Transcripts For CNBC Closing Bell 20140226

Lucy put the football up and Charlie Brown is ready to kick it again he thinks. I thought thats what you meant by here we go again. The fact that every time we come on air it feels like the market has been losing altitude. Today does that become the theme or will we be able to retest these highs, maybe break out above it as art cashin put it earlier, well need a close above that high for the bulls here. You know eventually traders will become impatient enough they will just throw in the towel. Well see what happens here. And well also get a read of the market, economy, and Banking Industry with two heavy hitters on deck. Gord nixon will join us exclusively along with investing legend john calamos. See where he finds investment opportunities. These shocking photographs from one of the richest towns in california, weve obviously blurred a few things. Athert atherton, residents have included meg whit man, eric schmidt. They have been vandalized with antiwealth graffiti on various homes and cars. We have a special report coming up on that. Here is where we stand. The dow is up 13 points but it has been back and forth across that line just in the last hour or so. Now, the nasdaq, take a look, is adding about a point, 4289 is the level. And the s p 500 is fractionally lower at 1848. The intraday high for the s p 1858. The closing high 1848 as we mentioned. Lets talk about it in our closing bell ex chachangexchang. Kimberly foss, steve east, Keith Fitzgerald from Money Map Press and our own rick santelli. Steve east, your work says maybe this market is fully valued, maybe even overvalued. What do you think is happening right now . We keep pointing out that they failed to get above alltime highs on the s p the last few days. Do you feel like were topping out here . I dont know if were topping out. As you pointed out, every day we make a run for the roses and ended up with lick wilted flowers. My model says the fair value on the s p 500 is 1812. So were a little above that. But historically you dont go to 100 of the fair value, you go above that. So i wouldnt be surprised if the market got to 2,000 this year. I dont know that were necessarily topping out here, and, again, historically you could go higher. But i dont think you can go a whole lot higher from here in the short term and were not going to have a year like we had the last year. That must be rick santelli. Whats going on there . Whats going on there . Were seeing a little bit of activity in the treasury side. You have to remember, treasury prices are moving up, yields are moving down, and most of the dynamic is that the treasury market isnt buying into the strength or the big weather excuse, but today its also part of the flight to safety. I tried to do an unscientific poll, and at least half the traders i talked to said the events going on with regard to ukraine kiev russia are definitely taking a toll on the market. Its bringing in new buyers and maybe that was also evident in the auctions the last couple days. Also finding strong sportsmanshisponsorship, but its hard to quantify what dynamic is the biggest. Its like several aisles in a grocery store. Theyre all packed up but we dont know which one is the most powerful or which one will have the longest longevity. I know youre our futures guy but do you think those same fums are having an impact on the stock market this week as well . You know, i think theres very little doubt that its having an impact potentially on certain commodities. I think when it comes to stocks the answer is yes with an asterisk. I can tell you which aisle has the most people. Its called the only game in town aisle. To what extent are we seeing across the market this kind of flight to safety bid . If you look at whats happening in the fact that were seeing both the u. S. Dollar rally and yields moving lower, so treasuries are rallying. Thats a little different than the kind of brighter Growth Prospect paradigm we usually see. Is it about russia . Is it something you think is going to persist here . Well, i think definitely the emerging markets and those types are on shaky ground, but i think, you know, guys, weve got nof yield in the bond market. We have 26. 6 trillion according to ici. Org in money markets that are yielding 0. 001. So i think that this market is poised to go further and go higher, but it is going to be spotted with volatility, and on those opportunities my clients are buying in on that volatility and i would encourage investors to do that as well. I dont think that we have seen the highs of the market but im not a market timer at all. But i think we have a stronger market further, and theres more growth down the road because we just have a lot of cash and theres nowhere else to go. One thing real quick, bill. With all due respect to the last guest, theres a lot of different types of volatility. Theres implied volatility, price volatility, but if you look at yields even with todays action over the last 2 1 2, 3 weeks the last thing youre going to think of is volatility. Its been in a narrow range drifting lower but not really priced volatile or Interest Rate yield volatility. You have two things at work, too. You have got things shades of the 1990s, the facebook acquisition for 19 billion of absolute fantasy island potential, and you have 20 something billion dollars worth of things flowing into equities. The average investor makes precisely the right decision at the wrong time. Im concerned were toppish here for a shortterm pull back. Combined with the bond market data, that to me is problematic. My scientific poll is the same thing. People are being cautious on an interim basis. Why now though . We know what the fed policy is and youre one of those who says as long as the fed has their foot on the accelerator, this market should be fine. Why are we seeing this reticence all of a sudden . Ukraine, technology is overbid. Theres a lot of things being traded off potential. Anytime you get that you have a shortterm aberration. This is simply one of those times. I think you can a Macro Economic bull and a short term bear. I think specifically today, this morning among the people i talked to, theres a lot of chatter about Media Coverage of credit spreads and other credit stress measures in china with the idea being that whats going on in china in the credit markets looks a lot like what went on in the credit markets here before the sub prime crisis. So we had the new home sales data which was better than expected and that changed the mood for a while, but that change in mood didnt seem to last. I think people are still worried about whats going to happen in china. Kimberly, i saw you nodding your head there, but we could come up with all kinds of excuses to build this wall of worry, couldnt we . Absolutely. And i think there is a lot of worry and thats going to cause some volatility. This market is not going to be 2013, but theres still opportunity out there, and were invested for the long term, and were in, you know, 44 Different Countries and 12,000 different stocks, but that being said, guys, listen, my clients need income, and they look for yield, and there is no yield out there. So, you know, like one of the guests said theres plenty of yield out there. You just have to find it differently. Theres plenty of yield out there, not to be disrespectful but you have to define it differently. If youre talking about dividends, real estate. Theres all kinds of ways you can harvest she is but when youre boouying dividends, youre still buying more risk. You can hedge that. Sorry . You can hedge that. Yeah, you can hedge that. Again, its a risk and reward play. Some people dont want to take that amount of risk, and i dont think people should be seduced into, you know, having no other place to go but the stock market and then have a big pullback in the market and then theyre exposed. Some people cant recover from that in their 60s and 70s. Cautiously optimistic short term, bullish long term obviously and clients should adhere to the discipline of their portfolio so they dont get overexposed when the markets pull back by 10 or 15 which is kind of healthy right now, guys, right . If they need to move if theyre not rebalancing now, theyre overexposed i would submit. You know, another part of risk that doesnt make any sense is you see the riskfree treasury complex, okay, and you see the way thats behaving. Certainly doesnt seem to be a risk on type mode. Then as you look at equities, look at the etf. Hyg is forging ahead. Its been on a bender to the upside. I think were at a point where the treasury complex is even broken away in larger respects, and it really does auger the big question. You know, are rates moving down or at least stubbornly not moving up with stocks because weve kind of securitized risk . An etf is different than actual coupon treasury just like weve securitized gold. I dont know the answers, but theres certainly huge amounts of cross winds in the sector or, rick, whats interesting if you were to look and say, well, maybe perhaps the treasury market is getting a bid here for other reasons, geo political reince or whatever, and thats supporting more of this chase for yield whether its the high yield you mentioned or whether its other kinds of instruments and that gets to be the kind of scenario that you worry about overvaluations, not just in the equity markets but in other parts of it as well. Kind of 99esque or 06esque. It seems as though the medicine is going to lead us to a disease that weve tried to put in gauze several times. Right. We have to go at this point, gang. Thank you all for your insights in todays market. Appreciate it very much. Yeah. Like we said, here we go again. Third time, could it be the charm or the curse. We have 50 minutes left. The dow is down 7 points. Thats something to keep an eye on. More importantly the s p right now, right . Well, were keeping an eye on it because the s p 500 trying again to close at a record high. Of course, that closing high was 1848. Were at 1841 as we stand currently. But if billionaire investor john calamos is a believer in the rally, where is he finding opportunity in this market . Well speak to him ahead. Targets massive data breach put the spotlight on the fast growing Cyber Security industry, and now word comes today, get this, 360 million newly stolen credentials are for sale on the black market. Eamon javers is at a massive Cyber Security conference in San Francisco. Hell have the latest on that story coming up in a moment. The 1 , the target of gra a graffiti vandalism. Well discuss it later on the closing bell. Keep it right here. Youre watching cnbc, first in business worldwide. We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. 