Will come here and speak for a couple hours. Day one of negotiations. Nobody is expecting huge news but as jim has already tweeted out this morning, the market is going to look for signs that this tone of compromise that weve heard so much about all week long is that for real or are talks going to break down in early stages . The market specifically is going to depend on that tone today and well bring that live when the meeting happens a little after 10 00 a. M. Weve seen reaction of futures to the possibility of a deal. Weve been down for six of the past seven days but the dow this morning implied open is up 33 points. Sapp looks s p looks to add fiv. Here we have italy down threequarter percent and mixed bag for the rest. Carl . Okay. Were going to go to the road map this morning. That is where carl is in washington d. C. Reports this morning that hard decisions surrounding deficit reduction could be kicked down the road until 2013 in favor of a smaller package of tax increases and spending cuts. What does that mean for the markets . Already since the elections the s p has lost more than 600 billion in market cap. Weve got stocks down six of the last seven sessions. A tale of two retailers this morning. Gap continues to show signs of a turnaround posting earnings at top estimates and raising guidance. Sears holdings slumps on its earnings miss. Wi at 10 15 eastern, president obama will host senate and house leaders to discuss ways to solve the fiscal cliff. Sources telling tthe wall stret journa journal, white house are in advance internal discussions to replace sweeping spending cuts set to begin in january with a smaller separate package of targeted spending cuts and tax increases and this certainly changes the story entirely in terms of what were looking at over the next few weeks if this is true . Why is that . We are just going to live with uncertainty until 2013. If we have a smaller package and we kick the can down the road so to speak to 2013, we dont have any clarity. Im saying that this morning weve got i see. We have this kind of plan. This is a 1990 playbook here. I know its an old playbook. That was iraq kuwait. Every friday there was a Short Covering rally because there was a belief that over the weekend there would be some agreement. Im not saying that this is saddam versus president bush. If you go over that period, its relevant. You hear maybe theres a deal. We had multiple moves on friday from 3,000 to 2,300 and back to 2,600 on the dow on percentage bases are important. They all started like this. They would float something really good. And really good meaning it would avoid the cliff in this case or mean a rapid pullback from kuwait. A lot of Short Covering because shorts have done a magnificent job. Made a lot of money. 8 decline from the top. What were stuck with is a world where the shorts cover and it looks like this might be a deal and theres huge disappointment and thats how you have up friday, down monday. Like what we saw with europe. You go into the weekend worried something will fall apart in greece and then there may be relief on monday. Are you a proponent of the theory they can Say Something positive enough where we reverse some of the pain from this week . I think the process will be played out there will be people like the republican from idaho saying his job is to stop us from rising above. Hes saying that rise above thing, this is the way i read it. Cnbc is doing it and its nonsense. Whats important is to stop anybody who might go for compromise. These people shoot down what happens today and they make anybody who was fooled into buying realize it was a thing that was floated and didnt work. Anything can happen. I want to caution people that there are going to be many moments where it seems like theres a deal and people fight the deal which is why we have featured the notion of rising above. The fighters have to give way. Carl, i do think its important in terms of what were hearing from the journal to start thinking i mentioned this yesterday. I dont have sources that journal has in washington but i did have a couple conversations with Senior Business leaders who at least seemed to be aware of the policy making choices that were coming. This idea that well find ourselves moving this debate into next year, there may be some sort of package of smaller spending cuts, excuse me, in terms of pushing off sequestration but we have to extend the tax cuts for some small period of time. Well see whether that starts to enter the mainstream conversation at this point, carl, and perhaps youll pick things up today when youre down in d. C. About that. That of course, jim, moved things every day it will be like this. Carl mentioned jim cramer on twitter. It hit at 3 30 in morning. This is a crisis. Im trying to get my arms around it every day figuring out what the analogs are and help people with this stuff as you are and everyone is. I come back to say were so oversold that any news would be a better time to sell if you dont believe in washington and would be a reason to hold on. You have to have a view. You have to have a view about whether theres possibility if people will rise above and compromise. Everyone is stymied about the idea that they feel pressure. Carl, do they feel pressured . Do you see anyone or hear anyone that says i was against compromise. Theres so much pressure going on, i am more procompromise. Ive not heard that publicly. You know the difference so well about whats being said publicly. There are traders, im sure you are aware, who think theres a deal thats basically cut but that both sides are trying to get respective parties in a position to digest it. Thats how wide the expectation is on this thing. There are Hedge Fund Managers who i have spoke to even today saying im ignoring most of this and im not pulling back really. Im just focused on trying to figure out what to do in this environment like i would be in any which brings us to the stock market. Already sending a message to washington perhaps about the necessity of a deal on the fiscal cliff. Six out of the last seven sessions have been negative. Down more than 5 on fears about it but youve been bringing up the Market Action similarity to a certain extent to 20 plus years ago. A year ago lets not forget we were starting to deal with europe. It did not end until we got ltro, longterm refinancing operations from ecb that said were going to its not going to go bankrupt today. Thats when we were watching italy above 7 . Today those tenyear yields up 4. 