about layoffs. since then, dollar general has underperformed by about 10%. but the outlook is robust as ever. it's got strong free cash flow and a reasonable valuation. >> not directly related to dollar general, does anybody remember six months ago when pretty much everybody else in the media was saying that all retail stores were going to soar because of low gas prices? whatever happened to that? >> not yet. nothing so far. >> not at all. >> third stock. paypal. jeffries adding it to its franchise list. it implies about 30% upside. the same call removes systems from its franchise pick. >> epam systems. haven't heard of that one. spin-off from e-bay in july. the stock is lower from that price which it spun off. next up, analog devices upgrading the stock to an outperform. there's been some concern as analog devices have become increasingly dependent on the consumer. increasingly competent. in other words, consumer products, more pricing pressure. >> i'm looking at my screens here. analog device is kind of a quiet winner. gets no attention and love from the media except for you. >> hmm. >> thank you. >> last stock. empire district. i had never heard of it. you know why? i don't live in missouri. it is a joplin, missouri, based utility. upgrade to a buy. they love the valuation of the name. they nudge their price target up a little bit. so not a lot of upside. about 10% seen by the analyst. but the company does pay 4.6% dividend yield. >> it's down 22% for the year. >> supposed to be safe utilities. >> not that safe in this world. you know better than that. russell 2,000 lower. coming up, names that could bring some big returns. excellent looking below the surface, researching a hunch... and making a decision you are type e*. time for a change of menu. research and invest from any website. with e*trade's browser trading. e*trade. opportunity is everywhere. so wi got a job!ews? i'll be programming at ge. oh i got a job too, at zazzies. 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(friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition! almost a whole hour has gone by and we haven't even talked about netflix out with earnings tonight. we're going to be seeing if netflix can hit that magical 3.55 million subscriber number and trade that stock tonight. a "fast money" at 5:00. russell 2000 is lower, but there could be some small cap stocks with big returns. small cap value. total return fund joins us now. great to have you with us. i want to go right into your stock picks, but i want to start with dsw. it's down 33% year to date. and it seems to be part of the shoe complex. may not see as many dollars to it. >> it's mostly fashion. they've had some athletics. it sells at 13 times earnings. has a 3% yield. it hasn't had a multiple this low for a while. there hasn't really been a fashion cycle in women's shoes for a bit. that will happen one of these days. the weather is pretty warm. no one's buying boots yet. but the weather will change, too. more importantly, they've made some big investments in omni channel and in planning allocation systems. once we start to cycle through that, there's great opportunity for margin improvement. the stock can go higher, i think. the chairman just bought half a million shares, so it's a great idea. >> does this benefit from the holiday seasonality factor? >> it will. it's not the biggest gift giving idea. when you need a pair of shoes, you need a pair of shoes. but christmas definitely counts. >> let's talk about brocade communications. $4 billion. is it facing tough competition from cisco? >> it is. the biggest business -- they're the leader in a mature business. people think it's going to die. it's very slow. it's mature. it generates enormous cash flow. they're using that to invest in the business. they do compete against cisco. but they're holding their own. they have some very fast-growing new software businesses. they've committed to return 60% of their free cash flow back to their investors. you have about a 1.5% dividend yield and a $1 billion buyback program on a $4 billion market cap. so that's kind of interesting. >> so maybe you get a floor for the stock there. nyr group. it's an electronic contractor, so what do they make and for whom, jay? >> well, actually, they are helping a repair deal. big businesses. they do the electrical for warehouse and things like that. a very solid domestic business. >> interesting picks. thank you for your time. >> we'll see you at 5:00 on "fast money." got netflix earnings. a fake-out as i'll call it. wal-mart dragging everybody down. ten stocks are actually higher. we're going to leave you with some good news. thanks for watching. "the closing bell" starts now. >> welcome to "the closing bell", everybody. i'm kelly evans. >> i'm bill griffeth. it is a jungle out there. how cool is this? cool and the gang will be joining us here at the new york stock exchange. they are ringing the closing bell today, celebrating their 50th anniversary together.excha. they are ringing the closing bell today, celebrating their 50th anniversary together. and kool himself will be with us to ring the bell. >> first, we have a ton of market news to bring you. let's start with wal-mart. it is dragging down the dow right now. the entire brick-and-mortar retail space, the