Were off the lows of the day but its the worst day of the market this year. Thanks for watching street signs. Closing bell starting in about two minutes. Or two seconds rather. Im not good at telling time. But ill be back tomorrow. And were into the final stretch. Welcome to the closing bell. Im maria bartiromo. Giving back much of the gains we saw on friday. And look whos back . I dont believe you hit 14,000 last week. This market doesnt look like 14,000 to me. Im bill griffith. What happened . The power goes out on the super bowl and on top of this super rally. Were on top of the first triple digit decline possibility of the year. Its something to think about in the final year here. Beyonce was that hot the lights went out. Whats behind todays moves lower are the earnings and the fundamentals behind this economy actually do not justify this incredible run for this market. Were going to hear both sides coming up on the closing bell. We will. Plus a realtime check on cloroxs company earnings. Theyre up br thnt and sitting at its alltime high right now. Lets check the markets for you. Dow down about 99 points. Off of the lows which were about 2 30 or so. 30 minutes ago on the industrial average. Now back to 13,910. Check the nasdaq composite where its down about 37 points. And the s p 500 looks like this with a decline on the session of just about 13 points. Okay. So in todays selloff were backing away from the alltime high on the dow set back in 07. We have danny hughes back with us from devine capital. Michael holland as i live and breathe. Blast from the past. Mike shay from direct access on the floor with us. And our own Rick Santelli is in chicago. Michael, im starting with you. You dont have sweaty palms with this selloff today . No. And i was saying with michael shay before we got down here, is i have friends who are short the market or out of the market. This was not a good close for them. All this deterioration happened in the first hour. This is the most important hour of the trade. Yes, it is. You can see where we are at 4 00. Thats when the smart money comes in. A lot of traders say that. Mike shay, do you agree with that . This is the smart money hour . To expand what michael said. When we were talking about this one, what i told him was the wall of worry has actually two sides. So for those people who are short, theyre getting knocked around. And for all that quote, unquote smart money, the real smart money got in this market 12 months ago, got in the market 10 months ago, 8 months ago. If there is smart money on the sidelines, if that waits too long, that ends up being chasing money. And everybody thats in the market loves some good chasing money. I feel this is the victory. Its 100 points. We are up so much. Im looking at the stat from the statistician team here. Typically weak for the dow as the market has declined 60 of the time in the first couple of weeks of february. Danny, is this just lets take a breather here after the runup weve seen . I challenge this is a selloff. Its a hundred point in the face of the 900point increase over the past few months. What im concerned about i think were all concerned about what we talked about earlier, mike. Is that the market, the prices have risen so dramatically if the face of a decline in liquid till. Theres no volume out there. Portfolio managers are taking shorter bets. Thats a big concern for the market. You have to take what the market is giving you. One of the real debates we have here is wlorpt the little guy is getting back in the market. Individual investors have not participated directly in this market. For the past few years, they havent. I see them coming in and getting more excited. Things are on the increase. Let me participate in this. Let me get back in the market. How do you want to do it . How are you allocating capital . As bill was dani was saying people getting in six months ago you were saying thats me. I never get out. But i own stocks and i used to own bonds. Ill be interested to hear ricks comments. I dont own bonds today. And the but id like to go to bills previous comment. Which stocks . How are you allocating . The big ones around the world. The best franchise names. The best brands are the cheapest by far. In china things that used to be the market over there that was 30 times earned, theyre now ten. Were the same way. Ibm, google, go on. The list is incredible. What about apple . Thats a private joke. Let me go to Rick Santelli. While i was gone last week you hit 2 on that ten year. Is that the ceiling or could we go higher from here, do you think . The conventional wisdom is that treasuries are toast and theyre going to be selling off pushing yields higher. The fact of the matter is fives, tens, thirties net change on the year is 12 basis points for fives. 