i think this goes a long way towards sort of soothing investors who are worried that e-bay was going to continue to decline and basically spiral into oblivion but i think that might be slowing if not bottoming all together. this could indicate that trough some on the street were anticipating. that's good news not just for the current quarter but maybe the balance of 2009. >> let's trade this thing. you heard jim say e-bay is gaining market share. >> i think these guys surprise people because they got it in april at 34 cents. something happened in this quarter in the turn-around in their business. is this move to more fixed pricing working? i think it actually has to be but i think people want to own this stock because there is more going on. >> i think it shows stabilization and furthermore that you have to own amazon going into their earnings tomorrow. i expect those numbers to be phenomenal. amazon is getting very aggressive right now. stabilization in e-bay, phenomenal for e-bay. do you want to own e-bay at 20 bucks? maybe but you definitely want to own amazon.

>> let's bring in the other after hours story. qualcomm, jim, what are the highlights there? >> you know, this was a good report in the sense that the company's third quarter was a little better than expected but the real problem for qualcomm comes not only with its guidance but with the average selling prices. you look at the metrics this company is doing and when you're talking about a wireless chip maker you are talking about one of the top if not the top companies in this space so it is a key, important company when you're talking about all things wireless. used to be a lot of competitors in this space but they've all sort of dribbled away by the wayside and that's leaving qualcomm all alone. it settled all of that litigation with broad com. that's good news but when you talk about softer than expected guidance like this with the rampup we saw in qualcomm shares headed into this report, that's a troubling sign and those average selling prices and what we're also seeing with cdma and wcdma's shipments being a little better than expected but again lower priced that's not good news for investors and we're seeing this company get hit

hard. >> what do you extrapolate for some of the handsets? >> qualcomm a lead inner this space, we're watching the shift toward smart phones. that's important for qualcomm and also a lot of other companies out there. but nokia is out there looking at multiple chip suppliers so when you're talking about qualcomm the softness in qualcomm's business might be qualcomm only because a lot of these smart phone makers like nokia and palm and apple and research in motion and the like, all those guys are looking at multiple chip suppliers. that's bad for qualcomm but very good for the smart phone sector because it means lower prices for you and me the consumer and the enterprise but it also is going to put the squeeze on the chip companies. good news for smart phones. not so good news for the suppliers in them. >> jim, we'll check in with you later in the hour as the news warrants and as the e-bay conference call gets under way. what is the trade though? >> i think the trade is, i actually bought qualcomm in the after market. q3 sales, q3 profit is right in

line. actually a little bit above. the problem here as jim said is it's q4 guidance going forward. what you're giving me here is a stock that has been heavily owned and might be a little bit of a liquidation over the next couple days but q4 is my concern. soft guidance is fine. conservative guidance? i'm not afraid of that. i am seeing sales of profit in q3. what i expect, slightly better, i think you still have to own qualcomm. >> you are betting on the fact that dr. jacobs over at qualcomm is giving you conservative guidance. this is not -- >> he is doing a phenomenal job managing that company and the bottom line and resurrecting qualcomm. >> but maybe again a victim of his own success because back june 11th they gave us fresh guidance and boosted the bar for these numbers. i think that's the problem and why with joe i would be a buyer here. they are rolling out 3g in china. i don't care really as much about the margin as i care about the units shipped. it's a big number. even though the rollout in china is going slower than ever, stocks down 5% here, that's where you want to buy it. >> steve, what do you make of this and what does it mean?

karen asked the key question. what does it mean for the handset make sners it is the largest chip maker for mobile devices. >> i can't get excited about qualcomm. i normally have things to say. you've heard me be quiet the whole opening of the segment. today goldman was the real story with the warrants buying them back from the government. that changed around the whole financials, qualcomm i'll kick to karen on that. >> you like nokia? do you still like nokia? >> i do like nokia. nokia announced the big intel agreement. i don't know if this matters for nokia or not. i don't love buying something down two bucks when the guidance isn't great. usually i thought it takes a day or two to shake it out. >> there will be a shakeout, no doubt about it. but the question really becomes is the shakeout -- what do do you? do you buy the shakeout after a day or two? i believe you do. or do you go the other way and play from the short side? i think that's the wrong trade. >> in a case where analysts often have to wait for the numbers to follow through we had a couple upgrades on qualcomm

