Transcripts For CNBC Closing Bell 20140205

Slightly positive territory for some of the averages right now. The dow though is down ten points. About five off the s p 500. 1750 is the level. The nasdaq sitting just above the 4,000 mark off 20. Speaking of moment of truth, twitter with its first Quarterly Results since going public due to hit within the hour. Investors will get their first real look at the numbers. Well see if they justify a stock price thats now up more than 150 since that initial Public Offering here that we remember so well. We will get you those full results right after the bell. And were not finished with earnings either. Disney also reports. A big bellwether for the economy and bob iger will be joining us here on the closing bell as soon as the numbers are released. Twitter and disney, two very Important Companies reporting in this jittery market right now. And lets remind people where we sit. After a series of losses to start out the year and after the worst start to a february in some time, we look a little bit better as we move through the week now. The market at this point you have the s p off only about 5 points, the nasdaq 10, the Dow Jones Industrial average as well off about 5. The question becomes whether that turns back into a rally as we head towards the close. Lets talk about that in the exchange today. We have barbara, Keith Fitzgerald from Money Map Press back with us. Joe bell from schaefers investment research. Peter anderson from Congress Asset management and our own Rick Santelli at the cme in chicago. Keith, you have done the math here. You point out this is the 19th time the markets have broken down by 5 or more since 2009. Significant . Are you expecting more . What do you think is happening right now . This is a classic correction. Its not time to bailing out. Its time to wait and see. The bulls and bears are duking it out. This 1750ish level is the dividing line. If we can hold it through the rest of the week, im very encouraged. I like the buying. If we go south of here and fail, i think the next stop is down considerably. Would you want to see a 10 correction . There are those who feel we need Something Like this . I think fundamentally, philosophically, were long overdue for that. I dont like losing trillions of dollars off the top like anybody else does. I want to see this thing come back. I want to see the buying continue, and id love to have it. And, peter, in a market thats still so heavily influenced by the fed, we have a couple competing narratives out there. We have plosser talking about potentially ending quantitative easing by the end of the year while lockhart is saying a sear yuz adverse change so prompt a change in the taper. What do you make of it . Well, i think its going to be a year of competing opinions absolutely. I mean, we saw in the Economic Data today, for instance, competing opinions between manufacturing and the services. So it doesnt surprise me were going to have conflicting opinions all along this way, and on top of it, you know, talking up stocks right now is a bit like trying to inflate a lead balloon. Still, if you look at individual holdings, and thats what i do all day, i hate to get began lar granular right now please get granular. She loves granular. Fine. We just bought a stock called super value. Its in the boring supermarket industry but its trading at half the pe of the industry right now, and, of course, it has some story. It has some hair on it. But its deleveraging. A private equity firm has come in and taken some major positions there. So its things like that, kelly, that while all this noise is going on in the background and i can almost hear mick jagger singing here comes your 19th nervous breakdown, but even with all that happening, you can still find some individual names, and when you look at it at that level of grahn lairity, i think the economy is still strong and there are stocks out there to buy and you will get a nice return throughout the rest of the year. Only on the closing bell do you get Elizabeth Barrett browning and the Rolling Stones in one tenminute segment. Barbara morrison, you and the rest of the group are classic stock pickers. Do you like this comeback in the market . Does it make it easier to pick a stock, or do you want to stand back and let this market settle out before you start buying some more . Well, i think there are always things that are of value in the market. You know, the overall market is not does not have a lot of value right now. It may be under 17 times earnings, and i think as we exited last year, we thought we were starting in on a period of stronger growth rather than this last couple of years of just 2 . And i think there was optimism over that. Now i think what we have seen with the ism reports and employment, i think it still looks a little mixed. I think you always want to choose your spots and buy something you think can have higher cash and higher earnings maybe a year or two years from now and get a higher multiple on that. But youre being selective in that regard then i guess. Yes. Yes. I think we always are. Thats right. Were always looking i think we think you make money at the price at which you buy. So were always looking to buy something at a good price. Got that list out. Rick santelli, if people want to be encouraged, there are a couple factors. You can point to huge volume in the etf that goes against the vix. In other words, expecting volatility to decrease in the coming period. You could look at the tenyear and the fact that yields have risen a little bit there. You know, i think volatility is interesting, and theres, oh, so many forms of volatility. We have price volatility, option volatility, implied, historic, but in the end the volatility that i think people are most worried about, investors in particular, is the type of volatility associated with the downside of equities like the vix. So that doesnt scare me. I think downside volatility is here to stay. You know, if you buy Life Insurance and you dont die, you dont call up your Life Insurance carrier and complain. I think traders when they see the markets trade to the downside are going to reach for vols. I think todays report, both ism nonmanufacturing and adp, give us valuable information, and that is there isnt a linear move in the data that measures the u. S. Economy thats looking straight up. It still looks like it could be fits and starts and we will need a couple more numbers on the employment side to get through the weather issues as big or small as they may be to convince analysts what direction the market is going. The problem is we continue to look at 2014 like its 2013. By the time we get through another two months when we know some more on the economy in a concrete fashion, if it continues the way it is, theres going to be many that are going to have their average price a lot higher than it is today. And, joe bell, you know, as we do look back at 2013, we were talking so much about the amount of cash sitting on the sidelines and we saw it as a potential bullish sign. That was money waiting to get in the market. Were not talking about that right now with this 5. 5 pullback but you still feel that is a bullish indicator we need to keep an eye on, yes . Bigger picture i definitely do. You talk about the fact that its been actually since the beginning of october since weve had a meaningful pullback, so it might have made sense for the markets to take a bit of a breather here. I think a lot of people are getting scared by this 6 pullback. In the short term im encouraged by the fact that the 1740 area which coincides with the november lows is holding but after a lot of volatility to the downside, it seems the bulls and bears right here, we would like to see this area hold. One thing thats interesting to us as well is we dont think theres a lot of High Expectations for this market right now, especially in the short term. It seems like a lot of people are perhaps saying how large is this correction going to be rather than talking about jumping right back into that market. We think that low expectation and really that fear, thats sort of what will sort of come off the sidelines at some point if we can get some strength here and some confirmation off the support area. Barbara, im just curious when youre looking name by name if anyone in the social media space appeals. We have a bunch of earnings, twitter, yelp, pandora, linkedin tomorrow, all of which people wave their hands and say theyre overvalued thats right. How do you view these names . I think you really want to have something that you think will be of good value a year, two years fro now, so there have been a lot of stocks that have been darlings and had a lot of momentum, but you want to buy something that you think really has value in it. Something like a microsoft fit the bill . Microsoft is i think microsoft really does not have a culture of innovation. I think thats tough for a technology company. I dont know how they can all of a sudden be all about the cloud and reinvent themselves. I think the competition is very high. I think they should buy another company to try to get their culture and almost reverse merge into it but i find it difficult to find value there. Any other names certainly apple. Apple is a tremendous buy here. Apple is trading at 11 times this years earnings, 10 times next years earnings. A tremendous amount of cash on the balance sheet. Who is going to win, carl icahn or cal percent. I think they both have it a little bit right. The company has done a good job of staying true to itself but i think the cash should go to the shareholders who own it. Thank you all for joining us today. Appreciate it very much. We have a lot to get to here over this next hour as we get ready for some very big earnings as you mentioned kelly. As we head to the close, 50 minutes left in the trading session here. A lot of volatility on the morning session. Not a lot this afternoon. The dow now up 7 points. Its been flirting with that unchanged level for a couple hours now. Well watch it closely. We have Standard Poors downgrading puerto ricos debt to junk status. Now worry that is it could have negative repercussions throughout your portfolio. As you have heard, twitter set to deliver its First Quarter results as a publicly traded company, but should you buy or sell this stock ahead of those numbers . A good oldfashioned stock brawl on twitter coming up. And dow component disney also on the earnings calendar after the bell and chairman and ceo bob iger will break down the results in a first on cnbc interview moments after theyre released. Thats all coming up. Youre watching cnbc, first in business worldwide. And it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. 