5, 4. 6. Talk about how italy has come. The economy is better than other countries. Northern part of italy is increasing Industrial Production. Thats impressive. They never gave up. Italian banks some are happy with no problems funding. The reason i go back which is of the analogy why i go back that far. Thats a tuesday, wednesday thing in europe. You focus on when ecb meets. Here its the belief theyll have secret sessions. Something is going to happen thats truly remarkable. And then when you dont have it, you come in on monday and say what were we thinking . What were they thinking . Thats what i here. The upside to any mini deal on fiscal cliff is there is some clarity surrounding tax policy. What kind of cuts will we have . What kind of tax increases will we have when it comes to Capital Gains and dividends and that will alleviate pressures on the market or give investors a clear road map on why they are selling and what they should sell and when they should sell in terms of a time frame if theres a silver lining. At this point a bad known is better than any unknown. It allows executives to plan. Tax planners to recommend ideas. Allows people at home to say i see i have to sell apple and ill sell a d and net the gain and protect myself. These are things that would lead to more rationale market where people might be opportunistic. Right now theres no reason to be opportunistic. Deere was on today. Sure enough, what does the executive say from the ceo . I got to cut back. I got to cut back because of the fiscal cliff. I think thats kind of what youre going to hear from now. David cote told you that. A parade of ceos who are cautious. Cote has a good business. I mention deere and honeywell, these are companies that right now were growing. And so they had a reason to hire. Honeywell has done a remarkable job. Made an acquisition in refining dirty oil. Talk about something we really need. Making shale gas into liquified natural gas. Thats a growth business. He should be the guy who is bringing people to work. For every eight people who retire, hes hiring one back. He should be hiring eight back but he says, listen, i got to do this right for the shareholders. On january 1st, its not as though the world will come to an end if we dont get a deal. People are still going to spend. They may just not spend quite as much or perhaps pull back down in anticipation of not spending much then. Its unknown enough that it feels like its armageddon. You go on twitter, how many geddons do you have . You know, whats important is that we dont know. We dont know and we have these discussions. We have so much to talk about. We havent got to retailers. Gap and sears in just a moment. Meantime, theres more Economic Data for wall street today. Breaking news on Industrial Production just moments away. Stay tuned for that. Also ahead, Senate BudgetCommittee Chairman kent conrad, todays fiscal cliff talks and what he thinks should be the main parts of a deal. And a Wireless Networking firm thats taking on cisco is going public today. Well talk with selina lo after the companys first trade. Well have to see where we open. More squawk on the street is straight ahead. For many, nexium helps relieve heartburn symptoms caused by acid reflux disease. Osteoporosisrelated bone fractures and low magnesium levels have been seen with nexium. Possible side effects include headache, diarrhea, and abdominal pain. Other serious stomach conditions may still exist. Talk to your doctor about nexium. Well, having a ton of locations doesnt hurt. And my daughter loves the santa. Oh, ah sir. That is a customer. Lets not tell mom. [ male announcer ] break from the holiday stress. Fedex office. Welcome back to squawk on the street. Rick santelli here. We are ten seconds away from october. Industrial Production Capacity utili utilization. Here we go. 77. 8. Thats really a big drop when you consider our last look was 78. 2 in expectations for a number very close to 78. 2. Some had it as high as 78. 3. If we now look at the production side, that was down 0. 4. Down 0. 4. Our last months look was up 0. 4 revised up 0. 2. This is split in half. Thats multiples less than the expectation of 0. 2 in october. On production side unlike isms weve seen, this number isnt reflecting a positive outlook and well have to monitor the response of the marketplace has been on the light side but remember, deal, no deal, its friday. Its been a wild week. We have issues in middle east. Traders down here will be conservative for the trade today. Look for trend reversal. Melissa lee, back to you . Thank you very much. A pair of retailers in the spotlight this morning. Gap raising fullyear Earnings Guidance posting a jump in Third Quarter profits. The apparel retailer reporting an increase in north american sales and stronger profit margins. Sears holding reporting a narrower than expected loss but a decline in sales at sears and kmart stores. Two different retailers and two different stories and one thats turning around being the gap. One thats struggling and that being sears. Numbers from gap are extraordinary. This is a remarkable job. They did that accelerated buyback. Old navy up 9 . These are among the best numbers ive seen. Sears i actually know that no one likes sears. I understand that. Sears, the actual stores, were down less than 2 for Comp Store Sales. Contrast that with jcpenney down 26. Sears domestic down 1. 6. Kmart was down 4. 