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Announcer ranked highest in Investor Satisfaction with selfdirected services by j. D. Power and associates. Bulldog oooh bulldog mattress discounters 197 mattress Sale Television announcer get a serta mattress, any size, for just 197 each piece when you buy the complete set. The 197 mattress sale. Bulldog oh boy Television Announcer . Is on now. Mattress discounters welcome back. Targets massive data breach just the tip of the iceberg of the global problem of hackers stealing personal information. One Cyber Security firm says 360 million newly stolen credentials are now available for sale on the black market. Just incredible. Eamon javers is at the security conference in San Francisco with the latest on this Frightening Development and how the Cyber Security industry is trying to prevent future thefts if they can. Thats right, bill. It is a scary story, very big numbers involved here, but weve had a chance to talk to some of the tens of thousands of Cyber Security experts who are here at the rsa security conference in San Francisco, and what theyre telling us is theres not really enough information in this story to make a determination as to whether those credentials could be used to crack into peoples Bank Account Information at this point. But what it does do is give us a little bit of a sense of whats available for sale in what they call here the dark web, a network of websites where theyre selling all kinds of things for sale, including credit card numbers, credentials like in this particular story. Also exploits and particular hacks that hackers have developed, and theyre selling on the dark web to other criminals. Think of it as the amazon for cyber crime. Its become a big business. We had a chance to talk to one Cyber Security expert about it. Take a listen. Its a business whether its a private business for profit or, you know, government state sponsored activity, and its very sophisticated. Of course, i dont like it, you know, but thats the reality of it, and so we have to treat it as a very professional attacker that has access to a lot of sophisticated tools. So business is topic a at the Cyber Security conference. The other theyre talking about is politics. In the wake of the Edward Snowden revelations, this is the first of the conferences theyve had since this story came out. Weve seen a whole raft of protests here, code pink was here unveiling a banner on the roof of this Conference Hall yesterday. Weve seen protesters who rented out a restaurant across the street from here. All of them raising the question about how much this Cyber Security community is collaborating with the nsa and whether any of that is appropriate or not, guys. A lot of controversy here in the room as well as a lot of Business Opportunities and big deals being made. Eamon, whats interesting as well is to look at the remark from the chairman of the event saying he feels as though the nsa exploiting his position or the industrys position of trust. How is that did this previously tell us how the relationship stands today and what happens now, especially with each additional headline about what the Obama Administration may or may not do. Well, look, it is a very tough, tense situation right now between then nsa and these companies. We talked to someone to came out to mend fences between the Cyber Security companies and the government. The chairman said effectively he thinks the nsa needs to be broken up into two parts, an offensive part and a defensive part, and the Cyber Security companies would be a lot more comfortable working with a defensive nsa than they are working with an nsa thats trying to hack into a lot of peoples information. So he suggested that they might not want to work with the nsa at all if that kind of clarity cant be given to the Cyber Security technology companies. I have a more practical question. What are they trying to do to solve this security problem for all of us with our credit cards and all the things that can be hacked into . I mean, is there a solution that theyre eyeing right now or are they just kind of flailing about here . Well, ill tell you, there are hundreds of solutions in this room. All of these little Startup Companies have a different idea about how to do that, and youre seeing sort of capitalistic, darwinian evolution going on as all these little Companies Pitch these ideas. Bigger companies are coming up and acquiring the little firms and saying thats where were going to go, but this question of passwords is so difficult. We talked to some Tech Companies here who said you have got all these pass words, theyre so difficult to keep in your brain as a consumer. Theyre still struggling to come up with a solution thats secure. At the same time i heard from someone at the fbi just the other day or who had previously been with the fbi, we got talking about the iphone and using your fingerprint to validate who you are, and she said, frankly, i dont want to get that kind of information out there. So even as the vi is turning to biometrics, there could still be push back. Because, remember, that can be hacked, too. We talked to a guy just yesterday, a hacker, who actually hacked into an android screen and he was getting the images right off the screen. He could lift your fingerprint right off the screen so the hackers can get it if youre putting it out there on the internet. I think i saw that in a tom cruise movie. May be mistaken. Hollywood cant even keep up. Its just like a tom cruise movie right here. And eamon is playing that role very well, quitimission impossible. We have about 40 minutes to go into the close, bill, and its hard to pick a narrative. Do we talk about the fact were basically back at alltime highs or the fact were selling off again in the session today in some of the momentum names . Just feels like a market thats running out of gas near the end of a marathon as they get closer to the finish line. Jcpenney set to report earnings after the bell tonight. This should be a big one with the sta stock down nearly 40 . Are they a lost cause as they try to turn things around . Also, outrage in the skies. Delta revamping its frequent Flyer Program to award points based on how much money you spend, not how many miles you fl fly. Well discuss whether that will be a good or bad thing for deltas business. Stay with us. Well be right back. You make a great team. Its been that way since the day you met. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. 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If you havent heard, delta is making a huge change to its frequent Flyer Program. Flyers are watching to see if it sparks a similar move by rivals. Bertha coombs telling us, they call it delta sky miles. They should call it sky dollars now. They really should. If youre not a high flyer, it could be harder to rack up miles next year because delta is looking to reward its big ticket, higher margin Business Class travelers. In 2015 sky Miles Program will be based just on the price of the ticket excluding taxes. Already this year cheating medallion status with perks like early boarding is calculated based on the price of the ticket and mileage flown. In 2015 the status will be determined by how many miles you earn. Even for road warrior like George Clooneys character in up in the air, flying coach will mean fewer miles. If you buy a 950 coach ticket from new york to San Francisco today, diamond status earns you about 11,600 miles. Next year, it would only be about 10 stsht,400. But step up to a 3,000 Business Class ticket, and next year that same flight will earn you 33,000 miles. Delta is aiming to make it pay for the Business Class flyer to buy up. Deltas stock, well, trading at an alltime high today. Seems some folks think this could pay off handsomely. And as you said, rivals will keep an eye on this as well. See if it sticks. We want to see what it means for deltas stock. Lets bring it down with ben and joe. It is great to see you both. Joe, you know the numbers here for the stock. What happens now . Yeah, we actually think the impact on the stock is going to be fairly minimal in terms of financial benefit to delta. We dont really see much. We think its more of an evident on their part to align the value of the sky mile with the dollars spent, and, you know, its pretty much in line with what weve seen from other airlines like southwest, jetblue, and virgin and we would expect american and united to follow at some point. We think it may give delta a benefit on the margin in their corporate business, but, again, if united and american match this, we really see very little benefit to delta. Ben, i dont know about you, i just logically speaking, i think this makes sense. If youre going to show commitment to a product, youre spending more dollars, just the fact that youd fly many more miles doesnt show that kind of commitment here. So from that standpoint, i think it makes sense and delta is just looking for a few more revenue dollars, right . I think its going to be interesting. What you have happen here is most people will earn less miles on more flights. That said, the people who are spending the big bucks are really going to come out ahead on this. Now, the other side is if youre flying to the west coast, you pretty much got to spend 1,000 for a coast to coast flight to really kind of get what you get today. So they may lose some people at the low end. Is that a risk . Yeah, its a risk. And people know how it works, they might push back, but i think until we see consumers show a different strategy than just booking a fare because its 2 cheaper, you know, i dont know that delta is going to see a whole bunch of people leave. Theres a big sorry, go ahead, ben. Theres a big reaction among the frequent flyer groups but its hard to say just how important they are to the airlines. The high spending people are definitely important. The people who are just racking up miles, it will be interesting to see how they react