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Superior service, best selection, lowest price, guaranteed. Sleep train your ticket to a better nights sleep welcome back. Breaking news right now. Some fed speak, steve liesman. Who is talking . Atlanta fed president Dennis Lockhart saying that the 10 billion fed taper, speaking by the way at the rotary club of birmingham, alabama, the 10 million taper is the default mode for the federal reserve. Other fed guys have sort ever suggested this. He may be the first one to come right out and say it. Its been really what the market that is thought. He said the stock market may have gotten ahead of itself and hes not surprised by the selloff but he doubts, however, it was in a bubble. Hes one of several people out there the past several days, fed speakers, who have defended the schedule for the tapering given some of the weaker Economic News and whats been happening in emerging markets kind of suggesting despite these things, the fed is on track and it being the default mode and earlier in the day he had said it would take an awful lot to get the fed off of reducing that track of regr reducing the quantitative easing by 10 billion. It was plosser who said he wanted the fed to be done with quantitative easing by the time the Unemployment Rate has 6 i saw a headline of him saying a serious adverse change could prompt a change to the taper. I dont want to interpret his comments as opening the door to something if the bulk of his speech he is not opening the door. Hes saying it is the default mode. Okay. Thats what the headline is from these comments which came later to the press after his published remarks or his printed remarks out there. Hes basically saying its the term default mode that we found most interesting on the news desk. This has been whats suggested, whats believed by the market but i dont think any fed guy came out and said default mode. But they will keep an eye on the Economic Data. No doubt. Theyre still data dependent but its how much data does it take to get them off that track. Thanks, steve. In the meantime a bailout for puerto rico is not in the cards were told after the s p downgrading puerto rican bonds to junk status. The white house considering its not considering Financial Aid if the u. S. Territory cannot immediate its obligation. You dont have to own puerto rican debt to be exposed to the fallout if they default. Joining us to explain lauren sco scott, also sean oleary, Senior Research analyst. Sean, it may be people who dont realize they have exposure to some of the puerto rican bonds in some of the funds they own, right . Sean . Go ahead. Im sorry. Its possible. There are certain punds that do own puerto rico paper, state specific funds particularly. But is this calamitous for those bondholders . Is this something we should keep an eye on . We keep hearing the hue muni bo market may be ripe for more defaul defaults. Is this the beginning of that . I dont think so. Its easy to delineate puerto rico from mainland credit. Most cities, states, counties, they sell debt for capital project. If theres some dislocation in the marketing they can sit it out and delay the Capital Projects until the pricing normalizes. Puerto rico is an entirely different animal because for more than ten years they have deficit financed, and they need the bond market to cover those operating deficits. To the extent puerto rico has problems, its not something that links back directly to the credit of the other cities back in the u. S. Mainland. Okay. I think thats an important distinction that should be made. Lawrence, here is what i want to know. People have been talking about how bad the situation in puerto rico is for months now. Municipal bonds were whacked last year. They have had a great run so far this year. What is the right thing for investors to do right now with regard to puerto rico . Well, you know, our investors at fundamental certainly ask us to manage money on behalf of their accounts in both hedge funds and private equity vehicles that are focused on these markets and actually anticipate this volatility and anticipate these they like it. These choppy circumstances. We see both securities that are interesting for investors as well as assets and services that municipalities, you know, look to monetize or look for assistance and we stand ready to invest along those themes. And it sounds like the yield pickup you can get in some cases is extraordinary. So whats interesting though, whewe were talking to alexander lavev that will, you almost have to sprite it into savvy investors and the guys who dont want exposure to pruerto rican debt. There has been a shift as to who owns puerto rico risk at this point. Remember, puerto rico is a 70 billion issue or Third Largest issuer of municipal risk in the marketplace behind new york and california. You wouldnt expect that Third Largest . Commonwealth has 4 Million People on it, and this is on account of the triple tax exemption. You heard the white house today say you have to interpret what they said, no bailout. Thats a flash point, that word bailout but if you look at their behavior as it relates to tweaking excise tax it is a soft bailout. You will say that, i wont. A large percentage of them work for the federal government or receive stipends and other backstops from the government. This is not a completely disjointed set of circumstances. Right. Shawn, when you get an event like this as were now hearing, the Third Largest issuer of municipal debt out there is downgraded to junk status, you will often get a response in other parts of the muni market. Have you seen that and do you think that presents opportunities right now . Well, im glad you mentioned the Third Largest issuer. It is the Third Largest issuer, but at 70 billion on a 3. 7 trillion market, its an infinitesimal spes of tpiece of market. Its held wide will you bly butf the broad scale of the market, its small. In terms of what its done to the market as a whole, its been unchanged today. Unchanged for puerto rico. And the reason being s p is not leading the market here. S p is lagging the market. Its just confirming what was expected. Exactly. If there had been a robust market for puerto rico paper, you would have seen a capitalizecapitalize ed gdp. We wouldnt be worried about their liquidity and s p wouldnt have had the conviction to act the way they did. This is solely because the market has clearly said for a long time this is no longer an Investment Grade credit. If moodys and fitch follows suit, what happens then . What is the end game here . Well, i think its in stages. I think it builds to hopefully a terrific result. I do tend to agree. The market, youre looking at 10 yields on general obligation bonds. 300, 400 basis points through other comparable issuers or other states, if you will, so, sure, the market anticipated weakness both in liquidity and ultimately solvency of the commonwealth but whats the end game . The end game is at least two stages. One, solve the liquidity certain the island has. We are hearing talk of at least two different competing structure that is will bring 1 billion or 2 billion into the islands coffers to deal with short term liquidity terms and then you need a case for growth. You need to attract businesses to the island, reduce energy costs. Energy costs on the double are rate of many payers in other municipalities. You need to connect with the dominican republic, access the European Union for trade. The medical and Life Sciences community is vibrant there, and you need to build up that ecosystem to bring taxpayers and Revenue Growth to the island. So its a staged plan. Wow. And many just yeah, go ahead real quick. Just the idea that they can get 2 billion is contingent upon theyre being credibility to the idea they will have a balanced budget in two years and thats a big problem for puerto rico. So thats a trick. Its difficult to see how they get the 20 2 billi the 2 b. I think investors will be watching. And being opportunistic where they can be. Thank you. Weve got about 40 minutes, bill, to go to the close. The dow is holding up about 8 points. The s p is off 2 or 3. And the nasdaq is still negative on the day. As we have documented again and again, twitter shares skyrocketing more than 150 since going public and that was just in november. But can this stock keep heading higher after it reports quarterly reports for the First Time Since the ipo . We have both sides of the debate coming up. Twitter is not the only big name set to report. We have disney, pandora, yelp all joining the earnings parade. Well break down the numbers as soon as they hit. Keep it right here. Humans even when we cross our ts and dot our is, we still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness with our auto policies. If you qualify, your rates wont go up due to your first accident. Because making mistakes is only human, and so are we. We also offer new car replacement, so if you total your new car, we give you the money for a new one. Call Liberty Mutual insurance at. 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Well, a stronger read on the Services Part of the economy today, but as you can see from the indexes, not really enough here to kick stocks into gear today. Dominic chu, what is holding us back . Well, the big loser today is 3d systems. The 3d printer makers stock is plummeting after cutting estimates. They all fall in sympathy. Tough day for those stocks. Also a tough day for Buffalo Wild Wings which saw its Fourth Quarter revenue come in below street forecasts. Morgan stan lie citing minimum wage hikes and higher chicken copses as a concern for the second half of the year. Goldman sachs is saying those january sales were disappointing as well. On the plus side is deckers. A 98 per share price target on the stock. Well end with twitter out with its earnings after the bell. Its first earnings since backing a publicly traded company. The street is looking for a 2 Cents Per Share loss. Well have its results and Market Reaction when they report in the next hour. Bill, kelly, back over to you. Lets duke it out on twitter and whether or not it can deliver for those investors who have so obviously bet big on this company already. Yes. Chris desy thinks twitter will stand up the valuation there. He has clients buy ads on twitter. Larry fisher expects the stock to go down from here to reality. Welcome to you both. Chris, first to you. Why does twitter go higher from here . There is no other Session Network today that drives more immediate, effective ad revenue for my clients. Its about generating ad revenue. Larry, is it just is it too expensive . Is that why you dont like it here . Its way, way, way overvalued. Overpriced. If you talk about twitter, theres only 250 million users but most of their business is outside the u. S. With 200plus million in revenue. Theyre unprofitable. Theyre not making any money. This thing is going to stand still. Well see a reality check i believe in a hatlf an hour. Absolutely not. When the leukemia and Lymphona Society comes to us and we can generate 81,000 in one day via