23 basis points for 30s. And since were still close to historic low yields, the moves are large. If you take them out of that contest text its not that big. I will consider this. If you look at the japanese stock market, its up about 8 . But their currencys lost 6 against the greenback. If you didnt neutralize your exchange, youre only up a few percent. It pops out in other places. You got to hedge the yen out of the expert story in japan for sure. Dani, same question for you. How do you want to allocate capital here knowing the runup weve had . We like at t. I own it. Ive owned it for a long time. Another is old republic, ori. Very old Insurance Company thats done well in this market. Pays a very nice yield. I also own that one. Again, the storys about yield. Everybodys been pushed to this market because of the excess credit the fed is pushing into the economy. Look for yields. Mike shay, where do you see money going on the floor these days . Whats interesting is that its not just equities. Last month we saw meaningful money going into equity funds. Just last week we got data that money was going into equity funds. Its going into bonds too. The only area was government bonds. Everything else money is going into it. Which makes me ask is this the money thats been on the sidelines . For all these years, is this the money . You think money is coming from the sidelines as opposed to coming out of bond funds and into stocks. You dont believe we have seen enough traction on that trade . I would like to see a couple more months of data. Right now normally you get money going from somewhere to somewhere else. And its easy to track. This time we havent had such an easy track. All right. Thank you, folks. Good to see you all for joining us today. Michael, come back when you can stay longer some time. See you later. Come back soon. Thanks. In other news, federal and state prosecutors are reportedly planning to sue standard poors. Mary thompson has the latest details. The Justice Department could sue the Rating Agency as early as tomorrow. It follows a yearlong investigation. The first legal action taken against a Rating Agency against the government involves how it rated 30 cdos also seeks a ten figure settlement and admission of wrong doing by s p. The threatened lawsuit is unjustified, says s p saying the cdos in question were similarly rated by other agencies. It did cut for 400 mortgage results securities. The unit at mcgraw hill is threatening to sue it for not predicting the full threat of the housing downturn. Rating agencies singled out after the crisis for giving high Credit Ratings to mortgages before the housing bubble burst. These were sold to investors essentially infecting the system. Standard poors plans to vigorously defend itself. Its not clear if s p will be the only target of the doj. Bill, back to you. All right. Thank you very much. We are heading towards the close. About 52 minutes left in the trading session in the dow. The question is, could this be the first triple digit decline for the dow in this new year . Down 99 right now. And at the same Time Congress is back in session. Lovely. We are a month away from the temporarily delayed automatic spending cuts. Unless we get a deal on the table. Coming up weve got representatives from the aisle to see what is possible. Today selloff notwithstanding, dont feel bad if youve missed the boat on this rally. Wait until you hear about the ceos who unloaded shares of their own companys stock before the runup. And after the bell, dont miss yums earning question lease. Theyre a flier from the hit super bowl commercial last night. But the stock is taking a hit. Analysis youll only see here after the close. With fidelitys new options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. And execute faster with our more intuitive trade ticket. Im greg stevens and i helped create fidelitys options platform. Its one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. Begins with back pain and a choice. Take advil, and maybe have to take up to four in a day. Or take aleve, which can relieve pain all day with just two pills. Good eye. We come off the lows of the day. If youre just joining us, the dows been down triple digits virtually the entire day. The question is will we be down triple digits on the close . If we are, it would be the first time this year the dow has suffered a triple digit decline. Of course this comes, maria, after the supposedly you hit 14,000 onz friday. I still dont believe that. Yes, we did, bill. Friday was the day. The house of representatives back in session today. Speaker john boehner taking to the floor about an hour ago blasting president obama for not having a budget yet or a plan to avoid scheduled spending cuts. Eamon javers in washington with the story. Hi, maria. Were lurching towards another fiscal showdown. March 1st, thats the new date now for the socalled sequester federal spending cuts that would be automatic and across the board. A lot of jockeying in washington yesterday and today. The preamble starts today with john boehner who took to the floor to criticize the president for being late with his budget proposal. This was to be the day the president submitted his budget to congress. But its not coming. Its going to be late. And some reports say that it could be as long as a month late. I think thats too bad. Our economy could use some president ial leadership