u.s. stocks falling as ibm thinks on earning and european equities and did their best rallies and 2011. joe: the question is, what did you miss? it is all about apple. the tech giant reports in 30 minutes than all eyes are on the apple watch. alix: but first we will hear from chipotle, microsoft, and go pro in a few minutes. of $50 a prices barrel. what is one key indicator that could tip prices in either direction? down bye market ending about 1%. no other industry is off as much is that the s&p is off by have a percent, and it all boils down to ibm and united technologies. joe: they were a big contributor to the dow selloff rated but you

can see by the diversions between the dow and the other indices, this was not a particularly ugly day in the market. this was a couple of docs, and the silly way that the doubt was greeted where a couple of stocks can have a huge impact. alix: it does point out that health care reit up about 57% of the rally we saw in the s&p so far this year. do not health care, you have industrials do not have technology helping. what goes on? are about to get a bunch of tech earnings coming out, so maybe they will save us. boldly earnings are crossing right now. julie hyman is looking at them right now. polio earnings coming out to cents ahead of european chipotle earnings coming out to cents above estimates.

cough sales up 4.3%. the estimate was for a gain of 5.8 percent. that is going to be the key number when you were the net chipotle. we are seeing that initial reaction as a negative one. been such a study, dependable grower for so long, for investors, that they become accustomed to it. it has also had double-digit sales in same-store growth. in the past five quarters in a row. no we are seeing a breaking of that street. not only of breaking of that street, but coming in lower than analysts anticipated. they are reaffirming their forecast for the full year in terms of comparable sales and that may offer some sort of reassurance here. restaurant operating margin, 28%.

be lower than what is anticipated as well. i going to go into this lush, the headline is that call sales missed estimates with a gain of 1.3%. alix: to your point, had that carnies has shorted that happen ed. about twod by percentage points because of that. taking that comp sale in stride. joe: potentially disappointing accustomed toors the same growth. alix: i want to talk about gas oil. are goingy oil prices down. the world is being floated with product. what you are seeing right here is the gas oil to crack spread. the profit margin that oil refineries make by turning crude into gasoline. year between all

the 14 and $16 level. recently we have seen a tech lower, down to about $12 a barrel. lower crack spread means lower margins for refiners, which means they are not making as much money. that could remove the demand driver for oil. joe: what is this? alix: is the difference between what you're going to sell gasoline for and what the actual crude price is. it is the margin you will make. suppliers are making less, that is your big take away. joe: i want to talk about commodities, this chart comes marx it feels as it management. there is a lot going on in the start, but the whole question is what is the impact of china on commodities? , the is a few lines here black line here is just iron ore.

china is slowing on that. here is inventories, that is declining. the part that he is interested in is this right line here, the baltic freight index which measures how much it costs to move commodities. it is a function of demand and supply, and it is starting to take out. he thinks that perhaps that is a sign that maybe the bottom is in with china, and this huge liquidation is coming to an end. alix: in that time, microsoft earnings just came out. julie hyman monitoring those. julie: microsoft earnings rising year-over-year on a share level. 62, the estimate was for $.68. that is a pretty substantial drop of 5% over here, but it is slightly better than analysts had anticipated.

cloudill highlight the revenue, everybody has been highlighting the cloud revenue. the company started. we will get more details on exactly the different breakdown of businesses. the u.s. dollar strengthening have significant impact, no surprise there. love has been a very common -- amonglong companies with international exposure. a result of the nokia related cuts, we already had knowledge of this but just to redirect, the company saying the results of a $7.5 billion non-cash impairment charge related to assets related to the acquisition of nokia devices and services in addition to a restructuring charge as $780 million. that is roughly in line with the

company talked about. they also said there is a charge of $650 million with the integration and restructuring plan. it is excluding all of that, and you get that $.62 earnings per share. other headlines coming out, honored revenue, $25.32 billion. a little bit worse than estimated. and the u.s. market share, 20. 3%. bing.ny people use joe: i do not know how the number is real. is it a distribution thing? browsermetimes my sometimes defaults to bing. you are also taking into yahoo! numbers. missing estimates. analysts were not looking for a