twitter, there is no other platform thats the goto platfo platform. Theyre making certain individual can aggregate emails via the twitter platform. Its a much more dynamic platform. If you were a true marketer you would understand that. If youre in it day to day like silverback social is on behalf of our clients, you understand twitter is the number one platform right now. That number one but theyre not making money. Its unprofitable. Everyone likes the post office but the post office doesnt make money either. Larry its a small number of clients compared to worldwide. I made this point yesterday. Let me hit you with it as well. Take us back ten years after google came public. There was a hue and cry about how expensive that stock was. How were they ever going to monetize this onetrick pony and grow it and find new Revenue Streams and look what happened. Couldnt twitter do the same thing . I dont believe so. The whole issue with google is they were profitable. When facebook came out, they were profitable also. Youre talking about 3 billion of revenue, 1 billion in profits. Theres no profit here and its a bland model. You might have some clients who like it, but if you dont make money on the product, who cares. Were in the stock market to make money. So to like something, theres a difference between liking a company and a stock, and i think this thing is going to start to go down. The problem is you need r d money to continue to grow. Its a bland model. You have to go mainstream, you have to go ecommerce. They dont have that. A bland model . When delete blood cancer comes us to and says starts a conversation with 18 to 25yearold doanors and there are 5. 3 people and week go into during the super bowl im glad you mentioned the super bowl. Its a terrible engagement. Ridiculous engagement. Fantastic engagement. 3 . That 5. 6 million are more highly engaged. Its a Second Screen phenomenon. There is nothing more immediate the bottom line is theyre not making money and growth is slowing. Youre making money for your clients, chris, but i guess what hes looking at the difference between that and a stock. The company to make money that will please shareholders. Exactly. Are we talking apples and oranges . Theyre doing everything in their power to make silverback socials job easy so we can engage with those individuals quicker. Theyre pandering to less sophisticated advertisers. Theyre making it very easy for mom and pop stores all the way up to the enterprise advertisers we work with to make it super simple for them to spend ad dollars on the twitter platform. It works. Its effective, its powerful. Its not effective because theyre not making money doing it and they have to grow and continue to do it and i dont see them being able to do it. Were going to find out. Apparently options pricing point showed a 15 swing one way or the other. Thank you both. Heated argument. Dont miss instant analysis right after the bell. The dow is continuing higher. We were down triple digits on the open right now. A lot of volatility in that Services Sector came in from the ism stronger than expected and were drifting higher right now. Natural gas prices have been spiking. More than 20 this year after a strong rally already in dwi2013. Has a lot to do with the winter storms across the country. Up next well get the outlook from the ceo of Spectra Energy. Do you go out and go shopping on snow days . Your best tweets on the impact the weather has had on your Shopping Trips out there. Thats coming up later on the closing bell. Search reports, customizable charts, powerful screening tools, and guaranteed onesecond trades. And at the center of it all is a surprisingly low price just 7. 95. In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Afghanistan, in 2009. Orbiting the moon in 1971. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Welcome back. Natural gas prices cooling a bit today after a huge rally to start the year. Jackie deangelis keeping an eye on things over at the nymex. Good afternoon, kelly. After hitting a fouryear high not so long ago, as you said, prices in natural gas cooling off a little bit, in negative territory today. Traders telling me a couple things to consider. First of all, its still above 5. Theyre also saying that these cooler temperatures are persisting at least for the short term so we are going to find some price support here. But on the flip side, we did see a 10 increase in margin requirements here so that is going to make the price very volatile. Tomorrow we have the storage report so that could swing prices around as well. Meantime, just want to give you a quick check on crude. We saw it seesawing today along with the equity markets as well but we did trade up a little bit. West texas intermediate closing at 97. 38 a barrel. Back to you. Thanks very much. While Natural Gas Prices have been cooling off, profits for red hot gas producer Spectra Energy have been taking off. Look at the numbers. You can see an 11 jump in net income fueled by the sale of one of its u. S. Businesses in that quarter. Even revenue topped analysts estimates by 80 million. Came in at 1. 5 billion. And ceo greg ebel is joining us now exclusively to break down the numbers. Greg, welcome, first of all. Good to be here. Thanks very much. What is it that most important to how your business did in the latest quarter . Is it that weve got higher gas prices because of the cold weather . Does it have to do with just transporting more fuel products . All those things. The base of our business is really about transporting, so if you think of us as the fed ex of natural gas, so we like to pick up peoples product, move it and deliver it to the burner tip of your home or at your stove, so thats really key. Wh is important. Obviously with the cold winter, theres more need for natural gas and a small amount of our business, we dont produce gas, with you we make some margin on the price of gas. With 5 gas, thats a good thing for us. Youre moving a pipeline into florida, the third one. Is that reflective of the demand there or tell us where demand is picking up and where youre focusing on right now. Natural gas demand across the country is actually doing well in all places, but in florida what youre seeing is a move off of oil fired generation. As you know, some challenges with the Nuclear Reactors down there, and so folk like Florida Power and light moving to bring new gas supplies into florida, which is one of the Fastest Growing demand markets in the United States. Throughout the southeast i think you will see that happen and thats a great opportunity to build pipeline. Thats a 3. 2 billion pipeline that well have in service by 2017. As much as gas prices have risen over the last year or so, theres still its so much cheaper here in the u. S. Than in most global markets. Should we push policies that would allow us to export more of that natural gas or should we keep the subsidy here for our consumers and our producers at home . The great thing about supply in the United States, we can do both. So weve got relatively low Natural Gas Prices. You see a spike up here right now but thats largely weather driven, and so we can continue to have industrial users here and power users and consumers benefit from those low prices while at the same time ship natural gas via l g offshore. So you see more shipping and more facilities. It takes tremendous energy, tremendous cap ex and no one wants these things in their backyard. The price goes up so much more when you export it away. There goes our supply. Before the great shale plays typically people would think 10, 15 years of supply. Now were talking about in excess of 100 years of supply even with demand going up. So i dont think price is going to be a worry from an l g perspective. You have seen that trend change from a policy perspective. The new Energy Secretary has approved several new l g export facilities. Places around the gulf coast where were located in houston, our head office, people are used to those type of facilities being built, and then offshore of west coast of canada youre seeing l g opportunities there of which we expect to be part of building a 10 billion pipeline there before the end of the pipeline. What about keystone . We know what you do for a living. We know your perspective on this, but the politics aside, the its effect on the world otherwise, the environment, thats the word im trying to think of, what would it do for business in this country . Well, obviously the price of western canadian oil runs around 20 bucks, 25 cheaper than what you get on the gulf coast or here in new york. So what that means for consumers and businesses is obviously a lower input cost for energy, and thats obviously going to make our products here in the United States more competitive as well as the jobs that are produced. If you look at the average pipeline worker in america, they make about 65,000 a year. Those jobs never go overseas. They stay here, theyre good jobs. Theyre not all in manhattan but theyre in places like missouri or theyre in places like maine and across the gulf coast. Great opportunities for job. That leads for more need for demand and revenue from a tax perspective. Im in the industry and we have oil pipe looilines as well but s the board its a win. I think as the state Department Report says, this product is going to get harvested out of canada and whether it comes here to the United States or shipped somewhere else and then they ship us back products they use with that oil, id rather keep it here in north america. Greg, its great to see you. Great to see you. A quarter that tells us so much about changing trends in this country. Really appreciate it. Thanks very much. About 20 minutes to go to the close, bill. The dow is up about 9 points. Seeing a small decline across the s p and the nasdaq at this hour. Definitely this market has just been marking time today. So much for the barbell strategy which is buying small caps and big caps and buying both big and small caps nearing correction territory. Is there any place left to hide right now . Well look at that coming up here. Also, how would the blockbuster film frozen impact disneys earnings and whats the latest news on the star wars movie due to shoot this year . Bob iger coming up. To manage your money. Thats not much, you think except its 2 percent every year. Does that make a difference . Search cost of Financial Advisors ouch over time it really adds up. Then go to e trade and find out how much our advice costs. Spoiler alert. Its low. Really . Yes, really. E trade offers Investment Advice and guidance from dedicated professional financial consultants. Its guidance on your terms not ours thats how our system works. E trade. Less for us, more for you. 