and what that means to delta. Its just so interesting. This is a cultural phenomenon. The whole idea of a frequent flyer and the ability of people maybe over time to build up enough travel that they could earn that trip somewhere, that indulgence, and now it appears as though this, joe, is blatantly moving in the direction of well let you kind of buy your way towards more of these rewards. Thats quite simply thats a very different kind of program fundamentally, isnt it . I think you may see some change at the bottom end of the frequent Flyer Program, but, again, i think the focus is going to be rewarding the higher spending traveler, and, again, thats what these delta, united, and american are focused on from a yield perspective given where load factors are. Theyre really using their yield Management Systems to try and fill as many seats with high paying passengers, and this is another initiative to support those efforts. All right. So if im a legacy carrier, im thinking about following as you said, joe, following delta in this whole thing, but what about the other side . If im a southwest, if im a jetblue or somebody, can i say, hey, you can still get frequent flyer miles with me just by flying those miles, not having to pay extra for that . Ben, what downe you think . Is there an opportunity for some other airlines to go the other direction and keep their programs the way they are. Southwest and Virgin America and jetblue already do what delta is moving closer towards. So in some respect, it makes them a little less different. If you were wedded to this mile idea, maybe you will stick with your youre less likely to stick with delta than maybe try jetblue which has flat bed seats coming for Cross Country flights. Im fascinated to see if united and american eventually match this or when they match it. American has their hands full with the merger. I think the one thing that might tell about how successful delta is with this, they have a new award chart coming up as part of this. They say theyre going to announce it in the Fourth Quarter. They have a bad track record of actually making Seats Available at reasonable amounts of miles. So if they improve that, that might mitigate some of the unhappiness with this, but theyll have to show me before i believe that. Their track record is not great in that area. I think speaking to the unhappiness among most people with the airlines, the onion nailed it when they i think it was last night they said American Airlines to phase out complimentary cabin pressurization. Thank you, guys. Thanks, gentlemen. Thank you. We want your reaction to deltas decision to award frequent flyer miles on the amount you spend. Send us your tweets and well get to your responses coming up later on the closing bell. Put the quarter in the slot and you get the face mask with the oxygen in there. Were getting word of a possible loan from the u. S. To ukraine. John harwood stepping in with that story. John, whats going on . Bill, secretary of state john kerry is just now doing a briefing with reporters, and weve seen one story come out of that which is that the United States is considering now that president yanukovych has left kiev, were awaiting the formation of a new government. Its going to be more prowestern than president yanukovychs, secretary of satae kerry says the u. S. Is considering a 1 billion Loan Guarantee to ukraine. No final decision made. The u. S. Is considering that. But one sign that the United States is going to try to help fill that power vacuum in a constructive way that will benefit the west as well. Bill . But, john, its a billion dollars. A billion dollars will do nothing in this situation. Well, i think it will do more than zero dollars would. I dont know how much a billion dollars can do. Thank you, john harwood. Good faith deposit or something. I dont know. Okay. Here we are heading towards the close. 30 minutes left in the trading session. The dow is up 19, but the s p is the one the traders all keep an eye on, and we are trying to come back here. Can we close at a new alltime high . Third day running when they tried to. Yesterday and monday they failed. Well see if they can do it today. Banking giant rbc reporting stronger earnings and hiking its dividend. Up next ceo gordon nixon tells us exclusively whats driving growth in the financial sector. And whats not driving growth. Vladimir putin ordering a test of russian battle readiness. Hes sending stocks lower. Former u. S. Defense secretary William Cohen will weigh in later on the closing bell. Stay tuned. [ male announcer ] here at optionsxpress, our clients really seem 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. 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For a time the s p was in alltime high territory again. But weve moved below that level of 1848 that was set in midjanuary for the s p 500, trying to come back right now. Still down a fraction at this hour and four points away from that alltime high. Lets check in with dominic chu for a roundup of todays movers. Its resistance for sure. Were running with slowing momentum. We begin with target. Its best day in 4 1 2 years after better than expected Fourth Quarter profits. Sturm ruger posting a loss. Blackstone is close to acquiring a 20 stake in versace. Plug power moving higher after receiving an order from walmart to power its electric lift truck fleets at six different north american distribution centers. And rbc, the stock is falling despite the bank raising its dividend by 6 . Lets get more on the Earnings Results moving shares of rbc today, shall we . Were joined by rbcs ceo gordon nixon. Gord, it is great to see you again. How many months left do you have on the job . How many day . Five months. Five months. All right. What happens in those five months do you think . How do we go from what has been a reasonably strong recent quarter for you guys to navigating some of the headwinds, especially as the Federal Reserve is cracking down on some of the capital foreign banks are holding . Yeah, well, the capital of the foreign ranks is not a significant issue from our standpoint because we actually have a very high capital base underpinning our u. S. Operations. One of the reasons for that is when we sold our bank in the u. S. , we maintained our capital levels down there. So while it does add a level of complexity to the way we operate in the u. S. And certainly a cost, in terms of our ongoing business, we remain in a pretty good position. All banks, and you guys are among them, face this issue right now. Were in sort of this awkward phase as rates start to rise. That slows the mortgage business, which is not helping. Its still not high enough to promote the savings business, which doesnt help. But youre finding growth now in the Wealth Management business. Thats where you see opportunities here, right . Yeah. Now, you know, canada is a little different, of course, than the u. S. Our Mortgage Market has been strong all the way through. While we are seeing a slowdown, you know, we view that as a good thing because we have seen a significant amount of leveraging by the consumer in canada, and while it is a slowdown, were still seeing mid single digit growth rates which isnt all that bad. And to some degree its been offset by pretty good growth in our deposit and investment side of our business. So, you know, overall, you know, business continues to be pretty good. Quarter after quarter we seem to be able to produce 6 , 7 , 8 growth rates, which in a low Interest Rate environment is nothing to complain about. And what about the personal and commercial banking business, one of the biggest segments of what you guys do. What kind of demand trends are you seeing . Well, again, theres clearly a slow down on the consumer side, but were coming off, you know, double digit growth rates, and were now moving into midsingle digit growth rates. Part half is intended. Our government has taken an approach to try to slow down Consumer Debt levels and its having an impact which i say is a good thing. When you look at loan demand on the commercial side, it remains very strong. As i say, investment demand, deposit demand has been very good. So when you look at the overall platform, it grew at 7 this year or this past quarter over quarter, and so its a slightly slower environment, but as i say not all that bad. I mean, we talk about the good quarter you just completed, but youve had a good year at rbc, but dont you feel like the easy money, to use that term, is done now . You guys are going to have to work a little harder to keep that growth rate going, dont you think . Yeah. I mean, we always, bill, think we work very hard to keep our growth rates going, and, you know, were in a similar environment really to what weve been in over the last couple of years. Canada is sort of kicking out somewhere around 2 to 3 growth, which has been slightly ahead of the u. S. And is currently slightly behind the u. S. So its a slow growth environment. We target to grow at a premium of about 25 to our domestic competitors in canada, and weve been able to produce that. And when you look at the growth of our business in the United States as an example where the economy is doing a little bit better, you know, our results down there have been very strong, and we continue to grow our market share. Were investing in the wealth business and the Capital Markets business. So, yeah, growth is hard to come by, but were certainly not giving up. We think we can continue to meet our 7 annual growth objectives, and we havent disappointed over the last couple years and hopefully we wont this year again. Most banks here would salivate over an 18 return on equity point but you did see that come down from 20 in the year prior. What is sustainable in the longer term . Our midterm objective is 18 plus which sounds high, but as i say, weve certainly been over that level over the last number of years. It is down a little bit this quarter, although its still, you know, on a sort of a normalized basis close to 19 . And ahead of our objective. Part of the reason is we have run our capital levels up to a higher level. Our common equity tier one ratio is at 9. 