there is a project pipeline on the way and the purchases are merely being deferred until the new products hit the market. >> got it, jim. thanks so much. we'll check with jim throughout the hour as the news updates -- the conference call is under way in a half an hour. check out jim's twitters also on our twitter page. certainly this is going to be a big story. we saw the nasdaq rally for its longest winning streak since 1992. we should note, though, too, jim had mentioned that, yes, windoes 7 is coming out, and the stock was strong going into sellings. so it's not entirely unexpected, karen. >> there's only so much you can make up for. everyone knows windowsina s isnt there. revenue miss of that magnitude, that's hard to ovcome. i didn't see anything about bing. >> saw nng about bing. waiting for the 5:30 conference call. nothing about bing yet. >> meantime, the other big

story, amazon.com, the shares are slumping. revenue this quarter may fall short of estimates. we've got the monster. he's monitoring that conference call which just got under way. dr. j., what is the latest here? >> just getting started. but i think the -- the key issues here are going to be other than joe taranova, these guys are the liquidator of choice. all of the sellers that come through amazon, that's where they get a lot of the inventory, quite frankly, that boosted up earnings in the previous quarter. will that continue or is the recovery carrying forward and they have less inventory that they're having to push out? so that's actually a big issue, i think, on the call. when they get to that or if they don't, i'll ask them that question. also, tax legislation, whether or not california and states that are demanding that they withhold taxes, whether or not they have absolutely cut to the associates that are in those states. they will not withhold for them. so the question is, of course, are you losing, then, sellers on

amazon because amazon refuses to withhold? we'll see what they -- what their answers are to those questions in the next ten or 15 minutes. >> dr. j., thanks so much. we'll check with dr. j. throughout the hour. he's also twittering the call, by the way, along with jim goldman on the microsoft call. let's talk about this in the context of what this means for the nasdaq. amazon is falling very hard because ebay posted such a strong quarter, had such huge gains. the bar was pushed very high for amazon. >> it's horrible. this is an 0 for 7 today if you throw in capital one, broadcom, netflix and others. you can't decide what you want to do. the market tells you what you're going to do. you're going to have to get smaller. these are not good earnings reports from microsoft, clearly disappointing. it does not mean to me that longer term, you cannot like microsoft, but you cannot like it in your position as much as you did yesterday. >> what does this mean, pete? we're talking about this before

the show. the implications of the microsoft report on the rest of the tech sector in terms of the cisco, the maker of the parts, exset raw? >> they've been on this great ride for the last couple of weeks. i just got to get those answers first. how did they miss on the revenues by that big of a number? and amazon, why is amazon struggling so much when we heard from ebay, we had great numbers. the forecast was phenomenal at ebay. why are these two so distinguished, especially when you figure amazon is not just about whole auction system. it's about the kindle and all the rest of the products. why is it right now that amazon is struggling so hard-core versus what ebay did today? i think in the microsoft case, if it's about windows 7, if it's about the people waiting for that, maybe that's going to be a phenomenal catalyst and maybe this pullback is a great buying opportunity. i own microsoft. this hurts a lot right now in the post market, but i think there might be opportunities for somebody like me who still likes

going forward microsoft with windows 7 and everything they're doing. i do have to hear that call before i start deciding to buy more stock. >> the major thing was we all said, what's going to be the next new leader? unfortunately, we still needed tech to be strong going forward while the other new leader is found. this is a major blow to -- to the market rally. >> i don't know that this is such a major blow, actually. look at what's happened to the nasdaq in the last two weeks. >> it's been so aggressive to the up side. >> it's been huge. if you put it in context and step back, this revenue miss on microsoft is substantial, but amazon is not so bad. >> i will tell you, this is the first day i've felt as if people were chasing the market rally. i feel mutual funds were definitely partaking. they held out as much as they could. >> it does not reverse your sentiment. not at all. doesn't reverse the sentiment. it does, however, tell you to reduce your position, what you're seeing in the after hours here. it has been a phenomenal run. everyone has been coming in.

