Never the crime, it is the coverup. Right. Thats what they say. Can anyone here play this game . Does anyone know how to do this despite the trading halt, stocks shook i was surprised they were able to shake that off. Nobody likes strange, weird things and they close with modest gains yesterday. The dow, in fact, could have traded lower, had done it six straight days, but it didnt. And Broader Market activity, treasury yields continued to climb. And in addition to absolutely beating the nasdaq story to death today, we are going to continue to figure out what the fed is going to do. We have lockhart and bullard on and Steve Liesman. The story we have been beating to death for weeks now. We want the exchanges to work. The facebook and everything else, it is interesting, we love doing it, but the big picture doesnt usually change. At some point, the Technology Gets better, it gets more the nasdaq has more competition these days. Theyre the first one. They should be the ones that have it down. You would think. And no one is going back to specialists. Well have all the politicians calling for more regulation. You know thats going to happen, even though the s. E. C. Is already, some people think fairly heavily handed and well talk about that in the executive exchange in a second. Other headline today, moodys placed the ratings of six of the largest banks in the u. S. On review. The agency is weighing the possibility of lesser Government Support for those institutions. Were talking about goldman sachs, jpmorgan, morgan stanley, wells fargo all under review with a possible implication for downgrade. Bank of america and citigroup are being evaluated in their words with the direction uncertain already sort of see what is interesting there, right . The stronger the banks, the stronger banks are being downgraded because s p says, oh, it all falls apart, they wont get it. Glad you did find something interesting. Thats good. You found the interesting thing about it. Thank you. A few after the bell movers to talk about. Gap reporting Second Quarter results that were in line with wall street estimates. Retailer also raised its full year earnings guidance, based on strength in its cargo pants division and hiked its dividend. In a different story at aeropostale, the teen retailer posting a bigger than expected loss and warning announced it will speed up store closings. Watch the shares if you would or im asking you nicely, im not telling you, to watch the shares. If you want to, fine. If you dont, dont. Pandora media, the stock tumbled in late trading after the online Radio Company issued disappointing guidance. One of these days ill look into what that does. E years to do sirius xm. I do end have sirius xm but i have spotify, the competitor to pandora. Does that gauge what you like and play it . Our universes will never meet. The tween shall never meet. You like classical music. Not so much. I have jazz, maybe. Old only men like jazz. Alternative, i dont like any of the pop new stuff unless it makes the crossover. And country, you said one of the country songs we got bigger fish to lets check on the futures. The futures are suggesting negative open, the dow opened lower by 17 points. The s p lower by more than one. The nasdaq would be flat. Lets share what is going on with the price of oil as well. Energy is higher across the board, but not by much. Wti at 125 per barrel. The tenyear yield, 2. 886. That is lower than the 2. 9 we saw yesterday intercession. As for the dollar, we watch what happen overseas, all the countries current account deficits doing massive intercession. The yen at 99. 88. Euro, 1. 33. The pound, 1. 56. The price of gold, 13. 75. Looks like almost a twomonth high there. Andrew . Thank you, michelle, for that. Back at the nasdaq this morning, there are more questions than answers about what happened yesterday. Bertha coombs has all the details. I dont think shes left here in the past 24 hours. I can happily say ill send it upstairs. I can see you. Take it way, bertha. Youre seeing the best side. The nasdaq issued a statement that the problem happened with a connectivity issue with an exchange partner. What we were talk about yesterday was the security information provider. This is essentially a utility that is owned by all of the exchanges that provides the feed that tells you what the pricing is. Yesterday it appears everything was fine as the opening bell started here. The problem here at the nasdaq was there was a monsoon outside, dark clouds. But about 45 minutes in, the nasdaq doesnt say who the Exchange Participant is, but we do know about 45 minutes into trading yesterday, nyse arca starts reporting issues with its feed, initially saying it was having issues with messages on routed orders. Ten minutes later, those issues were resolved. Then a little while later an 10 50, they say nyse arca was unavailable for tickers tact through zyy. C. This would be the continuing problem on the nyse arca throughout the morning. The ten minutes later, they said the issue was resolved. Some of those trades were busted. Then, about ten minutes after that, they said they had difficulty processing outbound quotes on that same range of nasdaq tickers. And then they said, again, about ten minutes later, that the issue was resolved. But now, about an hour later, thats when the nasdaq starts reporting issues again with this sip feed. Initially, just with options trading, but by 12 25, they not only had stopped the options, but had stopped everything trading on the nasdaq itself. Thats when we start seeing that nasdaq composite chart flat lining there for three hours. By 1 00, they said that they had a protocol to open. They were going to first test a few stocks, and then a few minutes later they would open the whole market. They said last night, in their press release, that they had identified the problem within 30 minutes. But that it still took another two hours for that market to open at 3 25 completely. It appears they were trying to resolve these issues with all of the Exchange Participants, and as we went into the close, the