right now. And maria, yesterday democrats offered up some thoughts of their own including the president himself in a super bowl interview suggesting the carried loophole is after a package of new revenues based on closing loopholes. Carried interest, one thing thats very much on the table here. And obviously that effects a lot of hedge funds and financial firms. Thanks very much. Those automatic spending cuts could mean we have more days like today in the stock market. Will there be a deal to avoid it . Lets talk about it. Joining us, two representatives back at work again. Brad sherman, democrat from california, believes the automatic spending cuts should be suspended. The representative republican says the democrats should come up with a an alternative. Representative harris, what about that . Representative sherman is among those who feels the sequesters would cost too many jobs. What do you say . Well, the House Republicans have twice put forth a plan that could delay the sequester offsetting it with other cuts in the budget. Were still waiting for the president. By law he was to submit a budget by today. How can we Work Together to solve the nations economic problems if we dont see a budget from the president or the senate . What about that, representative sherman . Are you working on an alternative . What can you tell us . Certainly we have alternatives. Whether the alternatives are likely to get a serious hearing with the House Republicans, i dont know. Congress is over four months late in passing the Appropriations Bills for the fiscal year that began october 1st. The president will probably be a month late in providing a budget. We need to have nonideological budget approaches. The Business Cycle puts us at different positions at different times. We ought to have different policies in the Business Cycle. If we get tied up in ideology, people will be for the same policies. That works for ideology, not economics. I know youre not the chief spokesman for the president , but why is the budget late . Especially now. We havent had a passed budget for a few years out of washington. Wouldnt this be the time to show president ial leadership and step up with a budget on time this time around . Boehner wants the leadership, but he doesnt want to be a follower. So the fact is that the sequester problem has much of washington tied up in knots. We arent so interested in a budget for 2014 in dealing with 2013. Weve got to do first things first. Congress is over four months behind. Its not surprising the administration would want to focus on the decisions we havent made yet. But whats the answer to no budget in four years . Are you asking me . Yeah. I would say that the senate rules are such that it is very difficult to get 50 senators to vote on anything but isnt that everyones jobs . Im not a senator. And so, no thats not my job. But the senate rules and they changed them just a little bit. And procedures and practices over there are such that it is very difficult so whos accountable for that . Is anyone taking responsibility for us not having a budget in four years . For decades the senate has been able to pass a budget. Now under the leadership of harry reid and president obama, its not able to pass a budget. Its not a problem with the senate. Its not a problem getting 51 senators. Theyve done it for decades. The problem is that no one in washington on the other side of the aisle wants to take leadership for how to get us out of the fiscal mess were in. And not this years fiscal mess. The mess that extends out 20, 30, 40 years. The president s budget last year never, ever, ever balanced. You cant do that. Those numbers dont add up. All right. Lets bet back to this sequester here. It comes at a time when we just learned that Fourth Quarter gdp was horrible compared to what we saw in the third quarter. The stock market seems to feel like things are getting back to normal, the economys on the mend. Is this the time to allow these spending cuts to take effect automatically that could take out a number the New York Times says it could cost a million jobs in the economy right now. Isnt this the time to think about an alternative of some kind . Absolutely. The senate has not taken it up. The house is the majority the alternative would cost the same million jobs. Whether you gut defense or whether you gut domestic programs. Its the same reduction in gdp, the same reduction in expenditures. You can argue about what the federal government should be spending money on, but if you dramatically reduce expenditures at a time of national recession, and i think were still in a recession, then youre going to see a decline in jobs. It is not an answer to say the house has passed something that they know is dead on arrival in the senate. Maybe fa doesnt matter right now. Is the debt not a priority right now . Is growth more of a priority than reining in the debt . I dont think theyre mutually exclusive. Government growth is not going to get us out of this mess. Private sector growth is. Right now government growth is a drag on the private sector. Every day the