Transcripts For CNBC Closing Bell 20140206

To 2. 7 , bill. Safe to say expectation are high for that number tomorrow. Were also continuing to monitor what might be the stock story of the day, at least to the downside. Take a look, of course, at shares of twitter. Down more than 20 . Wheresthegrowth . This is the question investors are asking. During the show yesterday we talked about that. Hes had a big track record in social media lately. Ill be interested to hear what he has to say. Also with us exclusively, aetnas ceo mark bertolini. The insurance giants stock is lower today. Well find out what happened during the quarter, plus follow up on his bombshell out of davos last month where he told cnbc aetna might not be able to stay in obamacare. Stay tuned for that important part of the story coming up. Thats right. Again, lets look across the levels, where we are as we enter the final hour of trade. The dow up 0. 7 . Lets look im sorry, the dow is now up 1 . Its up 166 points. That will make it the first time weve moved 1 to. Upside since december. The s p 500 is also higher, aggressively so, by about 1 to 1772 at the moment. And theres the nasdaq, up 1 as well. Thats the better performer of the major averages today. Still comfortably above 4,000. Lets talk about this. Weve got a whole lot of earnings coming out after the bell tonight as well. In our closing bell exchange, amy wu, jim lowell, doug saddler, joe duran, and Rick Santelli. You ever write a book . Thinking about it . Either on the markets or on painting cars. Well, i know if i do, painting cars is going to be the first one. The markets will come second. Painting cars . Havent you seen his promo yet . This man, hes a car aficionado. Does his own painting. Amy, what do you make of this week . If we had talked on monday, there was armageddon in the air. Today, our best day of the year so far. Whats going on . Well, its pretty funny, right . If youve been looking at the Options Market for the past few days, you would have actually seen this upside being echoed, even though were seeing hedging programs being put into place. A substantial amount of upside has been bought the last few days, even on monday with market down. Saw a lot of tech upside being bought. Also in domestic underliars. The Options Market still seems to be reaching for that upside, even when we saw it on the down days. Amy, this is so interesting. It has been a pretty good tell of market action. First when we saw a lot of people buying protection against volatility. Now it appears theyre buying for more calmness ahead. Yeah, and clients have been expecting something we call the check mark market. They sort of anticipated this selloff down, but they think most of the next part of the year is going to still be upside. So i think a lot of people say, you know, are we sort of at a bottom now in terms of where we can go and is volatility at a top. Doug, youve been excited with this selloff here. You feel like things are on sale right now, yes . We have a multiple point cheaper on the s p. Thats one thing. Thats a nice little discount. We have also seen another quarter of earnings. This is the First Quarter where weve seen some really key things. One is we saw loan growth across the board at most of the major banks. So loan growth, remember, leads to job creation ultimately. Secondly, weve seen top line growth. A lot of people have been peoplepeoppeopl this time its none of the above. Its Revenue Growth, which is great. Then to echo amys comments, when you look at the underlying, you know, we look at cds spreads, which is something that happens where you look at bonds and often the credit markets tell you when theres something to worry about. Theyve been really stable, as have volatile Asset Classes like the cyclicals, technology and financials. Everythings saying this is a pullback to buy, not a pullback to sell. You know, doug, im just curious what youre talking about for the revenue figures in particular. Just to take thompson reuters, it does look like i mean, 9. 5 growth on the earnings side. The rate much better than what people expected. The revenue figure i see from them is only up 1 . So even though the proportion of Companies Beating looks good by historical standard, 1 aint much. Well, youre seeing Revenue Growth in the industrials this time, which is really sort of the pulse of the economy. So were seeing Revenue Growth there. Youre probably not seeing it in retail. Financials dont really have a revenue number. Sometimes that messes up the overall averages. Youre seeing it where you want to see it. That, to me, gets me excited. I know when banks are lending, ultimately that will translate to Revenue Growth in the future. Jim lowell, the last few years the biggest declines weve had in the market have been about 5 . This one was about 7 for the dow. Now were having this big move up today. Im going to ask the dangerous question. Is the correction over . Well, we wont know even if it is a correction until we in fact get one. We havent done so here, even though japans nikkei 225 has been in correction territory. The reality is that in 2013, gains came as easy as scoops of ice cream. This year those scoops are in a blender and investors are hoping it can get turned into some sort of milk shake. I think it can. The fundamentals continue to point towards slow growth, not no growth in europe, and slightly faster growth here at home. Thats a recipe for these kind of pullbacks really serving up the ability to step in as a buying opportunity, not a selling call. Joe, lets talk about some of these earnings too. Obviously twitter is moving sharply to the downside. But General Motors had a tough quarter, granted on whats happening in europe as well. Are you seeing anything that raises alarm anecdotely or to the opposite point. Id say three things im a little worried about. Im worried Interest Rates dont reflect the optimism we all share about the growing u. S. Economy. We started the year at 3 . Were down at 2. 7. That doesnt make me feel good and suggests maybe the recovery isnt going to be as good as i had hoped. Were not seeing that earning growth translating to Revenue Growth in the way i would expect. So while it is broadening and Industrial Companies are doing better, not just growth companies, thats a little scary. Then the third thing that im a little worried about is you have a bad january, thats a bad precursor to the year. That doesnt mean we wont have a positive year. I wouldnt bet this little correction is over. It certainly wouldnt bet its the only one were going to experience. I think this will be a year of more traditional volatility, a couple of 5 moves, one or two 10 declines, and investors should be prepared for that and balance their portfolios in a way that allows them to withstand a year that could be much tougher than last year. If were up single digits, id feel good about that, given the head winds i see weve experienced so far. Well, youre not the only one worried about the ten year. Art cashen has also been watching that one closely. Rick santelli, the volatility continues. We have to get used to these big swings one way or the other for that tenyear yield. Yes, we do. But you know, its more than volatility. Just to put a face on it. The low yield closed for threeplus months was monday at 258. On tuesday we were up 5. Yesterday we were up 3. Right now were up 3. No single day has been really a big day. Whats big, and arts right, is the level more than anything else. Remember, as you look at these charts one week year to date, the only reason the rates are down is because of the implicit relationship and questions we all had about the reality of the level of stocks versus the economy. Its a stock market leading the pack here. If you think stocks are going to be up 20 , i guarantee youll make more money being short bonds. If you think stocks are going to be down 20 for the rest of the year, i guarantee youll make more money buying treasuries. So i think we can keep it pretty tightly focused. Tomorrows number is huge. Its not only whats going on with the taper. If the u. S. Economy looks like its going to put up a bad couple months t changes the Global Dynamics a lot. The jobs report tomorrow, theyre expecting 189,000. Thats the number to keep an eye on for the nonfarm payrolls. Thank you, all, folks, for your thoughts on todays market. See you later. We want now to get the latest on the guilty verdict in the Matthew Martoma Insider Trading trial. It happened just minutes ago. Kate kelly joins us with the latest. Reporter hey, kelly. How are you . Just standing outside the federal courthouse where Matthew Martoma was just found guilty on two counts of securities fraud and one on conspiracy to commit securities fraud. There was a scuffle that broke out behind me just moments ago as martoma, his wife, and his defense attorney attempted to get in a car and leave. Essentially what happened, were told, is a photographer tried to get too close and kind of got in the face of martoma, looking for a good shot. Ended up pushing a pregnant defense associate working with lawyer richard straussberg and words got ugly. It was broken up without any violence. It was looking pretty heated there for a moment. And it bespoke the high emotions in the courtroom when the verdict was read. Were told through a spokesperson that hes very disappointed in the outcome and that martoma plans to appeal. Of course, martoma is facing tenplus years in prison. Technically hes facing up to 45, although it would be very unlikely for him to get that large of a sentence. Thats the maximum sentence for these charges. Clearly, a very tough outcome here for a father of three, someone who wants was making millions of dollars a year as a Portfolio Manager at s. A. C. Capital. Well bring you more details as we get them. Thats the news as of the last hour. Biggest Insider Trading case in history. The u. S. Attorney trying that case has never lost an Insider Trading case still. Thanks, kate. Reporter thank you. All right. Back to the markets. Rally day, best day of the year so far for the major averages in this new year. The dow is up 172 points or 1. 