earlier in the week. i think you'll see more follow through. the street has a target on that which says you don't have to jump in and buy this stock unless we start to see follow through. >> let's move on and keep you updated on qualcomm as well as the e-bay stories as the show progresses. let's tackle the entire market today. stocks losing momentum, the nasdaq posing its 11th straight day of gain. apple and yahoo helped lift the tech sector. are we still seeing that asset allocation moving into technology chasing those returns? >> it's all about asset allocation. the economies can say all they want. there are data points i think actually getting better but more importantly you can't fight the tape. this is about money on the sidelines that needed first and second quarter earnings to show there was stabilization. that's all you need for some of these guys. it's allocations. >> you cannot fight the fundamentals in technology right now. intel is barometer. talking about intel, everyone told you when intel's earnings come out you need to sell intel, take a step back. you'll get intel back around 15 bucks. look at intel. throw up a chart.

it has done nothing but straight up. technology right now, there is a fundamental driver behind that and the fundamental driver is a recovery, a modest recovery in pc demand. >> right. but when the market started ticking down to that 870 level they sold everything and they sold their best performing stocks. they sold tech so in order for this market to move higher we need the leaders to still be there consistently. that's why you see the money going back into tech. they know it's the leader and they're staying with it. we need new leadership. i think you'll see farmer as well take the lead. >> that's a great point. that's why i would think you'd be encouraged about this tech move to say the rest of the market can follow. you don't cut your flowers and keep your weeds. these tech stocks, people want to own them. they're getting the glimpse of good earnings from a couple bellwethers and can feel good about that driver for the entire sector. >> i would have no problem if energy stepped forward and carried the baton as we continue this race higher. >> that's because you're long

energy. >> that would be great. >> what's interesting today, stocks are flat but financials did fairly well today. why are you laughing? >> i'm a happy guy. >> higher by 1%, bkx high beyer 1% though we had all these reports saying credit losses were terrible. we got it out from wells fargo and morgan stanley today. why are people so optimistic about the rest of the sector beyond morgan stanley and beyond wells fargo. >> i think credit losses being terrible should come as news to absolutely no one. so really the question, i think the reason wells fargo is down is because there was sauch big runup last week and so much optimism about recovery in financials earnings. i thought actually wells fargo's numbers weren't bad at all. >> after the initial pop down ward it actually traded great. >> i was shocked at the nonaccrual loans. >> it was huge. they also had a huge quarter in

mortgage orange nation mortga mortgage originations. there was the interview with the cfo earlier today where he said we are not issuing additional equity. that is the key. you don't want them to issue -- >> when people are listening to the numbers the interpretation was that because they didn't put enough aside, because they talked about 12 to 18 months to pay back t.a.r.p. these guys definitely need to raise more capital. that was the first reaction though the numbers blew people away. i think the earnings power for these guys going forward is fantastic because the originations, they have taken a huge amount of market share. we know what the loan exposure is through the consumer. we don't know their commercial loan exposure. we know it's 24%, 25% of their loan book, pretty big, but this was a better number than the market traded. >> why do i want to own wells fargo when i could own u.s. bancorp? you're not looking at the nonperforming asset growth in the 40s which you saw with wells fargo. bank of america, u.s. bancorp, nonperforming asset growth, it's in the teens, 15% to 20%.

right then and there, yes. the model may suggest wells fargo is a stock you want to go over the long term but looking near term i think bank of america and u.s. bancorp, names like that, have less struggles in front of them with these nonperforming assets. >> right. but the important thing was they're two different animals. wells fargo, bank of america, two different animals. three weeks ago if wells fargo stated anything like this the whole sector would have come in. that was the important part that it didn't kill the whole sector. early in the day they threw out the loser. they bought the winner. >> moving on, yahoo the internet giant closing the day higher after getting off to a rocky start. the move up came after posting by "the wall street journal" colu columnist saying sources i have spoke to over the last two days say the search deal is still on good footing and could be struck very soon even as early as tomorrow. >> what's the date on that, last january? >> it could have been any day from last january up until today but the fact is the stock moved

