Transcripts For CNBC Closing Bell 20140425

The s p 500 after earnings confirm the Company Continues to bring in huge sums of money but has razorthin profits. Is the street sending a message here to Ceo Jeff Bezos that its time to turn the spigots on and make some real money . If theres trouble at home, is there trouble for the entire economy . Mortgage lending plunging, even though we have become the spring housing season and rates e re main historically low at about 4. 5 . If the housing recovery stalls, what does that mean about the broader economic recovery . Well have a special report later on the closing bell. In the markets, how were shaping up on the last trading session of the week, the Dow Jones Industrial average down triple digits, 147 points at this hour heading for the second down week in three weeks. The s p 500 right now in the red, declines of almost 2 , that was the nasdaq, 1 on the s p 500, the nasdaq behind the three, pressure on amazon and technology stocks. The nasdaq down 74 points p with an hour to go, tyler. Cathy joens, rich peterson from s p capital iq jim kahn from Wealth Management group, Ryan Jacobson from wells fargo advantage funds an our own rick santelli. Let me start with jim from wealth enhancement group. Is this a time for me to try and enhance my wealth or just protect it . Always a time to try and enhance your wealth. We think there are a lot of great opportunities right now so looking at emerging markets, the news is negative, negative, negative. The reality is russia is driving down valuations. All the scare stories out of china driving down valuations. Stocks are cheap in emerging markets and this might be a great opportunity to buy. Rich were looking at technology selloff again. Here we go again, social media, cloud competing stocks, biotechnology. Theres obviously still some room to run in this selloff of the momentum days. You know, given todays downturn were still only about two points away from being positive for the week. The s p 500, id say good earnings season. Financials worth about 3. 3 for the First Quarter numbers, revenue up about 3 . We have some great m a news. Obviously some of those are voicing concerning about the deal making, but year to date its been over a trillion dollars. Youre encouraged by that. Im encouraged because if it gets more deals, but its a sign of confidence. Companies have all this cash, 2 trillion of cash on their balance sheets. Theyre reluctant give it to the government in part. They want to make shareholders more valuable in terms of buybacks, in terms of dividend increases. The deal activity, which, you know, taking place for perhaps ge looking to buy alcots from france or zimmerman for 14 billion. Kathy, fixed income has been an interesting place so far this year. The yields have really come down from the start of the year but not by very much as we look today, i believe the tenyear was up a lit until price, down a little bit in yield to 2. 66 from a little above 2. 70 yesterday. What is the way for me to make money in fixed income over the next three to six months . Well, you know, weve had a good year so far on fixed income, particularly the long bond up about 10 year to date and even the ten year down from over 3 beginning of the year. So it hasnt been that hard so far. I think Going Forward what were concerned about is people getting a little bit out over their skis in terms of taking too much credit risk and so we think still sticking with core bonds, you know, investment grade, high quality bonds a s probably the best way to go. Because right now youre not seeing a lot of great valuation and high yield as other sectors of the market. Brian, your interpretations so far. Halfway through earnings season right now, and it looks like if you add up all the companies we are managing to eke out some profit growth, earnings per share, and that was better than the expectation of negative growth. What sort of significant nams are you getting out of earnings on the broader economy and is it good enough to carry the stock market higher . I dont think that the earnings that were seeing right now are going to be enough to propel us that much higher in the equity markets. It is better than what the expectations were. The expectation was to have a slight contraction of earnings but now that were beating it, my big concern is the longer term outlook for growth. I think it will be difficult to see doubledigit growth rates in earnings, which is whats currently implied by various consensus estimates going into the end of the year. I think that were actually going to see almost a transition in the markets away from what i would refer to as little orphan annie stock where is theyre based on the sun will come out tomorrow, some high expectation about longterm growth as opposed to more into the daddy warbucks stocks, Higher Quality and more growth oriented. There is a transition going from speck laive to quality stocks right now. Rick, explain the week weve just gone through from from where you sit and what are you looking forward to or not looking forward to next week . I know that weather and geopolitics are always huge crutches for market movement. Im a chicago cub fan. I understand the excuses. But if we really take a step back and look at the landscape, flat stocks, lower Interest Rates has been in the stencil for 2014 long before crimea, march 16th, referendum, and i understand these issues are not good issues. But in terms of true market impact, you know, when they change margin on gold, tyler, usually get a whole lot more than a 10 range. I think our guests said it adequately. If you bought the long bond which is about ready to trade under 344, which means the lowest yield since june, youve had a great year. Ten years youve had a pretty good year, fives are basically unchanged on the year. Lets keep it simple. I heard another guest say when it comes to risk were getting a little over our skis. Janet yellin, are you listening . The plan is for everybody to get over their skis and risk naps how they want to fix the system. So, yes, i think its going to continue to be exactly like its been the First Quarter and part of the second for the next several quarters in my opinion, and i think the most important number next week isnt the jobs number on friday. Its the week wednesday look at First Quarter gdp, make all the weather excuses you want. The highside whisperer is 1. 5 . Which actually, rick, comes out on the same day that the Federal Reserve comes out with its statement, kathy, on the fixedincome mark. Rick said here we are making new lows for treasury yields. The yen is rally, gold is ral rallying. The ukraine Political Risk situation or something more worrisome about the u. S. Economy . I think you have a combination of things. First quarter was slower than expected. Globally Economic Growth is slower than expected. Weve got declining monetary indicators in europe and japan. Even in china now. So theres a lot going into it. Slow growth, very low inflation, got talk of Central Banks starting to ease in other countries. Its going to be a slow grind for a while even though we think the economy stars to pick up in the next quarter theres a long way to go from here. You know, jim, today selloff has been pretty worldwide frankly, asia, germany, and a lot of it, according to folks weve been talking to, including cash cas art cashin say its mostly tied into ukraine and concerns heading into the weekend about that hotspot. Do you agree . And how should i filter that particular Pressure Point as well as whats been going on in the middle east with the breakdown of the peace talks into my investing strategy . Yeah. Its really tough to sort of say because washington might invade the ukraine we should sell stocks in vietnam. Doesnt make a lot of sense. It raises the overall risk level for investors investing in emerging markets but ultimately if you believe in the emerging market story, if you believe that people in brazil are getting richer and therefore there will consume more electricity, theyll buy more goods from, you know, the walgreens of brazil, you want to own those stocks. Valuations today look very cheap. We subscribe to bob shulers research that basically says when valuations are cheap longterm expected returns are high. It doesnt matter whats happening in ukraine in the short term. You can even have an independent republic of donetsk and long term that wont impact the growth in vietnam or brazil. As a result, we like to take these types of opportunities as buying opportunities and not be scared to enter the market at great valuations. Folks, thank you very much for joining us this hour on the closing bell exchange. About 50 minutes left to go and the dow, the nasdaq, and the s p all in the red right now. The nasdaq off about 73, the dow by 141 and s p lower as well. And in the week on a down note, coming up, amazon hitting the skids big time despite better than expected earnings. Are investors finally pressuring jeff bezos to turn a bigger profit . Well hear the bull and the bear cases for this stock and whether you should buy this dip, keeping in mind amazon has lost over a fifth of its value just this year. And moving the other way, Royal Caribbean sailing upward, gaining more than 40 in stock market value over the past year. The companys ceo will speak with us exclusively next about how he has steered his companys stock around the industrys highprofile calamities. And well ask him about this crazy new feature on one of his ships. Are passengers really climbing into that little publ . That looks like fun. Id do that. Thats cool. Id do it too. Lets go. I think its debuting in china. Me and you, tyler. Well talk about that. Plus as we just mentioned, tensions mounting with russia over ukraine. Well bring you to up speed on the latest developments which could wreak havoc on the markets and your money. Heading into another tense weekend for geopolitics. Can you start tomorrow . Tomorrow were booked solid. We close on the house tomorrow. Tomorrow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. Csx. How tomorrow moves. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. Mfs. Are we still on for tomorrow . Tomorrow. Tomorrow is full of promise. We can come back tomorrrow. And we promise to keep it that way. Csx. How tomorrow moves. What a day. Cant wait til tomorrow. Man we know when parents and teachers work together. Woman our schools get stronger. Man as superintendent of public education, thats been Tom Torlaksons approach. Woman torlakson has supported legislation to guarantee spending decisions about our education tax dollars are made by parents, teachers and the local community. And not by sacramento politicians. And we need to keep that legislation on track. Man so tell Tom Torlakson to keep fighting for local control of School Funding decisions. It is a bit of a bumpy end to the week, bears watching, of course, the industrials off about 143 at 16,357, nasdaq down about 1. 