1 as we head toward the close, kelly. Stocks surging after a weak start to the year. Are investors betting tomorrows jobs report will be a strong one, and what happens if theyre wrong . Were going to talk about that coming up. And we want to know how the job market is wherever you live and are watching. Tweet us cnbcclosingbell. Well reveal your best responses, get a little anecdotal flaif of whats happening. And coming up, is aetna really considering pulling out of obamacare . The ceo hinted at that last month in davos. Hes here next to tell us about that. Were following up on that issue. Youre watching cnbc, first in business worldwide. Dont wait for president s day to save on a new mattress. Sleep trains president s day sale is on now. Save up to 500 on beautyrest and posturepedic. Get a sealy queen set for just 399. Even get 3 years interestfree financing on tempurpedic. Plus, free delivery, setup, and removal of your old set. Keep more president s in your wallet. Sleep trains president s day sale is on now. Superior service, best selection, lowest price, guaranteed. Sleep train your ticket to a better nights sleep welcome back. All three major averages up 1plus percent today. The best day of the year so far in 2012. For the dow, we have yet to have a 1 gain day in 2014. Its hard to believe as we make our way into the month of february. Didnt happen at all in january. But its happening today. Dom chu, whats driving this momentum . The bulls have their fingers or hopes crossed. Were going to start with disney, leading the dow higher after posting better than expected First Quarter earnings. Also a strong day for the auto parts retailers after advanced auto part, oreilly both posted better than expected Fourth Quarter profits. Auto zone going along for that ride to the upside as well. Now, on the flip side, theres aetna after reporting Fourth Quarter results that barely missed expectations on higher medicare costs. The company said it expects to lose money on those obamacare exchanges. So aetna certainly perhaps a little bit of a drag, although not by much. Back over to you. Dom, thanks very much. Last month aetna ceo said in davos theres a possibility his company will have to pull out of obamacare. Heres part of that exchange with the squawk box crew. Our big question is may 15th we have to commit rates for 2015. Right. So will those rates go rapidly higher . We going to get beat up because theyre double digit, or are we going to have to pull out of the program . Those cant be answered until we see the population we have today. Well, joining us now for more on his companys involvement on the Health Care Act is mark bertolini, the ceo of aetna. I know that was just a few weeks ago. Do you have a clearer sense yet . Can you tell us what youll do with obamacare at this point . No, not yet, bill. The enrollment grows every day. We have more members now than we did then. Almost 40,000 more paid members. So for us, we know the questions that need to be answered. We know the day we need to answer those questions. Until we fill in those blanks, were going to be hard pressed to make any decision. We have a process to get there by march 15th. I know youve been in touch with the guys working on this in washington, expressing concerns along the way. Did you hear from them after making those remarks . Yeah, they called to see, you know, what it would take for us to stay in. I said, heres the information we need. We need to get the back end Accounting Systems working properly. We need to understand where were headed with the number of programs, like any willing provider. Are we going to require to have a Larger Network than the ones we have today . Secondly, you know, are we going to require to have people keep what they have for another year or more . All of those questions need to be answered in anticipation of understanding the data we need to know in order to price products properly for 2015. Two quick questions on that. Do you sense that theyre making that kind of progress that youre hoping for . And even if you do opt out, thats not forever, is it . When could you come back . Well, its not an optout totally either, bill. I think the way we need to think about is were in a number of markets, and in all of those markets, we need to make the decision market by market based on the underlying dynamics of that market, the level of competition, and whether or not we can get an adequate return on capital. So we have a ways to go yet before we can make all those decisions. Its not going to be an allornothing decision this year anyway. Rmplg are you seeing progress . We are seeing progress. Every day we make a little more progress. We see a little more growth. Mark, where do you think this is all heading . Because were in a Midterm Election year. There are still members of the gop in particular who would like to see this law completely rewritten. While on the other side, you have people on the democratic side running saying we havent gone far enough, we need a single payer system. Do you feel as obamacare itself, do you have confidence in the way this program exists today and will exist for the next couple of years . Well, i think, kelly, if you take a look at a bill like medicare, every year it gets tweaked or changed. So to expect that obamacare hasnt been changed already and that it the Affordable Care act wont change in the future is probably not realistic. I would say we do expect changes and we do need to improve the bill. It is the law of the land. And it needs to get much better than it is now. But so has every other major program, Entitlement Program like this one. Part of the reason i ask, is it to some extent is what youre saying to the administration, we may have to raise rates by double digits, and if you dont like that or states try to push back, then were going to pull out . Because thats kind of how this sounds. I think in the end analysis, pulling out is always the last resort. We dont like to do that because we disenfranchise customers and disappoint customers. We always look at that as a last resort, but that is an option well pursue if we need to if the program doesnt settle down f we cant get a good handle on the data. Lets talk about your earnings. Obviously the coventry acquisition helped. Your enrollment was up, premiums were good. It was an earnings miss. Its been portrayed that way, and the stock has been down today on an otherwise big up day. How did you assess the quarter . Well, it was two cents miss on consensus. Consensus is an average of a number of analysts. Theyre all over the place. We were right down the middle of our guidance. We had seven consecutive quarters of growth. We end the year with more membership than we thought. Our revenues are up. Medical costs are stable. We feel real good about where we are right now going into 2014, a year of significant change. Suggesting the Analyst Community mark isnt always on the mark. A shock to most ceos. Im being facetious. In terms of the 2014 outlook, obviously the reason weve been talking about obamacare is because it is such a big piece of business. What else do you see in terms of either the way the u. S. Is economy, or the other important parts of your business . As we look at our business, the Affordable Care act is only 3 of our revenues. Only a portion of that population. The real issue for sus what happens with medicare funding. This year with had 800 basis points of funding gap between the rates we were paid and the expenses we expected to rise. So thats our main focus now. Everything else has fallen in line. The real focus is medicare for 2014. All right. Always good to talk to you, mack. Appreciate your candid comments. Thank you, bill and kelly. Great to see you. Weve got about 40 minutes left to go before the closing bell. As bill mentioned, its a strong day for markets. The dow is up 172 points at this hour. Probably delivering its best performance of the year and perhaps since mid december. So far. And Dunkin Donuts delivered sweet quarterly numbers. When we come back, ceo nigel travis will be telling us whats driving sales growth and what that says about the economy. Plus, well get his take on the Green Mountain coke deal. And its the epic rematch youve all been waying for. Seema moda yen dominic chu going head to head on whether stocks or bonds are the better investment right now. Sparks could fly. Stick around for this one. Well be right back. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, 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. 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Open an account today and get a 150 amazon. Com gift card when you call 18883303137 now. Optionsxpress by charles schwab. Certainly been a sweet day for Dunkin Brands following this rally today. The stock popping on those better than expected Fourth Quarter earnings, up 2. 7 right now at 48. 61. Yeah, and the Parent Company of Dunkin Donuts and Baskin Robbins. Joining us with more on these results and a first on cnbc is nigel travis, the ceo of Dunkin Brands. Welcome. Good to be back. What can you tell us about the quarter and the shape your consumer is in right now as we start the year . Well, we were delighted with the quarter. We thought that Dunkin Donuts had an excellent quarter with 3. 5 comps, especially when you compare it with others in the space. I think the consumer felt excited about our products, our new products, our innovation. Baskin robbins also reported a good comp for the quarter at 2. 2. We felt really good about that. And for the year they had positive comps as it obviously Dunkin Donuts at 3. 