7 which is slightly ahead of our objective. We did increase our dividend again this quarter which i think is the seventh time in the last three years. And weve reinstituted our buyback program. So i think you will see, you know, hopefully if we continue to produce the results return on equity hopefully will creep up rather than creep down as we buy back shares and manage our capital levels. Wow. Again, something that most people on this side of the border would envy. Thank you, gord. Thanks, gord, very much. Great to see you. Appreciate it. Terrific to be with you. We have 20 minutes to go into the close. The dow is more positive. Were adding 22 points. The s p 500 is dtrying to stay boyfriend 1844. Theyll tease us once again. Everybody loves a comeback story, but hopes are flickering that the 112yearold retailer jcpenney can make a retailing rebound this time around. Earnings out in less than an hour. Courtney reagan has a preview for us coming up. And after the bell, obamacare so far has been a less than smashing success, but well talk to the ceo of ehealth which is making strides in enrollment that could help obamacare hit its goals. More with that in just a bit. 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. Jcpenney is due out just after the close with its latest quarterly results. With the stock down nearly 40 this year, is the street saying this company is a lost cause . Courtney reagan, what do you think . Are investors losing faith in their turnaround . I think that probably is the case. Jcpenney garners an outsized amount of attention every earning season for the past few years. The 12yearold Department Store has shed more than 16 billion in market cap since its 2007 peak sitting at just under 2 billion. T jx 25 times the markets cap. Macys is 11 times larger. Its no wonder wall street is losing faith in a turnaround. Jcpenney was already struggling when it brought in ron johnson, though his bold turnaround plan cost the retailer 50 stock price decline in the 17 months he was at the helm. Former ceo mike ullman returned to stem the bleeding but the stock has fallen a further 65 in ullmans tenmonth reign. Jcpenney says it closed 2013 with 2 billion in liquidity but some analysts are projecting they will burn through enough cash that it will need to raise enough capital at the end of the year. Jcpenney did preannounce sales. So what wall street is waiting for is how bad the quarterly loss and margin actually was and one of the most promotional quarters weve seen in recent history. The consensus is for a loss of 85 cents on revenues up 3. 85 billion. Well bring those numbers to you, bill, in just about 13 minutes. Well see what happens. Thanks, court, very much. Heading toward b way, this is probably a good time to mention im coanchoring the nightly Business Report on pbs. Thats why im sitting here and not with you. Bill, im not pleased about this, but i am pleased that well see more of you on the airwaves later at least. On pbs. Check your local lisings. Heading toward the close, 13 minutes left in the trading session. Look at that. Minus signs for the s p. Can we close above an alltime high at 1848 finally . Once and for all . Well see. Now, earlier we told you about the changes to deltas frequent Flyer Program. Its about how much youre willing to pay. Tweet us with your thoughts on this one cnbcclosingbell. And homes and cars spray painted with obscene messages about the 1 in one of the nations richest towns. Well discuss it coming up on the closing bell. 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Comcast nbcuniversal. Welcome back. Nine minutes left in the trading session. The dow is still higher but the s p is the one that traders watch and theyve been waiting for a new alltime high, yesterday, the day before it was close. No cigar and again today were four points below the alltime high set back in midjanuary. David nelson is back with me here. You know, you were with us last week when you highlighted that you had sold all your shares of facebook after that 19 billion acquisition of whatsapp. Jim cramer was with us this week, and he said he feels like theres too much froth in some of these Technology Stocks and thats got him worried. Are you concerned about that as well . Well, facebook was a case in point. You know, we sold because we thought at 19 billion, you know, we were discounting just too far in the future and there was no nothing said about monetization and when you see that kind of thing, there is a little froth. Hes looking at netflix and even outside technology, tesla which has been up, you know, an incredible amount in the last 650 or whatever it is in the last 14 months. That kind of froth he feels like doesnt take us all the way back to the late 90s but hes becoming a little concerned. Are you . Im not that concerned about the market. You know, this is a battleground were seeing right now, and, frankly, you have a lot of sellers at these levels, and a lot of people are stepping to the sidelines, institutional and retail, because they got their money back. They were down on the year and now theyre back to the break even line. I think we need another push higher and i think were going to get it. When we close at the alltime high, i think we actually have to get above the intraday high set back on monday. If we can do that, then i think that says something for the next leg high per. What takes us there . Im not sure. It will probably come from some announcement somewhere. I think we have to eat through this slowly but surely, eat through that supply. Theres a lot of reasons to like the market, but i will say, bill, i will agree with this, that the tide is not going to lift all boats and were seeing that right here, for example, today in telecom. You got a company like avgo hitting a 52week high yet their biggest customer, apple, is still struggling here and just not growing. Just having to be sect tiff in this market. I think you do, yes. Thanks, david. As always, see you later. Thank you. David nelson joining us. Were coming back with the closing countdown for this wednesday. After the bell, chaos continues in ukraine as former soviet republic tries to stabilize its new government. Russian president putin meanwhile is flexing some military muscle near the borders there. Well analyze the situation with former defense secretary William Cohen coming up. Stay with us. Youre watching cnbc, first in business worldwide. Up late. 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Allen, we got a chart that shows the trading pattern for the s p so far this year where it shows a higher open, generally speaking, and then a selloff in the afternoon, and, you know, weve talked in the past about how the afternoon tends to be the socalled smart money. What does this tell you right now . Here we go again. Were selling off again this afternoon. You know, we spoke about this last year, bill, and last year we were buying on the dips a lot of traders because we knew the fed was going to backstop it. This year not so quick. Theyre selling on the rallies and not buying on the dips. The dow is down 2 and the s p is basically flat. Right now light volume. Traders are staying on the back and theyre not get involved but theyre selling the rallies. You wonder how patient traders will be, bob pisani. A third time of failure to close above the alltime high. It would be nice to get above 1848 but the dow right now the s p right now is actually slightly positive. I do think its more interesting that the big market leaders, your gold stocks, your biotech stock, natural gas stocks that have led the market up are the ones that are down today, but the bottom line right now is the market is just shy of historic highs and just having a little trouble pushing through. By the way, a lot of people arent sure how much this whole issue with russia and this combat readiness for troops over in russia is impacting that. A lot of chatter about that. I was going to ask you about that, allen. Whats important right now . All this geopolitics, not just ukraine but venezuela and syria and all those things, is that a worry for this market . Is that why were seeing such reticence in the market or is it something snels. Its definitely a worry. Anytime anything affects oil prices it will worry traders here and weve seen oil spike up. That is on the back burner. We are watching that. Again, i think the volume is very light, which indicates theyre not really selling off. Its just that theyre not getting involved because theres so much uncertainty out there right now. Traders hate uncertainty. Bob, we wait for jcpenney. For the most part retailer earnings have been pretty good but well see what this one does. Look, if you look at what happened today, five companies essentially came out, big retailers came out and said 2014 guidance would be below expectations or at least on the flat side, and all of them are essentially trading up today. Bottom line is at least they know right now, analysts were negative going into that, at least they have a sense of whats going on, and the guidance while weaker wasnt as weak as feared. Thats why were trading up. Well see what happens. Thank you, allen. Thank you, bob. Well see you a little later. Were closing out the day. Doesnt look like well get that alltime high on the s p once again. What does that mean for tomorrow, and what about jcpenneys earnings. Theyre coming up on the second hour of the closing bell with kelly evans and company. Ill see you tomorrow, kel. Stocks posting modest gains but lets look at how were closing as weve been gyrating. The s p back and forth between positive and negative territory. Here is a look across the major indexes. The deep south aow adding 20 po 16,200, and the s p 1845. So we did manage a small positive but it is certainly not enough to take out the closing high of 1848 that people were watching so closely. The nasdaq adding almost five points, 4,292. Joining me now, nathan bachrach, carol roth, our own scott cohn and cnbc contributor herb greenberg. Also with us for more on these markets, fast money trader guy adami. Great to see all of you. Herb, lets talk about the markets today. We almost got there with a new alltime closing high for the s p but were not quite. So whats the story . Is it that were almost there or that we failed to hit it . I think what the prior guest said about uncertainty is what really what this market is about. But i have to tell you one thing here. You have a market that everyone i talked to talks about the way it is squeezed the short sellers, squeezed them in the indexes. Theres