higher on the back of that news. shooting higher in the afternoon. >> look, yahoo is going to have to get this deal done. when you see 88% of your revenue coming from search engine and you are losing that search engine market share to microsoft, you're going to get something done. it's not google that's losing the search engine share right now. it is yahoo losing the search engine share to microsoft. bing has put microsoft in a much better negotiating position with yahoo. i think this is going to get done because i think it has to. >> they also said, there is another report they were talking about selling hot jobs and their small business -- this is, to me, right where we said last night, part of the spruce job. it's improving the margins, cutting their costs, getting this thing ready to sell. i think that's what we heard last night at the conference call. >> to sell wholesale. >> no i think to increase the profitability of the company now to cut costs and make it a more valuable multiple to sell this

company. >> both of you at the end of the desk think something is going to be done. does that make yahoo a buy? because you believe something has to get done. you believe this is a spruce job. >> i think it's all about microsoft then raising their search engine share up to 30%. to me that's a trade. look, the new yahoo, new yahoo page, i don't know if you tried it out. i don't know if it's an improvement over the previous page. i don't know how creative yahoo is getting. it comes with aligning themselves with microsoft, to me. >> these guys have put themselves in a place where they are as profitable as a year ago when they had a much higher bid. i realize the company is worth much less. if yahoo accomplished anything they've showed they won't take the low bid and need to be lifted at a premium. >> karen, you're the skeptic and also a holder of microsoft shares. a painful -- >> yes. >> -- painful experience for you. >> probably flat now but i did sell much at a loss. so, yes. i'm still pained by it. >> would some sort of deal with

yahoo make you more optimistic and less pained by your holdings of microsoft? >> no. it's ridiculous. they should just move on already at this point. >> forget yahoo. >> you know what? could be a fast fire in the making but i don't think we'll see anything tomorrow. >> she's rooting for me. >> there you go. >> on microsoft tomorrow i don't think it's really, no one cares about the search. it's not about the bing. sorry, joe. he's a binger. however, this is reabout window 7, x-box, the big parlt of their business, seeing how bad computer sales were off last quarter. >> it's about the aggressive strategy microsoft is finally adopting for the first time in several years. you can't just say it's not about that search engine market share because it is. they are going to ramp it up to 30%. that is significant. >> it's important but windows is the cash cow that keeps on giving. this was a disaster. if this is a much better product, people are rolling it, people have to renew.

it's about time for everybody to get a new operating system. >> we should know. "the wall street journal" had headlines after the bell today saying microsoft is affirming its release date, that win 7 will hit store shelves october 22nd so that comes ahead of the earnings tomorrow. we will by the way have an analyst on later in the show to handle microsoft earnings tonight. >> economic recovery. >> exactly. talking the tape today, apple shares of the iphone maker closing higher by 3%. nine brokerages raising their price target on the company following strong quarterly results last night. >> that's what it takes. again, these guys showed that the profitability in the fourth quarter, despite almost laughingly conservative guidance, is going to be there. >> it's hard to joke. >> when you hear nine brokerages saying it's going to go higher you automatically want tongue t it's not going to be higher. >> longer term everyone thinks apple is going higher. i don't think any of us on this

desk longer term think apple is a sell. >> what's the entry point? if you see a 3.4% rise in the session when do you get in? >> the point is, yesterday we all sat around here and we heard that iphone is outselling the ipod. granted, it's been on a shorter term than the ipod but there are so many new products coming down the pipe. there is apple tv. people are excited about it. once you get a mac you're excited about the product integration. apple is a long-term buy. i don't think anyone is arguing that. >> 5.2 million iphones sold. is this an apple specific story where the consumer is willing to shell out money for iphone or ipod but maybe not a new pair of jeans or dinner out with the wife? >> i think the latter part is true. i think if you offer it very -- >> in karen's case dinner out with the husband. >> right. >> a very specific, great product. there is a customer out there who is willing to spend. but for this sort of also ran, no. i think the customer is being careful with their money. >> when you offer a premium