4. We felt we had a good year in terms for comps. A wonderful year in terms of development. Your question about the consumer, well, obviously theres going to be ups and downs in the economy. We think the consumer is in a relatively good place without employment coming down. Housing seems to be getting stronger. Consumer confidence goes up and down a little bit, but overall its on an upward trend. So were pretty positive about the consumer. Youre engaged in the breakfast battle with mcdonalds and the others that are all going after that breakfast sandwich business. More innovations coming there, and are there other battlegrounds for you to go after to find more growth . Yeah, we really think that, you know, were an innovation pipeline thats very strong. Obviously not only breakfast sandwiches, which have really been the winner over the last two years. I think in front of you, youve got some exciting donuts that we got coming out for valentines day. We always have a lot of fun with our heartshaped donuts. We obviously have the brownie batter thats come back. This year for the fist time we have a cookie dough heartshaped donut. I think thats going to differentiate us. Dunkin donuts isnt really like anyone else. We have a number of competitors out there, and some of them are in coffee, some in breakfast sandwiches, but we have donuts as well. So we go right across the range of products, and i think our consumers love the constant new news. We poured out 40 new products last year. I think well do a similar number again this year. Speaking of, last time we spoke, you said you think of yourself as a technology company, donuts or no donuts. I wonder what you can tell us about rolling out the Loyalty Program, mobile payments, and the innovation on this front in 2014, which is probably going to be a crucial year for these developments. Well, kelly, im really excited about the way were going in terms of technology. If i start on the Baskin Robbins side, were testing online cake ordering at the moment. If its 25 as good as ive found online pizza ordering, ill be pleased. On the dunkin side, we launched our Loyalty Program last week. Yesterday we actually enabled the app, which you can find on google play or the app store to allow you to instantly register. Its a very simple Loyalty Program. We think this is the gateway to true onetoone marketing. If you and bill have different behaviors, you can have different offers to get you to change your behavior. Hes got the donuts. Youre the one that can eat these donuts and not change weight. I cant do that anymore. No. Nigel, let me ask you about the coffee wars. Thats one of your secret weapons. Mcdonalds has had success with that. Now you have cocacola taking that big position in Green Mountain. I just wonder if you have to keep innovating in that area as well to keep up with this growing business thats still growing out there. Well, we do keep innovating. Right in front of me is the brown sugar cinnamon latte. You got a product for everything. No, no, no. This is the coffee, if you can see it, bill. I was excited when i got the call yesterday that our good friends at both Green Mountain and coke were coming together. We intend to be part of the results of that partnership. We have a Wonderful Partnership with both coke and Green Mountain. Im excited for them, but most of all, im excited about what may come out for Dunkin Donuts. So nigel, so youre going to move into the cold drink space then in terms because this is going to be a new cold drinks machine and a deal theyre working on. Well, kelly, were already in there with coke. Coke are our preferred partner. We sell all the coke products. They do a great job. We already sell our iced coffees through kcups. So this is just taking it one step further. Were going to be able to give our consumers more variety. Remember, our consumers dont only go through the drive through, dont only come in the store, they take products home. So i think thats whats really exciting about this new deal. Nigel, thank you. And for the donuts too. Appreciate that. Pleasure. Enjoy them. See you later. Heading toward the close here on rally day, the day before the big jobs numbers. Theyre staking a claim right now with the best day of the year so far for the major averages. The dow with 30 minutes left up 171 points. Thats right. And General Motors badly missing, though, on wall streets earnings estimates this morning. And yet, the stock turned higher today briefly. It is now just fractionally lower. Phil lebeau will join us next. Chbl and when you think of irobot, you probably think of robotic vacuum cleaners. Did you know they also make robots for the military . We break down that fast growing part of the business coming up later on the closing bell. Stay tuned. Announcer where can an investor be a name and not a number . Scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Welcome back. General motors shares were down sharply after the Company Reported earnings, only to stage a rebound later on in the session today, turning shieligh positive. Our phil lebeau has been following this all day. Whats going on . A lot of people saying the headlines were overblown this morning. Take a look at the final numbers in terms of what they reported. General motors well short of estimates on wall street, earning 67 cents a share for the Fourth Quarter. The street was expecting 88 cents. Brings up the question, why are some analysts still bullish on gm . Couple of things. One, many said the headline miss was overblown. Europe restructuring costs another part. The losses in europe were down more than 50 in the Fourth Quarter, and the north american profit, theyre surging. Thats because General Motors sold more models at higher prices in the Fourth Quarter. The profit margins, by the way, up to 7. 8 in q4. A big increase from a year ago or in the fall of or Fourth Quarter of 2012. On the Conference Call with analyst mary barra, said its important that General Motors be profitable everywhere. Theres no excuses. I think that resonated with analysts. Also, the new rollout is not going to be slowing down. So keep in mind what she said to those analysts, i think that connected in many ways with analysts who wanted to hear that the plan remains the same and that the underlying fundamentals, they are there for General Motors to grow profits over the next couple of years. Kelly . Wow. Its a great point, phil. Stay right there if you will. We want to talk more about this. Joining us is the Senior Analyst at kelly blue book. Those of us in television, we like to simplify things. When you tell a gm story, its not all that simple. Still pretty complicated as theyre still trying to restructure and get their act back together, right . Thats exactly it. The headline can never go into all the nuances. Im so glad to hear phil talk about all those points he brought up. Thats exactly it. Theres more than just earnings per share. Theres all these other factors that are behind those numbers. When you look closely at them, you realize theyre in good shape. One thing id point out quickly is toyota, you know, they got crazy numbers theyre reporting. Dont forget, their numbers are better not only because of their market, you know, sales and market share, but because internally they really cleaned things up. Theyve gotten a lot manufactor efficient. I think gm looks at toyota and says, were going to be like them. Theyre in that process, but theyre not done yet, but theyre getting there. People have been saying that about toyota for four decades or something. But carl, does that mean they werent to trigger happy, gm, with the dividend . No, i think its fine with the dividend. You know, again, theyve got a l lot of things in place. Theyre just finishing up the process. Theyre going to have to work through some of these other problems like europe and south america, you know, australia. Everyones closing down production there. Doesnt make sense to build cars there anymore. Theyve got to finish some of these processes. Theyve got all these great products. Theyre doing great in the u. S. Theyre the second largest automaker still in china. Now, how can you say that theres a bad side to being the second biggest automaker in the largest, Fastest Growing market . Well, they are slowing down over there, but its all relative. Phil, i know its early, but i know the new ceo is getting high marks so far. She is. And when you listened to the Conference Call today, what struck me is shes no drama mary. Shes not going to sit there and be all panicky. She said, the plan remains the same. We have 1 billion in restructuring that we have to work tlurks but we do believe well be profitable both in europe as well as internationally as a whole by mid decade. I think that really resonated with analysts. Many of them told me, you know what, i like what im hearing from them, and i like what im hearing from mary. Carl, i wonder if this raises the issue of why shes only getting half the pay her predecessor did when she comes in cold on a quarter like this and manages to, as phils describing it, effectively turn things around single handedly by her delivery on the call. I think she has a great history at gm. One of the things thats made her so capable and earn that position is because of the nodrama element phil mentioned. I dont think she wants it to be about her. I think shed rather focus on the company and what it takes to make it succeed long term. If she can keep the focus off her specifically and how much she should or shouldnt make, i think thats part of her plan. And can i say one more thing regard regarding this pay issue . This idea floating around the internet that shes only making half. Dan had a longterm Compensation Plan in place. Mary barras longterm Compensation Plan will be announced in april when the proxy comes out. So youre comparing apples to oranges. Interesting. So her pay could be as much or more than his. We just dont know yet. It could be. We dont know what the board sets yet. People are glomming on to this on the internet. Theres this story thats circulating shes only getting half. They dont know what the longterm compensation is. Ive heard people in d. C. Talking about this. So, you know, cant believe everything you read on the net. Once again, its complicated. You got to get beyond the headline. Thank you, guys. Thanks. Heading toward the close, 20 minutes left in the trading session here. I havent seen the dow in the last two minutes, but there we go. We are not losing any ground. Still up 175 points, near the high of the session right now. Thats right. The s p strong as well, up 20. The nasdaq up 45. Its not exactly a battle between good and evil, but neither is this one. Once again, dom chu and seema moda squaring off in a fight for truth, justice and fair markets. Today, theyll debate stocks or bonds, which one should you be more heavily invested in. And after the bell, you need more than 145 characters to say what a bad day twitters having right now. Well talk to dan niles of Alpha Capital partners, get his take on the selloff in the social media giant today after last nights earnings debacle. [ 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. Theyre still kicking to the close here. Going to have a fast finish. The dow up 175 points. We were just talking here during the break how much more we would need to be up for the week after that 300point drubbing on monday. We had a pretty good today tuesday, flat day yesterday. We need to be at 15,698 or thereabouts. So another 80 points or so. If you get a decent jobs number tomorrow, who knows what might happen. We better get a decent jobs number at this point. Right now the expectation is 189,000. You might get less because of the weather, just like we had in december. The weather was a big factor then as well. Right. And stocks are rallying today. But bonds in the meanwhile have also been hot to kick off the year. The question is which of the two is the better bet for investors . So we have, once again, marvelous seema moda, saying stocks are set to surge. But dominic chu says investors should be riding the bond bonanza. All yours, guys. Thanks. Seema, youre going to kick it off. A lackluster year for stocks so far. Market strategists i speak to say stocks for the year will end higher. If you look at whats happened over the past couple weeks, experts would say this selloff is actually a good buying opportunity and also because valuations have come down. Second point, Interest Rates are still low and historically speaking, which Interest Rates are low, stocks do move higher. Thirdly, the pick up in the economy in general, thats supposed to help boost corporate earnings, which of course again is good for stocks. So three reasons again to invest in stocks. Heres the thing. I get all of that. I understand the bullish case for stocks. I understand the bearish case for bonds. Lets check out what happened since the beginning of the year. Take a look at the tenyear treasury note. We have seen yields start to kind of roll over. They were close to 3 at one point. Now theyre about 2. 