president threatens to raise a tax or another. As long as the threat of new taxes, huge regulations from the epa hang over the private sector, were not going to get the growth we need. You know one of the biggest drags on Fourth Quarter gdp that report showed was the reining in of defense spending as we got out of afghanistan and retracted some troops. That is what was a huge contributor to that decline in growth in the Fourth Quarter. Now are we doing this all over again with the sequestration here . Sequestration is already effecting government expenditures as agencies try to guess what position theyll be in. Of course theyre being conservative. The deficit problem is the problem for later in this decade. The jobs problem is the problem today. And this talk of a contracti contractionary fiscal position. It is hurting the economy. He wantive harris . In the end, weve got to get our deficit under control while we grow the private sector economy. We cant do it through new taxation. You cant tax your way out of this mess. Thats the problem. The president has decided thats the approach hes going to take. The republicans have a different approach. We believe we have to rein in entitlement spending, the budgets up until now. Again across the aisle and on the other side, theyre unwilling to handle. Well leave it there. Thank you. Let you both get back to work. Thanks for joining us. Thank you. Appreciate your time. Thanks very much. Isnt it nice to know in two weeks you havent missed anything . This sounds familiar. 40 minutes before the closing bell sounds. Dow down 103 points. Google getting downgraded after a record high on friday when we allegedly hit 14,000. Why did that happen . And are you better off buying shares of rival yahoo who got an upgrade from a different firm . We got those trades coming up. Then at 75 million, spiderman turn off the dark is the most expensive broadway show ever. And dont miss the premiere of my new documentary tonight, betting big on broadway. It airs tonight at 9 00 p. M. Eastern and pacific. You get to see maria do some kicking. Exactly. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Who wins in worldwide grosses . The answer, broadways the line king with over 5 billion. Betting big on broadway airs tonight at 9 00 p. M. Eastern here on cnbc. Meanwhile, Technology Stocks really leading todays selloff. There is one name in the group thats bucking the trend. Lets get to seema mody with the name. That name is blackberry. Formally known as research in motion. Trading here under the Ticker Symbol today bbry. Rims name doesnt completely disappear until Shareholders Approve the change this year. Outperforming today thanks to an upgrade to outperform the analysts has drained inventories and most distributors will take on significant initial orders. Expands from a user base thats equipped with aging smart phones. He remains skeptical of blackberrys ability to orchestrate a sustainable come back. But we are seeing a comeback in todays trade. If its sustainable, thats is the question. We will see. Thank you so much. Im waiting to replace by cup and string with a blackberry if its workable. Big days for calls. Upgraded yahoo to a buy. Its shares of goggles and yahoo both down in this overall market selloff. But which analyst should you listen to . Google or yahoo . Lets talk numbers. On the technical side its carter worth. Hes with oppenheimer. On the fundamental side its John Stevenson with First Insight investment management. Carter, what do you think . You dont like either do you . Ill say which analyst to listen to, dont listen to either of them. Ouch. The thing is here, look. These are big tech names that are doing well. Big tech in general are doing poorly. Microsoft, intel, apple. Its too much of a good thing. Google bounced from 650 back to an alltime high at 770. Thats 20 in two months. I think you fade that. And really with yahoo, its the same thing. This things shot the moon. Its 16. 21. Do you buy or sell stocks. I think history shows youre better to trim Something Like that. The charts dont tell the whole story here. Theres always the fundamentals. Yeah. John go ahead. You like both these companies, dont you . I think theyre both good. You have to go with the analyst on the upgrade. These are extremely come mettive valuations. Its got one of the best franchise track records in terms of innovation. Its positioned in every major trend. And mobile. So its gots all of that going. It can start buying back shares. When you look at yahoo, its more compelling. Trading at four times cash flow. A transformation. Thats it has huge shares in yahoo japan. And if you were able to monetize those, this is possibly a 40 stock by the end of the year. I think this is a tremendous opportunity to buy both right now. Thats what makes it interesting. Its all about ones time frame. If one talks longterm, sure all that is fun and good. Here and know, though, i would say the recent price action discounts a lot of the intermediate prospects ahead. What about that, john . Youre talking about investing. But at a trade now do you think theyve gotten ahead of themselves right now . Especially yahoo . Yahoo is cheaper than google. I think yahoo is the most compelling buy in the tech universe. And theyre buying back shares. To short this, you have to really believe that youre going these things are going to fall. How could they fall much further . Its very compelling. One of the cheapest in the tech universe. I think with 1. 