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[ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Stocks stantizing a bit today since mondays bloodletting but the dow is not far from that correction territory of a 10 decline and things are even worse when it comes to the small cap stocks. Dominic chu answering the question every investor has right now, where do i hide in this market . Kelly, bill, nowhere to run, nowhere to hide. Thats the reason why were taking a look at large and small cap stocks because between the Dow Jones Industrial 30 and the russell 2000, they are among two of the worst performing indices in the United States. Large caps and small caps both taking a hit. Lets take a look at the dow first because its down about 7 so far yeartodate. Among the biggest losers here are big names that we all know because we talk about them every day. First of all, take a look at some of the Oil Companies like chevron and exxon. Chevron is down about 12 , 13 just so far this year. So not a good year for them. Also aerospace and defense giant boeing, theyre down 11 as well. And then theres ge, one of the original blue chip companies, down 12 , 13 . If you look at the russell 2000 index, down about 6 so far yeartodate, and theres two 2000 stocks. A lot of them you probably havent heard of. We picked out three of the worst performers that you probably have. Check out supervalu, down 25 . Another big one to watch is arctic cat. Down about 26 . And finally walter energy. Its a coal company, and its down about 37 , 38 . If you look at the overall picture for large and Small Company companies, its very tough right now for investors although we should note it is a stock pickers market. There are still pockets of strength no matter where you look. Back over to you, bill, kelly. Heading towards the close with 14 minutes left in the trading session. Here with the dow holding on to a gain. Were strengthening into the close, up 25, 26 points. After the start weve had to the year, well take it. There can only be one first time coming up. Well have twitters first ever Quarterly Results as a public company. Youll want to get the crucial information first on the network that is first in business worldwide. Well be back after this. [ male announcer ] this is george. The day building a play set begins with a surprise twinge of back pain. And a choice. Take up to 4 advil in a day or 2 aleve for all day relief. [ male announcer ] thats handy. Ten minutes left in the trading session here. Market kind of holding steady. If this were thursday, kelly, id say were waiting for the jobs report but thats not until friday. Two more days to go. Were already waiting. We have Larry Mcdonalds waiting with new edge usa and matt cheslock. Matt, you have been waiting for this pull back in the market. Have you had enough yet . Is there more to come . Well, you know, i think were not done yet. I think were starting to see some movement in the market. Were seeing the transports are down pretty big today. Theyve been a leader as weve gone forward. Im not seeing the buy side wed hoped for. Its still sell that rally mentality and not buy the dip. Larry, what about you . I think short term you could get a little bit of a valley. Yesterday vix call call versus put volume was close to 3 to 1 which is one of the highest levels in a long time. I think you go the other way. When i see that, i want to go the other way. Its a good contrarian shortterm indicator. I was going to say so this is it then. Is that what youre saying, larry . No, i think we could get a 20, 30 handle bounce in the next week and a half, two weeks, and then over the next month retest these lows that were at right now and maybe go through them. What about that sentiment indicator, though, matt . The volatility index did get to 20. It got to 21. The last time we were there marked a shortterm bottom for this market in october. Well, you know, theres plenty of time for people to put their money in. Weve heard all along that the market is going to be strong, the market is going to be strong. They were expecting to buy this dip. So if theyre going to buy it, this is a good time. If they dont and we see a 10 correction, god forbid, it might be a really healthy time for people to get in. There are a lot of values here that people have been waiting to buy. You know, twitter is an example. Earnings coming out. Are we going to buy this at near highs that were seeing right now . Im not sure were going to see that. Its going to be really interesting to watch that one. You said god forbid on a 10 correction. Would it be that bad . Not for me. You reminded me of that again this morning. I think if youre an investor, i think you have plenty of money on the sidelines. Thats what weve heard all along. You have been waiting for a move like this. Its happening at a perfect time, the beginning of the year. I always ask arcy if hes getting back in the market, he got out in time but has been waiting to get back in. Hes not enticed by these levels. While stocks have moved lower, they dont seem cheap to a lot of people yet. Kelly, the best buy in the world right now over the next month is in the emerging markets in the sense of this, so the emerging markets are slowing down the u. S. Growth. Global growth is extremely exposed to emerging markets. Across wall street about in terms of gdp, theyre looking for 5 growth this year. In the emerging markets theyre probably going to get closer to 2 or 3 . That will slow down the developed markets. The eem has underperformed the s p by almost 60 since 2011. So since 2011 the s p is up 32 , eem, down 26 . Thats an absolutely unsustainable path. At some point the eem has to catch up with the s p and i think those two converge over the next year. We hope its not the other way around. Yeah. Thanks, guys. Were going to come back with a closing countdown in just a moment. And disney, twitter, pandora, yelp, all Just Moments Away from Quarterly Results. Well get you full Team Coverage of these important numbers. Youre watching cnbc, first in business worldwide. Or woof . Exactly the way you want it. Until boom your mattress a battleground of thwarted desire. Enter the sleep number bed. An innovative design that lets couples sleep together in individualized comfort. Hes the softy his sleep number setting is 35. Youre the rock, at 60. As your needs change, you can adjust your sleep number bed, so you can sleep better together. The ultimate sleep number event is on now only at a sleep number store. With queen mattresses as low as 599. 99 know better sleep with sleep number. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Coming up on the three minute mark before the closing bell, and its going to be all about earnings and social media stocks are going to be reporting big time coming up here in a little bit. Twitter, of course, this will be their first report since they became public in november and theyre up a whopping 150 since that time. Yelp and pandora also will be reporting. Then weve got disney coming up, and bob iger will be joining kelly in the next hour to talk about that. In the meantime, bob pisani, that market has been going sideways after some volatile this morning. What do you make of that . I think its terrific. Yesterday we talked about the fact that what weve got here is youre playing poker and you have two twos. What are you going to do with that . Youre not going to fold, not going to increase, just sit there and wait for another card. The other card we needed was theithe ism services report. That came in a little better than expected. The market shot up and then sort of moved down and largely sideways throughout the rest of the day. So the other card we need is whats going to happen with the nonfarm payrolls report. Thats why i think tomorrow will also likely be relatively quiet. We havent mentioned the adp jobs number, the private sector jobs number was anemic, not very good at all. I think a lot of traders dont the number wasnt very good. The correlation wasnt very good last time on that relationship. I think everybody is hoping well get a decent upgrade to the december report, 74,000, at least maybe to 125,000. Look, whats going on the last few days is the emerging market crisis gave a lot of traders an excuse to lighten up, and obviously you can see the volume is much lighter in the last two days than it was earlier in the week. People who needed to sell have sold and the rest of the people are sitting there with their two twos waiting for additional cards to come in. It makes a lot of people. The people who needed to sell are selling now and we sort of calmed down a little bit. I saw some interesting announcements today. The 3m announcement of the buyback, they said they were essentially going to buy back 14 of the stock thats outstanding. Of course, we need to have a clearer time frame over which theyre going to do it and they have to go ahead and do that, but thats an extraordinary number. Thats larger than many buybacks i have seen for years and years. I was trying to get some stats on whether it was the biggest one i have seen as a percentage of the amount of stock thats outstanding but its definitely up there with the alltime top ten. Thats a significant announ announcement. Earnings were a little disappointing and thats affecting different sectors. It will be interesting to see how twitters numbers are received. A lot of High Expectations for that company. They are not expecting a profit but they do want to watch very carefully to see if theres Revenue Growth here. I saw your debate, and i thought that was an excellent debate because really when you talk to twitter, youre on one side or another. There are very people who are indifferent about twitter. I mean as an investment not for its utility. There are a lot of people who feel its silly, not ever going to make any money and overpriced and many people who feel theres tremendous economic value that will be realized over time just like facebook. Well know momentarily when we get those numbers on twitter, also from pandora and yelp, and dont forget bob iger on disneys numbers. Ill see you tonight on nightly Business Report on pbs. Here is kelly evans. Ill see you tomorrow, kelly. Thank you, bill. Welcome to the closing bell. Im kelly evans. Its going to be a bigusy sessi as were moments away from twitters First Quarterly report. An up and down day. Stocks were searching for a direction. It was econ data. The dow will just avoid a gain for the session giving up about a point here at the bell. 15,443 is the level. The nasdaq down as well managing to stay above 4,000 for what thats worth as it sheds a half a percent and we wait on big social media name and the s p 500 down three or four points to 1751. What does it all mean . Lets bring in david sourby from loomis sales, stephanie link is here and John Steinberg and our very own jon fortt. Also with us is fast money contributor guy adami. David, first to you, what do you make of the Market Action today . Just more weakness. Were going to get this town 10 . I think when you get a down 10 move in the market you grind through it. When