>> i've got to tell you, this makes me a little bit nervous. i love the tech name. data storage, that area just keeps on cranking. emc came out, great numbers. network appliance continues to promote. look at western digital. all of that whole space is moving. but when you get names like microsoft out there like this, this does -- >> we have to -- hold on. >> i'll tell you what, i'm not so excited to buy it. i'm looking at it, but i want to know why this revenue -- >> we have the chart of the day up. the longest winning streak since 1992. let's see what they're doing in the after-hours session to see if this has changed other people's sentiment as well. as we bring up the chart, my guess here is that, yes, this will be a damper in tomorrow's session. here we go here. you see in the arhofter hours, softness. let's go straight to jim goldman. he has some breaking news. >> joe was just talking earlier about any update on bing, but i can tell you i don't have an update on bing, but i have an update on yahoo.

the "wall street journal" is reporting that yahoo's board is scheduled to meet as early as later today to discuss a possible search deal, a search proposal from microsoft that at this point it's unclear whether the board would support the deal that is currently being discussed. but nonetheless, a meeting, the "wall street journal" says, of yahoo's board to discuss a possible search deal with microsoft. details to come. could be occurring as early as later today. guys? >> is that a good thing or a bad thing for yahoo? i don't know if people were hoping it would be a take-over in its entirety. >> i think those days have -- yeah. karen, i think those days of a total deal for yahoo are -- are long past. unless as carol barts as said in the past and recently, microsoft has suddenly come up with a "boatload" of money, this is a search partnership. and if these guys can string a deal together, we saw microsoft's online division post about $731 million today in revenue and another horrible

loss. microsoft needs to do something with its honline stratege. yahoo can use the marketing and financial muscle that microsoft has. a deal today makes much more sense. >> got it. and, jim, we want to bring our viewers' attention to the headline that we are running. these are all courtesy of the "wall street journal." it is unclear whether the yahoo board actually wants any sort of a deal with microsoft. while, you know, buying yahoo in its entirety may be off the table, we saw yahoo in yesterday's session ride mid-day on the back of reports of some sort of only partnership or some sales of parts of its business. >> i think that's a good reason why you always want to have a little piece of yahoo in your part folio. we hear from carl icahn all the time about them warming up to a deal. so if that's the case, and this could be something great for yahoo. they need something to get themselves some muscle in their, as he just put it. microsoft would be a great addition. >> i think it's great for microsoft because obviously it

raises the market share. the introduction of bing over the last couple of months, this is what it allows microsoft to do. it allows them to negotiate and basically cherry-pick the crown and only jewel of yahoo right now and pull it out in a deal. i think it's a great deal for microsoft. obviously bing, that's up to about 30%. >> a lot of interesting news. of course, the microsoft conference call is getting under way in just about 20 minutes. i'm sure the topic is going to come up. we interesting to see what management has to see about those "wall street journal" headlines. the other big story, america express. we're watching the stocks fall in the after-hours session. revenues falling short of estimates. there you have a decline. another case of american express going strong into earnings and then we're seeing a sell-off on the actual report. we'll stay on top of this story as it goes. the xlf, we'll check on that to see what impact, if at all, american e press is having on the financial sector. this was a sector that has been strong over the past couple of days. it's soft in the after-hours

session. karen, this is a name that you follow. anything out of the quarter that you have been able to see so far that surprises you or concerns you about credit losses? >> no. i haven't seen the data yet. but the stock -- another one that's had a huge, huge run-up. the bar was moving higher and higher for them to be -- i didn't -- i can't tell if this is a terrible quarter. i don't think it is, but the run-up was really reflecting that they'd knock it out of the park to have the stocks go up. >> the first glance at the numbers, they do not look horrible. but you had to knock the ball completely off the cover in the -- after the price action that we saw today in the overall market. i mean, you basically had to have earnings after the close that eclipsed the expectations that we have put forth over the last three or four weeks, which have all been raised. understand the environment that these earnings were coming out with this afternoon on a day that the market rallied so

