Nicole and mobile buying is going well for ebay and paypal, so that is good news there as well. David talk about the news on the dream liner. Good news all over for the market. Liz the bells are ringing on wall street and intel numbers coming in, the Dow Jones Industrial off of the earlier highs off about 85 points, had been hired by more than 100. The s p seeing the level of 14. 80. Will they hold that level . Technicals make a big deal about that. And the russell 2000 small and midcap looking very heavy once again. David oil had a good day again. Selling at 95. 49 per barrel. This is a fourmonth high for the commodity. Again, it is the world growth figures that are leading this fight in oil. Liz outperforming with some of the names posting gains of more than 4 . The best performer followed with the move higher to lift the etf. The top holdings include some of the bigger names like texas instruments. David and even gold, gold settling at a onemonth high. Very close to the 1700 mark. Liz as we crunch these numbers, you can see the stock is moving, do we have them . Adam shapiro. Adam the earnings per share beating what the street was expecting, 0. 48, the street expecting 0. 45. Right in line with what the street is expecting 13. 53 billion. Liz let me mention to you, david, intel at these numbers and the stock is moving above not by a huge amount, but about were the last trade was at. 22. 89, we will be watching that as well. David a lot of details to be figured out with these numbers. Gross margins particularly interesting. Were going to have reaction from intel chief Financial Officer in just a moment to find out what is happening with the future of intel. Plus, we are expecting momentarily Richard Fisher, he is the president of the dallas fed calling for a dramatic reorganization of the banking industry. Could this mean it a good bank breakup . He will be here to talk more. Dallas fed president , one of the most outspoken and forward thinking members of the Federal Reserve just coming out with a mavericks proposal, to medically reorganize the banking industry. Some see his proposal as a way to ensure we wont have more taxpayer bailouts of millionaire investors. Here to talk about this proposal and the economy in general. And about the market. Lets start with the news, the market had a great day today. The s p 500 close to or at a fiveyear high right now. Why is the market doing so well even though the economy is still kind of in a slow move . David, nobody can explain the daytoday moves in the market anmatter how hard we try. The market discounts well in advance of what we mere morals are able to do for my daytoday. Other days youre not sure why. I would be hazarding a guess, i dont know why. David a lot of people have speculated about this from the wall street journal and others that it is the contention in the specific intention of the Federal Reserve over the past year or so to pump up the market. Is that true . Certainly this is in effect have a much lower interest rates. You can do the math, historically low rates for corporations in America Public or private, large or small. Mediumsized. Have a very small balance sheets, redoing the balance sheet, reposition their debt at much lower prices. Itd just get some clarity as you know, a little more clarity, a lot more clarity from the fiscal authorities as to what the cost of doing business will be and how they will be regulated, etc. They have plenty of fuel read the Federal Reserve had done so much, the point is theyre in better shape, they can compete headsup, we are ready to move if we can get some clarity from the fiscal authorities. That may be, it may be priced into the market now, but i dont know why the market moves day today. David you were reluctant to criticize other instruments, but you werent too hesitant yesterday to say so in a speech, you said accommodative Monetary Policy talk about printing more money to buy up more bonds and others have failed to adequately affect the economic recovery. Failed as a strong term, in what way has the fed failed to help the economic recovery . I am not sure we have failed, that is too strong of a word. David sorry to quote back to you. What we are doing again, we dont have control over this thing to the degree some might want to see. We provide the fuel and the incentive to use it and in terms of the one area that many of us are always concerned about, everybody on the committee and of course we dont see inflation occurring right now. Real . Is the mandate given to us by law. On that front i dont think we probably cannot havent gotten results i results i would like to see and we have to continue to test that assumption whether or not theyre doing the right thing to affect higher levels of employment. Unless we get the cooperation from the Political Parties who say taxes how much they spend and how much they regulate. By that, it is just not sufficient. We spoke about last night was about the banks, not Monetary Policy. David there is a conflict with regards to the fed interest and pump up the market, if you will, and unemployment mandate for the employment mandates you just mentioned. Stocks go up and companies lay workers off, that happened with American Express and in the past with other companies, so if the intention of the fed is to pump up the stock market, doesnt that sometimes conflict with its mandate to keep unemployment low . Theyre all kinds of approaches to this, david. One of them is the wealth effect, if stocks go up, through the broad pulls the mutual fund or more directly obviously feel wealthier and will be able to spend more and pump of consumption with consumption driven society others might argue it is a narrower base