8 . A lot of that has to do with amazon. Well talk more about that one later. Its off 75 points at 4,073, and the s p 5001,861, down 16 points or a littleless than 1 . Sarah . Utilities. The cruise line industry was no stranger to rocky headlines over the last year. Several reports of illness, outbreak on various ships and mechanical failures that left passengers powerless for days. You thought that took a toll on business, think again. Over the course of the past 52 weeks, Royal Caribbeans stock has sailed higher by 44 . With us now in an exclusive on cnbc is Royal Caribbeans chairman and ceo, richard feign. Welcome back. Nice to see you again. Thank you. Good to be here. It sounds like the First Quarter had some rough spots in it, you had to get more promotipr promotion promotional, but at the same time as you raised results yesterday you raised your forecast for the rest of the year. Does that mean youre not going to have to spend so much on promotions and discounting and that bookings are looking better . No. As you say, its really been a very good year. The timing between quarters has shifted but actually we keep raising our forecast because frankly were on a roll and things are looking pretty nice in our business. I want to ask you specifically about europe, because off nice chunk of business. I think about a quarter, maybe a lilt less of your capacity. Its ban struggle for some time, but yields actually turned higher. What sort of opportunity do you see in europe . Well, as you say, its very interesting because the European Market has been suffering much more than the just market. And really starring in the Third Quarter of last year thats turned around. Were seeing tremendous growth. Were getting more volume and a doubledigit increases in price over last year. So were really looking at europe as an exciting time for us. How much more have you had to promote and put some hard numbers on it if you wouldnt mind, and then another thing that i noticed in one of the reports is that people seem to be spending less on board, on ship when they go cruising. Why is that and what does that reflect to you . Well, we are doing more promotion but only in one mark, the caribbean market, and there, although our volume is up by 13 , our prices are flat or down just a smidgen. So that market we are working harder at. Why is that . Hoo but thats more why is that . And thats a big market for you. Its a very big market for us. It consistently is a good market. And what does happen is we are a floating business so when that market is good as it has been, we brought ships back and probably grew it a little too much in the short term. But thats, again, the beauty of our business. We can shift that around. And when it comes to onboard revenue, actually weve been doing quite well there. Last year we had a 7. 6 increase in yield from our onboard revenue, and that year were looking at another good year of that because weve put so much focus on providing things that people want, and theyre enjoying it and buying more, so our business is up. How would you characterize the Public Perception right now . I mentioned some of the negative headlines with illness, the kos ka concordia, the fire. This clearly resonates and makes frontpage stories and images. What does it look like now . Have you managed to turn a corner . I think we really have shown first of all, i would say were doing a lot bet we are the public than we are with the media. So i think the media has a somewhat more negative perception. But most of the public are feeling better as time goes on, its better and better. I think we still have to do a better job of communicating all that cruising has, but the numbers are very powerful. The public is buying at higher prices and greater volumes so its clear that were overcoming any negative perception. The images are powerful, too, and obviously the media reflect pictures of people who have not had a great time on cruises. I realize thousands more have a wondertime with it. Lets talk about your move the china. How big a market is that likely to be for you . Youre going to second maybe your biggest ship over there i believe next year. Its a real exciting thing, and this is the first time anybodys made a move so aggressively into china. The result of this is that we will carry more mainland chinese out of china than the whole company carried in total when i first joined. Were going at it with our newest ship, a very exciting ship as you say, one of our biggest, and the market there is just enormous. Were just scratching the surface. Its fascinating to see how fast its grown because we started there and we were worried whether we would appeal to the chinese, but theres a very large and growing middle class and the result is its also one of our best markets today and i think lit absorb even this increase. You mentioned this new ship. It has this crazylooking bubble glass capsule coming out, 300 feet above the ocean. Ive never seen anything like this. Both tyler andry intrigued and ready to sign up. Where did you come up with this idea . Well, i think it is wonderful, and we were hoping for exactly that. I think one of the things im so proud of at Royal Caribbean is the innovation that our people feel empowered to try. And this is an exciting concept, this capsule will hold 16 people and as you say give 360degree moves. It moves 360 degrees way above the ship, way above the ocean. Thats the kind of ideas that you generate when you empower your people to say, yeah, lets try something new. And the response has been terrific. I have to say when you showed your teaser before, even the cameraman here said, wow, that looks cool. It does look cool. It looks a little different than probably the cruise industry looked when you joined in 1979. Some amazing change. Of all the places, mr. Fain, youve cruised, whats your favorite . Wow. Well, you know, i have four children and i love them equally and we have 41 ships and i love them all equally. Im not picking favorites. Thats a good one. Isle take it. Thats fine. Mr. Fain, thank you very much, and continued smooth sailing to you. Thanks for having me. Weve got about 39 minutes left before the closing bell. Lets take a look at the dow, off 141, nasdaq down by 71, and there you see the dow and the s p is limping to the close as well, sarah. Its been an earnings story this entire week. Guess what, were about halfway there. It has been an enlightening earnings season so far. Coming up, we tally what weve seen and then the big names that have yet to record. And u. S. Tensions escalating with russia over ukraine. How far will russias president Vladimir Putin take the already tense situation . All stations come over to mission a for a final go. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Make a my financial priorities appointment today. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Have a look at markets here because we are still in the redheading into the close. The Dow Jones Industrial average down 140 points, off the very lows of the session but still looking at a down close and a down week, the second down week for the dow in the three. The nasdaq composite bearing the brunt of the selling. The tech heavy index is getting hit hard. Amazon is the worst decliner in the s p 500. Nasdaq down almost 2 and s p 500, tyler, down about 0. 896 . One of the reasons for that decline is tensions with russia and its actions around ukraine. Taking a serious toll on the markets today. John harwood has the latest developments. Hi, john. Hi, tyler. The situation is only getting worse. Just a few days after we thought we had some sort of an accord between the United States, europe, russia, weve seen russia provocatively placing troops near the ukrainian border, kiev saying they may blockade some prorussian troublemakers in towns in Eastern Ukraine, and president obama saying he has teed up additional sanctions but hasnt moved forward on those sanctions yet in part because of disagreements among european allies to who fear their own economic fallout. Heres the president on his visit to south korea today. Theres some variation inside of europe. That is as much of an issue as it is any differences between our assessments and theirs. What weve been trying to do is to continually raise the costs for russia of their actions while still leaving the possibility of them moving in a different direction. Now, the end game here, and i dont think were quite there yet, is going to be sanctions not just on individuals close to Vladimir Putin but entire sectors of the russian economy, most specifically energy. The questions going to be as a former National Security official in the Clinton Administration told me, is when the United States and europe say to russia you can either make trouble in ukraine, destabilize that country, or you can have a growing economy, but you cant have both. Guys . Its an interesting question and strategy the u. S. Is pursuing. John, stay with us because we want to dig deeper now into into where all of this may be heading, what impact it could have on the markets. Joining us is a russian analyst with ihs global insight. You heard john welcome, first of all. You heard john just say that the ultimate end game maybe in terms of the United States approach to moscow on this is you can either have a growing economy or you can make trouble in ukraine. Do you see it that way . And how do you think moscow will decide that question . Well, ive seen that already the sanctions are having impact. Of course russian president Vladimir Putin has brushed this aside, said that they can cope with any sanctions, and to be honest so far the sanctions have been relatively mild. But even so we have seen the s p has downgraded russias credit rating, and it seems that it is having some impact. However, i have to say that president putin has almost drove himself into a coroner in the sense that hes portrayed himself as a defender of russian speakers outside of russia. And if thing s escalate in Eastern Ukraine, southern ukraine, if there are further violent clashes, if the Ukrainian Military moves into this troubled region and tries to disarm the socalled rebels, then putin will have no choice really but to react in some way. And if he does and if there is a military intervention into ukraine, Eastern Ukraine and southern ukraine, then we will see a further deterioration. Then we will see serious sanctions being implemented by both u. S. And e. U. It just seems like, i mean, to lilets point, john, mild sanctions. It seems like there are a lot of threats, but the administration and the european allies have been so reluctant to really go tougher and to go further on this, and it doesnt seem like Vladimir Putin has been backing off. So whats it going to take to get us to that point of as you say the more damaging sanctions . I think everybody is monitoring whether or not russia actually does invade Eastern Ukraine in a real