market seemed to really have taken this in stride as joe pointed out, you had all of the indices moving higher, you had stocks moving in the same direction they had been before they had been stopped, but then the nyse arca had a problem again in the afternoon, some of their trades were busted, they continued to have a feed issue. This morning, when we look on the nasdaq trader side, it says all systems are go, they are not reporting any problems this morning. Again, the nasdaq did not identify nyse arca, but the question, andrew, guys, has to be where did this feed problem originate . Must have been with the feed itself, with the feed itself or did it come back from what was happening with the connectivy between the participants and the feed. Thats the question and the answer we still dont know. Thank you for that, bertha. Before we send it over to washington for a second, i have a question for you, which is nasdaq is taking it on the chin clearly. Ultimately is the New York Stock Exchange arca going to take it on the chin in the same way . Well, you know, it is interesting. We dont know, right . We dont know whether the problem originated with the feed, and that was what was corrupting the trading and the feed information for nyse arca in the first place. The question is, was this a Software Glitch and where did it originate and how is it it is talking to folks who are engineering in far more well versed when it comes to computing, they still dont understand how if there was a problem with the arca feed, how that then brought down the whole system, why you need to bring the whole system down in order to fix it. That is a question. Why wasnt there some sort of redundant way to do a work around and not have to bring the entire system down. Bertha koomz, youcoombs, a job and well be coming back to you multiple times this morning. Now to washington and well talk to Allison Pruett to help us make sense of all of this. Lets talk about the legal issues that relate to this. You had Mary Jo White out last night, suggesting that they need to do much more. Arthur levitt taking shots at the nasdaq. Is it fair that we suggest that the nasdaq has had too many problems . At the same time, i think to myself, this week, google went down for five minutes. Can we ever have a robust system, or system so robust that we never run into a problem . I dont think we can ever have guarantee there wont be problems, but you can have better policies and procedures in place, more testing, more capacity testing, and a better information flow to Market Participants so that people arent at sea for several hours. Here is the question. I talked to a number of people now behind the scenes involved in this problem yesterday. And the question you always ask them is why didnt you say more, why didnt you come forward the second you understood what the problem was or had a sense there was a problem and said there was a problem and why did it take so long to get back online . And the answer you always get back is that if we had provided an answer and our answer was wrong and all this is happening in real time, then we would have really been in trouble. On the other hand, though, you have people need to be able to plan and make assessments as to what theyre going to do. If they cant trade on nasdaq, what steps do they need to do to protect themselves. What are the liability issues here . We dont know whether there were significant losses. I understand that new york did break some trades. Who is going to be responsible for losses on those . Unfortunately, the exchanges tend to have rules that limit their liability. Recently nasdaq, i believe, volunta voluntarily gave more restitution to some of the people hurt in the facebook ipo, but it is also just recently made a motion to dismiss in action in new york on the basis of immunity. What is your expectations in terms of were going to have a lot of conversations about regulation, what kind of regulation can we expect . What do you imagine is going to have happen or play out over the next couple of weeks on this issue . Well, back in march the s. E. C. Actually proposed regulation sci, systems compliance and integrity or capacity and integrity. Sorry. And it would require all sros and other Market Participants to adopt policies and procedures for robust testing, for capacity integrity, you know, essentially to make sure their systems work as their intended to work. Also would possibly require industry wide testing. But, you know, there are that has already been in the works and i would not be surprised if the s. E. C. Pushes that forward more quickly. Okay. We will watch to see whether that happens. Laura, thank you for joining us this morning. Ill send it over to michelle, back at hq. Lets talk about Global Market news. Brazils central bank announcing a currency Intervention Program going to provide 60 billion worth of cash and insurance to the Foreign Exchange market by year end. The goal is to bolster the countrys currency, which has been in free fall, slipped to near fiveyear lows against the dollar. This is part of the continuing story that we have been telling you with the emerging markets, comes to places like indonesia, india, brazil, et cetera, places with current account deficits, seeing capital in the country and desperately trying to stop the outflow of capital and also defend their currencies because it is leading to worse inflation. You see the brazilian real. Time for the Global Markets report. Carolin roth is standing by in london. What a week it has been for Global Markets with that emerging market selloff you talked about. And european markets were hit pretty badly as well. But now the final trading day of the week, were looking at some stabilization, the stoxx europe 600 is essentially flat. Keep in mind, if we do end lower today, this would be the first weekly loss for european markets, though, since june. Want to show you the markets one by one. Outperformance in the european markets. Ftse up by. 2 . This is in part on the back of the upward revision to the Second Quarter gdp number. Now at 1. 