that, and it's looking like a nice open for the nasdaq. the dow and the s&p pretty much flat. >> and apple, we thank you for that one green arrow on the screen. >> yeah, that's it. all right, first breaking news. scott cohn reporting this morning on john paulson's first comments since charges were filed against his trade with goldman sachs. he obviously was not a part of the charges, but he's going on the offense. and steve liesman just broke a big story on the charges against goldman. so, let's start with you, steve. >> erin, thanks very much. cnbc has learned that the government has testimony from a former top paulson official appearing to contradict a part of its own case, specifically, cnbc has reviewed documents that questions the government's contention in its case against goldman sachs that the wall street firm misled the insurance company aca about paulson & company's intentions to short the deal. the government's complaint reads "unbeknownst to aca at the time, paulson intended to effectively short the rmbs portfolio it helped select." however, cnbc has learned that a

top paulson official, paolo pellegrini, told executives that they intended to short the portfolio. they asked him about a meeting with laura schwartz -- "did you tell her that you were interested in taking a short position with abacus?" pellegrini says "yes, that was the purpose of the meeting." they said we look forward to presenting a complete and accurate evidentiary record in court. it is possible that the government has other evidence contradicting this testimony in which the aca claims it did not know of paulson's short position. and pellegrini walks away from the testimony, saying he doesn't remember specifically telling her, however, adds "it would have been a little difficult to sort the miss the fact that we were trying to short this stuff." pellegrini also told investigators that he shared with aca the out lines in how it selected the subprime securities that did was looking for mortgages with low fica scores and high loan-to-value ratios. the government's case is substantially about goldman's failure to disclose the role of

paulson in shorting the portfolios that made up the collateralized debt obligations. however, aca became a major investor in the deal and appears to have firsthand knowledge in paulson's role of selecting the portfolio and its investment intentions relative to the portfolio. there's no evidence that they did wrongdoing and pellegrini declined to comment to cnbc. government officials say the $900 million paulson made on the deal made it one of the most profitable hedge funds ever. pellegrini replied "it wasn't off the charts" and admits making $20 million on the deal. scott cohn? >> pellegrini's former boss appears to be chipping away at the s.e.c.'s case, too. in this letter to clients obtained by cnbc. yes, john paulson made $1 billion or so, taking the short end of the abacus deal, but he says everything he did was transparent and open. he did have a hand in picking the mortgages in the deal. on that, pretty much everyone agrees. but aca, the biggest investor in the deal, as you heard, had in

the long side of the deal, had the final say, paulson writes. "paulson did not structure or originate the abacus transaction," he says, which seems to contradict the s.e.c.'s assertion that paulson was secretly pulling the strings. by the way, back in early 2007 when this deal was done, mortgages were viewed as among the safest investments possible. the fact that paulson was betting the other way didn't seem to dissuade people back then, suggesting his testimony wasn't as material in 2007 as the s.e.c. claims it is today with hindsight. still, they say goldman sachs didn't disclose it and the question remains does that constitute fraud? also the question, erin and mark, ikb, the german bank that was ultimately bailed out by the taxpayers, they didn't know paulson was involved and the s.e.c. says that was fraud. >> also, scott cohn, i guess it's interested, on the goldman side of this this morning with the relatively junior banker involved in this is losing his securities licenses, is now on leave of absence. so, it's possible that they could be clearly setting up to say, well, if he did something

wrong, it wasn't with our approval, and we'll let him take the fall. >> and yet, they haven't. they haven't cast him overboard yet, and that may be telling. i mean, they still so far are embracing him, maybe not his e-mails and the tone of them, but they have not thrown him overboard yet. >> it will be interesting. greg on the call yesterday seemed to be little bit distance. we're back to earnings. four dow components reporting. on the list, boeing posting earnings of 70 cents a share and mcdonald's posting $1.03 a share, as mark reported. alex handleson from c.k. cooper and company covers boeing. alex hamilton on boeing and mark will take mcdonald's. alex, boeing, is this something to buy the stock upon? >> we'd buy the stock. i think the results in the quarter were as expected. not a lot of surprises operationally. in fact, guidance remained unchanged, which i think was encouraging, because there was a little bit of noise given the