than it used to be, so it is a give and take, pros and cons of every single argument. Clearly those publicly traded have been able to capitalize themselves in a better position, but they will not be able to use it to hire more people until they get clarity and more certainty as to what the spending pattern will be and how they will be regulated and to what degree regulation will be rationalized. It is not in the power of the Federal Reserve whether youre a banker in that system or a member of the board of governors as we all are. It is in the hands of politicians and they have let us down. David in the leading category, think everybody would agree they are not spending as much as we would hope. All that in the system would have done. That is one of the prime intentions and printing money is to get them to lend more. Part of the problem has to do with the way in which this new doddfrank system of banking regulations has been stretched. You say on balance doddfrank has actually made things worse, how so . We have higher concentration in the banking industry, the top 12 Bank Holding Companies or 68 of the assets in the industry, what it has done is it has layered enormous amounts of bureaucracy in filing. Which are in terms of the numbers of the total banks added 9. 8 of the banks are the ones that personally think overburdened by so much of the complexity of this massive legislation that has occurred, which were only as one of the regulators part of the way through in terms of implementing what the law requires of us to do at the central bank, so theres a question of fairness, theres a question of really the objective of the legislation ending too big to fail. I do believe the very large institutions operating at a subsidy under the assumption they will never be able to fail, theyre systemically important. The other 99. 8 , david, they are too small to save. They come out on a monday and have the ownership structure. The system works, does not apply to the. 2 admissible argument was we have this huge haggle over the 1 on the tax front and finally it was resolved. Maybe not to everybodys liking. Considered too big to fail. Do not victimize the smaller banks, route 5600 or so. David it i was meant for the commercial banks, the highflying financial institutions. How do you do that without going back to the old rules of glasssteagall, how do you separate out the highflying investment banks in the commercial banks . Onl i only speak about ed els Federal Reserve bank, but our proposal is very simple. And that is to provide for the assurances we provide on the taxpayers back only apply to the commercial banking operations of the large Bank Holding Companies or any bank holding company. And we only allow that specific commercial banking operation, that is where they take the shortterm deposits for taxpayer guaranteed by the american tax, shortterm deposits and intermediate to make longerterm loans. Only that would be protected by law in terms of a guarantee on deposits, and only that part of the operation would be allowed to borrow on the discount at the Federal Reserve. David isnt that going back to glasssteagall . It is not. They engage another kind of business. They can be insurance, securities, other derivatives, special investment vehicles. It has to be made clear in a customer that describes on that side to their business has no assurance whatsoever from the tax credit, would sign a simple short form resented yesterday one paragraph long a sixth grader can understand it and read it simply send the money placed at risk will not be underwritten or guaranteed. David that would be quite a change. Will the fed continued to print money and buy bonds beyond 2013 . I think the committee has to make that decision and we will all argue one way or another. That is a decision made by the committee. I want to conclude with one thing, david. After the speech last night to our surprise, the dallas federal website was receiving requests for the speech so much that it wrote down. The speech with independent and small and mediumsize regional site thanks are very much supportive of the view we have articulated and now it is up to the lawmakers to take all the different perspectives and find a way to make doddfrank less complex, simpler and more effective for preventing too big to fail. Thank you for letting me say that. David Richard Fisher, dallas Federal ReserveBank President , thank you. Thank you, david. Liz intel dealing with the decline in pc shipments worldwide but they met analyst expectations for their numbers out right now, and just a quick check of the stock at the mome moment, it is trading higher in the aftermarket session. The question really is where is the growth for its chip now . A television opportunity, smartphones . Coming up, we will ask the chief Financial Officer stacey smith. And the path ahead for intel. David and find out the stocks on their path to profit. Make some money, folks. [ indistinct shouting ] [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All onhinkorswim from td ameritrade. [ male announcer ] how do you make 70,000 trades a second. Reach one customer at a time . Or help doctors turn billions of bytes of shared information. Into a fifth anniversary of remission . Whatever your business challenge, dell has the technology and services to help you solve it. David the s p futures are closing right now. Lets go to the pits of the cme with andrew. Good to see you. So what does this tell you about what will happen tomorrow . Andrew we had a nice little run up on intel going to be closing today the stock was up about 2. 5 today. The stock is bit much unchanged right now. I had a pretty good quarter, 0. 48 versus 45. Versus expectations of 12. 