only one thing i say, when those short sellers are gone, and im sure more are gone today, if theres any, any bad news watch out . Yes. Were clearing maybe some of the brush. Its interesting people came into the year maybe expecting, herb, positioning for this to be a weaker market than it has been. We had one correction that was all of 7 , and if you blirnked, you missed it. Guy, what do you think . What does that tell you about the activity . Uncertainty, i have heard that word for five years. The market has tripled since 09. Whats going to happen when there is certainty . Will it go up ten fold . When theres certainly it all rings hollow to me. It comes down to and you probably have the most skeptical panel on since you started doing this show with me, herb, and carol, but i will say this, you have Earnings Growth, you had eps growth, 9 . Everybody is saying look at earnings, theyre great. Revenue growth of about 3 . The chasm between earnings and revenue is probably as wide as its been in quite some time. So, listen, price is truth. The markets hear. I get the whole thing but i have to be somewhat skeptical of thats levels to think its sustainable. Look, were going to get to jcpenney earnings in a moment with Courtney Reagan. It looks like their revenue line is a miss relative to expectations. But nathan is not i would imagine as skeptical on the market as some of the others guy just mentioned. Give us one good reason why. You know, that was not the question i thought i was going to get because im going to sit here and tell you we have a very big difference of opinion. Im the guy who is saying watch the bond market. If we started im sorry, are you saying you are skeptical . Yeah, im skeptical. Right on brother guy, you brought him over im cautiously optimistic. I am optimistic but im really cautious because when the bond traders say were going to take the tenyear treasury down to 2. 60 something and everybody is saying, no, were going to see 3. 5 , that would mean bonds are getting crushed. You have to shorten up the duration on your bond portfolio. Last time i looked, bonds are three times as big in the world market as stocks. I know stocks get all the attention but Pay Attention to the bond market. Everybody who is getting out of stocks and going into bonds two weeks ago, that didnt work out well at all. Scott, wrap us out here. I wont ask you for a view on the markets. I appreciate that. From your seat, you have the luxury of not having to be here in the middle of kind of the wall street every day. I kind of look at it from 30,000 feet, sometimes literally. It feels healthy. It feels healthy that we didnt take out that high. We keep trying and we dont. Theres skepticism there. Theres people that are nervous about this. This is where smart money is made. So this feels like theres something to build on, but like you said, the correction wasnt enough. We may have some more rocky spots down the road, but were building something. Are we ready with jcpenney results . Is courtney ready . Lets get over to Courtney Reagan who has got the numbers for us as we watch jcpenney shares very closely. Court, what can you tell us . It looks like right now for the earnings per share there was a loss of 68 cents for jcpenney but its better than the expected 85 cent loss that the street was expecting. If we look at the revenue, theyre posting a revenue of 3. 78 billion. That was a little light. The street had been expecting revenues of 3. 85 billion. We already knew the samestore sales for the quarter up 2 . The company told us that at the beginning of february. For the guidance for first quarter, jcpenney is guiding comps gross of 3 to 5 . Thats slightly below the latest consensus estimate we have of growth of 5. 7 , though mike you willman says a key focus is to improve the gross margin. Thats something that investors and analysts are very, very focused on as the company is dealing with heavy, heavy promotions. Its at what cost is that going to be to shareholders. Kelly . Great point, court. Thanks very much. We want to bring in analyst paul swinen. What jumps out to you. Hi, how are you . Great to see you. Hey, obviously were looking at the comps and were thinking about the liquidity. So although, you know, i havent had the chance to see the full release, if the comps go up and they can improve the margins a little bit, i think the liquidity will be all right, so i think thats positive for the stock. Yeah. We want to talk about that margin figure as well. How important is it that they can show some positive momentum . Well, again, in order to generate some positive cash flow, theyve got to get the margin up. Its been almost a little bit below 30 , but the historical is 38 , 39 . The e bit margin has a lot of attention because theyve taken so much cost out of the system. Again, courtney mentioned the revenues are a little light. Dont forget january was abysmal for macys so thats not surprising. Its and macys was spore givforg. What do you think about mike ullman . Does this buy him some time . It buys him some time but i think the reason ullman is in there is because theyre supposed to have 2 billion of liquidity. The whole point is ullman has to make sure the vendors dont lose confidence. You can go bankrupt with 2 billion on the books, but if the vendors have confidence, they have a lot of breathing room. Paul, thank you, sir. Appreciate your thoughts. Jcpenney shares appear to be moving higher after hours on that report. Guy, do you have any thoughts on this retailer . Relief rally is what it is. Once you lose customers in this business, its extraordinarily difficult to get them back. And i think thats what the comps are telling you. Can this stock rally up to 6. 5 and squeeze some shorts . Yes. But i think the trajectory and the ultimate end for this thing is a lot lower than were trading now. Its nott unlike whats going o at sears holding. It doesnt mean the stock is viable for the long term. Im sure herb can speak to that as well. Herb, what do you think . You know, i was actually paying attention to a stock here thats going to be moving in a few seconds so i was not sorry, herb. Youre supposed to Pay Attention, man come on, i hear whats going on ill jump in if you dont mind. I think jcpenney is suffering from a brand messaging problem which is translating into a Customer Loyalty problem. Obviously, a lot of damage was done when ron johnson came in, tried to make them hip and trendy and the reality is there is a bifurcation in the Retail Market as in the Broader Consumer market with the very value plays and the luxury brands, and anybody who is playing anywhere in the middle is really finding it very challenging, and i dont think jcpenney is going to come out of that brand messaging issue anytime soon. Just real quick and then ill move off this one, carol, isnt it the case with a retailer like this, we both know, all you have to do is offer someone enough of a coupon, enough of a discount thats not the right customer though. Thats not the customer you want. Yes, you get the onetime purchase, but what the retailers need are the repeat purchasers. The people going in and buying over and over again. On the short term, you can discount and get some movement in terms of comps, but that isnt a strategy that wins in the long term. The jc customer is not going to be like a 96,000 of annual income. I think you will see why is walmart slow and not sustaining growth . Because neither are their customers. Its a groeat point. We were talking about this move that delta has made to basically start compensating people with their miles. If you spend more instead of if you fly more. Isnt this the same kind of thing . Theyre chasing the business thats most profitable and theyre seeing that on the upper end of the income spectrum. You started this so here we go. I live in cincinnati. We were once a hub. We know what its like to no longer be a delta hub. It doesnt feel good. Delta never misses an opportunity to miss an opportunity. Lets take our best customers and just, there you go, fellows, how does that feel . What are the choices . Thats the issue is that the same thing is happening across all the other airlines with all the consolidation. Unfortunately, the customer is really the one getting screwed here. You sound like united flyers. United theyre limping along, too . Theyre the only ones who thought their miles were being devalued. Equality for all. Thats supposed to make me feel better, herb. Theyre chasing their best customers in terms of their best spending customers, but who are they leaving behind . Right. And also as full disclosure, im platinum on delta. Whoo whoo i just got demoted from platinum, so i got to start coming to new york a lot more. I dont feel good about this. I dont feel like im going to spend more money with them. It feels wrong. You cannot buy loyalty at the end of the day. Its the onetwo punch is also cincinnati is the most expensive delta routes in the country. Thank you very much, atlanta. That would be a good thing if youre willing to pony up now for all your flights. You will be double platinum by the end of the year. Can we talk to the producers. Exactly. Well get on that for you, nathan. Guy, last word to you. Its all good . I love listening to you guys bicker over there. Listen, i think its a nondescript market today. I think you have to test lower. This last 50 points in the s p has been on vapor. Im not a believer. All right. Well bring you back. Thoost, everybody. Be sure to catch more of guy coming up on fast money at 5 00 p. M. Just under an hours time. Will this market continue to try to make runs at record highs or is guy right . Investing legend john calamos is up next. Find out how hes putting his clients 25 billion in assets to work. Hear if his cautious optimism has turned more bullish or bearish. Also ahead, class warfare in the bay area taking an ugly turn. A wealthy San Francisco suburb waking up to guerilla Graffiti Campaign against the 1 . The fbi is investigating and robert frank has the latest developments coming up. Usual of whatting cn youre watching cnbc, first in business worldwide. Eration to g. 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. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back. Another run at an alltime closing high on the s p falls short. It was a gallant run but alas, just a little shy. Jcpenney headlining thing. Reported a narrow eer than expected will yexpect ed loss. Tesla is a bit lower in the after hours. The carmaker announced a 1. 