7 . People are buying up the safety of treasuries. Call it perhaps a safe harbor in choppy waters. Also remember in the equity markets, nice rally today, but overall year to date right now, were not seeing some great moves, especially in the emer emerging markets. Thats a huge concern overall for a lot of these investors out there. Thats the reason why these bonds seem a little more attractive than what stocks are doing right now anyway. Maybe just for now. Then theres a lot of experts who say invest in bonds because you have that yield of 2. 7 . There are plenty of stocks out there that offer a dividend yield thats much higher than 2. 7 . For example, you have at t, intel, kindermorgan, transocean. All of these as well as many others in the discretionary space that offer that dividend yield thats higher than 2. 7 . If youre just looking for income, why not invest in stocks that offer Growth Potential as well as income . Well, all it takes is one 2 drop in your capital to erase it . Check out. Another reason against bonds has been, hey, what if inflation picks up . Guess what, inflation doesnt exist for right now. Nor does it look like its going to exist any time in the near future. You can see the Consumer Price index from last year going to this year. Still no signs of rising prices, at least for right now. Despite all those bullish, bullish forecasts about whats going to happen with the economy, were not seeing that ininflati inflation right now. If inflation is low, Interest Rates are going to stay low. That yield going to probably stay around 2. 5, 2. 7. It could, but thats safety. Guaranteed by potential. Full faith and credit of the u. S. Government. Thats a big one. That helps. The interesting thing is if these conditions hold, both stocks and bonds, which have been a winner for some time, could still continue to be a winner now. And they could be, youre right. Theres also an interesting dynamic here. Theyre just like seema showed you. Theres a whole bunch of stocks. Were not just talking treasuries for bonds. Theres municipals with certain benefit. All across the spectrum. Theres different ways to tailor a portfolio of bonds just like for stocks. True. Thank you, guys. Good job. And weve got about 13 minutes left to go before the close. The dow holding up, bill, at about 160point rally. The s p adding 20 points, back at 1772. Still to come, from cleaning your house to military moves, irobot is making the future happen today. Were going to talk to company ceo colin angle about whats in his companys future coming up. Fifteen minutes could save you fifteen percent or more on car insurance. Everybody knows that parker. Well, did you know auctioneers make bad Grocery Store clerks . Thatll be 23. 50. Now. 75, 23. 75, hold em. Hey now do i hear 23. 75 . 24 hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and. 75 25 now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter sold to the man in the khaki jacket geico. Fifteen minutes could save you. Well, you know. Make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Ten minutes left in the trading session here. The dow up 170 points. The best up day of the year for the industrial average for 2014. We havent had a 1 move higher yet in 2014. J. J. Burns joins me right now. I know youve been constructive on this market. Were having this rally the day before what is usually a market moving indicator, the jobs report for the month of january. A dangerous move or what do you think . No, i think its going to be a little bit of an oversold decline weve been having. More importantly, looking towards tomorrow, i think were probably going to see that 6. 4 , 6. 5 unemployment. Its really going to show many people are willing to leave their jobs. Weve seen the Participation Rate come down 18 where people dont really care about leaving a job. They feel that theyre going to get another job. And a lot of the data want media, other media reports is the fact that a lot of this data is not really being culled into the figures. I think what were going to see is that the economy continues to strengthen, and there will be pockets of opportunities as time goes on to be invested in here. Have you been buying on this dip . We have not been buying yet. The reason is because bullish sentiment is still around 45 , 50 , maybe 40 to 45 . We had it up to about 55 to 65 . As you know, theres a contrarian indicator looking at that bullish sentiment. We think when the sentiment gets to 45 or more 35, 40, we think thats going to be a fantastic opportunity, and emergining markets could lead the way. Ive been hearing that for a year. Got clobbered this time around again. They certainly have. I think thats a great sign for investors when you see arguably a capitulation, having 12 billion come out of emerging markets. I think that starts to become compelling when youre looking at pe ratios floating down to eight, nine times versus 14 for developed marks. For the average investor, you buy low, sell high, buy when theres good value. Emerging markets are showing good signs of Getting Better values. All right, j. J. Always good to see you. Thank you. Thanks, bill. Take care. See you later. Those jobs numbers coming up tomorrow morning. Were going to take a quick break, come back with a closing countdown in what could be the best day of the year for stocks. We have earnings. We havent even mentioned these yet. News corp. , linkedin, and expedia. Well have the instant analyst and market response coming up. Youre watching cnbc, first in business worldwide. 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. 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And Rick Santelli mentioned for the ten year we started the week with the yield around 2. 58. Weve moved up 12 basis points over the last few days. Were now at 2. 70 on the tenyear note. Now we have earnings coming out after the close tonight. Three more big companies. Linkedin, which has a 4 gain today. Theyve been among the best performers in the social media circuit lately. Expedia expecting a gain there. Then news corp. , which has split itself in half. This is the news portion of the business, up 2. 8 as it gets ready to report earnings after the bell tonight. Kelly will have all that for you coming up. Peter costa, what do you make of the volatility this week . Its totally expected. After seeing mondays dropoff and we bounced off a 200day moving average, you know, youre going to expect this. I think tomorrow might not be as volatile as today, but i think that, you know, investors are trying to set themselves up for something a little bit more positive tomorrow. There might be a little bit of a surprise though. Right now the expectation is for nonfarm payrolls to be about 189,000, which would be a lot more than what we got in december. That was a huge disappointment, which was largely weather related, we were told. Could we i mean, we had a very, very cold january as well. Could we get a weatherrelated disappointment tomorrow, do you think . You know something, bill, i honestly believe we will. A lot of times with weather, its usually one section of the country thats suffering and other parts are going through a normal winter. This has not been a normal winter for anyone in this country. Out west theyre very, very dry. Were spending, you know, threequarters of our time below zero in most parts of the country. It will be affected tomorrow. You will see that come in tomorrow. I can almost guarantee it. What do you think the market does with that . I think a lot of people are looking for that weatherrelated number to be i dont know why they came in with 185,000. I think it would be a lot lower than that. I think there are a lot of people that are expecting some sort of weatherrelated result tomorrow. And here we are up 191 points. The high of the day as we approach the close. The day before, a big number here. Skille you what i asked j. J. Burns. Is this a dangerous move on the part of the market right now . We were in an oversold condition. Youve had some good earnings today. Maybe this is a little much. Maybe we are moving a little too fast today considering tomorrow. And you know, we might have the converse tomorrow. So you might see the market sell off 170 points with even just a slight miss. So tomorrows a very, very risky day. Im surprised the market has reacted this way today. Truly surprised. Its been a surprising year so far with the return of the volatilit volatility. Well, we love the volatility down here. You never can hear me complain about volatility in either direction. Its manna for the traders on the floor there. Thanks, peter. Thank you. See you later. Heading toward the close, and it looks like we will have this best day of the year so far for the dow industrial average with a gain of about 180, almost 190 points right now. Stay tuned. A lot of earnings coming your way, including expedia, linked yn linkedin, and news corp. Kelly evans and an allstar panel coming up. See you tomorrow. And welcome to the closing bell. Im kelly evans. Heres how were finishing what appears to be the best day so far this year on wall street. Take a look across the major indexes. The dow adding about 186 points. Thats about 1. 