significantly. >> we overshot to the down side. we're overshooting to the upside. this is just a slight correction. we'll have guests later to talk about the technicals of it, but it doesn't hurt sentiment. is the rally over? who knows. >> the technicals is a lot about what this market is. mcdonald's numbers weren't bad today. i thought they were pretty impressive really. the stock has struggled. each time it's gotten up towards 60, it pulls back. it's been an opportunity. a hit and then pulls back, gets towards the mid-50s and then everybody wants to pile back in. they don't want to own it at 60. it's all about the technicals. if they can get through those, then the sky is the limit. some of these commodity areas, when they get through that level of resistance, then they've got plenty of upsides. >> and these are all trading vehicles. mcdonald's, i bought mcdonald's today. i'm glad because it's been a defensive play. and tomorrow, that actually ownership of mcdonald's should bode well if the tape rolls back over. >> look where we are in the s&p, where we corrected from.

two weeks ago we're at 870. we're 100 points higher. that's pretty aggressive on the way up by anyone's standards. >> the question is, you know, the mood that we've seen, you know, in the past couple of weeks in the markets, were we already anticipating that the earnings would knock the cover off the ball? isn't the fact that the earnings actually have to come out, is it that we've already priced that enso we're not seeing that and we're going to come back to normal? >> the nasdaq up 13% in the last two weeks alone. you've got to have a lot of really good news to keep that going. i mean, this last couple of days i have thought this is the flight from safety. and this is a trade we've had on safety versus short to hire, hasn't worked at all. i think tomorrow maybe that will start to work because you had names like walmart actually down today and some of the specialty rel tail just zooming. so i think that will reverse. >> and the early tell tomorrow, pete, you're all over this, the vicks.

let's see if the dollar rises overnight. those will be the -- >> to that point, the vicks did pop today as we got dlthrough 9. why? because of steve's point. i think people are starting to get themselves in a position where they have chasing this market. as they chase it, they're looking for the upside. we had all kinds of s&p buyers of the august 100 calls. those were 19 and 20 cents. they're now trading a buck 50. that's a home-run-type trade. they bought 200,000 of those last week. >> okay. just want to take a break from this conversation for a morning and check on the futures again. we're digesting a lot of after-hours stories. microsoft, amazon, american express all lower in the after-hours session. let's take a check on where we stand on the s&p futures. you can see the futures are trading later on the back of all that earnings news and the cubes are also trading lower. let's go keeper into the microsoft story and for that we

bring in peter misik who is on the fast line. peter, great to have you with us. >> thanks for having me. >> what was the most surprising part of the miss with microsoft's report? >> how much money they lost in online services. it was a record. >> you know, when people see a pullback on microsoft, you've got to wonder if this is potentially an entry point for people if they're not already in microsoft. at this point, are you believing that that -- this perhaps is an entry point or are there too many doubts in your mind based on this quarter? >> our doubts aren't on this quarter. our doubts are that this quarter is a symptom of -- what you're looking at is that microsoft is having asp pressure on their price of the windows. netbooks, for example, they're not able to get as much per, and as the price of laptops and pcs continue to come down, oems are pressuring them to lower prices. and then you've got competteres.

the alternatives are really growing. then you look at mac and it continues to gain share. the call on windows 7 upgrade is not going to be made or broken on this quarter. we won't know that until we know what the launch looks like in october and you'll probably get a reasonable read in november. until then, this trade is a tough trade right now. >> peter, it's joe. what is your take on the potential microsoft/yahoo deal and the affect on microsoft itself init does happen? >> we wouldn't be positive on it. chasing the search market in this way is really a lateral move. we'd like them to think outside of the box here. you're not going to catch google doing a deal with yahoo. you've got to do an end run. you've got look attack mobile. you've got to look at new, intative ways of handling data. nadal is a great way of looking at that. or natel, sorry. you've got to think outside of the box. trying to catch google head-on,