military way, not just sending troublemakers to make difficulty in those towns. You know, the challenge, obviously, sara, is that, yes, the United States and europe can make russia poorer with much heavier sanctions that weve done so far that would have consequences far beyond an s p downgrade. The problem is thats going to make europe poorer, too, and when will they be willing to accept that consequence in the larger goal of trying to impose some stability on the situation . Lilet, let me turn to that downgrade which you and john have mentioned. Does the s p downgrade in any way pinch moscow in any really serious way . I gather moscow is not a huge borrower. No, but the issue is not about the shortterm impact here. And i think we have to focus the mediumterm impact on russia. And the damage has already been done in some ways. The many investors who have been attracted to russia, operational problems, corruption and so forth, but they knew that its a relatively stable country with predictable policies. Now its quite different. Capital flight indicates once they leave its very difficult to draw them back again and i think in medium term russia will feel the pinch, russia will feel that the borrowing costs are going up for some of its companies that have been actually heavily borrowing in europe and u. S. I dont think that its, you know, just because short term they could weather this issue, thee sanctions. They can sort of within a couple of years completely forget about the ukrainian crisis, which seems to go on at the moment and the tensions are really high. Its really difficult to see how its going to deescalate. John, just to bring it back to the u. S. Markets and the selloff were seeing to end the weekend, you hear traders are talking about protecting themselves from any event risk over the weekend. What exactly is going to play out in diplomatic talks over the weekend . I think everybodys going to keep monitoring the situation. The United States is going to keep calling on russia to try to live up to the terms of the bargain that john kerry and Sergey Lavrov struck last week in geneva in their talks. I do think lilet is right, the in a substantive way, the medium term is whats important. The problem is because of the uncertainty and anxiousness of places like United States markets, theres more pressure for this to be resolved quickly and thats what the administration has to cope with in deciding whether to move faster and much further in the sanctions front. All right, john, lilet, thank you very much for that. With about 30 minutes left before the closing bell, the dow is off by about 123 points. 123 points. Nasdaq off about 70 or thereabouts. And the s p by about 14. Amazon is still dropping big time on wall street. Easily the worst performer on the nasdaq 100 today. Its also the worst performer on the s p 500. Well check in for the latest on this stock. 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In fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. Im monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. Call or click to open your fidelity account today. There you see the dow industrials up about 127, the nasdaq down by 69 points and really Holding Steady at that level. And the s p 500 is off by about 14 points at this hour as we wrap up a rocky friday, sarah. Were going to zero in on the nasdaq because it is also wiping out gains for the week, its being hit especially hard. Sima has been there most of the day. Clobbered today despite we were sitting on the panel yesterday and we thought there were better results at least on revenues. Absolutely. Analysts say it wasnt a bad quarter, revenue up 23 year over year, earnings in line, but guidance not Strong Enough to support the high multiple amazon is trading at. Valuation definitely a factor here taking a look at amazon. Other multiple highGrowth Stocks under pressure today. Thats whats contributing to the nasdaq trading lower and underperforming the major indexeses. Two factors here earnings and rising tensions between russia and ukraine. Traders really watching that situation closely. The composite now has reversed its gains for the week, is down about a half a percent, but there are some standouts in the technology space. One of which is apple, one of the best performing stocks on this week thanks to earnings. Its enhanced Capital Allocation program. Thats really driving voracek interest. You can see shares of apple up better than 8 on the week. But overall for the nasdaq were down about a half a percent. Sarah and tooiler . Thank you very much, sima. On the flip side, the utility sector is a bright spot in todays selloff. Go ahead. I was going to say American Electric looking at the stock at a 52week high, one of the Largest Electric utilities in the country, up a little more than 1 after handling beating earnings estimates. With us to talk more about the quarter and his concerns about the National Power grid, nick akins, ceo of American Electric power. So, certainly your stock is joining in the rally of utilities today amid the Broader Market selloff but your earnings also came in better than wall street expected. You upped your guidance. I guess the cold weather, nick, helps some Companies Like yours. Thats right, sarah. The polar vortex certainly had a big impact on energy usage throughout the country and certainly we benefitted from that. How much did it help you . How much do you think demand went up because it was that much colder in your Principal Service area, which is middle west and well, all around the country but mostly middle west . It was substantial. As far as the increase is concerned, we were utilizing every bit of capacity we had available. And when you think about that period of time, our industrial, commercial usage, residential usage were all way up as a result of the weather. I want to ask you about some of the warnings that you had for our nations electrical grid for the power system, specifically cybersecurity, because thered been a lot written on this lace lathely, experts warning that the power grid is particularly vulnerable. Is it . Well, i think from a cyber secure perspective we have a great relationship with the federal government on that where were using tools that the government has in place and also focused on security clearances and the systems in place to not only ensure reliability of the grid from a resiliency standpoint but also a cyber secure effort to make sure were capturing those threats as theyve come in. And certainlycertainly weve beo do that. How many threats do you detect over the course of a month or year . You must have some number about people trying to pierce your system one way or the other, some of them serious, some not. You have simple fishing xer siszs to other effort where is theyre try og get at equipment or systems. And typically from the fishing exercises you can have thousands, but certainly less so from those that are trying to encroach into information that we have relative to use of our assets. Where do the threats come from . Can you identify whether they are domestic . Are they international . Are they chinese, russia, what . Well, you know, a lot of it we dont talk about but obviously theres nationstates that are involved, theres other groups that are involved both internationally and domestically. And we watch for certain arias and certain countries where they come from. You talk about your relationship with the government and cyber security. What about in some of the Environmental Standards from the obama administration, especially with coalfired plants like you have . I know youve been closing a lot of those. How support sieve the federal government to you in these efforts . Well, certainly the mercury rules that came out previously had a dramatic impact on the grid, particularly as it relates to coalfired generation. Over 20 to 25 of the coalfired fleet in this country will be retired by mid2015. And were thinking of the Green House Gas rules that are coming out in june of this year. It remains to be seen how much of an impact thats going to have on a further standpoint. Also we had 89 of the generation capacity slated for retirement that was actually running during this polar vortex period. So its a dramatic impact. All right. Something to watch Going Forward. Thanks for joining us on these federal results. Nick akins, the ceo of American Electric power. Here we are about 20 minutes until closing bell. The dow, s p, and nasdaq still in the red but off the session lows but still down 132 points. Up next, time flies when youre making money. Earnings season about halfway over. About twothirds of the S P Companies that have report sod far have beaten street estimates. Thats a good thing. We preview the biggest names yet to report and the names that could move the market big time. And ron insanas latest market commentary is going gangbusters on our market right now. He was short the market and now he isnt. Hes pretty much taking a bath today. Why he reversed course and whether he might be a contrarian indicator himself. Can you start tomorrow . Tomorrow were booked solid. We close on the house tomorrow. Tomorrow we go live. Its a day full of promise. And often, that day arrives by train. Big day today . Even bigger one tomorrow. Csx. How tomorrow moves. [ dog barks ] [ male announcer ] imagine the cars we drive. Being able to see so clearly. To respond so intelligently and so quickly, they can help protect us from a world of unseen danger. Its the stuff of science fiction. Minus the fiction. And it is mercedesbenz. Today. See your authorized dealer for exceptional offers through mercedesbenz financial services. See your authorized dealer for exceptional offers all stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. First day of my life by bright eyes youre not just looking for a house. Youre looking for a place for your life to happen. announcer scottrade knows our and invest their own way. With scottrades smart text, i can quickly understand my charts, and spend more time trading. Their quick trade bar lets my account follow me online so i can react in realtime. Plus, my local scottrade office is there to help. Because they know i dont trade like everybody. I trade like me. Im with scottrade. announcer scottrade. Voted best Investment Services company. Utilities up, most other stocks down. Nasdaq down by 67 and the s p 500, sarah, down by about 14 points. And earnings season actually hitting the Halfway Point after a very busy week. Dominic chew has followed every single release. He has a scorecard. The. If results so far, 240 companies have reported results and so far its ban good season. 