6 billion convertible notes offering. That means bonds that can convert to stock at some point. In the regular session, first solar fell after reporting weaker than expected earnings and sales. Barnes noble returned to profitability in the first quarter. A strong day for middleby corporation. Better than expected Fourth Quarter results. Uti worldwide fell after they breached debt covenants. Thanks very much. The s p 500 as we mentioned flirted with a record close again today. It was a day of ups and downs across the board. So for just where this market is heading, i want to bring in investing legend john calamos now. Gate great to see you again. No one better to talk, right now dom just mentioned it, tesla is doing an offering of convertible notes. This is a Company Whose share price is over 200 from in the 30s at this time last year. So many people are wondering about overvaluation in the tech space. What is your read on all this . Well, you know, we remain cautiously optimistic in here. We do think its going to be a very bottom up picking type of market environment. Were going to see some volatility. I think the convertible issuance really talks to these companies that want access to capital. Theyre utilizing convertibles to Access Capital to grow. Well, do you think thats wise . Would you see this as an investment, you know, in tesla specifically that theres merit in . Yeah. I think so. We feel very strongly. Were optimistic about the convertible market and the increase in issuance. So we look at that as very favorable. Okay. And what about more broadly. When you hear people comparing the market today to the market of the late 90s to some of the tech price that is were seeing, the fact these companies arent profitable just yet s that a fair comparison or are we too quick to make that . You know, i think were a little quick to make that. Its still, you know, when you look at where we are in the Interest Rate environment and where we are in valuations, we dont think were excessive on the valuations. Yes, you can talk about a specific company, and it is very much going to be a bottom up type of market here, but we dont think overall that the market is too priced too optimistically here. Its probably fairly valued, and we look at Earnings Growth Going Forward to be favorable and especially Growth Equities here. So for those folks who worry the market is getting toppy, that weve tested the highs of the s p a couple times and failed, what would you say . How much further do you think stocks could rally here this year . Well, i think the market overall is probably going to be as were seeing this year back and forth, a bit more volatile. I think it finishes up the year, you know, up for the year, and i think its going to be, as i said earlier, more of a bottom up stock pickers market in this environment, but we still are positive on equities here, especially when you compare them to the bond market in here. So we remain positive on equities in here. What are some of those picks, those bottom picks, if you will . Well, i wont go through that. We have a lot of different strategies. I think some of the midcap growth areas look attractive to us. On the value side, were a bit more opportunistic on the value side, but, you know, i dont have specific names to give you today. Well, one last question, when you hear russian president Vladimir Putin saying hes going to mobilize troops in the western part of the country, when you see whats happening with ukraine and whether or not the u. S. May be offering some assistance here, how much do geopolitical concerns lead you to be more cautious in your investments, if at all at this juncture, or is it creating opportunity . Well, i think obviously the political environment around the world is very important to your overall Global Outlook and where you invest, so its pretty important. Its very difficult to predict, as we all know, but the Global Political environment goes from country to country, and thats surely something that you have to take into account in your macro factors, so its going to be a very selective market on a global basis. Sure. And it sounds like here as well. John, thank you so much. Appreciate your time this afternoon. Right. Thank you, kelly. Good to see you. Now, the 1 in the line of fire. Top swiss Bank Executives testifying on capitol hill today. Credit suisse accused of a senate panel of helping u. S. Citizens dodge billions in taxes. Well get details on that next. Plus, the wealthy San Francisco suburb waking up to some pretty ugly graffiti directed at the rich. Our wealth editor robert frank will get the latest developments when we come back. T much, you tk except its 2 percent every year. T much, you tk 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. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Welcome back. Credit suisse ceo brady gu began among the swiss banks top executives testifying at a senate panel in washington. John harwood has been following these proceedings, and john, how are they going . There were two distinct phases to this hearing today in the senate committee. One was the senators grilling bankers over the cloak and dagger methods they use to help 22,000 americans evade potentially millions in u. S. Taxes. Here is senator carl levin, the committee chair. The client was ushered in a remotely controlled elevator with no floor buttons and escorted to a bare room with white walls. The client opened the account after being told the bank did not require completion of the w9. Without that reform without that form, the account was not reported to u. S. Authorities. But the second part of the hearing involved senators grilling Justice Department officials over why they havent done more to get the names. They have only gotten 238 so far. Justice officials said they were constrained by the dictates of swiss law and john mccain said the swiss government wasnt helping either. Any real idea that the government of switzerland is cooperating with us is a joke, right . Now, the one common theme from both parts of the hearing was theres an unratified tax treaty between the United States and switzerland that would make it easier for Credit Suisse to turn over some of the names to use authorities and get the taxes collected. Reports say that that treaty is being held up on a hold by senator rand paul of kentucky. The question now is whether or not pressure from the publicity surrounding this will cause senator paul to relent. He hasnt so far, kelly. Wow. John, thank you. And this all, of course, comes amid other kinds of potential upheaval in the u. S. Tax system. Appreciate it. On the west coast meanwhile, police are investigating vulgar graffiti thats targeting the rich in a San Francisco suburb which is one of the wealthiest in california. Our wealth editor robert frank following this story. Robert . Were talking about atherton in california in silicon valley. One of the wealthiest towns in the country and its been tagged with antiwealth graffiti. Pictures shows fences, garage doors, and even cars have been spray parented with the same slogan, f the 1 . Police are telling residents to lock their doors and windows and keep their valuables secure. Police want to make sure that its not part of perhaps some more organized occupy wall street type of effort. Atherton is one of the richest towns in america. People like meg whitman, eric schmidt, and chuck schwab have all called it home. This incident suggests the antiwealth sentiment weve seen this San Francisco could be spreading to silicon valley. Back to you. All right, robert. Thanks. We want to get some reaction from the panel as well. You know, what do you guys make of it . I personally think that this is a result of the divisive leadership that weve had. And instead of putting out language that brings us together and says lets look up to the people who are Wealth Creators and helping to create jobs, its been vilifying them over years and years. This is the continued effect that were seeing here, and i think its really unfortunate, although i will say, kelly, its really interesting to me the one place we never see this in hollywood. Nobody is ever outraged that Jennifer Aniston gets multimillion dollar paydays for very mediocre movies. I think if youre going to put out this anti1 sentiment, lets put it out across the board. But my preference is we shouldnt be doing this. We should not be punishing the people who are creating the jobs. Give me a break, okay . The horror. You know, you dont condone vandalism, graffiti, and all of that, but lets take a look at the bottom 1 . They got more than just graffiti to worry about. Lets take a look at the bottom 25 . I mean, im sorry to see that their gates are getting spray painted and things like that and its not a good thing, but you cant ignore this. You cant ignore the fact that theres inequality out there and people are feeling disenfranchised. Do you think its at the expense i think thats the issue here, not that there isnt a problem. Its that its always focused on the wrong part of the problem. Youre focusing on the people who are Wealth Creators instead of focusing on the problem of poverty. People arent in poverty because of the Wealth Creators. I think those vandals probably are focusing on the problem of poverty in the only way they feel that they can. Criminal actions. Im not agreeing with what theyre doing, im just saying that to ignore them and to think that, oh, what horrible people because theyre lashing out at people that are richer than them ignores the problem. This is like trickle down theory but i think of two men in a mens club having a brandy going, you know, trickle down, if theres trickle down, thats because theres a darn leak. Im sorry, i really have nathan, what are you saying . What im saying is its hard to imagine the 1 are the job creators in this case. I just dont see how you can tie those two together. It is not theyre not look so you think Mark Zuckerberg is a job creator . No. No . All the people who work for Mark Zuckerberg, he is not a job creator . They have 15 people and they went in for 1 billion a person . What does that create . Its not the fault of these rich people exactly. That others are poor. You have to Pay Attention to this 99 or even less than that that feel disenfranchised. Robert . Guys, i think the important point is theres clearly an economic debate to be had here. Theres clearly a policy debate here to be had, but it should not involve illegal vandalism, and i think in a way this only gives credence to comments like when tom perkins said that the wealthy are being persecuted. Everyone made fun of him, but this sort of adds credence to that argument, and my point is just that, look, this is an economic argument. It should not be resorting to violence as we saw in San Francisco and vandalism as were seeing here. This is what the wealthy are really afraid about, and it has real consequences. Again, not to condone what happened, but these people are hardly being persecuted. 