don't see it happening. >> peter, were you down on the deal prior to this quarter or did your sentiment change based on the weak quarter? >> we figured that we've got at least another two quarters of weakness here on the pc side. we're not overly fussed by it. our key thesis, though, is what are we seeing from windows 7? are we going to see i.t. departments start to spend again? people are anticipating that in the future. we really didn't expect it this quarter and we don't expect it next. >> and, peter, based on microsoft's results, do you have concerns about other names in your space or is this is microsoft-specific problem? >> if you compare this to what intel told us, volumes are good, pricing has been tough but not as bad as people feared. intel has their chips in netbook and doesn't have has much of a pricing disparity as microsoft does from what they get on a copy basis and how they're handling that shift. their competitor is on its heels. for microsoft, they have a new

competitor. the read-through is more microsoft-specificer. >> peter, thanks for being with us. microsoft lower in the after-hours session along with amazon.com and american express. all of those stories, we'll continue to follow throughout the show. coming up next, jim goldman and pete najarian with updates. and why mcdonald's caught up without a rally cap on. the ceos of goodrich and our stock of the day. stick around. at 155 miles per hour, andy roddick

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welcome back to "fast money." want to continue our coverage of the two big after-hours stories we're following, microsoft and

amazon. let's go to jim goldman for the latest on the microsoft conference call which is about to get under way. jim? >> yeah, you know, we're going to get that conference call in about eight minutes. believe me, you know, where that missing revenue is and the latest on this development from the "wall street journal," they're reporting that a source says that yahoo's board is, indeed, going to meet this afternoon or this evening to discuss some kind of proposal, a partnership of some kind, with microsoft. it's not clear right now whether yahoo's board is even interested in a deal anymore. this source, according to the "wall street journal," says it is unlikely that any resolution one way or the other will be announced today regarding any kind of microsoft/yahoo tie-up. we'll get details on that. i guarantee you that they'll be asking those questions coming up on this conference call shortly, just to get some kind of clarification. >> you've got to wonder about a potential tie-up given the weak quarter that microsoft posted.

>> i'm sorry. say that one more time. >> you've got to wonder if there's increased skepticism about the tie-up given the weak quarter that microsoft jest pus posted. >> microsoft continues to shoot itself in the negotiation foot. something always seems to have gone wrong on the yahoo side. lately, yahoo has got the momentum and now we look and see what microsoft reported today. that online services division has become just almost embarrassing to microsoft. only $700 million or so in revenue. >> right. >> and $700 million in red ink. it is absolutely stunning that after all this time, microsoft cannot come up with an online strategy that works. >> got it, jim. we'll check in with you later. let's go straight out to dr. j., who is on the amazon conference call. dr. j., what are the headlines there? >> well, it's more or less a very conservative call. jeff bezos is not on it. he was traveling. which tells me that he knew that

the numbers weren't going to be stellar and said, i'm going to take a pass on this one. that's just my read of it, melissa. but the numbers overall look pretty good. they're conservative. $4.75 billion to $5.25 billion is what they're looking ahead at. they're also talking about mobile and how it can drive business to amazon. and in particular, about a 30% growth, which is above street estimates, for third parties that are doing business on amazon. so that's good news. if they can, you know, keep the margins up on that side, which they have, in particular in north america, that will be a positive going forward. so overall, no ground-breaking news on the call so far. >> all right, dr. jamp. thanks a lot. we'll check back with you later in the show. traders, what do you make of any of the commentary we've gotten so far from jim and from the amazon conference call? >> well, i think more and more as we digest the post-earnings news, i looks like maybe it's

not as bad as we initially think it is in terms of positioning. you reduce your position. you look at the numbers. you see what the numbers present. but i think overall you don't have this dramatic change in sentiment. you just cut back what you have and you move forward with the opinion that these stocks move higher on a three to six-month basis. >> microsoft, we've still got to hear why these numbers -- why did the street have this so wrong? this isn't just a small miss. this is a massive miss. we've got to find out why exactly. i'm sure jim will get the answers for us. that's a huge miss. >> we're just about five minutes away from the start of that conference call. time for a little bit of chartology. the dow crossing 9,000 there the first time. longest winning streak since 1992. we thought we'd bring in cart werth to walk us through the action. in tums terms of what the chart shows, what do you think here? >> microsoft and amazon first,