you grind through it you look at whats better price than what was more expensive at the beginning of the year. And i view this as a long term buying opportunity. When its down 20 , then the defense comes on the field but i dont think we have the fundamentals in place for a down 20 market. Just this down 10 that weve been overdue. Stephanie, do any of the earnings do you think move the needle on that bigger question today . You know whats interesting to me . A lot of the stock, maybe the stocks i own unfortunately, are down already 10 , right . So i already have been feeling that this Market Correction is even worse than it actually appeared. What are some of those examples . A Johnson Controls, that stock is down 13 and they beat the number. Now expectations were high, that sort of thing. But im listening to companies, what they have to say, kelly, and theyre saying things are not gloom and doom. Even Johnson Controls down as much as it is still is expecting to see an up double digit earnings year over year for the year. Look at google, 31 paid click growth. Hartford financial, boring Insurance Company we had the ceo on. It was a fabulous interview and he increased his buyback program. Im looking at various Company Specifics and im not getting too thrown off. Im upset my stocks are down but its an opportunity to be picking carefully on the weakness. The narrative is there. Its all still intact. Theyre doing the right things but the market is moving lower. You know the market doesnt like uncertainty. So we have plenty of that. Theres a lot of mixed Economic Data. We dont know how much of it is weather. We dont know how much of it is demand. China is on their holiday. Japan seems to be people taking profits because that was one of the best markets to own last year. Theres a lot of reasons to get concerned, but go back, listen to what the companies have to say. Look for good Balance Sheets and Management Teams and market share gains. I think you will probably be okay for the long run. Tough take a little longer perspective. An interesting way to think about it. Is it concern or confusion . When people are trying to figure out how much the weather might be a factor, for example, well, its hard to look at the tenyear and think thats really pushed around by the weather but its probably the case the longer this unusual pattern persists, the longer it will be before its really clear how strong the economy is or not. The long run for me, kelly, is like dinner tonight. Im not in the same camp as everybody else, but im not doom and gloom, but you just got to look around and look at things. First of all, i think we do people a disservice because i think weve conditioned the audience to believe a good day is when the market is higher and a bad day is when the market is lower. I dont believe we should use those adjectives, number one, but thats neither here nor there. To me i think the unintended consequences of our fed actions have been to empower other Central Banks to do like. Look at japan. Steph just mentioned it. I think theyve completely lost control of their markets. I dont think anybody wants to say that, but the moves youre seeing in the japanese bond market, currency market, equity market, thats not healthy whether they go up or down. So, yeah, i think there are definitely some headwinds, definitely some concerns. My line in the sand in the s p is sort of 1725. We talked about that weeks ago when i was on with you and i still think were headed there. David, is that overstating it, japan losing control here . I think its still em is still the big question mark. Its probably not a time to be a buyer of em, but when i look at the Asset Classes that lagged last year, thats on my radar because i think theres fiscal austerity. If you have embraced economic reform and youre a free market economy, those are the em countries i want to be a buyer of more than i would want to be a buyer of japan. It will be interesting tomorrow what draghi says. Thats going to be well see what he says. He we know they have room to do more. Theres speculation he might do more. Theres room there and the important thing which they just said is there are these countries that are still providing stimulus. Were starting to pull away. Some of the other areas are still really pedal to the medal and it could make for an interesting buying opportunities. There are countries ever interest to me, south korea, mexico, even india is i think has a lot of doubters but those are the countries that are moving in the right direction and represent value for the the markets that lagged in 2013, thats where you want to look for opportunity this year. All right. We are keeping an eye on twitter which is moving around after hours up about 6 as its earnings estimates hit as the earnings numbers hit well get you the full numbers as soon as we are ready, but its clear the market likes what it sees here. John steinberg, whats the most important thing to watch here as twitter and many other social media names are reporting . Twitter is a little different. We want to look at the user number. There were 230 active users at the end of the last quarter. 250 is the consensus. On revenue, 218 million is the consensus. These are the only things the market cares about. Great point. As twitter hits with its first Earnings Report on wall street, lets get straight out to Julia Boorstin with the detail. Thats right. Twitter reporting revenue of 243 million. Thats up 116 over the year ago quarter. Showing accelerated Revenue Growth from the prior two quarters. Now, the nongap eps number is a positive of 2 cents. So were just trying to figure out exactly the comparisons. Wall street had been looking for a loss of 2 Cents Per Share. Were getting that the nongap eps number is positive 2 Cents Per Share. Were going to continue to dig through the numbers and just look especially at the growth rate here because obviously theres been a lot of focus on user growth and im trying to figure out the comparison. I dont know if anyone from our breaking news desk can help us with that. But the active monthly user numbers was 241 million. Thats an increase of 30 yearoveryear. Mobile monthly active user numbers is 184 million, increase of 37 yearoveryear. Time line views, that reached 184 million in the Fourth Quarter, an increase of 37 yearoveryear. That represents 76 of total monthly active users. So advertising their metric of measuring how valuable their advertising is and how well their advertising is working, the advertising revenue per thousand time line views reached 1. 49. Thats up 76 yearoveryear. Theres an indication that the ads are working and advertisers are coming back and consumers are engaging with the advertisers. So just trying to figure out whether that 2 cent eps number compares but the fact that advertising revenue is up 121 and mobile advertising now comprises more than 75 of total advertising revenue shows significant improvement for twitter in this quarter. Kelly . Julia, thanks very much. Well let you look through the numbers. We have john fort n fortt with t as well. Any idea why the stock was swung 10 Percentage Points . One thing i would mention, from what i read the Options Market was looking for a swing of up or down 15 by the end of the week. So some volatility expected here. Im zeroing in on monthly active users. That number, 241 million, people were looking for as john mentioned a higher number on monthly active users. Twitter is a young company. Yes, its nice to see that revenue number higher than expected but you really want to see those fundamentals, the number of users, the engagement of the users strongly higher because thats what theyre going to be able to bank their and base their future growth on. So were going to want to pull out some more of that. Mobile monthly active users at 184 million in the Fourth Quarter, increase of 37 as i believe julia might have mentioned. I think the reaction has to do with those fundamental numbers and the potential for future growth based on those. David . Fundamentals matter. 67 times sales. So now we can calculate a pe ratio on twitter because they went to the positive but, boy, 67 times sales, anytime you look at the history of tech, you can calculate that the forward expectation on revenues but 67 times sales, thats priced for sainthood. Users time line, the mobile, even the mobile usage to me all came in a little less than what people were thinking. Not horrible by any means. The growth looks phenomenal but relative to expectations, relative to the valuation to davids point, a little disappointing at least initially. If were only looking at 8 million incremental new users, 232 to 240 million monthly active users, thats really on the low side of the monthly of ak at thises. That would only be an 8 million add for the quarter. Thats interesting. Julia has a bit more detail. The stock is now down almost 10 after hours. Yeah. I think thats absolutely right. This is an expectations game and a lot of analysts were expecting 250 million active users. There was hope there would be a user bump around the ipo. When it went active it had 232 million users. The company has, as just mentioned, has only added 9 million monthly ak at this users in that time period and there was a lot of hope there would be the kind of growth closer of the scale of a facebook. One other thing is twitter did give guidance for the full year of 2014 projecting revenue in the change of 1. 15 billion to 1. 2 billion. So theres perhaps that could be part of it. The company is also projecting adjusted ebitda in the range of 150 million to 180 million. They expect profitability but still has a ways to go. We have to move on. Thank you. I want to test this out, jon fortt. Is it fair to say if people are wondering whats happening with the stock, weve gone to a yeah, twitter beat estimates, to a wait, a minute, they only added 8 million actives and that stuff fundamentally Still Matters quickly. There is some of that, also the guidance for the march quarter looks to be for revenue of 230 million to 240 million. Granted, the street had expected 215 but given the am of the beat in q4, they might have been hoping for better after that. Thanks very much. To joule. Twitter shares on the move big time. It is now down in the range of 13 . Well get more perspective from a twitter investor coming up. Plus, disney earnings are due out any moment. We will bring you the entertainment giants numbers and break them down with bob iger. Stick around. Ew new york is ope. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. And break them down with bob and break them down with bob okay. Lets train like its race day. Whats up ted . I think i forgot to pay a bill. Yep, paid that one. What about your mortgage . Yep, paid that too. Alright were good then. Man i feel like im forgetting something. Eh, its probably nothing. You worry too much ted. Alright, hammer down bank from almost anywhere with the citi mobile app. Citi, with you every step of the way. Welcome back. And take a look at shares of twitter, down better than 13 after hours. Shedding about 8 to 57 or so. They went public at 26 last year. This Company Initially saw a pop when earnings first hit when it looked as though they reported a small gain instead of a loss, but Digging Deeper into the numbers, looking at the fact theyve only added a couple million active users for the quarter is responsible for the downward move. And now we move onto earnings from major dow component, it is disney. Those numbers are hitting and jouulia boorstin joins us. A huge beat or disney. Disney reported earnings of 1. 04 per share up 32 from 79 cents a year ago. Wall street had been looking for earnings of 91 Cents Per Share. A significant beat at 1. 04 per share. Revenue coming in higher at 12. 3 billion. Wall street had been expecting 12. 24 billion. So revenue was up 9 . Now, this really clearly seems to be a story of strength. Primarily at the studio. I am seeing growth in revenue and in operating income across all of the divisions, but the studio was a real bright spot here. Studio entertainment revenues up 23 , Consumer Products up. Operating income up 75 . So really Significant Growth driver. Joining us now to talk about these results is disney ceo bob iger. Thanks so much for chatting with us today about a phenomenal quarter here. Talk to us about the studio. What really happened to drive these kinds of results . Well, it starts obviously with the studio with their movies, and thor was a big hit, our marvel release in the quarter. We had a good solid release in saving mr. Banks and, of course, frozen is just a gigantic hit that keeps on giving. It was second in u. S. Box office just this past weekend. Just opened in china in the last 24 hours. Its already over 870 million in global box office. Japan opens in a month and its driving value not just at the studio but across the company. The music is doing very well, Consumer Products. This is a disney animation movie but it indicates the acquisition of pixar is really influencing the whole studio and company. When we bought pixar, we had a few goals in mind. We wanted to protect and allow pixar to continue to prosper with the great movies theyre making and we wanted to use the pixar leadership, namely john lasitter and ed to come in and run disney animation and turn disney animation around. Theyve clearly succeeded in doing that. Frozen is not the first example, tangled came before and wreck it ralph but this is the biggest. I should also say that you cited the studio, but every one of our reporting operating units reported double digit growth from a year ago in operating income. So that is an acrosstheboard Success Story as far as were concerned, a very, very solid quarter for the company. Kelly, do you want to jump in here . You mentioned the growth, but the revenue line for the Media Networks in particular a little bit soft. Its up 4 on the year. This as the nfl thursday is going to cbs. Why havent they made more of a push to capture National Football league. We own espn. Thats our primary sports brand. They have a long and very valuable and very important relationship with the nfl that results in some great games on monday night but also hundreds of hours of other nfl programming across not only the season but across the year. So as a company, werther r are thoroughly invested in the nfl, what has delivered so far and the future. We made an offer for thursday night football to put it on abc. We treat our sports brand of the company as one brand, espn. The sports programming on abc is delivered by espn. We made a bid to the nfl, and obviously it wasnt accepted. But were very invested as i said in the nfl and feel good about that investment. Now, your Cable Networks driven by espn continue to be the strongest part of your Media Networks business which is the biggest part of the company. As Cable Networks operating income is up 34 but broadcasting operating income is down 32 , so tale of two very different businesses there. Whats your outlook for advertising and also for subscription revenue in these two very different parts of the Media Networks business . Its hard to compare the two because you have obviously on espn quite a Success Story both on the advertising front and on the subscription fee front. The subscriptions for espn obviously are significant and anything in broadcasting on subscription front cant be compared with that. The Disney Channel and our other cable assets, abc family being another one, are Great Success stories for us. What we had in broadcasting in the quarter is an increase in Program Costs and we had some softness in ratings and, thus, the impact on advertising, and that was true on the local level, too, where you had actually difficult comparisons from a year ago because of political spending. So theres some apples to oranges there, but it wasnt a great quarter for broadcasting. It was a huge quarter for cable and thus a tremendous quarter for our Media Networks. I want to hear whats happening at the parks. 6 growth in revenue at the parks and 16 operating income. How are you achieving that kind of operating Income Growth when revenue is less strong . Well, the parks is a great Success Story. We had record attendance at three of our parks at disney world in orlando which is our biggest, at Tokyo Disneyland and Hong Kong Disneyland in the quarter. So were obviously delivering to the public product that they love. Thats primarily how were continuing to grow it. That takes investment. Were making the right investments, and theyre paying off. The expansion in hong kong would be a great example. What weve done in california with california adventure, disneyland also had a great quarter. Were getting strong attendance. Weve been able to increase pricing. Weve seen increase in spending, per cap spending on hotels and food and merchandise. Its just a very solid business for us, continues to be. Weve got great investment Going Forward meaning projects that were truly excited about and i think with an economy that is where it is today, which we know it doesnt feel overly robust but it is better than it has been, were very, very well positioned to continue to grow that business. Speaking of which, what is your sense of the economy and the consumers based on the parks and Everything Else . Well, i think with these results clearly the disney consumer seems to be in pretty good shape. Were offering products to consumers that they feel not only that they want but that is well priced. Id say as we look at the economy, we dont really we see a relatively decent economy for us today. We dont really have much visibility into the future. Its hard to look ahead and feel overly confident. We just feel that were very, very well positioned in the marketplace. Great. Kelly . Bob, just want to ask you speaking of fans, a lot of people excited about the star wars next round of movies and are concerned zac efron might be involved. What can you tell us about his involvement and who else you see here cast in this important film for your franchise . Theres probably a lot that i know about that franchise Going Forward and virtually all of it is information that i cant share with anybody right now. We know from now owning that franchise just how much excitement there is about it, how much interest there is. In fact, i dont think that theres anything going on at the company, and we have a lot of big things going on that have a lot of fans, anything going on at the company that is attracting as much aattention. The movie is not coming out until december of 2015. Its a long time to wait. People just want one piece of information they didnt have before, bob. Good things come to those who wait. If you have a second question, i wouldnt ask it because its unlikely youre going to get anything more out of me. Bob, thank you so much for your time this afternoon. Julia, thanks very much as well. Really appreciate it. Those shares are moving to the upside by about 2 after hours. Weve got some breaking news now on security concerns at the olympics. Eamon javers joining us now with the details. Eamon . Well, nbc news Pete Williams is reporting the u. S. Government has sent an advisory to airlines that fly to russia warning them that terrorists might try to smuggle explosives on board some of the flights originating outside the United States and flying to russia. They might try to smuggle these explosives in toothpaste tubes according to the reporting here. I have just been in contact with the White House National security council. They give me a little additional color on this saying that this is part of their regular communications with International Partners, and also saying here in terms of the sochi olympics and safety thereof, saying if we should receive information in the coming days and weeks that changes our assessment of whether people should travel to soc sochi, we will make that information pub like through the state departments usual channels. Pete williams also saying the intelligence that backs up this warning here is, quote, very new. So clearly u. S. Intelligence picking up on something here, kelly, and warning our International Partners about it. Back to you. All right. Eamon, thanks very much. Twitter has been taking on the heels of its first ever Earnings Report. Well break down the results and tell you what else you need to know. Weve been digging through the numbers. Dont go anywhere. Let me talk to you about retirement. A 401 k is the most sound way to go. Lets talk asset allocation. Sure. You seem knowledgeable, professional. Would you trust me as your Financial Advisor . I would. I would indeed. Well, lets be clear here. Im actually a dj. [ dance music plays ] [laughs] no way i have no Financial Experience at all. That really is you . If theyre not a cfp pro, you just dont know. Find a certified Financial Planner professional whos thoroughly vetted at letsmakeaplan. Org. Cfp work with the highest standard. Welcome back. Weve got some more earnings alerts for you. Pandora in particular. Josh lipton joins us with the numbers on that one. Josh . Kelly, so pandora reports, remember what the street was looking for here was 8 cents on 199. 9 million. Pandora reports 11 cents on 201 million. A beat on the bottom. In terms of ad revenue, that represents about 80 of the companys total. 162 million. Thats up 39 . Listener hours up 16 to 4. 