2 . Same goes for the nasdaq and s p. Again, 45 points higher on the nasdaq. 20 higher on the s p to 1773. Major earnings reports on tap this hour. So on that note, lets get straight to it with todays panel. Joining me no i hello and welcome to all of you. John fort, whats the important thing to watch for this hour in your view . I want to see linkedin, and parly because of twitters report. Pay attention to their fundamentals. How are they adding users . How do they guide . We get their full year guide for 2014 as well as for the First Quarter. Plenty of bullish expectations similar to twitter. You want to see how they come in to see how some of those high valuation social media stocks are going to be traded tomorrow. Twitter today certainly bearing out whats fast becoming an adage that the First Quarter for these publicly traded social media names is a rough one. Shares down about 24 today when all was said and done. Does it matter whether they had stayed above the 50 level, fallen below . More broadly, i mean. I dont know. Theyre back to where they were a couple weeks ago. Theyve still done extraordinarily well since the ipo. At this point, you really want to see, can they make the product changes necessary to tune up their fundamental growth the same way they did with modernization. They did a good job on that. Lots of questions on whether they could monetize mobile. Theyre doing that. Now we got to see those users grow. Now, i want to back this out, broaden it out a little bit while we wait for some of those results. One of the things that people were talking about as we rallied into the close here was Raymond James on this Network Earlier today putting a 300,000 number out there for the payroll number. Are people crazy to bid on that number like that or not . I think to see this type of rally on initial claims number might be a little exuberant. But certainly there is hope that december was an aberration. I dont buy the weather story everyone has been putti inting. I also hate to rain on everybodys parade today when weve had such a great day on the street. I have a big debate actually going on in washington, which is where im based, over the debt ceiling. I think thats going to be a major story line Going Forward, even if the jobs number turns out well. Were going to have a lot of partisan politicking, partisan brinksmanship on the hill again as we move forward. Thats a good point. Hold that thought, guys. We want to get these numbers on expedia. Earnings are hitting the street. Dominic chu is standing by with the results. Okay, kelly. The first thing you got to know is the stock is up about the in the after market right now. A sharp rise higher. This is expedia. Reports earnings per share of 92 cents. That beats the average analyst estimate of around 86 cents per share. Revenues also coming relatively in line, 1. 15 billion in revenues. That compares to 1. 14 billion for the average. Expedia beating on the bottom line, in line on the top line, gross bookings show some strength. Thats the reason why those shares, at least for right now, are up 9 . Were going to go through this release, bring you anymore details as they become available. Back over to you. All right. Much appreciated, sir. Expedia, of course, has moved around a lot on earnings. For expedia, this move isnt that big. Well keep an eye on the shares, of course. You were about to make the point want the debt ceiling. Should we be worried that were heading for another round of brinksmanship . Its been pretty quiet out of washington. Thats usually a good sign. Yes, true. Calm before the storm, kelly. That would be a good sign. The feds easy money has covered up the fact that many emerging Market Countries when were talking about the debt ceiling debates are spending more than they earned. Were building up these huge, largeaccount deficits around the world, not just in this country. As the Federal Reserve is withdrawing some of their asset purchases, as thats going to happen, you see turkey, argentina, india, and they cant maybe easily fund their spending now. Hold that thought for a second. Were going to get to linkedin results. The shares are whipping around here after hours. Julia boorstin has those numbers. Kelly, the reason why linkedin shares are trading lower right now is really about their guidance for q1 and full year 2014. Linkedin is projected revenue between 455 million and 465 million in the First Quarter. Thats lower than expectations of revenue in the First Quarter. Excuse me, 470 million. Projections for the full year of 2. 02 billion are also significantly lighter than the 2. 1 billion expected. Kelly, in terms of this most recent quarter, q4, the results were better than expected. The Company Ended the quarter with 277 million members, thats higher than expectations of 273 or 274. Also, earnings per share adjusted coming in at 39 cents. Thats a penny better than estimates. Revenue at 447 million up from 438 million expected. Back over to you. The first two earnings reports out of the gate. Expedia moving higher. Linkedin, a miss in terms of shares, which are down almost 12 . Yeah, linkedin is a company weve been used to seeing really blow out the expected numbers. This isnt quite the level of blow out that were used to seeing. On the guidance, theyve been conservative on guidance traditionally. So that isnt a big surprise. Wonder why the markets taking it this way. Maybe theyre hoping for linkedin to push on guidance as well. I wonder if some of the core business, the most the best performing best units, that maybe some people are looking to see outperform didnt quite do that either p. Bri. Brian kelly, thoughts on a couple earnings results, especially these linkedin numbers. Whats happening between expedia and linkedin, well see what happens later on with expedia, but the numbers have been coming in good in terms of last quarter. Its the guidance that seems to be hurting these stocks. Now, on linkedin, its a big company where you can start to make bigger macro calls off that. You say, okay, who used linkedin . Sales people and its also kind of a career website. Between those two type of things, if theyre saying thats starting to slow down, you might be able to begin to extrapolate some of that out to the broader economy. Well have to see. And people have been talking about what the right price is for linkedin, for a lot of these names. Looks like tomorrow it could be a stock trading below 200. Brian, you know, fair value when were talking about guidance and some of these fast growing names, you know, is it all about what is the metric . That is the problem with these, right. They have been trading on high valuations because of incredible growth. And when that breaks, you have a problem with these stocks. If you look at linkedin, 200 has been pretty good support over the last month or so, if not longer. Now that weve come through 200, well have to see how it opens up tomorrow morning. Thats now resistance. If we continue to get some negative news flow out of linkedin, 200 is probably a good place to short it against. It strikes me. Linkedin is different than twitter fundamentally and facebook and isnt as dependent on user growth. I dont know. Do they break out that number on user growth . Just interesting given all of the panic today about twitter. They did. As julia mentioned, its 277 million members. Now, theyre not doing monthly active users. Thats just an aggregate member number. Its not showing whos actually logging in, engaged. Let me double back again to those product segments. Talent solutions came in again at 245. 6. Street was looking for something closer to 248. Its actually Marketing Solutions that seems to have outperformed at 113. 5 million versus 103 expected. Thats good. Its nice to have a diversity of different product categories that you can have compensate for one another, but the core of linkedin is seen as talent solution. You ideally want to see that performing at expectation and then Marketing Solutions outperforming. They also making the biggest acquisition to date for this company, buying bright for 120 million. That doesnt appear to be moving the needle. Want to switch gears and look at whats happening with news corp. In the meantime. Theyre out with earnings. Shares are moving higher after earnings. Julia has those figures as well. Kelly, just a reminder that news corp. Did spin off from fox. We dont really have apples to apples, year over year compariso comparisons. The Company Reported its fiscal Second Quarter rev news of 2. 24 billion. Thats a 4 decrease from the year ago period. It is slightly stronger than the 2. 23 billion that was projected. Earnings per share of 31 cents, thats adjusted, is flat with the year ago period, but it is 11 cents better than what wall street was looking for. So definitely better than expected, but it has been harder for wall street to make projections about this company just because of that split from fox. Now, of course, the biggest part of this business is news and information services. Dow jones likes that. That business had a 9 decline in revenue 249 quarter. Back over to you. All right. The shares still moving higher, almost 5 after hours. Julia, thanks for that. The other earnings reports and thanks to everyone for digging through the numbers. Be sure to stick around and catch brian kelly also coming up on fast money at 5 00 p. M. We need to get to the latest on another big moving story this hour. It is with regard to the Matthew Martoma case. Although are we going to go to kate kelly here . Kate kelly is standing by. Lets get out to kate right now. Reporter hey, kelly. Thanks so much. Im standing outside the federal courthouse where just within the last couple of hours Matthew Martoma, former s. A. C. Hedge fund trader, was convicted on three counts, two of securities fraud, one of conspiracy to commit securities fraud, guilty on all three charges, and face a maximum of 45 years in prison. Although, the sense is it will be farless than that when he is actually sentenced, probably a few months from now. Obviously, a blow for the defense. Also a blow for s. A. C. S. A. C. Has already been hobbled by a raft of investigations into Insider Trading, both civil and criminal. They settled as a corporation with the government over some of these charges late last year. And they are now in the process of converting to a Family Office that will manage only the money of the founder, steve cohen, and certain employees and family members. Things got