lot of fireworks for this yahoo! quarter, but we have to look to the downside here. earnings coming in three cents below what analysts had been anticipating. , traffic acquisition, 1.4 billion dollars. but it is a little bit better than estimated. but the company's earnings and sales were estimated to fall year-over-year. it looks like we still have that situation a little bit better than estimated. estimatedn been than through the company says it continues to cut its workforce to fewer than 11,000 over the course of the quarter. when people are going to win to hear from yahoo!, any more details on the alibaba span off. well there it will indeed be able to be tax-free. i am not sure we have any commentary to that effect in the statement. i am looking for the word alibaba, but it does not look like there is any detail on

that. we will definitely get some questions on the conference call. and they are trading a little bit lower as we start to get those numbers. alix: this is a surprise to me that yahoo! continues to cut their workforce, fewer than 11,000 over the quarter. following whoen for the last to seven or eight years, and this is such a quintessential yahoo! response. it is always about the next quarter, next year. but the present always feels like a disappointment. alix: three years into the turnaround. and now we're looking at go pro. gone prowler earnings at $.35. analysts had an estimated $.25. also, revenue beating estimates, almost or hundred $20 million. folksillion were what

were estimated. that revenue is a 72% increase year. that is why they call it the growth stock. go pro's going to be introducing and has introduced new products, smaller cameras, and the company says in particular, it has launched five new cameras in the past 10 months. as you know, there has been some concern about competition for go pro. it looks like up until now, if you don't buy these numbers, it has not been an enormous issue for the company. perhaps they're waiting for the conference call to get any kind of forward-looking statements. very good stuff rated busy. i appreciate you breaking down those earnings for us. are just 20gs minutes away. we will zero in on the apple watch and show you an unbelievable charge that could foreshadow the sales trajectory. ♪

alix: i'm alix steel. joe: and i'm joe weisenthal. what you miss? take a look at iphone unit sales slow adoption of the beginning, but year after year adoption increased. could it be the same with the apple watch? joe: people were accessed with the iphone from day one. we ask people in the commercial break, it was a great question, what do you think about your apple watch? >> i really like my iphone. joe: it does not sound like a kind of answer that will look

like an iphone related chart. alix: last time i saw benjamin i saw him wearing his apple watch. often -- to now where i do not wear it recently. alix: we know that apple will not actually breakout sales rate analyst estimates are anywhere between $3 million in $5 million for the quarter. what is your call? >> there still a massive upside for the apple watch. so early days for this product. it was such a rudimentary product when it was launched, basic functionality that was not there. thee look at that time of upsides for the apple watch is absolutely there. this is a generation one, by generation three we will see a very different product. >> what you think the next generation will sell? this ishe problems with you always have to have this.

if you have to have this, you're going for a run in central park, you have to carry this. the health part is very cool. itshe health care is one of best astrophysics -- attributes. i am a mechanical watch lover, and it comes down to real estate. at the end of the day, i love my mechanical watches so much that i'm not willing to give them up for a novel watch yet. joe: i people did not? -- are people doing that? >> some are. but it is like google glass, you do not want to be one of those guys the apple watch is a well-designed object for sure, but i cannot give up my old watches. joe: as an investor, how big a deal or the watch numbers to you when you look at the report at

4:30 p.m.? how important is the watch? >> not. tim cook already says he will not show the numbers, he will do a bunch of the other stuff. revenues, 65% is coming from the iphone. the iphone is incredible. the iphone 6, the larger one is doing really incredible things, particularly in china, as well as the rest of the world. would you put all of that together, the watch is interesting. i was just as interested today to see that they are hired yet another percent in the auto area. aboutre not only talking tv, but they are talking about cars and joe. joe: >> it is to see, but not going to make or break? >> there are things that they can do. the first thing is, make it good enough to fit under a