10 of the country but why should they be persecuted . Im not saying they should be. But robert and you are saying they are. Theyre not being persecuted. Theyre targets. Lets just you know, you could say persecuted, targets. This adds to the sense that the wealthy have become public targets of criticism and in this case vandalism and in the case of San Francisco some mild violence. And i just think this escalates the class war that were starting to see reemerge in this country and its not good. I think its not good for the wealthy who are productive job creators, not good for other people who are trying to lift up the bottom. We have to go. Nathan, quick last word. Walmart going up and nordstroms going down before youre going to see this thing end. That may yeah, look, it does sum up the attitude as to where the 1 are or are not the Wealth Creators. Guys, robert, thank you for now. Thanks. An important story. Over to dominic chu for a quick market flash. Kelly, lets talk about noodles and company. A hot ipo from last year getting hit hard. Porsing weaker than expected Fourth Quarter profits and sales. You can see that stock is down 15 in the after market trade. So a big year out of the gate but at least this time around down in the after market. Back over to you. Wow. 11 downward. I think an important point herb herb doesnt matter. Herbalife and herb. Remember, this is from last years class of jobs act ipos which were so many of the ipos from last year. They got out perhaps when they shouldnt have. This is a company that, you know, right out of the gate disappointed, and the stock had done well. You abo were seeing a number of these Companies Start to fade but thats a really important point. Are you sure its going to be because of the jobs act and not specific to no noodles and the Restaurant Industry as well. There were a number of restaurant stocks that went out, including potbelly. The jobs act took a lot of companies out. We saw the big class that people arent expected. It was an avalanche of ideas. Its great they were able to raise money but the big issue is noodles shows prematurely, thats the big question. Testing battle readiness. Russian president Vladimir Putin ordering military exercises near ukraine. It could be a sign of some saber rattling but it could also be cause for concern. Former defense secretary William Cohen speaks with me in a first on cnbc interview next. I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry, but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Welcome back. Well, the Olympic Games may be over for russia, but now potentially playing war games. Russias stock market slipping another 1. 5 after Vladimir Putin ordering the military to test battle readiness. Andree na mita mitchell joins m the latest. I had an exclusive intrervie with secretary john kerry talking about the fact putin has ordered military drills prompting a stirring warning from the secretary of state who said Vladimir Putin should take a look at the rapidity with which this movement took place in ukraine and think about his own country as well. It was a not very subtle warning. Take a look. Then i think russia needs to be very careful in the judgments that it makes Going Forward here. We are not looking for confrontation, but we are making it clear that every country should respect the territorial integrity here, the sovereignty of ukraine. Russia has said it will do that, and we think its important that russia keeps its word. Kerry also said that we do not believe this should be an east west, russia United States confrontati confrontation. This is not rocky 4, believe me, we dont want to see that. Rocky 4 in which the stallone chshg went to the stoformer sov union to fight the soviet boxer. Were talking about billions of dollars when you add it you will up a with the imf, but he said this is not meddling. He said this is what the United States does when its engaged with the ukraine and it always has been even though this, of course, is in russias backyard. Kelly . Adding a level of complexity for sure. Andrea, thank you so much. Joining me with analysis of this developing situation is former defense secretary William Cohen, now chairman and ceo of the cohen group. Good to see you. Great to be with you. What would you say about the situation. How serious is it . How far is putin willing to go . Situation is quite serious on the ground. You have this confrontation taking place and it needs to come under control. What secretary kerry was suggesting to president putin is calmness, that theres some chest beating taking place on the part ever president putin but he has to be careful because he will really squander any good will he generated at the olympics with the investment they made of some 50 billion or 60 billion will dissipate if he were to use military force to go into ukraine. The message is to president putin, its a serious situation, we need to Work Together. The United States and the European Union are not trying to take ukraine into its orbit at the expense of russia. We want to see ukraine thats independent, which it is, but peaceful and hopefully one day prosperous because right now its an economic basket case. And so we need to see russia cooperate with the eu and the United States to see if we cant stabilize the Economic Situation because basically thats really at the core of the countrys problems right now. It absolutely is. And i wonder what other end game there possibly could be here other than somebody, whether its the u. S. , a combination of international bodies, extending billions of dollars of aid to ukraine or if theres some other outcome that were not thinking about at the moment. Well, the United States, the imf, eu are all interested in providing economic assistance, but it has to be tied to economic reforms, and this has been the challenge in the past. Russia has moved in with its 15 billion aid proposal without any conditions. They just simply want to make sure that they continue to be a dominant force in the region and have moved in in that particular gap. And so what we have to insist upon is the ukrainian people have to decide for themselves what kind of a future do you want . One in which you can see the kind of prosperity thats been generated in free and open markets as opposed to what you have with high level corruption, capitalism thats gone amok in ukraine, kleptocracy, et cetera. We need to see what kind of reforms they as a people are prepared to make. Its going to take some time. Youre not going to change these institutions over night. Theyre too well entrenched. This is whats so interesting about the situation currently. Its the ukrainian people who are saying we want those things, its our leadership who is keeping us from getting them because theyre the ones who are turning to, for example, russia for aid instead of the European Union or the western communities. What do you do in a situation like this . Do you hope new elections lead toward a friendlier government to the west representative of what the ukrainian people want . What you have to have is a government thats united that doesnt try to extort or basically exploit i should say the ideological divisions within the country. A government that is inclusive, that seeks to unite the people, rather than divide along ideological lines, and say, look, we have an Economic Situation we need to address. We have to Work Together. That is in president putins interest as well. It is not in russias interest to have a country that is on the perpetual rocks of economic dissolution or bankruptcy with the kind of civil unrest that will develop from that. Its in russias interest to see a stable ukraine. Its in our interest to see a stable eukraine as well. Russia has to be persuaded, lets Work Together and not work and see this as a zero sum game where it ukraine expresses its preference to have a system of capitalism thats open and transparent and noncorrupt, thats not adverse to russias interest. It really will benefit russia ultimately. One final question, a remark earlier today was going around where one of the trading shops said the biggest risk in all of this is civil war in the ukraine. How likely of an outcome do you think that is . Well, one cant project that that will take place. Is it possible . Its possible. It should be unlikely as far as the rest of the world is concerned. We do not want to see a repetition of a civil war taking place in ukraine. That would be really bad for all of europe. It would be bad for russia. It will be bad for all of us. So we have to do whatever we can to make sure that doesnt take place, and that means cooperation. That means russia joining with the United States, the eu, working with imf and others. This is in his interests, meaning president putins, as well as ours. We have to avoid that at all costs. Mr. Secretary, thank you so much for your thoughts at this hour. Pleasure to be with you. Now, the struggles of obamacare to win over consumers in American Business have been well documented, but next well talk exclusively to the ceo of ehealth. Its making strides in enrollment that could help obamacare hit its goals. Let us know what you think. Weve been talking about this on the program. About deltas huge change to its frequent Flyer Program that will now be based not on frequent flying but how much youre willing to spend. Tweet us cnbcclosingbell. Your thoughts coming up at the end of the show. 