expectation of a charge related to the obama health care plan. i think what's marked is the language that's in the press release, which is they're talking about substantial improvement at the end market and on the other side, if we look at orders, and let's compare orders to where they were last year, significant improvement. so, we have a recovery going on. >> and so, the company splits down into sort of half defense, half commercial. within those two spheres, which one is taking off more quickly? >> well, right now there's a little bit of a reticence on the defense side. certainly, we have top-line budget constraints on the defense, but at the end of the day, i think what drives boeing and the stock price are commercial orders, and that business is 180-degree difference from where we were last year. >> all right. thanks very much, alex. we appreciate it. >> thank you. >> alex hamilton with the boeing trade. mark, how is mcds? >> mcd is looking at a higher open after reporting better-than-expected first quarter results.

jeffrey bernstein is senior restaurant analyst at barclays capital, joins us now. jeffrey, good morning. thanks for being here. >> good morning, mark. how are you? >> pretty good. i'm reading the press release. chief executive officer jim skinner says mcdonald's' compelling menu, unmatched convenience and unbeatable value generated another strong quarterly performance. what do you think is driving it, the compelling menu? >> we'd say all those components are very much true. the combination of value -- >> what's compelling about their menu? >> well, they've got a good mix of value offerings to attract that low-end consumer, and they've been pushing the envelope with more premium products as well. so, it has little bit of everything, broadening out their customer base, and it's not just domestic, but clearly seeing tremendous strength internationally. >> can you break out or does the company break out how coffee is doing for them? >> the coffee and the broader beverage platform rollout has been a big benefit for them. the hot beverages were rolled

out last year and it's driven coffee to be closer to midsingle digits as a percentage of their total sales. now we're getting the frappuccinos and the other colder beverages rolling out this year. so, that should be even more of a lift. >> so, basically, what this company's had is some pretty smart management for the last few years. >> it's been an incredible turn for the past, you know, six, seven years, off of its bottom. and seems like momentum is building as we look through the rest of this year. >> all right, jeffrey, thank you very much. appreciate your time. >> thank you, mark. let us hit the markets. bob pisani, aka, cool breeze, here at the big board. bob? >> good morning, mark. simple story here. we got the great earnings from apple and of the banks versus the bad news from greece, where the credit spreads continue to blow out here. look what's going on with the banks. the trends are very clear -- credit trends are improving and there's big profits for the biggest banks from trading. look at morgan stanley. their profits from trading tripled the same period last year. their earnings on the top line,

earnings numbers were terrific as well here. wells fargo beat estimates. top line was a tad below expectations. i think that will be a problem this morning, but the important thing, the company says credit has turned the corner. that's a quote directly from the company. although i see loan demand seems kind of weak here. that may also be an issue. keycorp, one of the big regional banks, reported a smaller-than-expected loss, only 11 cents that was pretty good. nonperforming loans again decreased for them. elsewhere, amongst united technologies, the big companies reporting, they also beat by a nice margin, but again, top line a little bit on the disappointing side. 2010 guidance was raised, though, at the lower end. tradertalk.cnbc.com. scott, how are we looking with those apple earnings? >> all right, the buzz -- >> excuse me, mark. okay, the buzz is all about apple this morning. >> ooh. i don't know. i've got allergies or something. trying not to sneeze. >> maybe you're allergic to this belly bomb you just -- >> the belly bomb. i'm not allergic to that. >> apple is getting several upgrades after last night's big

earnings report. that is next. and later -- i'm sorry. i'm trying not to sneeze. later on "street signs," a big get by john harwood. he's talking with president obama about everything impacting your money -- financial reform, goldman sachs, who knew what when, what calls were made. i am sure it will all be on the table. we'll be back in two minutes.

in asia overnight, a mixed set of trade.