68 beat, just 11 have matched estimates and 1 out of every 5 have missed analyst estimates. Generally speaking a good earnings season so far albeit on lowered expectations for those earnings. Remember, we are only expecting about 1 Earnings Growth for these largecap companies. If you take a look at next week, we have another busy week but not as busy as this one. 120 companies in the s p will report. Not all of them are on this list here, but we have some highlights of some of the bigger names you want to Pay Attention to. Monday you have herbalife and norwegian cruise line, you just spoke with caribbean, so another indicator. The drugmakers come out later in the week as well. Merck, glaxosmithkline, some big names there, also twitter. Remember all of these internet 2. 0 social media stocks are really taking it on the chin today so twitter could be an interesting report on tuesday. Now you move down the line here on thursday, the big energy companies, conocophillips, exxonmobil, linkedin and mastercard as well. Then you get cbs care, ron on friday. Heavy slate. This is just scratching the surface because of course we have another slew of Companies Even beyond this week that are going to report. You think other big names. Remember tesla reports later on this season, as does whole foods, nike, a favorite of yours, sarah, of course, disney, cisco, pfizer, hp among the big names that have yet to report and will not do so until after this coming week. So tyler, some very, very big names to Pay Attention to but certainly ones for next week, 120 companies in the s p 500. Back to you. Right in the thick of it with about 13 minutes to go before the closing bell. Dow, the nasdaq, and the s p all comfortable at their levels right now. But they are lower. Sarah . Plus, fancy stores on Beverly Hills rodeo drive could catch a cold if chinese consumers sneeze. Jane wells with an interesting story in the next hour of the show. Dont touch that remote. [ male announcer ] when fixed income experts. Work with equity experts. Who work with regional experts. Who work with Portfolio Management experts, thats when expertise happens. Mfs. Because there is no expertise without collaboration. The dow is down about 118 points at this hour, nasdaq and s p also lower. Back with us to talk markets and more, katcathy joens from charl schwab. Warren myers, where is the money going and where is it flowing from . Well, we seem to have money coming out a lot of the smallcap names. Theyve been very weak. As weve talked about last few weeks the momentum names have been losing quite a bit of money and quite a bit is going into the utilities and some energy names. I think its a bit of a defensive play in this higher volatility market we seem to be in right now. Kathy, speaking of money flowing one place to the other, i know you have your eye on the fixedincome market. Do treasuries receive money flowing in from capital flight say out of russia, one of the major reasons Standard Poors downgraded russia today . I think theres been capital flight from probably much of Eastern Europe into the u. S. Treasury market. You know, whenever you get these geopolitical jitters youre going to see treasuries bounce. Keep in mind, too, that its not just jitters. Sanctions arent good for anybody. Its not good for world trade. Its not good for local growth. Sanctions just arent a good thing for Economic Growth. Warren, what do you expect the next week or two to look like . More of the same . More volatility . More defensiveness . Or might people get their appetite back for risk . I think, you know, we start off this earnings season with a very weak jpmorgan number but the following banks that came out were strong and i think that gave us a little bit of positive feel going go sbing the rest of the earnings season. Weve had had a mixed bag on some of the tech names which a lot of people have been looking at. I think its the individual earnings that will drive this market so youll continue to see quite a bit of volatility and i think pretty much what you see this week is what youll see next week. The difference next week, kathy, is well get advanced look at gdp, the Federal Reserve statement, and well get a jobs number on friday. I just got a note, half a percentage point on gdp. 0. 5 our economy grew in the First Quarter. I think expectations are pretty low for the First Quarter. Somewhere around 1 to 1. 5 is kind of where the consensus is. I think people will dismiss a lot of it as weather. Theyll say oh its the weather and move on to Second Quarter numbers. But the jobs number will be important and what the fed says will be important as well. Warren, lets look at a chart of nasdaq. I know your position down there at the new york stock exchange. But this is the qqq, indicating whats known as a head and shoulders training pattern. What does this suggest to you if anything . And obviously the big question is whether were going to continue to move lower. Well, you know, if its a traditional head and shoulders and youre on the right shoulder you wouldnt anticipate a market sell off from here. I cant tell you how low im not a technician so im not going to tell you how low i think well go, but typical head and shoulders chart would show you you have a little Downside Movement still ahead of you. This does feel very different than last year, kathy, just got a note from the markets team at cn cnbc. Weve been wavering between gains and losses in stocks in a way we have not seen since 2006. In other words, up week, down week, up week, down week. This is the volatility of the new world that were in. Yeah. And i think a lot of its driven, you know, not just by the geoPolitical Risk but the fact that the fed is tapering. So were starting to get to a point where the excess liquidity is going to be coming out of the markets. And what happens is riskier sectors of the fixed income markets tend to decline when you see that liquidity decline. So emerging markets, some of, you know, the highneed area, all of that depends on this sort of easy money flow. And if that money flow is turning the other way, then those sectors of the market arent going to do as well. All right, kathy. Warren. Thanks very much. Have a nice weekend. Up next, well come right back with the closing countdown. Then after the bell, ron insana will be here to explain why he thinks the correction has run its course. His commentary why he is no longer short the stock market. Absolutely lighting up our website right now. Cnbc. Com. Check it out and tune in to ron for the next hour. [ banker ] sydney needed some Financial Guidance so she could take her dream to the next level. So we talked about her options. Her valuable assets were staying. And selling her car wouldnt fly. We helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today. And tomorrow. So lets see what we can do about that. Remodel. Motorcycle. [ female announcer ] some questions take more than a bank. They take a banker. Make a my financial priorities appointment today. Because when people talk, great things happen. Make a my financial priorities appointment today. For what reality teaches you. Firsthand. E. In the face of danger, and under the most demanding circumstances. Experience builds character. Experience builds confidence. And experience. Has built this. The 2014 glk. The engineering, and the experience, of mercedesbenz. See your authorized dealer for exceptional offers through mercedesbenz financial services. Became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Last market check as we head down to the closing bell. Time now for our closing countdown with bob pisani. Bob, sum up the day and the week for us. Bob . No bob well, then, sarah, why dont you sum no. Its been a really very busy week with all the earnings that have come in. I guess the highlight of the week have been some of those tech earnings and today, sarah, it is a lot over at nasdaq has revolved around amazon, a topic well ak tack until greater detail in the next hour. Yeah. Youre watching the technology shares, bearing the brunt of the selling today. Amazon has to be at the top of your list, going the other way of what we saw out of apple. Interesting to see amazon having a rough day, down more than 8 . Tyler, havent seen that kind of decline for amazon since the last earnings report. It has heavily sold off its recent high. One of the interesting things, what is the market saying to jeff bezos and are they telling him enough already . Lets start churning out some profits . Youve got this huge revenue base. Show me the money. Show me the money. Bob pisani has apparently checked in. Im here. You have no idea how glad i am youre here. Sum up the day and the week for us. Earnings have been coming in sort of normal in terms of historical perspective. The companies that are beating, you know, 70 , about normal. The big growth name was amazon and not really beating but their guidance isnt very good. Thats the part of the market thats really falling apart and without that kind of oomph to the momentum names, the market looks very weak in certain sectors. Thats the issue Going Forward. I think the markets are going to do a little better in the next month or two because i think the gdp numbers will come in a little better. But right now its growth names showing the problems. You know, a lot of the bigger theres been a rotation into some of the bigger blue chip names, obviously the utilities this week and today especially. Yep. But some of the largecap companies, those seem to be the ones that still have sort of a little bit more value in their prices. Thats a very good point. So if the economy improves, tyler, in the next month, if we get 3 gdp, 3. 5 even that would be fantastic, in the Second Quarter, what does that mean . It means value stocks should outperform over Growth Stocks. Why do you pay up for these Growth Stocks . Why is amazon 174 times forward earnings because we dont have any growth anywhere, you pay a lot of money for whatever company has a little growth. But when the overall economy expands its better to buy value stocks over the Growth Stocks. Thats a big argument why some of those oldschool tech names, for example, have been getting looked at in the last couple of weeks. Tuesday we had hose deals coming in in the pharmaceutical sector, valiant, allergan proposal. We can expect more deal making as we move ahead for the Second Quarter for the rest of year, given stock prices, given the amount of Cash Companies have and their dee sire to put it to work in ways they think ultimately will create some value for shareholders. Bob pisani, thanks very much as well roll into the closing bell here and wrap up the week with a loss of about 139 points or thereabouts for the Dow Jones Industrials. Sarah . Welcome back. Im tyler mathisen. Bill griffeth will be around on monday too. Lets look how were finishing this down day on wall street with the dow industrials off about 138 points. 16,362. Nasdaq off 72 points. That in percentage terms the biggest loss against those major indexes off about 1. 