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. Call or click to open your fidelity account today. Phone your account is already paid in full. Oh, well in that case, back to vacation mode. Boots and pants and boots and pants and boots and pants and boots and pants and boots and pants. Voiceenabled bill pay. Just a tap away on the geico app. Huh, 15 minutes could save you 15 or more on car insurance. Yup, Everybody Knows that. Well, did you know that some owls arent that wise. Dont forget about im having brunch with meagan tomorrow. Who . Seriously, you met her like three times. Who . Geico. Welcome back. Here is a look at by due. Shares rallying 8 . So by due moving higher. The company is posting better than expected Fourth Quarter profits and Fourth Quarter sales. The stock is up 8 right now. Whats more important with all the internet companies, chinese or otherwise, mobile is huge. Robin lee, the ceo of the company, said in the Fourth Quarter 20 of all total revenues were from mobile. So, again, a huge number on the revenue side for baidu shares. Ehealth is telling people here open for business. Last quarter 40 of ehealth enrolls were 18 to 34yearolds and that, of course, a key demographic that obamacare is trying to tap into. Here to break it down is ehealth ceo gary lauer. Thanks for having me. You are not necessary competed with the federal exchange. You are offering a different way for people to sign up for Health Insurance as long as they dont need a subsidy, is that correct . Today thats right. We were doing this long before the words exchange and Health Insurance were in the same sentence. Were simply an option. We expect when healthcare. Govs technology is stable, subsidy individuals will be able to use it. Youre saying its still not stable . Id say its not where they want it to be. We have support from the federal government to work with subsidy eligible people. We just need their technology to connect to ours. When this does, we can get more people enrolled like we did in the last quarter where we had so many young people come in which is the demographic everybody wants. Gary, i want to bring the panel in on this. It would seem to me if im the Obama Administration and i see a way of getting younger people to sigh un, wouldnt i want to take advantage of that . Is there any reason they shouldnt . Possibly the technology of it. And i think gary can speak to that. I think thats been part of the issue is, as you just said, the systems arent talking to one another. But it will be interesting to see if those numbers line up after a while. If the Obamacare Exchanges start to sign up those young invincibles that werent signing up initially and the numbers start to match up. Isnt the case what were seeing no matter how you look at Health Insurance, that he is no cheap date, theres no way other than the catastrophic, there is no way to go out on a saturday night with a Health Care Policy and not spend a lot of money. What i want to know, itch h to ask this question, when my daughter signed up, she didnt know that your exchange existed. She was stuck going to this one exchange where she gets no out of network coverage, just what she was offered under the Affordable Health care act. Does your exchange do anything differently in the programs offered there . Well, we can because in some cases we have got many more products than the Government Exchange has, a you will of which are compliant with obamacare. The message i have to your daughter and everybody else is just go online and see what choices there are. By the way, the reason we attract so many young people, this isnt new, we do everything online. Young people dont want to pick up the phone. Young people dont necessarily want to use some kind of a government site. Its fine if they do, but they warrant to do this on your hand phones, on their tablets. Thats what we do. Thats why we need, i think, entities like ours partnered very closely with the government to make this legislation work. Gary, just curious, is the selection of plans offered you must do comparisons. How does the selection on your site stack up to healthcare. Gov . Healthcare. Gov has subsidy eligible plans. We will have subsidy eligible plans, other plans that are not subsidy eligible but compliant with obamacare. For many people that may be a better option because theres a Wider Network or choice of bock ter doctors, hospitals, things of that nature. I urge people to investigate and learn a little bit about before they go ahead and simply make a decision. Gary, this is carol roth. I want to ask how you are reaching the folks that you are bringing in online. Is it through seo . I know the Obama Administration had those wonderful advertisements with the boys in the pajamas and the fuzzy kitties, but how are you out there reaching the millennials and the young invincibles as they call them . We really do it where they are, which is online. Yes, Search Engine optimization is something we do very well with. We do something called pay search, a Search Engine management. We have a lot of partners that bring perspective people to us. Opportunities like this to get the word out. Really its a list of things, but most importantly were very present online and thats where young people are. Well, herb, i guess do you have any other kids who are going through this process maybe . I just wonder if she can get off the plan shes on and look at his program and perhaps find a better plan now even though shes signed up. I wonder if they trust it more because it is not run by the government. Its not the government. Leasing along with the other stuff going on with it . Quick last word, gary . Ehealth. Com. Tell herbs daughter, please. Thank you for being here. Really appreciate it. The arctic blast is not cooling off our website. The hot list is coming up in ex. What do you think of deltas revamped frequent Flier Program . Tweet us your thoughts. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. [ chainsaw whirring ] humans sometimes life trips us up. Sometimes we trip ourselves up. And although the mistakes may seem to just keep coming at you, so do the solutions. Like multipolicy discounts from Liberty Mutual insurance. Save up to 10 just for combining your auto and home insurance. Call Liberty Mutual insurance at. [ thump ] to speak with an Insurance Expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. Personalized coverage and savings. All the things humans need to make our world a little less imperfect. Call. And ask about all the ways you could save. Liberty mutual insurance. Responsibility. Whats your policy . 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. Weve got more breaking news on jcpenney. This is actually a little bit of good news for jcpenney. Follow along with me if you can. We knew that the fcc had requested more information from jcpenney about how it finances its operations, including its liquidity as well as the Stock Offering it issued in september. We understand that the fcc is now no longer investigating jcpenney. The fwt worth office recommends no more action is taking. They must have been satisfied by about what jcpenney had to say. We should mention. Jcpenney shares are up about 10 afterhours after reporting a smaller than expected fourthquarter loss. The deep freeze, not cooling off the website. Allen wastler, joining us now. We got a jostle from the jcpenney news. But the barn burner today. Robert frank wrote up a piece about the richest neighborhoods in america. And its getting a concentration of wealth around d. C. It hit a spike alert for us today. I love these things. Its getting about 300 readers a minute. Number two, a writeup on the top and the bottom of the housing market. She is saying housing nirvana is right around the corner as it gets through inventory problems. Jeff cox wrote up a note that points out, they have this index. They call it the lobbying index, based on companies that spend the most in washington, d. C. That index has outperformed the s p for the last 15 years. Fascinating to look at. And it brings us back to Robert Franks d. C. Power concentration. Do you know, allen, by how much its outperformed . A lot or a little . It varies from year to year. 2012, 2013, 17 versus the s ps 4 , 5 change. It matters. Allen, thank you so much. Take care. All that stuff on cnbc. Com. You tweeted. Up next, theed thats on deltas frequent flyer problem on airfares instead of miles flown. Be right back. Isnt the only return im looking forward to. For some, every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. 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Tdd 18886282419 so you can take charge of your trading. Welcome back. Delta, making some changes to its frequent Flyer Program. The airline will awarding points on money spent, as opposed to miles flown. It hardly matters. Flyer programs have been rendered almost worthless because of consolidation and lack of seats. And john tweets, so, i guess delta is changing their destination from a loyalty to a royalty program. Maybe theyre going to have spray paint on the side of the planes. This is rewarding the 1 who can afford to spend more money. After first class. I dont know what im supposed to do. Am i supposed to plan my travel based on the most expensive ticket . People go to the least expensive option, typically, unless the company is paying. Yeah, exactly. Id get in trouble. Thats true. They give you a hard time if youre not within a certain band of the at least expensive flights. I dont like the structure. I think they could have done this to make it a base program plus an incentive bonus. It would have been the same thing but sounded different. This is an excellent p. R. Opportunity for delta. They can turn and say they listened to their customers. Cocacola classic. Fast money is coming up in a few minutes. Melissa lee joins us with a preview. Im going to do my best impression of a local news anchor. A stock entering the triangle of death. Details at 5 00. Thats what were going to talk about. Much respect. Fast money starts right now. At the nasdaq markets in times square. Tesla, announcing details of its new factory in the last hour. Well have more on that story coming up. Tonights top story. Why the consumer is not dead. Take a look at these stocks. Abercrombie, target, macys, rallying in todays session. Despite the weather, some out there are spending, karen. What do you make of the action . I thought it was pretty good. Theres a holdover from yesterday. Macys, target, the numbers werent great. But they werent so bad. And i