8. There could be some selling pressure, 150 Day Moving Average at 23. 03. Tomorrow we will have more earnings. Ge, morgan stanley. We had a mixed review. The market is to climb higher even though we had weak bank earnings. Taking the market higher. The market was very strong today despite bank of america and citigroup both selling off. We had problems with boeing dreamliners as well. That is about it for the most part. Liz thank you very much. Lets get back to intel because the fourthquarter results met estimates, but it is the Current Quarter outlook getting people little spooked because right now, nicole, we are seeing the stock moderate a little bit. Nicole the part that is surprising to traders and what t has been brought to my attention. I said moments ago, you said 4 now. Ithat is because the numbers are starting to come out. These breaking News Headlines of the earnings per share and revenue came out right before the closing bell, and that is why we saw the action, the quarterly profit topped estimates of course. And then we saw the stock jumping intraday. You saw that right here at the end. Liz should we read much into this . Traders said it is so weird how it came out before 4 00 p. M. Have been right there on the closing bell, the busiest moment in market trading. As far as the outlook, the 2 where it had been prior. We should talk about the earnings per share 0. 48, revenue came pretty much little bit weak. David are we getting any indication what they were expecting . Any hints at all about this bar phone market . We are not really seeing that yet, but really it is the outlook something people will continue to look at. Ones that we will focus on for tomorrow read david we have a lot more on intel coming up. Liz the chief Financial Officer stacy smith, we will ask about going into smart phones like the iphone. Coming up after the break. Stay tuned. Whats next . Hes going to apply testosterone to his underarm. Axiron, the only underarm treatment for low t, can restore testosterone levels back to normal in most men. Axiron is not for use in women or anyone younger than 18. Axiron can transfer to others through direct contact. Women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. Report these signs and symptoms to your doctor if they occur. Tell your doctor about all medical conditions and medications. Do not use if you have prostate or breast cancer. Serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet, or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. Common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. See your doctor, and for a 30day free trial, go to axiron. Com. David lets turn to our market panel. Harris Financial Group managing partner and brian obrien. Advisory research ceo. Good to see you both. The fed, were talking to dallas fed president , a lot of traders were focusing on the fed repo market, why is that significant may have plugged into the rally . The data came out at 10 00, 30 minutes ahead of that. The report agreement came across 200 million, cross added liquidity to the market and that promoted a lot of strength. Weakening the dollar, which set off a fire in the market which had equity, you sort of have the dollar gets weaker as equities go up in that kind of happened in the day. I think that really promoted what we saw earlier in the day. You look at what happened when the data came out, that was really bad news, 10point spread over expectation. It did not even pudge, in fact it was up. The repo injection had an impact on stabilizing the market into that number. Liz what do you see . It was great, firsttime jobless claims falling and the numbers you want to see come down, a nice move and the housing numbers showing a lot of optimism i would say. Suddenly we have a very solid market that some part of the nation, correct . The jobless number number isy good number up for a nice number at the yearend. We expect things to happen relatively well here. David i will put it to you this output to Richard Fisher, why is it the market is doing so well when the economy is still slowing . At least it was a big improvement over what we thought it would be, but the economy is still stuck below 2 growth, do you think it is possible to market to continue chugging ahead as it has been with the market at below 2 level . Itll be difficult for the market to continue the pace of the last several weeks for the rest of the year, but we look for the stock to be significantly higher going into the yearend. Additionally corporations are being very wellrun, the offshoot is very strong, Corporate Management is running the company very well and you are seeing good earnings and good numbers coming out. That is being reflected in the market. The other thing that is important is investors have to put money to work and the opportunities that they have are most attractive in this domestic stock market rate now. Liz dimensioned financials when brian talks about that, all i can think about his financial companies, the big names have kept their costs down. That is not exactly making a ton of money, but you like financials among other names at least the sectors. Lets talk about where you would show us the money for your clients and our viewers. In the financial space i think he needs to be focused on regional banks. They dont have the stigma of the too big to fail problem, the sector, we talked about it last friday. Those banks have part of the market where they can participate with housing getting better. They are positioned better, i believe, for recovery. Dividend yield reasonable at this point, not hammered by some legacy assets. We actually saw the interest market go up, and that is unusual in that space