75 . The s p 500 down about fourfifths of a percent at 1,863 and change. Yep. And the dow, s p, and nasdaq heading for a down week right now. It looks like theyve just closed lower. Lets bring in todays panel. Cnbc contributors howard dean and ron moody join us. Morgan bren nonand robert frank back with you in headquarters. And back for more on todays market coverage is bob pisani. First of all, i want to go to howard dean, who has just informed me that hes just returned from ukraine and that is certainly top of mind when it comes to the action today, spooking some of the traders. Saw a flight to quality. Its going to be a spooky time and anybody with money in russia will have a rough ride. I think putin will probably invade. I think the sanctions i think obama will put the full Bank Sanctions that irans got on them and i think thats going to give russians a very rough economic ride. Thats a scary scenario. It is a scary scenario. Talking about a u. S. Tough response with the full sort of sanctions as theyre known, targeting sectors. I think the biggest target will be the banking sector. Thats what brought the iranians to the bargaining territory. When you cant do business with any bank who does business with the United States, you really cant do business with anybody. That forces the europeans hand. Doesnt matter what the europeans do. Theres two scenarios here, one that russia simply wants a destablesed ukraine in order to prop up putins numbers and its not in their economic interest to really take over the eastern part of the country. And once the elections are over in may things will die countdown. Do you really believe they want to annex the Eastern Ukraine . What is in that for the russians other than putins sort of momentary popularity . Heres what they want. What they want to do is not have te lecavaliers on may 25th or they want to fix the elections so one of his stooges is back in there like yanukovych was. The problem is i think the ukrainians are going to have elections on may 25th and putin is making it more and more difficult for anybody the Eastern Ukraine to get to vote. So its almost certain that somebody who putin is not going to like is going to win the election on may 25th. Once that happens then its very clear that the message for the maidan is if you dont work with europe, well get rid of you. This is a rough one. Its not in putins best interests. He knows that. Hes put himself between a rock and a hard place. Lets turn to steve grasso, fast money trader. You heard governor dean talking about the sort of foreboding situation in ukraine. How big a calculation is it in what youre doing with your money these days . Has to be a huge calculation. Just look at yesterday. We had every reason to focus on apple. We had every reason to be positive about the market. And they ran with a couple of headlines on ukraine, and thats what sent the market lower. Tyler, the Biggest Issue is were caught in this trading range. Where are the new buyers coming from . You have hedge funds that are basically trailing their averages already. Mutual funds are going to get hurt if we go lower. They have very little dry powder. Theres not a lot of people that are left to invest at these levels. I agree with steve, by the way. The real problem i think the Trading Community has is its not clear what kind of Chain Reaction this could set off. In theory, the ukraine is a small country and not terribly important to the Global Economic environment but the law of unintended consequences is very big here and nobodys sure of where its going to go. I think thats the problem. Howard, if your scenario plays out, which it certainly is a scary one to ponder, that would affect american business. I mean, there are multinationals that have put money into russia, they have a huge presence in russia as one of the brick nations, the Oil Companies and it actually wont affect american business. It will affect some of the Oil Companies. There are a few Oil Companies that have gotten out. What i think is going to happen first of all, i think bo bob was talking before, started on the previous show, this being a different market, nasdaq has a bubble but people are moving to value stocks. I still think the market is strong. I and we should note in one of your careers one was on wall street. My first one was on wall street for a couple years. Thats true. But i think you know, that russias serious, we only do 40 billion worth of trade in russia each year. Europe does 400 billion. This will have a much bigger effect on europe than the United States. Governor, why would europe go along with what you describe as really punitive iranlike sanctions . Because the core of the postwar era is not to change borders because of ethnicity or nationality. Putin is the first person to seriously violate that. He did it in georgia seasoned now is doing it in ukraine. If this were to become a pattern, youd have problems between the hungarians and the romanians, problems all over the place, maybe the next step is estonia. Theres a city right on the border thats 97 russian. This is a serious problem not because ukraine is a big deal, because europe is showing right now they dont want to really punish russia. Theyre not backing us to the extent that were putting on sanctions. Germany especially to your point, governor, doesnt want to go there. Right. Theyre worried about the Economic Impact. The Economic Impact is enormous on russia. Looking at the u. S. Impact here. Right. Part of reason the markets are spooked by the situation in ukraine is because the u. S. Economic story is simply not compelling enough. Where is the catalyst going to come for more growth . There were numbers released today that were overlooked but that were really important that showed the two sectors that contributed the most to growth in 2013, nondurable manufacturing, and the Information Services sector only created 14,000 jobs. Thats less than 1 of the 2. 2 million jobs created last year so youre not necessarily seeing growth match up with job creation and thats a sign of fundamental problems within the economy. Look at this. Everyone is talking about bubble stocks and everyones talking about if you scale out of those and you go to risk off stocks, those arent the stocks you guys report on, get the retail voracek, the watchers of this show excited about investing in the marketplace. Its the teslas, the netflix, the hyper stocks, the twitters, all those names people want to tune in and see. They dont like the shift from risk off into stocks they think are quasisafe, those old tech names. So unfortunately perception is reality. If those bubble stocks continue to fade, the s p continues to fade as well. I want to ask morgan about that. You have been on the west coast, following some of these momentum stocks and the rotation out of them. Yes. What are you hearing from analysts about whether theres more room to run in this trade . Amazon is a great example of this because we still see Something Like threequarters of all analysts are still really strong on amazon, yet we saw amazon down almost 9 today. Almost all the stocks i cover from the west coast pandora, netflix, linkedin, twitter, facebook some reported this week and some beat the street, still down today anywhere from 5 to 16 depending on those names. I want to go back to russia for a minute because we cannot have that discussion without talking about visa, which also just reported earnings and actually had comments to say about russia, spoefkly that their transaction volumes were hurt by sanctions in russia and theyre expecting the Revenue Growth to be hindered this quarter because of russia. And the same will happen with american express. Absolutely. They cant do the credit cards if the banking sanctions are tough. Why does the s p have to go down if the big broke names go down . I argued before if we get 3 , 3. 5 growth in the gdp in the Second Quarter global stocks. Thats what i mean. If we get 3. 5 growth in the gdp, for example, a lot of names are going to be seeing topline growth of some kind. Why wouldnt that help sustain market . Those are the names people have established pogs in a lot of these names that are the safer names, the value stocks so, they dont increase their holdings, theyre allocated enough. When theyre trying to beat the market you have to outdo the market. The market needs beta so you need those high fliers to perform so you can outperform the overall there are times when the value outperforms growth notably. Im very happy, by the way, that governor dean remembers when it was named Master Charge because i remember when it was Master Charge and bank americard, not visa. Atlantic, not verizon. Thats right. Or tat t. Right. Question for anybody on the panel. Look, theres a ton of cash around, investments have to be made, Interest Rates are really low, the gdp is reasonably strong. Yes, we have a trouble spot but its only 40 billion worth of trade which isnt much. Why isnt this market very healthy . It seems to me like it isnt. Were just having a rotation out of high p e stocks to more stable ones. It is healthy. Were 2 off the historic highs. I dont think that gdp is very good for the First Quarter at all. Im hoping were going to get 3 . Im talking because im optim t optimistic but i dont make any guarantees that thats going to happen. But the stock market overall is holding up very well. You need either a selloff, drastic selloff, to feel like people are getting a bargain or a breakthrough on the s p 500 to take on more risk. Fwheer month mans land in the market. Thanks, everybody. A good discussion of all the themes shaping up in the market today. Be sure to stick around and catch more of steve grasso and the rest of the fast money crew coming up 5 00 p. M. First on the closing bell, a huge bear lately but ron insana just wrote on cnbc. Com hes no longer shorting stocks. He seems to have changed his mind. A little early perhaps based on todays action . But the piece is heating up the web. Well talk to ron to get his thinking on why he has changed his mind. Also amazon ringing up nearly 20 billion in sales in just the last quarter, but it managed just 100 million in profit and that is why amazon took a big hit today. Will this wake up the ceo, jeff bez bezos . I think hes awake but might he turn on the spigot to make some money and turn from revenue focus to profit focus . Day, we g. Treat you. Care for you. Today, you can come to Cleveland Clinic for anything, everything or just to get that thing checked out. Big, small, and yes, the best heart care in the nation. Its here everyday, for everyone. Thats the power the power, thats the power of today. Cleveland clinic. Call today, for an appointment today. Well, up until very recently he was calling for major correction. Today despite the losses we saw in stocks, cnbc contributor ron insana is backing off that call and hes now no longer short the market. Ron, how are you feeling today . I feel wonderful. Thanks for asking. Listen, i just think that, you know, having reviewed what happened and having the index shorts that i had on against the portfolio of long stocks over the last week and a