product at a discount it doesn't matter what it is people are going to believe they're getting a deal and that's what you saw happen at apple. >> let's move on. it is time for bull market or bs the stock market snapping a seven-day winning streak today but still up 6% in the last month. have we gone too far too fast? could there be a ticking time bomb ready to go off in the overseas market? danielle, always a pleasure to talk to you. >> hi, melissa. >> what is the potential ticking time bomb overseas you are watching? >> okay. so what i'm getting at here is i think that i believe if you ask me bull or bs with regard to the rally we've seen, i say the most believable thing is the tech rally. i agree with the conversation some of you are having there just recently. the tech rally is encouraging. that should lead the next cyclical expansion. energy ought not to be leading. if we're going into another upturn, which is really what we're looking for, right? we're looking for an end to this god awful recession and the next

expansion cycle even if it's muted. let's get on with it, right? i'm more encouraged by the american progress being made because i think america is further ahead in this cycle and if you look at what's been happening around the world, there's this fantasy somehow that, you know, the rest of the world is doing better or will rebound quickly. i think that's absolute fantasy when luke at soyou look at some numbers for example out of european banks, the fact that there's been a bunch of reckless lending. they're 30 plus times leverage. japan's in shambles and they've been funding a lot of these in asia the last few years. when you start adding these things up and i cog uld go on, r example -- >> okay. what pullback are we going to see? >> what i'm concerned about here is the emerging markets have raced ahead and everyone is going, see, that's because america is sub standard and the emerging markets agree. i say no. i say because the risk appetite has gone crazy again in the

last -- >> well, let me jump in. i think if i see china as an economy of roughly $3.5 trillion, the us ups at $14 trillion, if we think these two economies, certainly we know china is growing and the u.s. which is the biggest consumer-led economy in the world, compared to japan which is about $3 trillion and the euro zone, germany about 3.5 trillion. i'm wondering if i see half of the world growing and growing substantially, where is the problem? emerging markets by the way, it's not just china. it's brazil at 2% this year and probably 5% this year and india which is a billion people growing at probably 6% or 7% this year. so i'm going to take the other side of that. >> okay. but relative to global gdp we're talking about very small slices here. right? >> looking at half of global gdp is growing. >> you're talking about america and the uk being about 26 or 27. >> you had mentioned around the world. i would make the argument and as

cs and goldman sachs and a bunch of people have this week that the u.s. is actually going to start to grow in the fourth quarter and we've started to turn. your argument is the rest of the world is very slow so how can we be excited? >> danielle, you say you want to be invested by october of this year. is that in anticipation of some sort of recovery in the fourth quarter? >> right. so the point is simply this. i do think the u.s. is coming out of recession sooner rather than later. perhaps it is now. i think that's positive for, you know, earnings have been slashed down. we'll see some growth. that's all good. what i think we might see, though, is a rough patch, again, coming into the fall. and i'm concerned about that because as you relate -- as you also alluded to earlier it's great that techs are leading and maybe it's the right sector to do so but everything gets sold off. >> right. >> we go into another sort of risk aversion we'll see everything get tested again. i don't want to lose in that but i want to be ready because i think we're finally getting an opportunity to buy some reasonable growth and some

reasonable earnings expectations out this of recession. but i don't buy that the emerging markets, etcetera, are going to be great. they lagged in this cycle. the u.s. lagged. world gdp, world trade down 20%. >> these are v-shaped recoveries for a very real reason. >> i'm going to step in and play referee. we have to go. danielle always a pleasure to talk to you. hope you'll come back very soon. >> a drop and then a pop? >> basically. a rough patch, fully invested by october. >> she makes a very good point. japan and europe are dead. that's not a reason to believe the world cannot continue to rally out of this thing and that's my point. >> great debate. time to see what's going on around the trading floor. we have an early pop on today's "fast money" for the taxpayer. goldman settles its t.a.r.p. warrants with the treasury for $1.1 billion. the dividends along with the redemption of the warrants gives the taxpayer an annualized return of 23% on its goldman

investment. not bad, taxpayer. that was the word on the street. it finally has some buzz but will the heat hit microsoft where it counts or is it a bust? a chairwoman studies the fine print for a stock that has consumers and investors lick tlg lips. welcome to the now network. population 49 million. right now, 1.5 million people are on a conference call. 750,000 wish they weren't. - ( phones chirping ) - construction workers are making 244,000 t calls. 1 million people are responding to an email. - 151 accidentally hit "reply all." - ( foghorn blows ) that's happening now. america's most dependable 3g network