8 . Doesnt seem like a turnaround. A slow, steady decline they are managing to some end thats hard to understand but involves trying to generate cash along the way. Its in a better position than it was a year ago when there was real concern at one point that they managed to stem about factors and whether they could get financing for christmas and selling season. Whats the strategy here . Whats the end game . The end game is you figure out what are 200 or 500 stores that actually make money and you put chips on them. Thats what i said they should do for a long time. Many years ago i had my fanciful view about what should happen there. Sears has a good brand name. I dont shop there anymore. Like many people i feel like the time has passed by. I do think they do generate cash. They made a series of spinoffs and theyve done a lot of very creative things. This new ceo came in. Its not a disaster. The entire strategy seems to be generate enough liquidity and potentially generate enough cash at some point until what . I dont know. In canada you have to wonder in terms of sears canada was down 5. 7 . Target is making a giant push into canada as well. Will sears feel more pressure on the Canadian Business . Will that interfere with the overall objective of having 1 billion in liquidity. Gary chronicled this better than anybody. Number one in his accounting class in canada in the 80s. Longer than anybody. Whats he saying . Dollar went to 1,000 . He said we dont feel liquidity is an issue for sears. It does have assets it can spin off. The balls stay in the air. People get shorted and they keep hoping that something will go disaster and it doesnt. Again, jcpenney is the end game of when you dont have the right merchandise and you dont have the money. Right. Amazingly sears stock is a double so far this year. Despite all of with the short interest, et cetera. Lets not forget. Controlled company of course. All right. You mean like communist chinese control . Yes, actually. Just like that. Last night on mad money, cramer gave you top five reasons not to sell everything right now. How should you make the run for profit . Thats coming up next. And ruckus president and ceo selina lo will join us. More squawk on the street just you a hid. 6 30 before the opening bell to close out a difficult week if youre long at least on wall street. Time for cramers mad dash. It will make you happy. I dont know if dell shareholders will be happy. The company is struggling for relevance. Pc sales. 19 decline year over year. Very negative for windows 8. They didnt say that. Negative for intel. Again, Hewlett Packard, dell, time is passing them by. You are getting hit by two things. Corporate side where they sell a lot of computers. Fiscal cliff concerns. Perhaps not spending as much. We know that. Then you have consumers who are just saying why do i need another pc . Bring your own device. Thats been one. Michael dell said that would not happen. Its clearly happening. What do you do here . Theres a lot of cash. Sorry. Thats where it is going. Why apologize . I dont know. I think you have to go. I think you need to raise on debt. Theres a lot of stocks whether it be nokia or research in motion. These are of our era. Its where we are in the cycle. Some companies do not have other than cash, a reason to live. Lets look at this. This company has taken its future into its own hands. A game operator, some companies are not sitting down. Theyre tied of it. Fiscal cliff. Whatever. Will vegas come back . Right. Lets stop letting the fates dictate and get control. I applaud Penn National gaming for doing the right thing. A lot of Companies Choosing to do that. Whether Outdoor Advertising or gaming. If they have the real estate, theres an opportunity to do it and make it tax free and they go for it. One reason you want to be in. Your friend, jeff, decided to become a reit. Good. Companies do take matters into their own hands. Dont sell every stock because of the fiscal cliff. Five minutes until the opening bell. Were back after this. [ male announcer ] this is joe woods first day of work. And his new boss told him two things cook what you love, and save your money. Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. All right. Welcome back. Were gearing up for that last opening bell here for the week on this friday. Ruckus wireless ipo set to debut today. A lot of people here at the face of the podium and a lot of black labrad labrador. Not real ones. Stuffed animal dogs. Very large ones outside. Very large. Not real also. Big ones. Still. Out there. But one of the few ipos top bra brave the waters this week. Ruckus priced at the top end of the range. One of those companies that gives you because of the overload of data, gives you a wifi alternative and great blood lines. I think that this frontier and at t decided to go back and spend money to wipe competitors out. A name like ruckus and can others choose to withdrawal because of the choppy waters . Its symbolic of whats going on more broadly. I cant remember a name we have seen here that hasnt gone up in the first trade in a number of weeks when they first go public whether a Growth Company like this one or deleveragine deleverageing exercise as we have seen. Ruckus has growth. We want growth. Theyll give it to us. We lost about 600 billion in market cap since the close on november 5th, the night before the elections. Its been a very rocky ride down 5 overall for the markets. Down six of the past seven trading sessions as we get set to reopen the bell here. Ruckus wireless celebrating the ipo today. Well speak to the ceo in just a few moments. A Alzheimers Association of america is at the nasdaq. Right now apple looks to open lower initially. At t is beginning to sell the new ipad mini and the ipad 4. We could see some numbers. Its always fun to see all of the new ipad applications. Theres a terrific article in usa today talk about how shoppers use it. They give you coupons. Nice company where they are trying to interact with the people. They help retailers interact with people in the store and give you coupons. This is again another growth business. Paypal very in