5 growth for the Second Quarter year on year. Meanwhile, the xetra dax is flat and we are seeing some losses to the tune of. 4 for the cac 40. In the currency space, we are seeing sterling against the u. S. Dollar, seeing some nice gains of around. 2 . We did see that jump on the back of the upward revision to the gdp number. Euro dollar flat and dollar yen seeing further gains, thats been the big story this week. The dollar rebounding against the yen. Of course, partly because the safe haven appeal in the yen is now easing. But finally, the dollar is striking the yields higher. Back over to you and have a fantastic weekend. Great. We will. And you too, carolin. Thanks very much. Looking through the other stories of the day. There are other storys . Usa today has got a little they looked at al jazeera and decided whether they liked it or not. Usa today says the best thing about it, it is refreshingly fluff free. Unlike usa today, which, i mean, really, do what i say they like flufffree news at whoo it is like chinese food. Colors and graphics. You read this, youre hungry in 15 minutes for something after you finish usa today. Usa today likes al jazeera because there is no fluff, no tabloids, no colors al jazeera, just debuted earlier this week and they have been selling themselves as very serio serious. Like all networks when they start. Were going to be better and highfalutin. Well see how they like not paying any bills. Carl icahn is at it again. His latest tweet about tim cook. And plus i have a lot to say about this, the new batman review. I know. What do you think . I care less about the personalities of who is going to play him than the idea of superman and batman together. Thats what im trying to think logistically how that one difficult. One is a true superhero with superpowers. That can fly. First, as we go to break, lets check on the weekend Weather Forecast with jen carfagno. It is going to be super. You can see where the storms were, you can do anything if you can think about think about the weather world. Batman or superman could give us a good call on the forecast this weekend. High pressure building in, the timing is perfect for the weekend. Well have great air, cooler, dryer, less humid air coming in. Looks good. Couple more showers left today, especially across pennsylvania, western p. A. , parts of West Virginia and virginia. But look at these readings tomorrow, were running in the 70s from boston, back toward syracuse, new york city, barely 80. D. C. , 85 degrees. And no rain on the map. Beautiful sunny day saturday and sunday, all throughout the northeast. Plus, this front were tracking will make some progress finally into the southeast, cities that have been so water logged will get to dry out like atlanta and charlotte and points in between. Sunshine next week. We havent seen that in a while. For an extended period of time, it is coming back. The middle of the country, the heat is the story getting into the weekend. Temperatures going above average again. And for a couple of days, were back to the 90s in north and south dakota. Thats on the move. So minneapolis, chicago, get ready. Sunday, were 94, minneapolis. Chicago, practically 90. Well get there next week. Forecast for the weekend is dry. Couple of showers may move into minnesota for you on saturday. On sunday, it is up here around the northern lakes and the west, still hot, watching for changes with the rain coming to the southwest over the weekend. Thats a look at your weather. Well be back with more on squawk box after this. Eing st. A quarter million tweeters are tweeting. And 900 Million Dollars are changing hands online. Thats why hp built a new kind of server. One thats 80 smaller. Uses 89 less energy. And costs 77 less. Its called hp moonshot. And its giving the internet the room it needs to grow. This is gonna be big. Hp moonshot. Its time to build a better enterprise. Together. Welcome back. It is time now for the executive edge. Our daily segment focus on giving Business Leaders a leg up. We often talk about the revolving door between washington and wall street. Now the s. E. C. Is making more of its staff leave the agency for the private sector. Subject now to a oneyear cooling off period. Under the new policy, anyone who makes more than 155,000 a year would be barred for one year from appearing before the agency. Guys, what do you think of this . I was wondering what you thought of it, andrew. You wrote that nice piece the other day that not all nepotism is bad, if you have a great roll dex and the way of the world, my take after reading it closely was that since you could leave the s. E. C. And go and lets say you were pretty lousy at your job at the s. E. C. , so you go and get you dont get a good job afterwards, make 154,000, which is not enough money, then you can come back and you can continue your mediocrity you had at the s. E. C. And at your new employer and it is fine to appear before them, right . Just if youre really good they dont want you coming back and saying anything, right . Is that how it works . That is one way to think about it, given the salary cutoff. You leave and cant get anyone to pay you and come there, then you can go back. My sense it is a good thing. The reason is only reason i think this is because there is such a perception out there that the whole game is so stacked and there is no level Playing Field. Im not sure this levels it. This wont change that at all. Somebody will still get hired. So they cant appear, but you think they can give advice behind the scenes about when you appear when you go do this and go do that, call this person, tell them this, ask them this. This is complete and total bs. This is them looking like theyre doing something theyre not. Why say it is a good thing . It is because remember when we got the Investment Banking side out of the analyzing side and got Pure Research firms where no one made any money and thats the kind of research you got when you hire people that werent good at what they did and they did the research and that wasnt very good and suddenly,