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welcome back. we're live at the nasdaq market site in new york city's times square. let's check on e-bay the big story we are following in the after hours session reporting earnings better than expected at 37 cents a share. the online auction site saying essentially they are seeing signs the core market place, business unit is in fact improving and it is gaining in terms of market share. we should note also we'll have an interview with the e-bay ceo right here on "fast money" tomorrow so you will not want to

miss that. >> during the break just looking at the numbers the gross merchandise in volume, the falloff there looks important and that's important for e-bay's business model. >> let's move on in tech land. time to take your position. while yahoo has been heating up the talks of a possible deal with microsoft have been on a tear this year. joining us from portland, oregon is one of the top analysts on the street from pacific crest. it is always a pleasure to talk to you. >> thanks for having me. >> we've already gotten some headlines out of "the wall street journal" saying win 7 will hit store shelves october 22nd. does that make you more bullish on what microsoft might report tomorrow? >> that's right in line with what they speculated all along. what makes us more bullish about microsoft tomorrow is we saw such a nice recovery in the quarter of pcs where people expected pcs and client revenue for microsoft to be down as much as maybe 16%, 18% even before the tech guarantee program. we thought it would be down like 11%. now it looks like that with the latest pc numbers. >> we want to bring our viewers

up to date on a development out of berkshire hathaway. warren buffet has reduced a stake in moody's, nco down from 48 million shares. remember just yesterday the treasury released an 18-page draft about possible changes to the credit rating agencies to reduce their influence and possible conflicts of interest. we d.c. the stock along with mcgraw hill shares yesterday a little soft but again, berkshire hathaway reducing its stake in moody's to 40 million shares. karen, this is a space you've been following. >> this is a name that we're -- not icon. i'm sorry. david inhorn, as well. i wonder if he made that filing though. it certainly does make you think more to come. >> right. >> so i would imagine this stock will be heavy tomorrow. >> absolutely. let's resume. brendan, forgive the interruption here. we had to update our viewers on anything that warren buffet does. in terms of what an investor might do ahead of the earnings during tomorrow's session what would you recommend? >> you know, i think it's a good

long go into the session tomorrow. i think we could see some upside. expectations are pretty decent but most of the other analysts are thinking we're just going to be in line to have a little lightness in the revenue. i think we could see some decent upside again mostly because of the recovery we've seen in pcs as well as better indications out of the enterprise sales guide over at microsoft, the data business, e-mail business, those things are things people have to buy. they're not as heavily impacted by the economy. >> this is karen. one thing we've seen a lot of companies do is have much greater productivity through expense cuts. god knows microsoft would have room for expense cuts. what do you think we'll see there? >> i think we'll see more of the same though i wouldn't get too bullish as people think about next year. microsoft originally committed about $27.4 billion in operating expenses for this year. they'll beat that by well over a billion this year but as you look at next year it's probably going to be the $27.4 billion. they've got more expense cuts to go and definitely changed their culture a bit.

it's still a bit over there. >> on this it seems to me the strategy is get farg moreting f aggressive. what's the difference right now? >> i think i just got a good preview. i was down at their partner conference for two days. i think they're going to see them come about much more aggressively on virtualization. there were some headlines across about microsoft claiming they have 7% market share. i think you'll see them continue to come out much more aggressively against google. you probably saw the comment last week where he pretty much dismissed what google is trying to do with an operating system. microsoft got a little more confidence and its group back and is going after some of these competitors. >> thanks so much for your time. always a pleasure to talk to you. anybody buying microsoft ahead of the earnings? karen, i'm guessing you're not. >> i guess that is similar to

buying it. >> i don't think you need to buy after an 11% move. a lot of stocks you may want to. microsoft isn't one of them. i think things that are going to be surprising not only on the window side but the entertainment and device side. the x-box story has continued to be a bigger and more important part of their revenue stream. they have a lot of things to excite people there. >> i might look like a fool after earnings but i have added to my position every day over the last couple weeks. i am telling you i believe mutual funds which are significant players in ownership of microsoft are under invested in microsoft right now. >> i haven't seen any mutual fund. i don't want to pour water on you now but hand me some water. >> i got coffee. >> the biggest and the best, just the ones i cover. that's all. >> let's move on. in yesterday's conference call, wall street firms were accused of taking advantage of reduced competition to make what he calls, quote-unquote, luxurious profit. quote, there are fewer fires. there is very little capital