5 billion of Share Repurchases to come and 1. 45 billion in the Fourth Quarter, this is a strong stock and should be bought. All right. There we are. Well let the folks at home decide what to do about it. Good to see you both. In the final stretch of trading here. The market is under pressure to the tune of 95 points. 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The reason is federal and state prosecutors planning on bringing civil charges against s p for wrong doing in its ratings of mortgage bonds prior to 2008. S p firing back. Saying the lawsuit would be entirely without factual or legal merit. You can see mcgrawhill owner of s p moving lower. And you can also see the rival moodys slipping now hard into the red. Back to you. Thank you, josh. Stocks off to a bad week bad start, rather, to the week. This comes after five consecutive weeks of gains. So while many investors are optimistic, our next guest is warning the quality of earnings is not that good. And the state of economy is not much better. Which could mean we have more down days like today. All right. Lets talk about it. Chris weiland. Also joining us here is mark martiak. But lets start with you, chris. Make your case. You think were setting up for a bigger decline here. I think the fed has been driving this rally. Youve had a rotation out of bonds in the stocks. We all know that. And i think, too, that the fed has gotten what it wanted. To force people out of riskless assets. And so to that extent weve had the rally. If you look at employment flopping around between 150, 175,000 a month, we dont have a catalyst here for strong sustained growth. At least in my view. Then if you look at the regulatory environment, it isnt healthy. You have to say were constrained as far as providing credit to consumers. All in all, i think its hard to put a bold case together thats relying on fundamentals. What about that . Is that rally about the fed and not the fundamentals . Yes to some extent. But im advising my clients that optimism rules the day. And in fact, i see equity prices and higher equity prices and bond yields being recurring themes through 2013 . When do you expect rates to start moving up . If we start seeing rock bottom rates actually move in step with economic improvement . Well, i dont think either of the markets the bond market or the equity markets with the economic improvement to be honest with you. Negative gdp growth last week. What would be the catalyst to move . I think the catalyst to move Interest Rate is higher equity prices. Inverse relationship, right . Well go up because informsers need to come back on fixed income. On days like today, obviously my clients and their and me as an adviser, were telling clients keep allocated to fixed income. Dont abandon fixed income entirely. You need it as a stabilizer in your portfolio. The treasury was up over 2 last week. I see that going up slowly and steady. But again, the recurring themes for this year, higher equity prices and bond yields. Many of the bulls that come through here, they agree with you as mark does. This is fed induced. But theyre saying equity prices were so cheap they didnt reflect the worst scenarios on this economy. Thats why it was a good time to get into stocks at this point. In financials that was certainly the case. But if you look at banks generally, they have been making their earnings up with cost cutting lower credit costs particularly. And a lot of subsidies from the fed and other agencies. If you think about it today, if ur yo selling a loan into the agency market, youre going to make several points gain on sale. Thats been a big incentives to banks to loan. I dont think as we see fed policy normalize simply because we have longterm structural issues we havent addressed and cant address. The fed has kept us on life support for the past five years. Right. And you said the backdrop is really no great shape. You said the earnings are an issue. In financials particularly, maria. What i look for in banks is widening spreads. We have the opposite. You look at the mortgage market. Its a case of where the banks are doing the easy business in large volumes. Making very good money on it. But we arent going to secret costs go any lower next quarter. If we dont have that to put the earnings dollar together, where are we going to get it . Thats the real question. I think theyre going to be under a lot of pressure this year. Very quickly what would you buy here . I would buy emerging markets. Id buy financials. Id stick with them. Id stick with energy. Id stick with mlps. I like a number of other sectors. What about the quality issue . That he just brought up. I disagree. I think with the s p having reported at least 50 of