half, the shorts were hurting me more on up days than they were helping me on down days. So that market was starting to they will me something, that it wanted to go up. Today is mostly russia so im not going to back away welcome to the life of the short seller. Story for years. And this was a shortterm column. People are confusing this with a secular call. I am a secular bull. I think this goes on for years to come. Youve been saying that. So we had a 10 correction in the nasdaq, a 30 correction in momentum stocks. To a certain extent that satisfies some of the criteria but not all. Your short was a hedge. Right . As i explained that to you on air several weeks ago, of course it was a hedge. I wasnt about to go net short forever. Were not on the cusp of a bear market in any way, shape, or form. What i liked about your piece youre the only one. You went into detail on what are the conditions. One is you still have fed support as opposed to rising Interest Rates, which you oaf had in the past. And also relatively speaking the stocks are not really expensive, especially going back to 2000. Certainly against Interest Rates and inflation. Both of those things were also true two months ago. So is it really that the market sort of fell by 10 or did Something Else fundamentally change . The nasdaq fell by 10 roughly, the others fell 20 to 30 if you were in high tech, biotech, other momentum names. Again, this was much more of a shortterm trading call. You know, i still expect this year may be choppy and very sloppy. But at the moment it appears that you can make more money long than you can by hedging is that because of the fed really . Is that the bottom line for you . Part of whats been said that ive heard of late is that we are on the cusp of a bear market where stock market returns will be subpar for years and that were in a technology bubble, which i dont happen to believe. You know, we were frothy, the froth has been worked off so, i think the markets gone through a rotational correction thats to a certain extent satisfactory and if you want to be long a select group of stocks it makes sense to be that way. The hedges were costing me money so i decided to go with the prevailing direction in the market than try to fight it as hard as it was. Ron, i have a question for you. I was teasing you that you were a contra indicator. It was just a joke. I read that online all day long as well. Well, people are very interested in your column today. My question is what is the fundamental reason, though . Because when you look at how the economy is shaping up right now, its disappointing, as elan was just showing. Were not getting the kind of breakout growth we need. Were not getting this 3 gdp. As a result, were not getting much earnings for us either. Yes, beating expectations, but expectations were low to begin with. If its earnings and the economy that drives the stock market, what has you feeling so confident . For one, again, i have been confident since march of 2009, actually before when i was off the air away from cnbc for a period of time, i started arguing in november of 2008 with my former employer that we were reaching a bottom in the stock market. I still think that bottoms in place. I still think theres a secular bull market. This was much more of a trading call. The fed is not raising rates until sometime in 2016 at the earliest is my best guest if you look at janet yellins preconditions for making a move. Earnings are fine, particularly looking at some stocks that have delivered well in excess of not produced expectations but lofty expectations. But you still have an economy in the private sector probably growing closer to 2 to 2. 5 and last year grew over 3 and i dont think its nearly as weak as people would suggest. I still think the fundamental prerequisites for a bull market are there. People are misinterpreting what i said either several weeks ago when i was looking for correction or now when ive backed away from that as being some major call. I guess one of my concerns would be, you know, a lot of people have been hoping for a big turn, an improving economy in the Second Quarter and a turn in corporate profits. Because while they havent been dismal, they certainly have not been great. Theyve been sort of 1 , 2 , but there have been some standouts and some losers. But man theres a lot of money hoping for a strong, you know, second half of the year in terms of corporate profits. You can beat all the estimates you want. In the last analysis, in the last analysis, its what is the corporate profit going to be. Its growing enough i think to satisfy the current valuation. Again, im looking at relative valuations really for the first time in my career. Most often, and there are those who argue that absolute valuations are the only meaningful metric. They are when inflation and Interest Rates are rising or when war is imminent and you can have a disruption in a bear market. Right now relative valuations at 19 times earnings give or take against zero Interest Rates and 0. 9 inflation is actually a fair key for the market. If that were to change you would have to change your point of view on the market. But its not changing anytime soon. Your comments about the fed that you mentioned earlier, you said that you felt that janet yellin wouldnt raise Interest Rates until 2016 or later and you organize argued in your pace she wouldnt until we hit a natural rate of unemployment. But she said something different, shell keep Interest Rates low perhaps for longer, maybe until weve reached nehru, but that she would probably start the Interest Rate increase sooner than that. John williams, San Francisco fed president , has argued raising rates at 6 unemployment. You just said nehru on tv. Used to have one of those shirts. So the maximum level of employment that the economy can take. Right. But if Interest Rates lies at 6 unemployment as some fed officials are suggesting, does that change your outlook for stocks . Well, first we have to get there and second i think janet yellin is suggesting that nehru is 5. 2 to 5. 6 and inflation also has to be above the 2 target for rates to start moving higher. Thats my interpretation of what theyre saying at the fed in the yellin camp. So i would be disinclined to believe that 6 is going to be the trigger for higher rates from the fed. Morgan, do you want to jump in with a question . Quick question. We were talking about tech and valuations and weve seen the momentum stocks. Im wondering when we talk about valuation, stocks being cheap compared to Interest Rates, et cetera, im wondering your thoughts on tech because youre arguing against a bubble. Yes, we did. This looks nothing like certainly in comparison to the 1990s it is not remotely similar. Theres no public participation. This does not meet the prerequisites of a bubble in the classic sense, whether Charles Kindleberger is defining it, charles or nehru. Or nehru for that matter. You have overvaluation, you have frothiness but also m a activity retiring stock, money being returned to shareholders, even in the tech sector. I dont think this is anything like the 1990s. Its a little frothy but cnbc not all bubbles look alike. But if theyre not well, you have to a bubble is a bubble. It has to meet certain criteria. It might be a mini bubble. Its not a big bubble, historic bubble. Quick break, folks. Thanks very much. Amazon, the biggest percentage loser on the nasdaq 100 today after another quarter of razorslim margins. Up next, well discuss whether investors are sending a message to Ceo Jeff Bezos that its time to stop concentrating on sales at the bottom lines expense and flip the switch. To the cash printing press. Huge question today. Also existing home sales have fallen for three straight months. Is the Housing Market stalling . And is it stalling the rest of the economy . 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. Call or click to open your fidelity account today. A lot of red on wall street today. Dominic chu here to round up todays movers. How about good news first. Theres the hospital operators lifepoint earnings in line with estimates but made positive comments on Health Insurance enrollments. Universal health also up on earnings. That helped push Tenet Health Care to be the best performing stock in the s p 500 up around 8 to 9 . Now, the second worst performing stock in the largecap s p 500 is masco after reporting earnings that fell short of expectations. The maker of delta faucets to baer pains said the wintry weather and slow Housing Starts hurt results. Momentum stocks have taken a hit today, the internet 2. 0, social mediatype stocks. Yelp, trulla, open table, twitter finishing near session lows. Weep cap things off with the biggest loser in the s p 500 today, thats internet retailing giant amazon. Com falling after forecasting flat sales in the Current Quarter and a possible loss, a loss of as much as 455 million. The move now puts amazon shares down about 25 just in 2014 alone. Tyler, sarah, back over to you guys. All right, dom. Brutal day for amazon. Even though shareholders might not be too happy with the stock right now, our next guest says, tyler, do not beagainst amazon. With us is Colleen Taylor from tech crunch. Colleen, what is the market not seeing that you see today in amazon . I think if you look at the way that amazon has been behaving recently, if you were to evaluate in the same way that you would evaluate a lot of other companies, i can understand why investors might be skeptical. But we have to look at amazon in the context of the Tech Industry and also in terms of how amazon as a company is unique and how its historically operated. The Tech Industry is a time of a lot of competition right now. Amazon has done fantastically well and there are a lot of companies right now that want to eat its lunch. And so what amazon is doing is its taking its revenue and instead of stockpiling that cash its reinvesting it. Its coming up with new products, being very experimental right now. Its investing in r d and hopefully going to be better in the long term. Its going to continue to keep its edge. But i wonder if theres a limit to that spending. I mean, it is getting into businesses. I get that its a disrupter. It gets in and dominates and totally changes the business. Now were hearing reports its getting into devices like smartphones that its getting into its own shipping system. Capital intensive, really costly kind of products, and i wonder if investors will have the patience for it. I think that that is probably what were seeing from these investors. When amazon comes out with kind of whimsical new products like the dash, its this wand that you can take around your home and look at products and reorder them, but i think that these are just showing that amazon is being really creative right now. Were not sure how much money theyre investing into these new products, these oneoff things. I think its just being experiment