the price action as they're indicated right now in the night market, they're only back to where they were on monday. meaning is it a sell-off or simply returning to where they started the week? they had big weeks. i wouldn't read a lot into that. strong stocks and i would leave it at that. in terms of the major averages, here's the nasdaq. i want to tell you what we're thinking. the nasdaq led this whole thing, right? and we think it's going to finish with the nasdaq, if you will. so the s&p makes a low as does the nasdaq in most equities in the fall, november, and the s&p makes a sharp new low in march. that's not the case with the nasdaq. the nasdaq does not break its low, meaning impressive relative strength, and it leads on the way out. where we think ultimately it ends up is it comes back to level from which it broke, right, a well-defined level where there's a lot of memory. supply is here. people didn't have a chance to sell, suffered this incredible collapse, and when they are made whole, human nature is to get out. we think 2,100, which is about 5%, 6% from here, is where

basically the nasdaq is going. by contradistinction, look at the next major average, which i have up here. i believe it's the dow jones industrial average. >> okay, go ahead. >> okay. so the nasdaq -- the dow and the s&p, is makes a sharp new low in march. what we're seeing here, this eight or ten-session rally simply brought you back to the top of the range that's persisted for the better part of ten months. we do not think it's in a position to retrace as the nasdaq has done. in fact, it's going to get stuck right at the top of this range. hence the drawing that you have here. so we're looking for what a lot of upside on the dow and the s&p, let's say, in the weeks ahead. and yet we think the nasdaq will continue. we think the whole thing kind of finishes with the tech stocks just as it began. but let me say something about -- i'm sorry. go ahead. >> go ahead. >> what creates interesting moments is the release of information. >> sure.

>> for arethe idea is can you f out which sftocks are going to beat rather those that are going to miss? just look at price action before they released earnings. in the two weeks prior in trading before all the stocks that beat versus those that missed, the ones that beat were up 5% on average, the ones that miss going into the earnings were up only 2%. their wisdom and share price, the stocks act in advance of the fact. go with relative strength. very important. >> okay. pete, what do you make of this in terms of bumping up against upward resistance on the dow and the s&p 500? >> those charts just say it all. it looks right now like we are at this kind of somewhat overbought area, carter, if i'm reading that right and we're ready for a pullback. i can tell you this. out in the options pits today, massive put leverage, moving themselves to closer strikes so people are not totally buying into this rally right now and they're positioning themselves -- there was a monster trade today, moving from august to december. and they traded up a few strikes

from the 92 level to the 95, but pushing out to december to buy some protection. probably not necessarily a bearish move, but something to protect themselves here from what we already see by that chart, which is a potential pullback. >> all right. >> fair enough. as you see it, i think it's a very interesting moment here. it's a very steep -- but the key is what you introduce would the ten days in a row, the nasdaq strike, hasn't happened since the early '90s. the implications are what it means longer term. it's incredibly powerful. >> carter, thanks so much. next trade here, goodrich. a leading supplier for aerospace and defenseky industries. it sunk 7% today. after profits shrunk 5.1%. we've got the goodrich ceo joining us here on "fast money." marshall larsen. marshall, great to have you with us. >> great to be here. thank you. >> first of all, the big question on investors' minds has to do with spending and the

potential slowdown we might see under the obama administration. one major data point that we have so far to digest is one from boeing who has said that it sees that the department of defense has, in fact, trimmed or will trim major boeing-led programs. does that necessarily mean that we should brace for a decline in sales in your business? >> not at all, melissa. we really have positioned our defense business on those parts of the defense budget that are continuing to grow. for instance, the intelligence, surveillance and recognizance markets, we provide a lot for that. we also are very well-equipped in supplying the helicopter market, which is another portion of the defense budget. it continues to be -- have new-built helicopters and refurbished. in addition, we are very well-positioned on the f-35 lightning, which is going to be the one fighter that's going to continue to be built. >> can you give us a breakdown