being committed by these dealers. they're just talking the spread between the bid and the ask and making a very luxurious return. at the same time, karen, you bring up a good point and that is perhaps mr. fink is talking of his own business. >> i think it is relevant to note that he did just acquire bgr which is barkley's which has an enormous etf business and i would guess that etf trading might be the kind of thing that would get in the way of that luxurious trading he also talked about. >> i think you're smack on and it's also a good time to be politically correct with what you say or what you do which is what goldman sachs did today by paying back t.a.r.p. and essentially hitting the government's bid on warrants that jp morgan and morgan stanley said they wouldn't do. it's time to say and do the right thing. as much as goldman sachs is under fire for the enormous profitability they have that's the right thing to do so i think what blackrock is doing is verbally piling on. >> it's highlighting what steve and i have known for 20 years. you never take off holidays on

the trading floor. why? because holidays are the best trading days to be on the floor because no one else is there. you're the liquidity. right now that's what goldman sachs is. they are the liquidity, one of the few games in town because everyone else basically blew out. >> is that what you still do, you don't take holidays off? >> steve, would you cover for me on christmas? >> i got you covered. >> let's move on. technology and financial earnings have generally been lifting investors' spirits but tomorrow we get a real tell on the state of the economy as some of the top industrial names report. the industrial sector is still down on the year so what could you expect from 3m tomorrow? dean, great to have you here onset. >> thank you. >> the data points so far out of the industrial sector not stellar. caterpillar, revenues down 41%. eaton cut its forecast. illinois toolworks guided only after the third quarter saying visibility is too limited for the rest of the year. out of ge the industrial business was soft. what do you anticipate for the

rest of the sector here? >> interesting. what you're seeing for the first time, everyone talks about the green shoots but fort first time in itw numbers today they're pointing to incremental growth between a first quarter and second quarter. so rather than looking for year over year growth you're now talking about where is the incremental growth coming into the second quarter and the margin and lift itw got was very impressive. you didn't see it in the stock price but the stock is priced for perfection at this stage. looking ahead for tomorrow everyone is looking more at organic revenue growth so for 3m, the big gasp in the first quarter was down 20%. we don't think it's going to be that bad. more importantly, it's where do you want to be positioned at this stage of the economic cycle? we think investors need to be in defensive early cycle names and 3m is a proto typical early defensive cycle. >> how about something that's not very defensive but how about the auto industry? i mean, there is a big expectation the fourth quarter could start to see if nothing else an increase in production

even mostly because we've built down stocks at this point but that will trickle through the industrial world. >> a great point. the idea selectively within the multiindustry sector, you can add exposure like auto and 3m has a significant oe and after market auto business chlgt selectively you could get that type of early cycle exposure. we agree. >> 3m, a buy at these levels? >> absolutely. and daniher is our favorite market performing. the more defensive name in the group. 40% of the portfolio is in businesses like water, like medical tech, and so from that standpoint it's also the best cash flow generator in the sector. >> great to have you with us. coming up next, what is everyone out there waiting for? no it's not the solar eclims. it's karen's stock of the day of course. she'll reveal the best way to play the consumer names when we return.

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on the trader radar tonight whirlpool the world's largest appliance maker among the most active names in the nyse today. let's check on qualcomm, the mover in the after hours session. its losses are steepening at this hour. qualcomm saying revenue next quarter may fall short of estimates. we should know qualcomm is the largest maker of mobile chips out there so there could be a ripple effect on some of the handset makers as well as the other chip makers. right now qualcomm is down by about 5%. joe i think you're probably a little behind at this point. >> a little behind. >> we'll keep a watch on it for joe and all of you viewers. time now for pops and drops. u.s. bancorp was up 4%. a pop. >> this is one of the names that i think you have to own. it's not a crowded troid which