very heated this afternoon as weve seen. There was a scuffle that broke out just down the courthouse steps as the defense lawyers attempted to get into a car. One of the lawyers on the staff, an eightmonth pregnant woman, was pushed or prodded by a photographer, and she pushed back. A scuffle ensued. That was just one example, kelly, of the high emotion thats really dominated this event this afternoon. Not entirely surprised, but one that took longer than many had expected and im sure came as an unwelcome surprise to the defense. Yeah, kate, thanks. I want to get some reaction from the panel here. Guys . I mean, a pretty good record on getting these guilty verdicts on Insider Trading. The question is, did they get anything when it comes to getting the ultimate target on steve cohen. I think thats going to be the real question. Some reports indicated that was a goal and they didnt get much. This does appear to be two for two in the big cases. Reporter if i could jump in on that kelly kate, go ahead. Reporter yeah, if i can just jump in on that, i do think these investigations are continuing. In fact, cnbcs learned just this afternoon that the u. S. Attorney office for the Southern District is still looking into Insider Trading at hedge funds in general and is particularly targeting at least one individual at s. A. C. So there may be more to come on this front. Theyve said all along they havent dropped the inquiries they have made, even though they settled with the corporation. Thats one to stay tuned on. Yeah, and just really broader Insider Trading crackdown. Have the number here. Guilty pleas or verdicts against 79 individuals since october 2009 for federal prosecutors on Insider Trading. And i think they are Something Like 79 for 79 in this instance. Kate kelly, thank you so much this afternoon. Guys, thanks to all of you again. Jobs, jobs, jobs. Well tell you what to expect for tomorrows closely watched employment reported. If its a bad number, could these gains today go out the window . And social media stocks on the move. Twitter wiping out a fifth of its market value. Now linkedin moving lower after hours. Wait until you hear what dan niles has to say about twitters prospects. Is he seeing this as a buying opportunity . Well have much more, as i said, on that big move in linkedin shares. Keep it here. Youre watching cnbc, first in business worldwide. [ male announcer ] at optionsxpress, our clients really 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. My uncle wanted to say thanks for idea hub. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a 150 amazon. Com gift card. Call 18883303136 now. Optionsxpress by charles schwab. Welcome back. So did Mother Nature put januarys jobs growth on ice . Steve liesman tells us what to expect in tomorrow mornings super important employment report. Steve, this takes on added importance because we saw december was so anemic partly because of weather, yes . Its a funny one though, kelly. Do you remember january . There was one mild week, and it just happened to be and it was the jobs report. The week of the jobs report. So youre bounded by the polar vortex on either side of this one mild week that ends up being the survey week. And the survey week doesnt care how cold it was after, doesnt care how cold it was before. What it cares about how cold it was on the week of the 12th. And that is the reason why we have 189,000 forecast and a slight dip or 6. 6 decline in the jobs number tomorrow forecast. And let me show you some of the indicators we have out there. The avp number, it pointed towards, you know, right around trend growth or pretty neutral right there. Claims pretty neutral. All the indicators we have so far there we go. Ism manufacturing, neutral. Nonmanufacturing pointing to stronger. Adp, certainly stronger than the previous month. And claims, same thing. Down at that 330,000 level, the fourweek moving average barely unchanged today. Its a funny thing. You do have a lot of snow. December, by the way, had the most people absent due to bad weather since going back to 1976. You cant go back further than that. Now, january and february tend to be worse for both of those. Wether or not thats the case this time, its hard to tell. Its anybodys guess. But right now economists sticking you know, its not a bold call to say between 175,000 and 200. What theyre doing, kelly, essentially is picking trend. All right. Steve, stay with us. For more on what to expect in tomorrows jobs report, lets bring in Dennis Gartman and greg epps. Greg, whats your take here . Where do you think the whisper number is right now . I thi i think the whisper number is lower than 180. If i thought it was going to miss, i think it would miss on the downside. The reason is weve had a couple of its not just been december with a lot of misses on things like durable goods and home sales. Those misses have continued into january with automobile sales. If you look at the manufacturing ism index earlier this week, big drop in the new quarters component. That cannot really be explained by weather. I think that what were seeing here is partly weather, but i think its more that we were sustaining a pace of growth in the second half of last year. That is not possible to be continued for another year or two. Its just not that kind of recovery. People still have it in their head that 200,000 jobs is the trend rate of this recovery. Thats too high. Its lower than that. Dennis, how are you trading this jobs market . Are people crazy to buy high today . People are crazy to spend any time with this number. I go back to 1976 with this figure. Ive been commenting upon it for almost 40 years. The only thing that you can say that makes rational sense is if you hit the number within 50,000 plus or minus of whatever it is, you should consider that to be an absolute bulls eye. Now, i think greg had a very good point that most of the data that weve seen coming in for the past several weeks has been less than we had hoped for. Steves point about the weather being the only optimal week of the month when the data was being put together is another very good point. The fact is were probably going to see tomorrows number be somewhat less than we had hoped but last months number, dont be surprised if we revise it upward. I think we average about 160 for the two months. Theres some talk as well about whether the misses that we see over the winter are due to whats called the lehman effect. Thats a great question. I actually asked ted weisman that question earlier this week. He said, you know, id love to think it was that, but then he trotted out the nonseasonally adjusted numbers. The move you see, december to january, still looks really bad. As much as i like to blame the data, i dont think thats it. Yeah, its fascinatie infasc. So steve, sum this up for us. December might have been worse than the month really was because of the weather. January might look better. Its february and things are still out of whack compared with historical norms. Call me in may. I think thats the best way to sum it up. And if you think about it if we ever get spring, which im not clear on anymore. I think i may change my forecast for the seasons as it were. But heres the real story. If you have a weather related downturn, its very normal to get a very related up turn as a result, a snap back, pentup demand. I was going to go shop for a car, but its 5 below. Still need the car. I may go buy a car along with the other people who are going to buy a car in april, for example, or march. So what you have is you have neither one of the bottom of this or the top of this telling you what the trend is. So truthfully, it could be until may or june until we get a read. What greg is interested in is a very important point. Whats the real trend of the economy . I know the fed is very interested in that. I submit we may not know that for several months. And that will make it additionally complicated for janet yellen on monday. Thank you so much for being here this afternoon. Still excited about tomorrow morning. 8 30 eastern that number hits. Its always a big one. And also a big move after hours, linkedin moving down on the heels of its results out just moments ago. Noted tech investor dan niles up next. Plus, twitter tumbling almost 25 today on disappointing user growth figures. Find out if he thinks this is a buying opportunity. Well be right back. Open to innovation. 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Lets start with linkedin t obviously a name weve been hitting, moving lower in the after hours. It did post better than expected Fourth Quarter earnings, but its guidance was light for the First Quarter and for the full year. Also, gap moving higher in the after hours, reporting january samestore sales were up about a percent. Its guided its Fourth Quarter earnings above street estimates. Thats maybe what has the optimistic look. News corp. Easily beating street views. Its revenues matched expectations as well. Expedia moving higher in the after hours, after posting better than expected Fourth Quarter earnings. Were going to end on twitter, which that its worst day on record, shedding over 7 billion in market value after its Quarterly Report really fell short of some expectations, which said user growth was starting to slow down a bit. Thats the story behind twitter in the after hours so far. Back over to you. Dom, thank you very much. Now, hes been right on facebook stock. Back in november, he shorted twitter, which is now reeling. Does he see more pain ahead for the company . Hes dan niles from alpha one partners joining us now on the newsline. Thanks for being here. Just first things first, what about twitter . Do you buy it now that it shed a quarter of its market cap . No, you dont. Because if you think about it this way, the stock really ran up to 75 based on just optimism. Nobody cared the valuation because if you think numbers are going to be huge and the growth limit is to the sky, then you can try to dilute yourself like people did in 2000. The thing is, their actual results now came out versus what people thought would end up happening. In two of those three metrics, they were absolutely horrible. Unless you are willing to suffer a lot more pain, which i think could happen, you absolutely do not step in here. Okay, dan. Were going to spend more time on that in a second. In light of the fact that linkedin is now moving lower by about 10 after hours on their results, do you own this stock . What do you make of