between the traditional aerospace part of your business and the new growth areas that you cited, this smart surveillance, for instance? >> about 1/3 is in the new intelligence and surveillance and recognizance market. the rest for platform-related, parts that go on various military aircraft. such as the f-35 and the helicopter. >> okay. marshall, we've got to leave it there. we appaologize for the short ti. we hope that you'll return to "fast money" very soon. marshall larsen, the ceo of goodrich. guys, seems like goodrich is positioned in the sweet spot. so-called sweet spot of the defense spending budget. do you like goodrich here or do you like the other names that have reported of late? >> i think it all boils down to you truly believe that the second quarter, there was a trough in the suppliers to the aerospace sector. if you believe that, you believe it's a trough then, yes, goodrich is going to work for you. i don't know personally if q-2

was the trough. >> and it's a much better play on boeing. boeing has been plagued. so i think that if you want to play it from that angle, it's a much better play. >> okay. that is your aerospace play. we'll continue to keep you updated on the microsoft and amazon calls. microsoft call getting under way right now. we'll check back in with jim goldman. more "fast money" coming up. 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

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the women's clothing retailer was among the most active names in the nyse today. we've got several after-hours stories that will have an impact tomorrow. all trading lower after

reporting results. let's check on the futures. s&p futures. first up here. we do see some softness. a little bit of a comeback here of late, but some softness in the after-hours sessions. on the qs, we have microsoft and amazon as potential weights in tomorrow sessions. we are lower. the nasdaq today posting its 12th straight gain. moving on here, morgan stanley shares rebounding today, a day after losses. they were questioning whether management had become too risk adverse. morgan's ceo felt compelled to ramp up the risk. well, charley gasparino joins us. it seems like he's got to. >> can you imagine we're talking about taking mere risk? here's the interesting thing compared to six months ago. the government is essentially saying take risk. build your balance sheets. you've got the -- you still have toxic assets on the balance sheets. they all have it. what goldman did, what some of

the others did, they went out, they took the cheap money. remember f you have access to the discount window, you can borrow in the secondary markets, you can borrow at a cheap rate. they're saying do it. do some -- whatever -- you know the trades better than me, velocity trades. but do them because now you can borrow cheaply. interest rates are low. it's a good environment to do that. morgan stanley didn't do it. now, part of me wants to say -- because i know john mack very well. i like him. he's doing the right thing. he learned from his past mistake. they had a $9 billion trading loss in october 2007. they had lots of toxic assets on the balance sheet. he took down the leverage to about 11-1 and he's cutting back on the trading in a major way. that's the dilemma right now. from what i understand, they are now taking more risk. you have to ask yourself -- >> is it too late, though, and

is john mack going to pay a price for not having taken a risk during one of the biggest trading opportunities in our lifetime? >> you're right. the market is up, right? you do have a chance. we hear a lot about inflation possibly in the future. that's not good for the bond market where you make these broad trades. it's really a possibility. and, you know, for me, it's a guy that i like. he's a good guy. he's an honorable guy. i can't say this about john thain or about, you know, what's his name, schwartz, the guy that ran bear stearns for three minutes. he didn't go out there and say everything is hunk ae doey-dory then the roof is falling in. john mack kept his mouth shut. he did the right thing. i think, you know, it looks like he could be -- >> we'll check back in with you, charley. the oracle of the bronx -- >> they grew up -- >> always a pleasure. coming up, an interview with

the ceo of ebay. of course, we'll ask him about how his business compares with amazon.com, which is dropping in the after-hours session. g b [ engine revving ] [ engine powers down ] gentlemen, you booked your hotels on orbitz. well, the price went down, so you're all getting a check thanks. for the difference. except for you -- you didn't book with orbitz, so you're not getting a check. well, i think we've all learned a valuable lesson today. good day, gentlemen. thanks a lot. thank you.