you want to avoid in this environment. when you talk about nonperforming asset growth it is in the scene. >> whirlpool was down 10%, karen. >> at this point with their guidance and for me this is t , the -- this is not quite there yet. >> pop, for china petroleum up 6%. tim. >> the story is refining margins in china are getting much better now that the government has stopped subsidizing prices. very good. very interesting stock. >> amd down 13%. >> reported larger than expected loss. i haven't seen any one of my clients buying it. i say stay away. >> a drop here for the sun. yes, the heavenly body known as the sun. the longest solar eclipse this century took place this morning blanketing asian countries from india to japan in darkness. the eclipse lasted six minutes and 39 seconds at the longest

point far surpassing the two-minute eclipse that took place last year. pretty cool. a pop for wynn resorts up 6%, joe. >> followed suit after las vegas sands last week. an ipo to list on the hong kong and change. this was a classic short squeeze this morning. shorts were scrambling. i tell you i do believe the short trade in wynn is over. >> we've got a pop. regional bank. yes, a regional bank popped today. key corp up 6%. karen? >> key corp really feeling like a champion among regionals. losses weren't as bad as people thought. >> drop here for caterpillar, down 2%. >> remember, yesterday their profits were down 66% year over year so maybe people took a breath. they have projects start k in the fourth quarter. i would own this stock. >> we talked about berkshire hathaway reducing a stake in moody's. mcgraw hill was up 2% today. >> any concern over government regulation even though it popped back after being sold off, you have to stay away. too much. >> and a pop here for camel

milk. >> camel what? >> camel milk. looking for your dale chily choe fix without the fat? look no further than the camel. dub dubay's company is aiming to be the godiva of the middle east. all right. don't go anywhere.

welcome back to "fast money" live at the nasdaq market site in new york city's times square. amazon.com reporting it would acquire online retailer zappo's.com for $807 million. more on what that could mean and we'll bring in patricia edwards. patty, great to see you. >> always good to be here. >> it seems like they've been on some sort of buying spree lately. >> they have been doing a lot to really enhance the brand and i think part of it is they're taking advantage of the weakness in other retailers. they've come out with some of their own lines. they've got a line of home goods, their own denali tools, they partnered with tom douglas a local very famous chef to do a line of kitchen utensils.

now they have zappos. there are rumors they want net flix. i think we'll see this continue. >> it looks like this is a stock deal. if you're amazon and trading at 40 times earnings i bet they didn't pay 40 times earnings for zappos. that makes me think probably not going to move the needle sideways but do you think they'll continue doing these deals when they have this currency that's so valuable? >> i think they will. they've always wanted to be the big presence on the net and they have such cost advantage over regular retailers with the bricks and mortar. they want to get bigger and have the opportunity now while everyone else is really suffering and they don't have the capital. you know, when you've got the money and opportunity you've got to take it. these guys are really smart. i would expect we'll see more of this. if they were to pick up net flix right now trading at 30 times, once again, still creative even though the stock is expensive. >> when you talk about amazon

heading into earnings, clearly, they are looking to become the walmart basically online. what are we going to see tomorrow if you can tell in terms of earnings, in terms of this economy, their resiliency and looking overseas, the emerging demand? >> you know, i'm not sure exactly what they're going to report but i can tell you that people are trying to save money however they can and one of the things you can do with amazon that you can't do if you're driving to the mall or seeing individual stores is you can price compare. a lot of people are doing that. the new outdoor store they just launched was partly in response to people wanting to buy in one place, buy with just one transaction, have one shipping charge. and so they're able to consolidate stuff so much that it is really resonating here in the states and i think it's going to continue to resonate as they go more overseas and build those brands out also. >> the bottom line for amazon i think right now is for traders, that we've had such a great run i wonder where the next trade is. that's really, despite all this positive development, i'm

curious where you stand on the technical aspect of this. i would not be owning this stock here. >> you know, i think that any time you are getting the news you probably do want to take a little bit of a breath. the stock is at what, 73% year to date? >> yes. >> you have this news today. you have got earnings coming out. there is no sense to necessarily rush into it. at the same time when i was looking at the charts earlier, it didn't seem that poppy to me, either. i think there is room to go higher but you might be able to get a slightly better price. >> you mentioned net flix. amazon might buy it? >> i think net flix is a buy on the premise they are killing the competition and the video demand from places like comcast hasn't caught on as well as they would like. the fact amazon is going to buy it, i've never been one to play a stock just because i think someone is going to take them out. it's a good stand alone. as they become part of amazon it's even better.