cuff. when my cuff is buttoned, it does not fit under a cost. they idea of a design is something that does not intrude on life in any way. and that is a problem. theas to be connected to iphone, that is a problem. when you look at apple in who they are in who they have been over the past 20 years, it is basic design, basic original you could take out the box and you understand. the apple watch is not that. someone described it as work. i've never had to work for an apple phone. heard of people returning it because it is not intuitive in the way you would think. mcquarrie has an interesting no doubt about the iphone 6. demand has been so enormous folders -- for those of larger screen phones it has taken

sales through the roof. if you take that away, where would the sales the? be? >> one of the biggest disappointments, one of the mismatched expectations of the apple watch with input i am playing with it, and i did not understand it that you cannot put anything with your fingers, it is all audible. that was a misfire terms of communication. you know inherently that you cannot use your fingers to put anything in on a fitbit. i think they will address a number of these things, particularly the extension of being able to do things away from your phone. i think it will be a good product, and something you may use, but i do not think it is anything like the iphone. the iphone is really a life changer. alix: a lot more to talk about. thank you for joining us.

a lot for apple to come. in the meantime, julie hyman is on entering some of the stocks after earnings. julie: i wanted any give me some of the earnings reactions we are seeing a it is almost everything down after these reports. microsoft is trading lower even after earnings beat estimates. have a right down after the purchase of nokia's handset theirailed to rescue mobile business overall. but we knew about that. if you look at the revenue by unit, and like the biggest is was in the phone hardware unit, with a revenue of $1.3 billion. commercial revenue also short of analysts, and an area of treatment. estimatesles missing a little bit. the company coming out with their third-quarter forecast and that too is below estimates, that is why we are seeing those shares lower. it looks like chipotle, at least we were seeing the biggest decline, now they are. by 6%.

oneou are going to look at number, it is going to be sales. that is a number that mr. sales. 4.3% of the increase last quarter. that is an enviable number in any business. thank you. we will be right back. ♪

alix: i am alix steel. to apple earnings, they are expected to, 10 minutes from now. quarter, is made

up 20% of the revenue, last quarter beyond that it was only 9%. alix: gentlemen, welcome. the first question that you when i talk about when we think about china is the stock market and the slide we have seen overall year-over-year. what does that do for apple when you see those kinds of decline? howhe question for apple is much do people see that they need the iphone. how much will they use that discretionary income? we saw some very bearish signals from ibm, talking about china not able to quench a big deal. the idea for analysts is how much will that carry over to a whole. i think apple is distinct from ibm in this. think this big enterprise business has concern about china because there is an active the foreignplace tech providers with domestic, homegrown technology.

that is a very bearish signal. athink apple is unexceptional case. >> he nails it. the government is not what ibm doing there's the great they want to control it. with respect to these things, and iphones, the consumers over trillionill have $21 in demand deposits. people worry about the stock market. blip. a l people want the iphone. if we get a big surprise in the next hour, i will think it would be it would be china sales are the largest portion of the iphone sales to joe: you do not think it is a big risk that they might favor some homegrown consumer tech company in the same way they are doing with the enterprise? >> always a risk to it. yut tom's reaction to what the

are doing is right on. >> it is hard to replicate the consumer cachet. these are individuals who are making their own discretionary choices with regard to the devices are this is not a big company looking for a piece, this is individuals going to spend a few hundred dollars on an iphone. joe: the massive growth in -- ins iphone sales and le the last two quarters in china. of wealthye a lot people in china. the stock market was up 100%. we lost 34% of it. when it went down 30%, it was headlined.

there were a lot of people want money buying these things. we are cointreau minutes away from the numbers and we appreciate you having us today. joe: we will be right back.

not miss this tomorrow morning. coca-cola is reporting the number one thing york to know, unit case volume growth. it is inspected to come in flat. everyone stop talking about greece, a got quiet, but economist thinks that the storm will be back next year. te can be talking about grexi

all over again. west will write those numbers for you, and we will be back with a special edition at 5:30 p.m. to dig deeper into the numbers.

>> welcome to a special edition of bloomberg west and we have breaking news, apple earnings , and we're taking a 47.5at those numbers are million iphones sold in the third quarter. that is slightly lower than as the mets trade -- the ban estimates.