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welcome back to "fast

money." we are live at the nasdaq market site in new york city's times square. ebay closing the day up 10% after blowing past analysts' estimates and raising their guidance for the third quarter. with us now is ebay's ceo, john donahoe, who is with our own julia borsen in pasadena, california. julia? >> thank you. i'm joined by john donahoe. john, thank you so much for joining us. >> glad to be here. >> yesterday ebay posted quarterly net profits that beat expectations. what is it that really worked in the quarter? >> well, we're just staying to our plan. we're focusing on executing across our ebay business where we're driving real turn-arounds and making nice progress. and then our growth businesses of stub hub, paypal, skype had very strong progress. >> and those numbers were still down from last year? >> no, everything in our portfolio grew and grew double digits except for our core

auctions business. paypal grew 32% in the second quarter. >> obviously we had a great day in the pamarkets today. a lot of the momentum this week has been driven by tech stocks. but we've seen in after-hours trading that amazon and microsoft are both trading down. was this momentum this week, dow crossing 9,000, have we psychologically turned a corner? >> i don't have a crystal ball, but i can tell you what we to see see in our business. we si we see stabilization. we see i think stabilization is the -- is the word for us. >> now, you offered some guidance for the next couple of quarters that are above what analysts were expecting. do you think that we are off the bottom? where mean, stabilizing, but we really see a turn? >> as i said, stabilization. i don't know what the second half of the year is going to

bring, whether we'll go up or down from that. but we're just focused on delivering great deals. we're finding more people are coming to places like ebay because you can find something that's lower priced than other places. and people are shopping more online because you can find cheaper items. >> one of the things you have been focusing on is building up your fixed-price business. why does that help ebay? >> well, we're offering choice. we're now half auction, half fixed price in our business and we just want to offer buyers' choice in how they want to buy and sellers' choice in how they want to sell. >> how does that have to do with your competition, specifically amazon? >> i think our marketplace is the biggest marketplace in the world. we're 2 1/2 larger than any other e-commerce provider in the world. it's a function of how we're meeting our customers' needs. >> amazon just got zappo. ebay has plenty of cash on its balance sheet. you accumulate more cash in your balance sheet.

do you see ebay making any acquisitions? >> we've made two billion-dollar acquisitions in the last six months. we're using the balance sheet strength to get stronger. we bought bill me later in the fall, which is a great transactional billing business. and then we bought t-market, which is the leader e-marketplace business in korea. >> anything else you're looking at right now? >> you know, we'll keep our eyes open and where we see opportunities that will strengthen or core e-commerce business or our payments business, we won't be shy. >> great. unfortunately, we have to leave it there. we look forward to hearing more about what you have in the works. >> great, julia. thank you. >> thanks, julia. john donahoe, the ceo of ebay. >> you know, the thing about ebay and amazon, they both put up good quarters. the reason that ebay's response was so much better was that ebay was trading at 13, 14 times and amazon was at 41 times.

so you really need -- that disparity is so huge that amazon just couldn't overcome it, no matter how good they put up. >> absolutely. >> absolutely. >> we should keep you updated on some of the headlines that are crossing right now. we'll go out to jim goldman. they're saying they see exciting demand for win 7 and that north american pc demand has normalized. that conference call is going on right now. american express saying that it expects better third-quarter and fourth-quarter u.s. write-offs than had been expected. these, of course, are stories that we are monitoring and we'll bring you the latest on the other side of this break. stay tuned.

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welcome back to "fast money." three big after-hours stories that we are following, microsoft, amazon and american express. all three will prove to be weights in tomorrow's session. this follows a day where we saw markets rally more than 2%. the nasdaq in particular, which will be hit by microsoft and amazon tomorrow, today finishing out a 12th straight winning session. its longest winning streak since 1992. is it over, guys? i hate to phrase it that way,

but maybe we ran too far too fast and this is just the cold water. >> you know what's funny? when the market goes straight down, no one ever asks how long can this list, right? you just assume that the next day is going to be another down day. when the market goes up, everybody says we're so long in the tooth in this rally, it can't last forever. today was the day of reckoning. we'll have to take a couple of steps backwards or lateral for the next couple. >> it's that softness in microsoft that really seems to be troublesome. it's waiting on the s&p 500. it is, of course, amongst the top 100 companies on the nasdaq. it is a dow component as well. all three indexes will be hit by declines in this stock. it's a weakness that's really a bit of a concern. >> some of the other names, the expectations have gotten too high. but this miss on microsoft, a revenue miss of that magnitude, that's more than the bar being too high. it's bad. >> let's see what the microsoft conference call holds for us. jim goldman has been monitoring that call. jim, what is the latest? >> yeah, melissa.