experimental. What weve seen many the past is a string of hits from amazon from previously experimental products. Amazon web services is the cloud competing infrastructure leader right now. And that started off as sort of an experimental product. I think that a lot of things that amazon has come out and dominated with, you know, the kindle, all of these things have started as sort of experiments. And i would not bet against amazon. I think anyone who betted against amazon in the mid90s when they thought that profits were the most important thing at that time, they were wrong. Wrong. Howard . How much do you think this is jeff bezos not his ignoring shareholders but this is a guy who thinks long term not short term and doesnt treat his company as if its a shortterm company that has to make earnings . Hes building an enormous company thats caple of crushing many of his competitors. Do you think this is just great business and hes because hes thinking in the long term . Howard, i absolutely agree with you. I think long term is the focus here. And i think a lot of investors on wall street, they think quarter by quarter and they want to see dividends if they can. They want to get a check back every quarter. Heres what i dont understand. I dont understand the mind of a shareholder that was in this stock until today and suddenly realized that jeff bezos doesnt care about quarterly earnings. Hes been saying it for over you know, 17 years, we know what quarter in and quarter out. How is this today surprising to any shareholder who says im selling this stock . Ill tell you. Ive been following the earnings. Two big points. Weve seen the growth in its core business declining, the growth of its core business slowly declining for the last two years. We saw it again in the earnings last night. The second thing is there is a Tipping Point for just how much investment theyre putting these sort of tentacles that theyre reaching out with new businesses. Were seeing it this quarter. Operating loss is projected to be 55 million to 455 million. Thats why are pulling out. Just to go back to a point made earlier in the show, the last time we saw amazon falling like this it was almost 11 down the day after its last earnings where we saw similar results. So i think are catching on that theres a trend here. I would much rather be a share holder in amazon than one in a company will ever compete against amazon. Weve seen that. Ali baba, potentially. Weve got to wrap it up there. Good point. Thanks, colleen, for joining us. Colleen taylor at tech crunch panel. Stocks selling off in part on increasing tensions between russia and ukraine. But will new sanctions on russian president Vladimir Putin really be enough to make him change course . Youll hear from David Gregory of meet the press later. And theres a red flag for rodeo drive. Why Beverly Hills may be coming too reliant on chinese tourism dollars. Well tell you about that later. Ameriprise asked people a simple question can you keep your lifestyle in retirement . 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. 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. Vladimir putin continues to threaten ukraine. The white house continues to threaten sanctions. And the market obviously feeling threatened today with the dow closing the day down triple digits to end the week, tyler. Meet the press moderator David Gregory following the story from washington and he joins us now. David, welcome. Good to have you with us. Thanks, tyler. Weve had governor howard dean on this hour just back from ukraine. He said among other things that he thinks putin will eventually invade ukraine and that will mean that the u. S. Will have to lead the way on a real, real ratchetting up of sanctions that will really bite against putin. Is that the sense that youre getting in washington . Yeah. I think were certainly headed in that direction. I think theres also a concern in the administration about what Vladimir Putin is concluding based on whats happened over the past couple of weeks. After crimea, he still has all those troops on the border with ukraine, and hes had them there with impunity. Hes been threatening. There have been the incursions. Youve got these guys that dress in black masks and all the that sort of thing, moving forward and intimidating this part of Eastern Ukraine and really nothing has happened. So now the west has to think about ratchetting that up. Theres been some troop movement, part of nato and baltic states. I think putin is thinking what can i do to destabilize ukraine . Because he doesnt want to come together and get its act together and move toward the west. And hes being able to do that with impunity. I think the administration wants to wrap up economic sanctions but they have to have europe on board as well. Thats the big question, i think. How do you make sure europe is with you so youre not just hurting American Companies in addition to dealing a blow to russias economy. Well, david, thats the question. As these Leaders Debate the next step and the strategy forward with russia, what were seeing is the russian economy is starting to feel the pain, Standard Poors taking down the credit rating, worried about capita flight. You get back to this question of where is the pressure going to come from, from the markets and the economy or from the politicians . Well, i think its going to have to come from the economy. I mean, i think thats whooo whats going to have to clarify putins mind. All this talk about an off ramp, hes obviously won some concessions here already. I think what the president s focused on, because this is not a huge strategic interest for the United States, is to try to avoid going toe to toe with putin. I mean, this is a guy whos, you know, posed with his shirt off in all these various settings. Thats what he wants is this kind of greater russia return. I think the president wants to avoid all of that and just get putin to sort of declare victory and then stand down and then they can start negotiating whatever the new reality is like in ukraine. Lets talk about two other stories. In todays New York Times a story about how the president did not achieve a trade deal with ya ja pan that he hoped to achieve and this week, david, and your guests this week with can talk about this. I know you have tony blair on. It looks like its stacking up here for the next couple years as the president rounds out his term that Foreign Affairs are going to be a much bigger part of his on his plate than they were over the past four, five, six years. Thats right. Usually the case and has been the case in the last presidency. And if you think about it, the president s considering how to draw down troops in afghanistan, what that looks like at the end of the year. Tony blair is very provocative saying, look, the west is kind of coming home but the middle east is roiling. And radical islam is on the rise, irans influence is even more dangerous. You have a new potentially failed state in syria. So all of these things are coming up at a time when the west, meaning the United States and other western countries, dont want to be committing great deals of not only forces but dont want to be engaged in the middle east and thats a great danger. So the Israeli Palestinian Peace Process falling apart was not doing very well anyway. But blair makes a point and so do others that the president does not want that disintegrating because without at least the shell of a Peace Process things can only get worse in the middle east. And thats what has to be a grave concern right now for the administration. All right. David, good to see you. Thanks. Be sure to tune in to nbcs meet the press this sunday morning. Hell be sitting down with the former british Prime Minister tony blair. Be sure to check your local listings for show times. Coming up on the closing bell, making a difference in china. Thats the mission right now. Aols brand chief will be joining us coming up. But mortgage lending is at a 14year low. That means people are not buying houses. Is this holding back a full recovery for the economy . Our panel will talk about that next. Really. So our business can be on at ts network for 175 dollars a month . Yup. All five of you for 175. Our clients need a lot of attention. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. 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Well, with mortgage lending falling to its lowest level in 14 years and other housing data continuing to lag, we want to know, is a full economic recovery in jeopardy because of housing . Lets bring in the panel to discuss this. Robert, do you have any perspectives on that . Yeah. I think really we are in two Housing Markets here and you can tell the broader story of the u. S. Economy. I mean, we just had numbers today from the hamptons showing that sales there, average sale price up 40 , average number of deals up 52 . So clearly when you dont need a mortgage and when you have the cash, there is a huge amount of confidence in the broader Real Estate Market right now. But i think the real issue is affordability and mortgages for the rest of the market. When affordability doesnt matter to you you can afford it and its no problem. The broader point is there is confidence in real estate as an ass asset class and the demand is there. I just think the affordability and the mortgages, thats the issue. So ive got a question about this one. I think theres got to be a fundamental change coming in the Housing Market because kids are getting out of school with 100,000, 200,000 worth of debt. How are these 30yearolds ever going to be able to buy a house ever if theyve got that kind of debt already from their school, Student Loans . Youve been looking at housing formation and this factors into that. Yeah. Janet yellin has pointed to this problem of young people not going out and starting their own careers, moving out of their parents homes, getting their own homes of their own, buying condos, elt xetra, as one of the Things Holding back the Housing Market. The other issue youre seeing is is rising Interest Rates as being a big issue as well. All those people who refinanced into a 3 loan, theyre not giving that up to get a 4. 