higher in china, higher in japan and lower by 0.5% in hong kong. obviously the gains in magnitude bigger than the loss. in europe, slightly lower across the board, part of that due to concern over the greek situation, which is still, you know, may not be on the front burner right now, but it is there and it may re-emerge again. let's check on tech ahead of the open. bertha coombs at the nasdaq. which, bertha, as mark pointed out, that's our one green arrow here. >> tech is the apple of our eye. apple the stock of the day, blowing away the street yesterday with its fiscal second quarter. $3 billion in profits, nearly double from last year. and way more iphone sales, nearly 9 million iphones sold. we're talking mcdonald's numbers here. and this morning the numbers are getting even bigger as far as the price. stocks traded at about $265 in after-hour trading yesterday, looks to open at $260. deutsche bank is raising its price target. yahoo! also putting in a nice quarter as well, partly because of $35 million in payments with

the pact with microsoft, the search pact starting to kick in. it's set to open higher. huntington banc shares posted its first profit in over a year with easing loan losses also looking higher this morning. gilead is a loser on its earnings. first quarter topped on broads, but it now sees about $200 million on impact from health care rebates. at 9:30, david, i'll tell you about a little deal. we're seeing more and more of these, more mergers happening these days. all right, thank you, bertha. of course, apple is an exciting company. at&t, though, still one of the largest, most important companies, perhaps hasn't provided quite as much excitement, certainly not to its investors over a period of time. reporting numbers, however, this morning that were better than anticipated is at&t. of course, this is the old sbc, but we use the at&t name. we forget that the old at&t more or less withered away. there's the earnings per share number. again, ahead of expectations by a good amount. that was not due to

higher-than-expected revenues, but really due to higher-than-expected margins. there's a look at net income and where we stand. again, ex-one-time items, it did exceed, but why is the reason is margins, particularly in the wireless arena, where, of course, at&t is one of the biggest players in the nation, vying, as it does every single day, and spending enormous amounts of money against verizon, as those two fight for market share. margins were 44.5%. that was beell above expectatio. why? well, mainly because they did a good job. let's not take anything away from them. they did have retail post-paid net adds of $12,000. that was below expectations. that actually helps margins. you know, if you sign up more people, initially at retail, right, you've got some costs there, so it hurts your margins. so, fewer than expected. i think analysts were looking for as much as 550,000. maybe that helped net margins. but at the same time-of-got an

enormous amount of people buying and using iphones. you heard bertha talking about that for apple. well, of course, at&t's still the only provider. 2.7 million iphone activations. that hurts margins in part because remember the big subsidy that at&t's paying for the actual device itself. so, the wireless margins were quite strong. that was the key in driving a better-than-expected eps number. as for that old wireline business, remember that? you know, i used to sit here years ago and just talk about how all the old regional bell operating companies were losing their customers. and, well, to the extent that's a legacy business at at&t, it continues, although they say, listen, we had the smallest quarterly decline in consumer connections that we've seen in over a year, reflecting what they say increases in broadband, tv, voice over internet protocol connections, which in large part offset declines in traditional voice access lines, consistent with broad industry trends. true enough. now, another area that we look to at&t for -- i put this under

wireline -- includes other businesses -- is the enterprise business. and they did say this. there are emerging signs of stabilization in business markets. 10:00 is the call, and i would encourage many people who are interested in just the overall view of the economy here to listen in, because when at&t talks about the enterprise base, when they talk about business spending, they have typically had a very good perspective into the future. if you remember, i think it was, what, january of '08 when randall stevenson was at a conference and talked about what they started to see in terms of a real decline in the economy, potentially, and then the market took a tumble on that particular day. at&t has very good visibility into that. so, yes, emerging signs of stabilization in business markets, revenues for business did decline 5.2% versus the year-earlier quarter. we'll see what they have to say on that 10:00 a.m. call. finally, just incredible when it comes to integrated devices and the growth that those are having at the company

itself. they now represent more than 50% of post-paid users, integrated devices being, of course, those that can do both data and voice. and that is the trend. that is where it's all going. and that's why at&t continues to spend enormous amounts on capex in wireless and less in wireline. so, actual capex spending coming down a bit or less than might have been expected, i should say. nonetheless, wireless, they've got to get spectrum, they've got to increase tower usage and all sorts of cell sites wherever they can. you've got all those bandwidth hogs out there. they've also got to figure out a better way to price it to make them pay more so that they create a little more capacity on the system. high-class problems in some ways, mark. nonetheless, big ones for at&t. back to you. >> thank you, david. the big bank profits streak continues. >> this belly bomb is just: >> it's very good. >> it is truly the best belly bomb in the history of bacon, eggs and cheese, as we call

belly bombs. two more banks added to the list of earnings surprises. details on wells fargo and morgan stanley. we'll be back.