the companies maybe over 60 , the earnings have been good. Positively mostly good. Outside of financials, yes. Absolutely. The financials have done well, but if you dig down underneath, what you really see is a cost cutting story. Its not a revenue story. Right. And theyre still cutting costs. I agree. Well leave it there. We appreciate your time. Thank you. And later on well take the pulse of the economy from a company that takes everything. Donl knaus will join us. Today his stock is at an alltime high. Meantime heading towards the close with 20 minutes to go. Looks like this may be the worst decline for the dow so far this year. The dow with the worst decline was 255 points. Well keep an eye on this. Some top wall street executives sold their Company Stocks ahead of the rally. Wait until you hear who sold and how much it cost themselves. Thats next. Also can money really buy happiness, maria . An overwhelming number of millionaires think so. Is it easier to think that way when you do have money . Thats coming up later on the closing bell. Great, everybody made it. We all work remotely so this is a big deal, our first full Team Gathering i wanted to call on a few people. Ashley, ashley marshall. Here. Since were often all on the move, ashley suggested we use fedex office to hold packages for us. Great job. [ applause ] thank you. And on a protocol note, id like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh im sorry guys. Ah sometimes the caps lock gets stuck on my keyboard. Hey do you wanna get a drink later . [ male announcer ] hold packages at any fedex office location. Its delicious. So now weve turned her toffee into a business. My goal was to take an idea and make it happen. Im janet long and i formed my Toffee Company through legalzoom. I never really thought i would make money doing what i love. [ robert ] we created legalzoom to help people start their business and launch their dreams. Go to legalzoom. Com today and make your business dream a reality. At legalzoom. Com we put the law on your side. Some top Corporate Executives are probably kicking themselves for selling their Company Stock before the road ahead to 14,000. Kayla tausche has the numbers. Perhaps even it is hindsight 20 20. Unloading their Company Stock before it skyrocketed. Crunched some exclusive data for us. The parameters were that a stock rose 350 or more after an insider sale. Some unfortunate times there. John lipinski sold in november of 2010. Carl icahn last year offered to buy the company at 30 a share. The stock is now at 53 a share which would have netted him about 300 more. Tom kartsotis sold more than 22 million in fossil shares in march of 09. Shares are up some 500 since then. Those shares would be more than 130 million bucks today. Then theres Dennis Wilson as yoga retailer lulu lemon. He sold 6 million in lulu in september 2008 and two months later. Shares are up 1600 since then on those two trades alone. Wilson cost himself 40 million. But what about those repeat offenders . The data shows the ceos who sold the shares most often are jeff boyd of priceline. Com and Reed Hastings at netflix. Both ceos have long had prescheduled selling plans in place with or without a crisis. So you cant blame them for that. The old plank. Yes, they are human beings. And they we call it the smart money. But they dont always get it right. Not at all. 15 minutes before the closing bell sounds today. Watch out. Despite the rally so far this year, our next guest says a market pullback would not be surprising. And hes here with some plays that he says will help investors make their way through that period. Then we went from wall street trader to broadway investor. Who turned a gamble into the longest running show on broadway, the phantom of the open ra. Dont miss betting big on broadway tonight at 9 00 p. M. Eastern and pacific here on cnbc. All stations come over to mission a for a final go. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. And having an investment expert Like Northern trust by your side makes all the difference. We add precision to your portfolio construction by directly matching your assets and your risk preferences against your own unique life goals. We call it goals driven investing. After all, you dont climb a mountain just to sit at the top. You look around for other mountains to climb. Expertise matters. Find it at northern trust. Who wins in worldwide grosses . Lion king outpacing the star wars series by over a billion dollars. We have a developing story for you now on the ratings agent sis. Attorneys general are set to bring action against s p. Lets go to david faber on the story. I want to make sure people understand. It is the department of justice. Not attorneys general in the states here. It is an unprecedented action by the federal government that seems to be about to take place. Specifically against s p. No other Rating Agency is involved here as far as at least im aware from my own reporting. It would be the doj filing a case in the state of california against s p essentially alleging fraud. When it rated 30 separate cdos in the