>> thanks so much for your time. appreciate it. >> long amazon. once it gets above 90 it goes to a hundred it's the whole nine, ten thing. once you get above the nine you always go to ten. >> tim, you're skeptical about amazon's run, continued run. >> once it goes to the eight it goes to the seven and the six. >> all right. >> i don't know. >> let's do a little poll action here. tonight's question is amazon.com is up more than 70% -- 73% to be exact so far this year before earnings tomorrow. are you a buyer? the kindle and recovering consumer are reasons to buy? or b, no, too far, too fast. logon and tell us what you think. do not miss the anchor of "20/20" as he debates robert wright on the proposed obama health care plan tonight at 7:00 p.m. on "the kudlow report" with larry. >> i like that. don't go anywhere. up next we have a fast message a

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all right. let's get to the fast message. matt in akron, ohio writes badu has been on a tear and is closing in on a 52-week high. what would you do going into earnings at the end of the week? tim? >> these guys have beat the last couple times significantly. i'd be a little worried on the price appreciation. their growth is there. they are cementing their lead in china. i'm not worried about google in china despite a down grade this week by cs that pointed to that action. it's a great stock. i've missed the rest of this rally. be careful here. >> matt in akron you have your answer. time now for our stock of the day. karen? >> the stock that i am watching today is actually pepsi. i don't know if you know what pepsi does but according to pepsi this is what they do. they make nourishing and tasty food and drinks that bring joy to their consumers. >> joy. >> that sounds wonderful. >> yes. doesn't it? >> what's in those drinks? >> happiness. >> they don't say. but they have this host of huge -- >> the quaker man's happy.

look at him. >> he's joyful. >> does it -- is it have a coke and a smile? >> no. they beat today which is nice. they reaffirmed their guidance which was also nice though we may see some headwinds there. that's one thing you have to keep an eye on. but they are seeing actually the consumer in europe and in the rest of the world coming back as that is a very good thing. pepsi cash flow is huge here. and it's trading at 15 times earnings. if you look at their multiple over the last five years it's been north of 20. i like pepsi. you can buy it right here. another way to play it is pepsi bottling group, pepsi has made a bid for their bottlers. pbg is the target. it's unclear how it's going to be resolved right now. play it that way. you get to own pepsi and get a bump if pepsi bumps their prices. i bet they would. that is your stock of the day. [ engine powers down ] gentlemen, you booked your hotels on orbitz.

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>> watch my widget and i'll tell you why. >> i'm melissa. thanks for watching. see you tomorrow. tomorrow a key aerospace supplier flying high. the ceo of goodrich talks numbers and the future. plus tough and getting tougher. pete tackles earnings season. should you go long? "fast money" 5:00 eastern tomorrow on cnbc. your savings into income -- guaranteed, and get a retirement "paycheck" for life -- guaranteed. call... to get started, and learn how to secure retirement income that won't go down -- guaranteed. call fidelity at... for details about guaranteed income for life, and change the way you think about your retirement savings. and you know what, it works. nutrisystem for men: flexible new programs personalized to meet your goals. what's great about nutrisystem is you eat the foods you love

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i'm jim cramer. welcome to my world. you need to get in the game. going out of business? they're nuts! they know nothing! i always like to say there's a bull market somewhere. >> "mad money" you can't afford to miss it. hey i'm cramer. welcome to "mad money." welcome to cramerica. people want to make friends. i'm trying to make you money. i'm not just to entertain you but to educate you. call me at 1-800-743-cnbc. maybe the best way to look at this market has nothing to do with business at all. instead, you need to think in terms of medicine -- doctors and patients and, specifically, diagnosing those patients. it's kind of like an episode of

the television show "house." it's the perfect analogy for what stocks are doing right here. we've got dozens of patients, think sectors, each with different diseases and conditions. some that were never really all that sick in the first place. last fall, all of these patients practically every stock, was felled by what can only be called a national outbreak of plague. >> the house of pain. >> the home market was diagnosed with the lehman brothers induced black death. at the time analysts, mutual funds, heng funds, individual investors rendered the exact same negative prognosis. practically every patient was put in intensive care. condition critical. some not likely to make it. others labeled dnr.