5 billion. The problem here was guidance. The q1 guidance is worse than expected. The street thought youd see a loss of around 12 cents. Pandora is saying its going to go more like 14 to 16 cents. Back to you. Were seeing the response there. Shares moving down about 8 after hours. And what about yelp . Dominic chu joins us to look at those numbers. Any better news . Were talking about a relative outperformer if you will. Twitter and pandora shares are getting kremd. With yelp youre seeing at least a little bit of perhaps there was a little upside to begin with. Now its down about a percent. They come wutout with a loss of cents. Sales coming in better than the 67 million estimate. They did also say theyve expanded now to 24 countries, International Growth was a concern for some investors. Also that their cumulative reviews grew 47 yearoveryear and the number of average monthly unique visitors grew 39 . Active local business accounts grew 69 so some strength. They also provided some guidance for First Quarter as well as the full year. They say First Quarter net revenues are expected to be between 73. 5 and 74. 5 million with full yet expected to be 353 to 358 million. Back over to you. Dominick, thanks. We want to get back, of course, to twitter, whose shares are tumbling after releasing the first Quarterly Results since the ipo. Theyre down about 10 at this juncture. Well get more reaction from josh at freestyle capital and Brian Hamilton from sageworks. Welcome to you both. Take a look at the shares and looking through the numbers, josh, what do you make of it . Well, i think twitter has been very focused on revenue for the last couple years and i think its paying off. Wed be having a very different conversation if the revenue numbers hadnt beaten expectations. Guys, hold that thought right now if you would. We are getting some breaks news in the meantime on Green Mountain as i understand it. Lets get straight back to headquarters with dominic chu. Again, some breaking news just crossing the wires right now with regard to Green Mountain. We were expecting their earnings but here is the headline. Cocacola is going to partner with Green Mountain coffee to develop cold water products. Again, the release basically saying that they are going to purchase cocacola purchase a 10 minority equity stake in Green Mountain coffee that will cost them 1. 25 billion. Theyve also signed a tenyear agreement to collaborate on the development and introduction of the cocacola companys global brand portfolio for use in the keurig cold at home beverage system. Keurig, the next iteration is going to involve cold beverages. Cocacola will be a huge part of that effort and now theyre going to pay 1. 25 billion for a 10 stake in Green Mountain coffee. Big news. One of the biggest Consumer Brands in the world, cocacola, taking a 10 stake in Green Mountain coffee for 1. 3 billion. Well get you more details but thats the big news with Green Mountain coffee this afternoon. The immediate verdict from the market here seems to be they like it better for coke than for Green Mountain, dom, but thanks very much. A lot of fast moving pieces this hour. Lets first bring in the panel for a second who is with me and, guys, so much to digest. Its interesting the social media names seem to be moving lower. Is the theme this isnt just a twitter story, that perhaps this is a story about lackluster growth in some of the strongest fast growing parts of the market . I think thats exactly it, kelly. I dont think anybody has been able to combine user growth and Revenue Growth in the explosive way that we saw facebook achieve it. Twitter, nice on revenue, but the user growth. Then we see pandora come out a little bit weaker than we were looking for in the guidance. Yelp about in line but certainly not blowing the doors off there. I think we were expecting more from the social media cohort, especially given how much theyve run up in the past few mo months. Brian, you know, to you, your thoughts here as you look through twitter specifically and see, you know, is this a story about execution there or more broadly just about the extent to which all of these names can compete for some of the name population . Right, kelly. Theres only one story here to me. Its still valuation. These guys are 56 times trailing revenue. Its a huge valuation. Look at google, 15 times, microsoft, 5 times. Look at facebook, 23 times. These guys are way out of bounds on value. Now, i will say this to joshs point, i like positive cash flow from operations. Thats a good thing. The gap versus nongap earnings im a little confused by that, but the story is not just revenue, its value. I think you can have an enormous valuation if the sky is absolutely the limit. The minute you start having growth of only 9 million new users in an active quarter, thats just not enough. If we look at yelp which is the only one doing okay right now, the number i teased out thats interesting is 67,000 active business advertisers. I think most wall street analysts were looking for around 62,000. Thats a case where the picture is so much bigger than people thought it might be, allows it to sustain that oversized valuati valuation, but the minute you show any signs of slowing, things come down to the ground. Right on. Right on, exactly. How Many Companies in the history of american commerce have grown have doubled profits for ten years . Nobody. So this company is a young company, and once you get a dip down, theyre going to be punished in the market which maybe they should be. Although i do like that their net margins are getting a little better so thats good news. David . We learned intimately 14 years ago that valuation matters. Probably more than any other fundamental metric youre talking about the dotcom absolutely. And yelp, 23 times sales. Thats priced for perfection, but google at six times sales i think represents value. Im overweight tech. When i look at the Free Cash Flow yield in technology where the average tech stock is trading at 5 Free Cash Flow yield, thats above the overall market. I want to be overweight a tech in names like google or qualcomm, perhaps even a name like facebook. Should people be worried these are the disruptors or is it fine to bet on some of the its fine to bet on the disruptors as long as thats what theyre doing, right . Certainly. I think a lot of this is because google surprised positively, facebook blew it out of the water, and these guys, unfortunately, were the ones that reported after those guys. So lets look at the numbers. The growth is still very substantial. Theres a place for all three of these companies. Its just that the expectations got ahead of themselves and, yes, the valuation, i totally agree with everybody on the panel that the expectations of the value got ahead. So lets wait for these stocks so settle. If google falls on this thus, thats the one you want to pick up. Its trading at 20 times earn, not sales. Josh . Well, i think when i look at we have a different perspective because not only am i an investor but we have fort folio companies that work with twitter. Over the last year if you werent offering a revenue feature that twitter valued, then your partnership was likely going to be pushed kind of aside. I think im seeing that change now. Youre going to see twitter refocus on Audience Growth and not just revenue. I think that will make a big difference in the companys future prospects. Just to keep everything in perspective, this is sort of a nonevent. Its 56 a share. It went public in the 20s. This is just a very modest correction. Lets see what happens on the call. The call will be very interesting. If they say anything on the call that hints at slowing growth, expectations not hitting where they wanted it to be, were going to have a problem. If they talk about new initiatives, growth in knew areare new areas we could see a correction back up. Thanks very much for your thoughts as we keep an eye on that name. Cvs is snuffing out sales of tobacco by october but if people who smoke arent getting their cigarettes from cvs, where will they go . Thats coming up next. Thats not much, you think except its 2 percent every year. Go to e trade and find out how much our advice and guidance costs. Spoiler alert. Its low. Its guidance on your terms not ours. E trade. Less for us, more for you. Welcome back. Theres been a ton of after hours action here on wall street. Lets get to dominic chu. Its got your heart racing. We begin with twitter reporting better than expected Fourth Quarter earnings an revenues. The company earning 2 cents on sales of 243 million. It also issued a stronger than expected qq1 revenue. Disney posted First Quarter earnings of 10. 04 1. 04 on sales. Pandora reporting better than expected Fourth Quarter profit. Sales matched forecast but it gave guidance below what wall street was expecting. Cocacola and Green Mountain. Coke is going to buy a 10 Minority Stake in Green Mountain coffee. Green mountain is still halted on this news. It is anticipated, kelly, to anticipate at 5 00 p. M. Eastern time. So da stream, however, you want to watch those shares. Theyre moving lower on this news. If theres a competing beverage at home system, thats bad for soda stream, and we end with cbs caremark. It will ban tobacco in all its stores by october. We will see what happens when Green Mountain reopens. Take a look at whats happen been happening with the cvs story. Saying they will stop carrying Tobacco Products by october. Who will profit from cvs not carrying these products. Stacy from sw retail advisers joins me. Great to see you. Hey, kelly. Difficult truth is people will still buy cigarettes. They absolutely will. 18 of Americans Still smoke, unfortunately, and i guess the good news for them is that the dollar store, family dollar, and Dollar General just started selling Tobacco Products. Family dollar started selling them in 2012 and Dollar General just in 2013. This is a win for those two companies because not only, you know, will they maybe get some share, but the more people that come in, they will buy extras potentially when they go in to get their cigarettes. Im curious about two things. How much do Tobacco Sales drive foot traffic and how much of a halo effect is there where people buy other things when they go for cigarettes . Its interesting. Dollar general last quarter, they have only had tobacco in their stores for a few quarters and they said originally about a third of the business of people coming in and buying tobacco was just that, but then the following quarter those people coming and buying cigarettes started increasing their basket and buying a smoke and a coke or other items. So it actually does make a difference and it drives the actual total basket. So its very important for samestore sales. We know that a lot of the times people go to kind of mom and Pop Convenience stores, of course, for Tobacco Products as well. Other than the dollar guys, is there anyone else who might move into this space or is it now seen as sort of a toxic thing to do at least from a pr point of view . Yeah. I think from a pr point of view you will see the other drugstores pull out. But, you know, the drugstore space only represents about 4 of Tobacco Sales. Supermarkets only represent about 4 . The bulk of it is actually from gas stations and convenience stores. So those are the winners. Absolutely. Im curious by the way, seem to be curious about a lot this afternoon, but going back to cvs, if theyre try to move in a more Health Services direction, does it imply they will look to be more of a services than a goods business over time . Absolutely. I think thats something theyre focusing on is trying to get the consumer in their store and do consultations. So there are a lot of unfilled prescriptions that people come in, so theyre going to try to give them a consultation and say you really need to fill that. You really need to fill it here while were helping you with your overall health. Services is the direction for these drugstores, absolutely. All right. Stacy, great to see you. Interesting story. Well be following this one closely as well. I want to add in dominicks report a few minutes ago on the Green Mountain coke deal when he mentioned soda stream. Take a look, this is the after hours move. Its actually down about 8 . Taking a big hit on the deal that its competitor has made. A lot happening this hour. Whats getting the most clicks on the website . The cnbc hot list is coming up next. We want to know if you go out to eat or shop on snowy days . How much do you change your buying behavior . Do you think it helps or hurts the economy . Tweet us cnbcclosingbell. Dont go anywhere. We route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. To appreciate our powerful, easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. Hey ray, my uncle wanted to say thanks for idea hub. O well tell him i said youre welcome. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. Yea, and these ideas are across the board bullish, bearish and neutral. I think you need a bigger desk, pal. Another one . Traders love our trading patterns, now with options patterns. Whats not to love . They see what others are trading like the days top 10 options trades by volume and get ideas yea i have an idea how about trading that in for a salad . [ male announcer ] so come trade at the place thats all about options and futures. Optionsxpress. Open an account today and get a 150 amazon. Com gift card when you call 18883303137 now. Optionsxpress by charles schwab. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Neither rain nor snow nor sleet nor hail where shop the hot list. So much happening. What is popping online. Its earnings season and earnings have been the big topic after the bell, especially twitter. I love the pattern were seeing right now. The earnings come up, its complicated, people go diving in and the traffic numbers roll up. The stock went down and down. We have another favorite coming up, the apple brawl. What to do with apples big pile of cash. You have had icahn saying one thing, calpers is coming out and laying more pressure. We have a wrapup of that fight going on. Its a wonderful piece. Our readers are eating that up. Finally, back to obamacare. Its tax season. And did you know there are a few extra taxes in your form now due to obamacare. People are finding out about it and theyre not happy. Allen, thanks very much for joining us. Its a tough one in terms of the Road Conditions out there. We appreciate it. Some quick thoughts continuing the discussion on twitter and im picking this one because its the biggest move after hours. Is that right . I have one positive thing to add to it, which is that Goldman Sachs had 1. 17 per thousand time view. They came in at 1. 49. Its a significant beat on the financials but as we said before, this is a top line massive growth story. We needed to see a lot more users growing than 9 million. But ultimately were seeing a relatively small correction in the stock given how much its run up. Is it fair to start asking the question about whether twit s erring is listening too much to wall street . Its always a give and take when youre growing so fast. What exactly to you want to show wall street or where do you want to focus your engineering efforts . I think the question is how many ancillary products do they have . Do they have a facebook paper or another vine up their sleeves that can grow the size of their user base . One of the criticisms has been its really great for content creators, for the Justin Biebers out, there the taylor swifts. If youre not one of those people, maybe you just dip in once in a while. Despite the fact tv has been a big driver do we even call it Second Screen . It feels like its the firtion one . How can you say that . Youre interested because of twitter and thats a good thing for everyone so im surprised thats not catching ill be interested to see what they talk about on the call, Research Studies showing the effectiveness of the Second Screen behavior, what happened during the super bowl. It will be interesting to see how the Management Team is tuned into wall street. It took facebook a bunch of calls before they started knowing what people were looking for. They could pull the stock up a little bit if they address some of that second of that second stream and stuff like that. Thats true. A lot of people like to point out, i dont know if this is fair, that a lot of Tech Companies have these declines. The air pockets when they first go public. Then, they start to gain traction. It could be. And i would also say that the First Quarter out of the gate, you need to blow it away, no matter what. And i wasnt saying this wasnt a great quarter. You need to surpass expectations because the stock had run because of the valuation. But also because to show the people that, yes, we deserve to be public. And we have growing and have visibility Going Forward. This is not the end of the world by any stretch of the imaginati imagination. They tried to take down expectations. That was easy to do. But they couldnt get the numbers they needed on the users. And down 12 as a result. San francisco real estate is apparently hotter than ever. Up next, our wealth editor, robert frank, giving us a rare look inside one of the priciest homes for sale in the bay area. We still run into problems. Thats why Liberty Mutual insurance offers accident forgiveness if you qualify, and new car replacement, standard with our auto policies. So call Liberty Mutual at. Today. And if you switch, you could save up to 423. Liberty mutual insurance. Responsibility. Whats your policy . Welcome back. Robert frank has taken us into some serious megamansions. But this San Francisco home was actually remodeled for a queen. Robert frank does join us now with more on it. Robert . Were going to take you inside, tonight, one of the most expensive homes for sale in San Francisco. Its 16,000 square feet, overlooking the bay, right in pacific heights, which is now called billionaires row. Lets take a look. The home has some superrich history. It was built in 1905, as a private home for southern aristocrats. In the 1950s, it was pink and nicknamed the pink palace. This thing was 30, 40 bedrooms. And it was a highclass boarding house. They didnt just sleep here. They partied here, too. Bigtime. Throwing lavish cocktail parties every friday night for 15 years. The pink palace is no longer pink. But its still party central. Listen to this. What would you use that for, overlooking here . Its the ideal place for the orchestra. I mean, orchestra, you know, 11 pieces. Just a i mean, this is not guys, its 24. 8 million in case youre interested. Youll get the full tour tonight on secret lives. Kelly, back to you. Looking forward to it. Thank you very much. Weve been asking, you tweeted. Do winter storms really hurt the economy . Your thoughts on that. Whether it changes your eating, Shopping Patterns on snow days. ] the new new york is open. Open to innovation. Open to ambition. Open to bold ideas. Thats why new york has a new plan dozens of tax free zones all across the state. Move here, expand here, or start a new business here and pay no taxes for ten years. Were new york. If theres something that creates more jobs, and grows more businesses. Were open to it. Start a taxfree business at startupny. Com. Were open to it. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Here in philadelphia you can access a philly cheesesteak anytime, day or night. Just like you can access geico anytime, day or night. There is only one way to celebrate this unique similarity. Witness the cheesesteak shuffle. Cheesesteak, cheesesteak its the cheesesteak shuffle huh every day, all day, cheesesteak, cheesesteak every night, all night cheesesteak, cheesesteak 9 a. M. Cheesesteak 2 p. M. Cheesesteak 4 a. M. Cheesesteak any time ruh geico. Fifteen minutes could save you fifteen percent or more on car insurance. Welcome back. Weve been using you as a gauge of the economy, really. Asking if you go out to eat or shop on snow days or stay in . Joe is tweeting, of course i go out on days like this. How else do you get a table at starbucks . I just went to chipotle and i was the only one that was there. Weve been trying to figure this out since the jobs report. Friday, we have payroll. But it may be a tough tell. We have earnings to look at in the meantime. Its tough to tell whats going on there, as well. What have you learned in the afterhours report . It speaks to the kind of investor i am. Im more excited about coke than i am at twitter at this point. I think theyre finally looking to grow, right . This is a company that had been buying back stock and increasing the dividend and investing in china. Its nice to see theyre parter thing up with a growth company. And i think its a good announcement. What about them buying a stake in Green Mountain, instead of soda stream . I want them to find growth. I want them to expand beyond the carbonated soft drink market, which has really been a problem for the company. They get into we dont know the strategy behind this. But they further diversify into growth. And they open for trade at 5 00. Want to get a final thought from you, as well. Before we got on the set, 1 S P Companies had reported earnings. Ten had beaten. Thats embodies what weve seen in this earnings season. Id give it a solid b or bplus. And they create longterm shareholder value. And theyre doing it in the back of the store, versus the front of the store. Ten years of return. 210 price return for cvs. 55 for the s p. I think its creating more value. Thank you for being here. Really appreciate it so much to dig through. Make heads and tails of. As we hand it over to fast money coming up in a few seconds, melissa lee, i imagine you will be breaking that news on how Green Mountain behaves once it reopens. Thanks, kelly. A lot of breaking news to deal with. Green mountain coffee scheduled to open for trading right now. Green mountain announcing that cocacola is taking a 10 stake in the company. Shares are up 33 . You see that spike in the afterhours session. Were watching soda stream, getting hammered on the back of this news. Also breaking here, twitters firstever conference call, starting right now. Shares are sinking after its firstever quarterly report. Our traders, tonight, tim