first half of 2007 and rated those cdos as aaa. It would be a civil case although they would be using criminal statutes. They would be prosecuting under the afria act passed in 1989 to deal with the outcome of the snl crisis. But has been revived recently by prosecutors in the cases they brought and settlements they have gotten from some of the big bank bs in mortgage related matters. But here we are many years past the credit crisis. And it does appear that finally s p is in the sights of federal prosecutors. But not moodys. Kind of an interesting question. And one at least that im hearing from sources close to s p, they believe perhaps stems from their decision to downgrade the debt of the u. S. Government back in the summer of 2011. Is it political payback . Theyre at least asking the question. S p has gotten ahead of the u. S. Government by putting out its own press release saying it would be without factual or legal merit for the doj to sue. As we previously also reported, there were at least there was a desire on the part of the doj to get at least a billion Dollar Settlement and admission of guilt from s p to drop the charges. S p said no thank you. It would be a long time until we go to court, but this is an interesting potential case and certainly an Important News story that is having significant pressure on both mcgrawhill stock price and interestingly on that of moodys despite according to our sources there does not seem to be a case mounted against moodys president. At least at this point. Selling off just in case though. Absolutely. Were looking at the stock markets reaction. Stay right there. We want to get reaction from brian belski and bob pisani. What about this . When you see a move like this in these stocks while were waiting. What do you want to do . First off it was five years ago, six years ago this happened. From an investor standpoint were looking like well, how much credibility do these credit agencies have in the first place . They missed the whole move. You got to remember, too, in 2006 and 2007 these instruments they were looking at were wildly acknowledged. Everyone knew what they were. Everyone knew what they were getting into. It just so happens that the market closed up on them and things went haywire. Do these serve to remind everybody, take us back to that time in 08 and 09 and spook a market starting to get back on its legs again. I think if you notice the overall market didnt drop. Although mhp dropped dramatically. I find this is a little disturbing. They didnt name anybody else. Even though all the other Credit Rating agencies had similar ratings. Secondly, theyve already acknowledged they had a flawed methodology. They say they deeply regret it. They didnt anticipate the housing downturn. But thats not fraud. Thats just flawed methodology. And they should figure out a better way to get a better methodology. But thats not a fraud. At the end of the day, youre talking about lawsuits. This is going to cost the company something. How severe is this going to be . Well have to wait and see as it unfolds for s p. If there were a case to be a case that goes to court, its going to be years. But conceivably given what the government was after and the fact they filed this case or will. We havent read this, it hasnt been filed yet. Imagine a jury might be fairly sympathetic. I would make one argument here. Lets not forget that s p was paid by its issuers. They made terrible judgments there. And they were the oil that helped to move along the huge mortgage machine that was built in this country starting in 2004, 2003. Up through the height of our crisis. So nobody ive written a book about this. They are culpable with so many others. But it is curious that years later were finally visiting this. By the way, connecticut, blumenthal brought a case against moodys and s p awhile back. Its not like this hasnt been out there. First time the fed has tried to do something. You said youre waiting on the department of justice. Youve also got sources saying the state ags are going to pile on. Are you expecting that . That is not part of my reporting. May be others at the network. I have to apologize if i havent heard their reporting. My understanding this is a doj action reacting on friiea and the actions there. Where the burden of proof is lower. They have to prove to a civil case specially but can get criminal penalties. Nobody would be going to jail. Thats my understanding. The first time the doj has moved against any rating agencies. At this point its only one. Only s p. Right. Very good. Thank you, david. Check back with you later. And brian, ill get your market coming up in the countdown in a moment. Take a short break here. We got the closing countdown after the break. 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Now we are down 139. And last i checked not a single dow component was higher today. So all 30 are contributing to this decline today. We were up 140something on friday. Now were down 137 giving much of that back. Mcgrawhill and moodys are part of this sentiment today among the s p 500 components. With david