it looks like a gain on the s&p at the open. the nasdaq, thanks to apple, looks like it's going to open strong. let's get to mary thompson back at hq. ma mary? >> mark, those better-than-expected numbers continue to roll in from the financial sector. this morning morgan stanley and california banking giant wells fargo posting strong results. morgan stanley reversing a year-earlier loss, posting

earnings excluding a 21-cent-a-share tax benefit of 78 cents a share. those results 21 cents ahead of estimates as revenue more than tripled to $9.1 billion. the bank's new ceo, james gorman, saying the company still has work to do, but the work the firm has been doing to improve its trading operation appears to be paying off. revenue in the fixed income unit was well above the $1.3 billion from last year, a key reason for strong results in the first quarter. compensation expenses in the quarter rising to $4.4 billion from $2 billion last year, one reason is the venture with citi. still, the compensation ratio declined to 49% from 68% because of the increase in revenue. yesterday, rival goldman sachs said its compensation ratio for the quarter was 43%. some upbeat comments from wells fargo. the bank says that credit has turned a corner. still, net income of $2.55 billion was down from last year as nonperforming assets increased as did the bank's provision for loan losses.

earnings per share of 45 cents a share were 3 cents ahead of estimates, though, with all three of its business units -- community banking, wholesale banking and wealth management -- delivering good numbers. loan demand in the quarter did decline as did profits from its mortgage hedging operations. still, the bank saw improvements in early-stage delinquencies across all its businesses. but ceo john stump says challenges still remain in the economy. now, during the quarter, net charge-offs declined slightly from the fourth quarter to $5.33 billion, the same amount the bank said it set aside for future loan losses. also, the firm commenting on the integration of wachovia, which it snatched out from under citigroup's nose back in 2008. it says it remains on track. both firms are going to be holding conference calls later this morning. wells fargo starts at 9:30 eastern, morgan stanley's at 11:00 eastern. we'll be monitoring both of those. mark, back to you. >> thank you, mary. a quick programming note. wells fargo chief financial officer howard atkins will be on "the closing bell" today at 3:15 eastern time. final countdown to the

opening bell coming your way right after this commercial break. again, the futures are really right in the middle on the open. and you can't see below your thing, but the belly bomb is gone. it's in the belly. >> it was delicious. >> it really was. and the tech stocks signaling a turn-around for consumers. much more on apple right after the break. we're back with the bell in two minutes time.

all right, in the headlines at this hour, four dow components reporting. three beat estimates, boeing, mcdonald's and utx up. at&t barely missed. apple getting several upgrades after posting big numbers last night. that has driven the nasdaq futures to a strong position. and u.s. mortgage applications are up from three-month lows, up 13.6% from the week before.

>> all right, as we count down to the opening bells, let's bring in john o'donoghue, head of equities at cowan&company company. good morning, john. >> good morning, erin. >> so, we've got more revelations in goldman sachs gate or paulsongate, whatever you want to call it, and we've got a whole lot of earnings today. what's your focus? >> a few things. you know, what we've talked about before has been the consumer, and i think apple, if you think about it as a proxy for the consumer, has been extremely strong, the numbers that we saw last night, probably reflective of how people feel. if you look at the macro market overall, you know, the goldman sachs, greece, all the other issues, financial reform, the market's held in remarkably well here despite all that. so, we're right in the middle of earnings season, so i pay particular attention to single stocks, if you will. mcdonald's reported a very nice number today, will probably break out through $71 here, but i think a lot of good news is priced into some of these things already. >> john, we have the opening bells, but please stay right there. i want to ask you a question. we'll get right back to you. here come the opening bells at