the company's chief financial officer is just going over the company's expectations for the company's upcoming fiscal 2010. not so many specifics as far as earnings and revenue are concerned. he's really going segment by segment as far as the company's units are concerned, talking about the climate. but some of the choice comments here, we have a stronger company today than we were a year ago. the economy continues to be challenging. he's anticipating tough year over year comparables for the rest of this calendar year, but microsoft has seen the worst. the fourth quarter is going to be, you know, this was difficult time for the company. he does expect market conditions to be difficult. conditions he says will not improve much, but they also will not worsen. again, microsoft seeing the worst. he says that there will be continued tough times for the balance of calendar year 2009. he does expect some improvement in 2010. he thinks there's going to be a confluence of events, not only

market-improved conditions but all of these new products that microsoft is hoping to get out the door. that will accelerate the recovery that microsoft hopes to experience in fiscal year 2010. so we'll see how it goes. but those comments certainly not enough to turn microsoft's after-market slide around. >> all right. jim goldman, thank you very much. that is the latest on microsoft. the conference call continues. we're still looking for commentary and we're still listening for the questions that will be asked by the analysts. certainly microsoft management will be grilled about that revenue miss as well as the tie-up with yahoo in some form. >> i think steven is right. the market shifts potentially into a consolidation phase. i don't think you see a roll-over. the stocks trading about 23.5 right now. do you think microsoft is going below 20 before it goes above 30? i still think microsoft goes above 30 before it goes below 20. tonight, a special market

coverage of today's market rally as well as what this all-hofters action means. "final trade" right after this.

time now for the "final trade." let's go around the horn. joe? >> abbott labs has pulled back in the last couple of weeks. i think you look at it here and buy it. >> they're still cash-rich. they can continue that trilling and they still have a lot of onshore production. >> whole foods puts. i think this stock is really expensive. you have safeway trading down today because the customer was trading down. how can that not affect whole foods? >> when you look at microsoft, think back to apple. i think this is a great opportunity. i love microsoft for that reason. also take a look at fucyrus. >> and before we go, i want to check the futures once again. the big after-hours stories will be weights on tomorrow's sessions. we're seeing the futures trade lower. the s&p 500 dipping the after-hours session. look at the nasdaq. microsoft and amazon.com will be the big stories of the day tomorrow. and we are seeing softness there as well. don't forget, tonight beginning at 7:00 p.m., special coverage

of the day's rally as well as what all the after-hours action means for tomorrow. have a great night. tomorrow, this global giant's number two, but its stock is on the rise. we connect with the team. and the earnings edge. pete's trading the future with help from the past. "fast money," cnbc 5:00 eastern. [ engine revving ]

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i'm jim cramer, and welcome to my world. >> you need to get in the game! >> go out of business and he's nuts. 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. other people want to make friends. i'm just trying to make a little money. my job is not just to entertain you but to educate you. so call me at 1-800-743-cnbc. what a day. what a day. unbelievable.

just keeps getting better and better for the bulls. while the wholesale slaughter of the bears just keeping happening. yep. up 47 points for the nasdaq. up 12 consecutive days. now, i have to tell you, i would make bear stew again, but given the move we've had, frankly, i'm worried the department of fish and wildlife might lock me up for eating an endangered species. so what we're doing, of course, is we're settling for knocking the stuffings out of them. i think we're in the bowels of the operation. nasty. but before we get irrationally exubera exuberant, let me give you a quick miranda warning. many of you have seen gigantic profits in two weeks time. now the market is way overbought. people are