this story . Yeah, i mean, i think with linkedin, you know, its a little different. But if you look at what happened, the revenues came in better than forecast. Their profitability in the quarter they reported came in better than forecast. Now, they have a habit of guiding pretty conservatively looking forward. But, you know, having said that, if you look at the full year guidance, theyre guiding profitability roughly from what i can tell about 15 below where the street is and guiding revenues about 6 below where the street is. A lot of this is going to come down to what they say on the call. If you look back over their history, they tend to be somewhat conservative. A lot of its going to come down to the metrics that they end up disclosing and what they have to say about it so im not as concerned about linkedin. A lot of this comes down to valuation. I think thats one thing we havent touched on. You know, it really comes down to the price youre willing to pay. Somebody came to you and say, hey, ill offer you 1 for your house, youre not going to sell. If they offer you a billion, youre going to sell. Unless i really needed that dollar. Im going to bring in the rest of the panel. Thoughts here, john fort . Im curious, dan, what you think about how you trade a company like twitter. I mean, it certainly looks like its off on fundamentals. The user monthly active user growth just isnt there. Timeline views just isnt there. Do you wait until they come out with a hit product, until they have a redesign that seemsengag . Or do you wait until the actual results show up and assume everybody else will jump in at that point as well. Chblts thats a great question. It really comes down to that analogy i made about kellys house. If you look at facebook, theyre trading at about 20 times failed off reported numbers. If you look at twitter, even with todays fall, theyre trading at about 49 times. You know, that, to me, is still way too much of a premium. The growth rates between the two companies right now are actually a lot closer than you would think. And look at it this way, right. Facebook has about 1. 2 billion users. They added 40 million monthly active users quarter to quarter. Twitter came in at about like 4 million or so. Given that facebook is about six times as large, this business, as you rightly pointed out, timeline views were down 3 year over year. Monthly active users, you know, only grew about 4 sequentially. All of those relevant metrics were tough. The only way they were able to beat the numbers is they managed to increase their average revenue per timeline view. They basically managed to double that from march to december. So i think to your point, i dont think you want to get involved here until you get a multiple thats quite a bit lower than where it is today before you say, you know what, im getting paid to take the risk. And the multiples would go down if the earnings would just go up. Heather . Hi, dan. We know its a quick news source, twitter. Its based on streaming data versus the visual aspect as you alluded to on facebook. People dont spend an hour a day posting pictures on twitter like you may on facebook. So do you think its a fair comparison to compare facebook to twitter . Is that kind of like the radio to tv . No, its an absolutely fair comparison because a lot of the people when they were valuing twitter at this level were saying, hey, you know what, twitter is a better platform because you can follow whoever you want. Its not reciprocal. If you want to follow, you know, whoever, president obama, he doesnt have to let you follow him. You just do. On facebook, its potentially something different. With twitter versus facebook, its absolutely the right comparison. What you need to think about is whats the ultimate potential for twitter . Because twitter being at about, you know, the size theyre at, at 240 million or so monthly active users, facebook is at 1. 2 billion. Facebook is adding users at a faster rate. So if you think twitters audience isnt at large, you shouldnt be paying a ridiculous multiple for it. Right, sarah . Would it excite you if twitter got into new business, broadened its scope . Maybe they should buy flip board. Now that we know that user growth is going to be a problem, should they try to think bigger, expand the horizon a bit . No, because i think thats a mistake a lot of companies do when they run into trouble with their base business. They try to get into too many other things. I think Dick Costello said it really well on the call. Im looking here for the quote, but it was, growth was something that happened to us. Now it will be a combinations of changes introduced over the course of the year that will start to change the slope of the growth curve. I think thats what they need to do. They need to focus on their core business, make it so its easier to use, so it attracts new users and not get distracted by something else. They only have 240 million users. If you think you can be as big as facebook, you know facebook has 1. 2 billion. Thats an extra billion in there. Exactly. All right, dan. Thank you so much for calling in. Appreciate your time this afternoon. Very welcome. Over to dominic chu. This time its outer wall, kelly. The Company Formerly known as coin star, the coin counting machines. They also own the red box dvd kiosks. They just reopened. The First Quarter guidance was below analysts views. It also announced three executive leadership moves within its red box, coin starring, and ecoatm businesses. One in particular is mark horak, who used to be the president of warner home video in north america, a man who used to be responsible for growing dvd sales of Warner Brothers home video products in north america. He will now be running the red box dvd kiosk and streaming Division Within outer wall. You can see those shares up about 7, 8 in the after market. Over to you. All right. Thank you very much. A lot of big moves after hours. Well, shutterfly seeing black and blue today. The online photo sharing Company Selling more than 10 on weaker than expected guidance, though earnings did beat street estimates. Im seeing a pattern here. The Shutterfly Ceo is up next with his take on the quarter, job growth, and more. Dont go anywhere. We know were not the center of your life, but well do our best to help you connect to what is. Welcome back. Fourth quarter boding well for shutterfly, the photo sharing company beating on earnings and revenue. Yet, the stock down 13 today. Whats going on here . With us in an exclusive interview is Shutterfly Ceo. Thank you so much for being here. Good to see you. Lets talk about the quarter. Y you saw an increase in the amount people are spending. What is that you think investors have the most concern about right now . You know, we had a great quarter, up 17 on revenues, profit exceeded estimates and street consensus. For the full year, up 22 . We had another fabulous quarter and another great year for shutterfly. I think people are concerned on the street today about the level of investment were making for the future, which seems to be an overreaction because weve been telegraphs that for about seven months. We forecasted record rev news of 900 million to 920 million for the current year and record cash flows as well. It does sound like people are looking for you guys maybe to be investing more. Why not do that . Why not ramp up the investments spent on Something Like your cloud piece of the business so that you aggressively move into a space that so many are trying to move into right now . You know, were making meaningful investments in a service. It will exit beta around mid year, and well put some mark marketing dollars behind it as we look to expand the usage. Were making significant investments and very excited about the product and the customer reseptemberivity to date. What do you think shutterfly looks like in, lets call it, two years time . Were going to continue to grow our core brands of shutterfly and tiny prints. Were going to continue to incubate and grow our wedding business through wedding paper divas, one to one card service. Our my publisher business and ever growing enterprise. Lastly, we think our new Cloud Service is going to be a meaningful contributor to Customer Acquisition and stickiness to the service. So as the market leader, were looking to further monetize our ever growing user base and drive increased profits for our shareholde shareholders. If all thats going right, where are you going to lose 80 cents a share this quarter . On an eps basis, on a gap basis, theres a lot of noncash charges flowing through from acquisitions in the build out of our new manufacturing facilities to the tune of about 50 million in 2014, but theyre noncash charges. If you look at our nongap eps and nongap grossed margins, theyre in a much healthier place, and were going to Record Record Free Cash Flow for the year. How much are you expanding . How much are you hiring . You know, in 2013 we hired over 500 people. We now have close to 1500 fulltime. And we hire thousands of temps during our seasonally strong Fourth Quarter. Were proud to say we brought manufacturing back to america, and weve moved our customer service, which was offshore, back to u. S. Facilities. So were employing more americans than we ever have. Final question, and only because aol Ceo Tim Armstrong this morning said he was going to stop his employee 401 k match because of the cost of obamacare. Are you seeing a similar pressure . I think the cost of the escalating cost of insurance and health care for our employees is a problem not just for aol and shutterfly but for all businesses. We have to find a way as a society to bring down those costs so that we can employ more people and give them, you know, universal coverage at a cost that makes sense. So it is a concern of ours, and weve recently selfassured ourselves over the last few years to manage those costs. Okay. I think Tim Armstrong was saying hes not matching for employees who have left the company. Nervous, curious about any pressure it may be putting on the business. Thank you so much for joining us. Thank you. Shutterfly doing everything except taking a picture for you. But maybe the folks at irobot are working on that. The Company Makes rumba vacuum cleaners as well as military surveillance vehicles. Well talk the ceo about earnings and its companies stock, which is up 60 from a year ago. Wait until you hear how he plans to fuel growth and get robots into every home. And all eyes on tomorrows closely watched jobs report. Find out if people are already obsessing about it in our hot list next. And weve been asking, how is the job market where you live . Tweet cnbcclosingbell. Your thoughts at the end of the program. [ male announcer ] 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. We asked people a question, how much money do you think youll need when you retire . 