because you look at the major banks, jpmorgan and others that was it big drag on earnings over the last year. So with the regional banks you find those particular organizations are able to manage but are not overwhelmed with cash like some of these other banks are. David what about the bigger banks . Citi and bank of america. Today down when we got into it exactly how much it owed, how many bad debts that had to absorb from fannie and freddie, citibank still too big to absorb. Is it time to abandon them for the small regional banks . Full disclosure i own bank of america personally, but to say i think most of the people that would argue they would rue the day bank of america ever accrued countrywide. We may have gotten by the fannie and freddie thing but we are not passed countrywide just yet. Once you do, you can get a little bit more clear skies. The financials are a pure play against an improving economy. That is a procyclical type Investment Strategy looking at Industrial Financial technology. I think that is where we are. Liz American Express, you also like leucadia as another pic. I guess it acts as a dow component. Would love to know your perspective right now. They put out a good number today. Again, here here is another sin where management is running the business very well. Additionally they have the right kind of finance in here right now, the Upper Echelon client, those people who pay their bills and pay them on time, you also have the benefit getting exposure in the emerging market. One of the keys for being successful for big businesses right now is to make sure you have exposure in these emerging markets. That is where real growth is happening and they could offset to that 2 growth rate we are experiencing in the u. S. That is one of the things you havlook for in these markets rit now. David information technology, you are big on ebay. Why . If you look at what ebay used to be 10 years ago, it was about sort of an auction type situation. Now if you look at their marketplaces is about fixed price. The altered landscape of what it used to be. Now it is the ceo is the Online Outlet mall. I kind of liked that concept but then again i like the mobile strategy for paypal. Theyre using paypal for their technology and i think that really promotes an unbelievable opportunity for a company like ebay to gather the mobile payment space, which is growing leaps and bounds. Ebay, paypal has been around long enough people trust it, that matters what youre talking about transaction volume and transaction between two parties. They set a very good position to take advantage of the mobile space if it becomes a commonplace and grow. You can look at the mobile, they really understand it. I think this quarter indicates mobile is sort of going to be a growing part of the revenue in the future. Look at their earnings. Their records. That is my view on ebay. Liz thank you so much for giving us your favorite pics right now. We appreciate it. David boeing 787 dreamliners have been grounded worldwide now, but will the stock pick up . A big buy rating. Wait until you hear how much he thinks the stock should be selling for. Liz a gutsy call. An intel reporting revenue forecast, but the forecast fell little bit short of what many were hoping the Company Might do for the Current Quarter. Whats going on here . Lets find out. Stacy smith is the chief Financial Officer of intel. We are interested where their next Revenue Sources will come from. We are talking to stace stacy sh when we come back. Liz welcome back, everybody. Intel released its Fourth Quarter results early this hour. We have the guy calling the money shots inside the chip giant. Stacy smith, chief executive fer an vice president. This is dow component. Widelyheld stock and in Peoples Pension portfolios. Tracy, there was a big pop before the top of the hour when you guys, i dont know what was it a fat finger punch . You came out earlier before the closing bell. Our normal process come one minute or two minutes after the hour. Were following up on kind of where in the pros he is is process it happened. Liz maybe somebody tripped and fell on a keyboard. Let us know when you find out. Market gets all black helicopter about this stuff. Theyre looking right now at your guidance. Lets get to the headline. You met for the Current Quarter or previous quarter youre reporting for the you met on revenue. Just a bit of a slight beat here and a bit of a slight beat on eps. But current revenue estimates may spook the market. 12. 7 billion. Give or take 500 million here ore there. Some of the estimates were 12. 9 billion. What do you see for the Current Quarter that would keep it slightly lower than what some are looking for . Actually revenue guidance for the First Quarter is a little better than what you normally expect as you go from q4 to q1. For 2013 were forecastings low singledigit revenue growth. My expectation well see acceleration in the back half of 13. When i think about the year and you have a couple of tailwind that could kick in. Most economists are predicting second half gdp growth around the world is better and we do correlate to that. Secondly we had this tremendous product cycle over the course of 12. Were in tablets. We have great new devices with ultrabooks and convertables and the best of a pc and the best of a tablet the we think that in conjunction deenabled devices kicks in second half and helps with growth. Liz what i find fascinating you guys pushed an entire industry to move unbelievably quickly, coming up with concept of an ultrabook. Call it what it was. It was a way to take on apples thin and sexy power macs and mac book pros. Now there are 140 designs out there, or ace sus or lenovo