5 loan to buy a new home nape ear not willing to give up their low rate so theyre finding a problem where folks are locked into their homes, not willing to buy a new one. When we saw this happen in the late 70s and early 80s, you saw for every 2 rise in Interest Rates household mobility decreased by 15 . So this is going to be an issue Going Forward in a rising rate environment. I think where the rubber hits the road is for about six months weve had an inventory issue and weve had especially among the builders, the big builders, publicly traded companies, weve had rising prices anticipating that the inventory shortage is going to catch up. And i think we could be in for a big surprise here as inventories starting to build, youre starting to see it creep up even at the very high end. And will these builders have to just back down on these higher prices and then will those stocks get killed . Jobs and income drive real estate in my experience. And when youve got flat incomes youve got rising Interest Rates, as the governor points out youve got mounting debt on the part of new household formers, youve got a pretty strong head wind in a lot of markets. But i think the good markets, the good neighborhoods, those will always be okay. I just wonder, it makes me wonder, maybe you can address this, elan, what the demand looks like because you would think there would be a lot of pentup demand from the cold winter. This is the spring selling season. I mean, it is a little unusual to see such a lack of buyers, i guess, the supportability issue is factoring in. Weve reached the point where the weather effect should have washed out by now. So that raises the question about, again, where is the catalyst for Economic Growth going to come from . A lot of folks have been pointing to the Housing Market. Manufacturing, Capital Expenditures are up. Thats true, but if housing were back to its post world war ii average in terms of resident shl investment, we would be seeing a 4 Economic Growth rate instead of the 2 , maybe 3 were lucky we get. Its a big piece. I used to cover housing at forbes magazine. My corner. So theres a couple things here. First of all, going back to that idea of a tale of two Housing Markets, you want to know where all that cash sitting on the sidelines for the stock market is going. Its going as a hedge against the stock market into real estate. Thats why youre seeing 100 million plus purchases, net worth buyers right now. The other things i would say is it was starring to decline for young adults before the recession. It accelerated exponentially. That doesnt seem to be turning around anytime soon. Thats the big question mark, where are these young adults and why arent they forming nor households . The answer is theres another housing boom going on and thats multifamily housing. Youre seeing people move into cities, especially young adults, and retirees, move into cities and multifamily, move into apartments. Thats why when you look at the new construction numbers, the new housing number, its such a big part compared to where it is historically is multifamily. And multifamily is moving into one home. Thats another part of that. Multigenerational family. Were going to leetch it there for now, folks. Thanks very much. Aol making big strides in video content delivery, streaming wars heat up. Up next, youll hear from aol brand sheaf susan lyne. She joins us exclusively to talk about the medium and a new deal that she has going to expand aol in china. Cars are driven by people. Theyre why we innovate. Theyre who we protect. Theyre why we make life less complicated. Its about people. We are volvo of sweden. Who would have thought masterthree cheese lasagna would go with chocolate cake and ceviche . The same guy who thought that small caps and bond funds would go with a merging markets. Its a masterpiece. Thanks. Clearly you are type e. You made it phil. Welcome home. Now whats our strategy with the fondue . Diversifying your portfolio . E trade gives you the tools and resources to get it right. Are you type e . Aol stock up to news on one of the top brands going global. Its aols womens leadership platform and its expansion is the companys biggest branch launch in china since the spinoff of time warner back in 2009. For more on this, lets bring in susan lyne, the ceo of aol brand group. Thanks for joining us, susan. Thanks for having me. Tell us a little more about makers. What exactly it is and why you choose this brand to enter china. So, makers aims to be the largest collection of womens stories anywhere. We now have many thousands of stories online. These are really about groundbreaking women, women who did something first in every area, whether its finance or politics or sports or entertainment. And our hope is that any girl out there will be able to find someone who feels like her, looks like her, has the same aspirations and will inspire her to be able to do great things herself. And i think that moving into china besides the fact that its a huge opportunity for us as a business, its also indicative of the fact that there is this growing i would say Global Movement of women. It knows no boundaries. Who are really trying to make sure that this next Generation Next generation of girls actually has every opportunity to enter the workforce and to do great things. You know, i dont think this is a product naturally aimed at me, but i like any product that reminds me of my favorite bourbon. But how difficult is it and do you anticipate any problems . It doesnt sound like this content would be the kind that would raise any concerns among the chinese leadership or the government there, but how tricky and difficult is it for an online enterprise like aol to get in there, to do business there smoothly, and to avoid any of the censorship or other issue that is might be worrisome . You know, we have a great partner, yang lan, who is often called the oprah of china. She has a website thats called her village that reaches 300 million women every month. Shes really a pro in this area, and she is shes actually one of our makers, and she helped us to put together a really great Advisory Group over there, and they helped us to choose the first ten chinese makers. So we launched yesterday with ten Chinese Women who are just phenomenal in their own rights, and i think that having yang lan as our partner is going to mean that we can do this the right way. Susan, so far what im hearing is this big collaboration when it comes to content and sort of launching this media platform. How does it make money . What are your revenue aspirations from this in china . So right now it is primarily advertising, and i think that is probably what it will be Going Forward. That is certainly the model we have used here in the states. We did launch our first conference for makers, brought together 500 women and some amazing makers like gloria stein steinem, sheryl sandberg, women who were able to inspire this group of women from about three dozen corporations across the United States. So there will be other Revenue Streams but advertising is the primary one. Advertising in china. Thanks for joining us on this launch. Its good to see you. Susan is the ceo of the aol brand group. Thank you. Coming up, it was once a bridle path for horses but now its one of the most exclusive shopping addresses in the world. 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But you might be surprised by who is doing an awful lot of that spending or maybe not, and, no, it is not our jane wells, though i think she can hold her own out there. Jane . Reporter oh, i do. Just get out of way. You know, 100 years ago this used to be a bridle path for horses but now its a luxury destination and as the city is going continuing to go through a makeover to bring in new stores, sales tax reetz are up over 10 , room rates at the Rodeo Drive Hotel is also up that amount. This city is increasingly dependent on chinese tourists. I saw one couple lumbering down the street bogged down with their bags. They bring in 60 of revenue on rodeo and they are no longer just day travelers. The younger ones are doing it on their own without going with major groups, theyre finding their way out and doing it personally, privately. Before it was chicago, new york, San Francisco, and were now finding that 15 of our volume is from australia. 15 . 15. Reporter Beverly Hills will throw a 100th Birthday Party this weekend with a massive cake. They forced me to sample it. Beverly hills is different because the retailers have really banded together and the city hall here is very receptive to their ideas to try to stay competitive, especially as luxury spending inside china is slowing down. We had a couple from australia what city are you from . Sydn sydney. Mandy drury if youre watching, back at you. Not just the chinese. It is fascinating to see the numbers. We have to get the panels reaction, especially roberts. Rod rodeo, its a street in Beverly Hills. Its been the overseas china consumer. All these Luxury Companies set up shops in china only to find out those customers are buying in seattle, miami, and new york. Thats where the future of luxury is. The slow down within china is not going to affect the money pouring into the u. S. But you know what might and i hate to bring this up but ive been telling you guys, the chinese currency has been slumping. Its at a 14month low right now and it continues to slide and that cuts into their buying power a little bit. It does and it doesnt. It also means more jobs in china. This is globalization, and this is not only great economically, its great politically because the more back and forth there is between china and the United States, the better were going to get along and the less likely it is theres some estimates one third of all luxury sales are by a chinese consumer, not so much in china, but overseas. Lets pivot to the markets next week. Well get a window on gdp but also a fed meeting and a jobs number on friday. I know youre going to be all over it. Im going to be all over all three of those things and also dont forget that on tuesday the Senate Banking committee is going to be voting on the nominees to join the feds board of governors. Stanley fisher and jay powell being potentially reconfirmed for another term. There will be a lot of action. Im expecting the meeting to be pretty quiet. The 10 billion taper going on as expected, but more action in gdp and jobs. Morgan, what are you watching . Twitter on tuesday, linkedin on thursday. We have more momentum in the momentum stocks. Now we just have to see which way. Robert . Im going to continue looking at, you know, Real Estate Market. Theres so much cash, as governor dean said thats out there, its not going into stocks, going into other places. All right. And i guess governor dean, youre watching the geopolitical im watching the ukraine. Folks, governor dean, you short of frightened me when you said you were pretty sure putin would invade. Well be watching that. Thanks to all of you. We appreciate you being with us this friday afternoon. And have a good weekend to you, tyler. Meanwhile, fast money coming up in just a few seconds. Melissa lee, whats on tap . Hey there, guys. Today we witness the crush of the internet stocks. We have the ceo of zillow who can talk about the spring selling season. Spencer. Over to you. Thanks, guys, fast money starts now. Live from the Nasdaq Market site in new york citys times square. Pete na jair jjariannajarian, s josh brown. The nasdaq the biggest loser closing down 1. 75 . Internet stocks getting burned. Amazon down nearly 10 after last nights disappointing conference call. Facebook, netflix, pandora, all getting hammered. Price action not