500,000. Maybe halfmillion. Say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last. I was trying to like pull it a little further. You know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. Im going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, are you kidding me . [ dan ] its just human nature to focus on the here and now. So its hard to imagine how much well need for a retirement that could last 30 years or more. So maybe we need to approach things differently, if we want to be ready for a longer retirement. Fifteen minutes could save you fifteen percent or more on car insurance. Yeah. Everybody knows that. Did you know there is an oldest trick in the book . What . Trick number one. Lookest over there. Ha ha. Madeest thou look. So endeth the trick. Hey. Yes. Geico. Fifteen minutes could save you. Well, you know. Welcome back. New jobs report will be released tomorrow. I peeked at some stories trending earlier on cnbc. Com. I think there was a jobs related story in there. Allen, did it make the top three . Not right now. Its faded off a little bit. Ill tell you what, any time we put up a story this week thats had any sort of job outlook in it, like this morning the challenger report or the weekly jobless claims, zoom its a rocket shot up to the top. Then it just sort of percolates, percolates and dies down. By the afternoon, people are looking at other things. Right now, you know what theyringing at . Theyre looking at natural gas. More specifically, theyre looking at all the hedge funds making a bet on a natural gas shortage. Heres how it works out. Its from our partners at the financial times. Essentially, whats going on is you may have noticed weve had some cold weather lately. A little bit. Thats upped the Household Consumption of natural gas. At the same time, weve had more businesses make the shift to natural gas because its cheaper, right . So all of the sudden youve got all that demand, and yet our supply, even though weve been booming, the shale boom and everything, it hasnt been able to keep up the pace. A lot of hedge funds now are diving into the market, making a little spot bed on it. Thats whats really hot right now. Also, the martoma trial. That took off. Geez. Everybodys checking out the clip on our site of the little scuffle that happened. Finally a report about how more men in their prime working years are not getting the jobs they need, which brings us back to jobs again, which is also a rocket shot. So there you go. Allen, its a great point. Weve been asking people about the jobs market, where they are in their industry. A lot of interesting tweets. Well see what happens tomorrow morning. Allen, thanks. From your living room to the battlefield, did you know the maker of rumba vacuum cleaners also buildsen ma unmanned vehic . Find out when robots could take over the world. Dont go anywhere. And a low sex drive, i had to do something. I saw my doctor. A blood test showed it was low testosterone, not age. We talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. Axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these symptoms to your doctor. Tell your doctor about all medical conditions and medications. 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For a current prospectus visit www. Etrade. Com mutualfunds. Welcome back. It seems like nothing can stop the machines from rising. Robotic specialists irobot reporting better than expected Fourth Quarter earnings and strong sales last year. But the companys forwardlooking guidance came in under expectations. Time into for 2014. Collin, welcome. Thank you, welcome. Youre ahead of the times in getting a robot Consumer Product to market. Whats next . Are you going to be expanding the line aggressively Going Forward or on what exists . Its a little of both. The Irobot Roomba is blowing the doors off the grow. Over 40 in north america. 40 in asia back in 2013. And were looking at 18 to 20 growth this year. So, were very excited. And we think were just getting started. But of course, vacuuming is only the beginning of robots. So many other things around the house need doing, as well. I want to bring in the panel. Does anybody here own a roomba . My apartments not big enough. Jon fortt, i would figure youd have one in every room or something. Im not the rum ma type. I like control. Control over my vacuuming. Theres some interest in having a robotic maid. I dont have to cook or clean. Much like the jetsons. It is a Consumer Product, colin. How much is Consumer Products . How much is your contracting work for the defense and military . The home robot represent 90 of our revenue, which has grown so much over the past few years. Were about ten years into the roomba. And the Adoption Rate and market share are similar to the microwave oven and the dishwasher. Were excited about where its going to go. The remaining 10 , a lot of bomb disposal defense and police force robots out there. They represent the bulk of that remaining revenue. And then, we have an emerging business. Focusing on remote presence. We have robots that go into hospitals and allow doctors to perform diagnosis. That allows people to talk to each other. I wanted to ask you about the defense business in particular. Obviously, washington is a big area where Government Contracting is. Its hugely important. Your Government Contracting business, your defense business has shrunk as the wars in iraq and afghanistan have wound down. Do you envision investing more in that department . Do you see building that business line back up . Or is this an area youre planning to exit entirely . Our focus in the shortterm was to stabilize the business. Were guiding flat, year over year. We continue to invest. Theres so much we can do. Investing in technology. But certainly, our levels of investment in that space have come down with the revenue. Were not investing the levels we did a few years ago. Im curious about googles recent moves. Theyve been betting on robots. They clearly see a future in your industry. Is that a competitive threat . Do you like to see that . Does it keep you on your toes . Add a sense of urgency . Or do you see yourself joining googed one day . Well, i think what it shows is the respect that the robot industry is starting to get. Googles interest, they realize, is going to be important. Amazon also looking at what connected mobile machines with intelligence can actually do to create value. And so, the mainstreaming of the industry is happening. Were certainly excited and very interested in what these companies are doing. You mentioned inside back inside the home, in terms of peacetime, since we cut military and Government Spending in terms of defense. You have 10,000 babyboomers retiring every day. In terms of the handicapped and senior care space, are you doing something in that space beyond just the vacuum . Are you looking to expanding the home in that way to take care or help that situation . Yes. The aging demographic is going to is of the u. S. And the developed world as a whole, is creating a huge, growing demand for robots like the roomba. And so, the roomba is already one of the major demographics buying it. We call them cleaningchallenged. People who are not comfortable or able to push the thats me. Anyone who doesnt want to push an upright vacuum cleaner. Clearly, theres many opportunities for robotics to help these people live independently longer. Colin angle, thanks for your thoughts on the quarter and whats next, as we ponder a future with more robotics. Thats colin angle, the ceo of irobot this afternoon. Your thoughts on the state of the job market are coming up next. Mine was earned in korea in 1953. 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. 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. Welcome back. The january jobs report is due out at 8 30 a. M. Eastern tomorrow morning. We want to know how the job market is where you live. Jeff tweeting, alas, the job market for architecture in ohio, still bad. Chicago is booming as a report record snowfall. And jeff saying, my job market in phoenix is decent. Ready to buy kellyevans home for 1 billion. Its not for sale. But every time i watch robert frank with the superrich, it makes me think about the places weve gone. The answers speak to the fact that job creation in this country is still bumpy. Its so long to get back to trend. The Unemployment Rate has fallen. The interesting thing to watch in tomorrows job report will be whether last month gets revised up. And whether this month or january got hit with the weather. And earnings. Its all about the weather. If you see another bad number in january, thats going to be hard to explain it away, as problems with snow, problems with cold weather. I talked to the former commissioner of the bureau of labor statistics. And he told me if we see another bad number in january, the shortterm Economic Outlook is going to have to change. I think that has implications for the fed. Dont forget about Silicon Valley at the same time. Its not just one story across the board. We say some of this growth isnt as big as expected. If youre a pretty Good Software engineer, you can still get those arent the companies that are creating the bulk of jobs in this country. Theyre creating construction jobs with apple building its spaceship headquarters in cupertino. I must ask, did you not come to work today because its cold outside . No. Youre all here for the show. A job. Beam me in. Thank you for this job. Hope to keep it another couple of days. Melissa lee, fast money is up. Whats on tap . A lot of p. C. S and hand helds have touchscreen technology. We have the ceo of the company that provides the technology out there. A momentum name. You have to tune in to find out what that is. Not too shabby. Over to you guys. Fast money starts right now. Were live from the Nasdaq Market site. Linkedin shares falling after hours, as the companys guidance falls short after expectations. Well have more on the outlook for the internet stocks coming up. Our traders, team seymour, brian kelly, Karen Finerman and ben nathan. The s p clocking in their best day of the year