or hewlettpackard or dell. You dont see hardware guys move this quickly but you have. Are the numbers where you want to be. Paul otellini wanted 40 adoption. All laptops would the ultrabooks. Were not there. Do you expect to get there in 2013. The first objective we had was to work with the industry to enable inknow vision. I think it has been successful. Liz absolutely. You articulated it. A year ago we were just starting to talk about. Today we really redefined the notebook market. When we think about 13 the next level of inno station will be around touch and convertables. In terms of the penetration rate, were hitting price points we need to hit today. We saw touchenabled machines in the market at 499. Some skus at 399. Were hitting the back point and innovation. Against the backdrop of a weak macroeconomic environment but were optimistic as we go through 2013. Liz the whole point of windows 8 to make it touchscreen enabled. We hear from Microsoft Windows 8 is trending in the same trajectory as windows 7. Was that enough for you . Im sure you guys would have loved to see faster do00 of windows 8 . It was late in the Fourth Quarter. Not later than they said but late in terms of the buying season. Were quite pleased with what is happening in the market. You know, the operating system, if you played with it enables a great touch experience. It is a modern ui. You put that in conjunction with a great piece of hardware, you know, convertable and something very thin and light with all day battery life. I think it is really compelling device. Liz let me get to smartphones, as you push into the realm not as quickly as some names like qualcomm, the past four months we have had a patent war with samsung and apple. Now they are mortal enemies the only other entity could scale up a huge roll upfor the next apple iphone would be intel. Do you expect in the next year, 2013, that iphones will have intel chips inside . So, you know, our, our policy in this is, that we never talk about a customer design win until they go to talk about it particularly in the phone space. When i look back at 2012 we were not in any phones when we started the year. Today were in seven phones shipping across 20 different companies. People expected once we got into the space we would have leadership in terms of performance. Where we surprised people we also have leadership in the terms of power efficiency of our silicon and i think were in a great position to build on it from here. I also want to say i dont think it moves the needle from the standpoint of revenue in 2013 but we have design momentum that is gathering. We want to build on that as we work our way through the year. Liz will your smartphones move the needle in 2014 do you think . At that point will you start to see a bigger move . I expect to see good unit growth in 2014 and we build on it from here. Liz last question. Listen, it was a big topic of buzz around the Consumer Electronics show. What is intel doing in television . I personally think at that, you know, everybody is waiting for apple tv, google tv. It is not happening. Is intel. We know you hired people to look into but intel working with the Cable Operators to come out, i dont want to say a settop box box but something, some type of device that will make television a lot better experience that we wont have to have a cable box of some sort . Im sorry to do this on the last question, similar to talking about customer design wins up until theyre ready this isnt a place where were going to comment. We think that we have great silicon in that leadership silicon is probably appropriate in the internet of things. In the data center. In clients but were not going to go there specifically. Liz i am looking at that as maybe a yes but i will let you hold onto that comment. Thank you, stacey, very much for joining us. Great. Good to be back. Liz stacy smith, intel executive officer and vice president. David boeing luxury jet has been grounded all over the world. How much will this cost boeing and its investors . Maybe not as much as you might think. Coming up next an analyst who thinks the stock is way undervalued right now. Find out you who much he thinks it will pop coming up right after this. What are you doing . Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. [ male announcer ] save on ground shipping we replaced people with a machine. R, what . Customers didnt like it. So why do banks do it . Hello . Hello . if your bank doesnt let you talk to a real person 24 7, you need an ally. Hello . Ally bank. Your money needs an ally. Im adam shapiro with your fox business brief. It was a bullish day on wall street following upbeat reports on the u. S. Labor and housing markets. The dow was up 84 points, ending the day at 13,596. According to realtytrac banks repossessed 17 fewer homes than they had the year before. Judicial states like florida and new york where the courts play a role in foreclosure to work through their cases. Florida had the nations highest foreclosure rate last year. College tuition always seems to go up, one thing hide to Higher Education is going down. Moodys says the high cost of college plus growing public doubt about the value of a bachelors degree and potential cuts in Government Spending cause it revise down the outlook on entire Higher Education sector to negative. Thats the latest from the fox business, giving you the power to prosper [ male announcer ] you are a business pro. Omnipotent of opportunity. You know how to mix business. With business. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above. And still pay the midsize price. I could get used to this. [ male announcer ] yes, you could business pro. Yes, you could. Go national. Go like a pro. David the faa is grounding the boeings 787 dreamliner jets while it is being investigated. Liz he loves it despite all the shortterm problems. We have a aerospace and defense analyst at credit suisse. Im hoping theyre short term. You must really believe theyre short term . I do. I think it is a short term issue. Question whether well fly again in a few days or longer that on that. Were talking about batteris. Assuming it is not part of the electrical system, and it is just the batteries i suspect boeing can fix this, identify the fix in a few weeks, perhaps a couple months and start to implement it, perhaps even be flying again before that fully happens. David . Robert, dont they have to come out with a big Public Relations push . There is nothing that will turn people off of a flight as quickly as any suggestion that flight might go down. I mean how do they combat the Public Perception this is a dangerous aircraft . I think that is the a very tear point. Ive fair point. Ive flown on the aircraft. Weve seen situations like this in the past with many new entry aircraft. Go back through boeings history, airbus, perhaps a year or so ago, the a380, for example had issues. David will they have to take a big chunk of their resources now and hit the campaign trail for this plane . No, i dont think so. I think people need to fly. They believe in the safety of boeings r d. They have got a great track record in general. I do think they need to come out and talk about what the fix is, make that clear to the public and they will move forward past this. Liz move forward past that but right now the big competitor out there is airbus. Do you think this pushes some investors to simply say, i dont want any trouble. I just dont with to see those still photos of burned out batteries or even pieces of equipment and does this mean this is a real win for airbus . Absolutely some people will look at it this way. They will see the photos. They will wonder what will happen in the short term. From a near term perspective you may see rotation from one company into another, from boeing into airbus. Over the long term these things generally get fixed. We find that the stocks fully recover and return to their previous trajectory. Liz compel tent point about that. David robert, in the first part of the show we had Richard Fisher from dallas fed. He said way these companies, corporations in america restructured is nothing short of phenomenal. Boeing is an example of that. They have already worked into their plans, their strategyings, the fact there will be a downsizing in the military because that is such a big part of their business. Yes. David have they done a sufficient amount of work even if the worst happens from their perspective and there are huge cuts in the military . Im not sure we all know what the worst is and were constantly thinking about it. Boeing has the benefit relative to pierce being a company that can downsize on the military size and move resources to the commercial size and that is unique to boeing and it is a positive. David robert who has by the way a 86 price target for the stock of boeing. Thanks for coming in. Appreciate it, robert. Thanks for having me. Liz contrarian call. Get a good Company Going through a bad time. David massive defense cuts, we just talked about could still be coming and that could spell more bad news for boeing. It will also hit the state of North Carolina especially hard. Coming up next well look how some Companies Already are bracing for it. [ male announcer ] how do you turn an entrepreneurs dream. Into a scooter that talks to the cloud . Or turn 30million artifacts. Into a hightech masterpiece . Whatever your business challenge, dell has the technology and services to help you solve it. David even though defense cuts have been postponed to march as part of the debt deal, the threat is forcing companies for layoffs. Liz North Carolina will be hard hit if the cuts go through. It is home to seven military installations. We put fox newss Jonathan Serrie on the story. Jonathan. Reporter good afternoon. The problem is sequestration. While Congress Delayed the automatic spending cuts until march, it has not delayed all of the uncertainty surrounding defense funding. Just miles from fort bragg, k2 solutions trains dogs for police and military use. And provides research and development for equipment and weaponry. But the status of new defense contracts is unclear for this company that employs 274. In the past seven months we submitted eight proposals. Two of them have been canceled and the other ones are in limbo up to eight months. Reporter disabled arm veteran kathleen is a ceo of a company that markets facial recognition technology. We actually last fall got turned down for funding twice because they said working for the federal government was too unstable. Reporter some companies can survive by marketing their services to a wide range of civilian needs the k2 trains these dogs to find virtually any type of object, in virtually any type of environment. K2 solutions is growing . Reporter contractors with more military specific roles are bracing for worst case scenarios. Wondering how are they going to survive and how they are going to be impacted. Some are taking measures to lay people off. Reporter her Industry Group estimates 34,000 jobs are at stake. That is just in North Carolina. This is really something that is already starting to affect defense contractors of all sizes. Back to you. David Jonathan Serrie, thank you very much. Liz looking for some extra money . Who isnt . Yeah, who isnt . Hey, were taking you on a snake hunt. Are you brave enough for this one just for the green . We have details next