the big board. the security traders association of new york. and at the nasdaq, oracle, ticker orcl. before we get to the reporters, let me just finish up with john. john, you've been positive on the casual dining stocks for several months now, but i'm reading in my notes that you may think it's now time to take little off the table? >> yeah, i do, mark. i think a lot of times, what happens is the market will, obviously, look forward and discount where they think the moves have come, and if you think about what you and i have spoken about for the last few months -- the texas roadhouse, the pf changs, desjardens, all these names, they have had remarkable moves up 30%, 35%. and it's not priced for perfection, but it's priced for very good numbers and i think we'll see those, but overall, i think it's time to take something off the table here. >> john o'donoghue, thank you very much for sharing your thoughts. >> our market reporters are standing by. we're open and we're up, mark, as you said, we were up 1,111,

which could be considered a good omen by some, if you trade in omens, which are frankly just as accurate as other things in the trading world. bob pisani, take it away. >> and you'll have the conflict of the jug yeger inaugurate of terrific earnings, and a kind of tough situation that's continuing to go on in greece. the bank earnings is very simple. i know it's complicated, but make it simple. first off, credit trends are continuing to improve. that's the most important thing we have been seeing for this quarter. and secondly, for the biggest banks, trading revenues have been terrific. you see that with morgan stanley. three times the trading revenues they had this quarter, the prior quarter, than they had the same period last year. much of that from fixed income. but remember, wells fargo is the important thing, is that we saw increasing in earnings overall here. the top line was atad below expectations here. they also note that credit has turned the corner. that's the important thing overall. one issue i saw for wells fargo,

maybe this will be for other companies, we're still not seeing a lot of loan demand growth, and that could be a big issue going forward. keycorp, similar situation, reported a smaller than expected loss, though. nonperforming loans, again, decreased for them. a number of companies are raising dividends. we saw with freeport mcmoran, they came out, beat the earnings and raised the dividend. we've seen that before. mcdonald's, boeing, they'll be opening flat today. they beat on the earnings front here. for mcdonald's, the rise in first-quarter sales was terrific, but remember, comps in europe 5.2%. again, they're getting good numbers out of europe. tradertalk.cnbc.com. bertha, how's the nasdaq? >> bob, if you're apple, if they build it, they will come. eye-popping numbers all around on apple, nearly 9 million iphones sold, 21 million ipods sold in the quarter. looks like a lot of people took those gift cards to electronic stores and bought them in the quarter. with today's move, it's not quite starting at the peak. still at a new high, all-time high, but shy of $260.

it puts its market cap today at about $230 billion. deutsche bank and several other analysts today are raising their price target. deutsche bank puts it at $350 now for a price target. if it reaches that price target, it would give it a $317 billion market cap, just shy of exxon's. meantime, yahoo! also reporting earnings. street more or less impressed with this morning, we're seeing little bit of a sell-off. one of the things yahoo! talked about was the pact with microsoft is starting to pay of the they got a better than $30 million payment during the quarter, however, microsoft also trading to the down side along with yahoo! meantime, cyber source is one of the stocks this morning we're watching. this is a company that does security transactions. meantime, it's being acquired by visa for $26 a share. it's a $2 billion deal. google is up as well this morning. cree is a big loser after the earnings, despite boosting the outlook, not as much as people were expected. expectations will get you every time. rick santelli is in chicago.

>> thank you, bertha. you remember not that long ago all the anxiety and tears over, hey, quantitative easing's done, the fed may not buy any more mortgage securities, interest rates on mortgages are going to fly. did you look at the data today? 505 on a 40-year, these are the lowest interest rates in weeks, according to the api -- i'm sorry, the mba mortgage bankers association. what's interesting here is everybody tended to focus on no more buying. they should have focused on we're not selling any more of what we already own. interest rates are moving to bid in the u.s. but were moving a huge amount overseas and greek bonds were up over 8% in the ten-year, up about 30 basis points, but their two-year was up almost 60 basis points. their curve's almost ready to invert. erin, back to you. >> thank you, rick santelli. let's check oil this morning. john kilduff is at the nymex. good morning, john. we're getting back towards $85. >> definitely on the rise, erin.

we had a bullish report from the american petroleum institute last night that i think caught some folks by surprise, and i think these earnings that we've been seeing certainly go to the fact that there's discretionary income out there. apple's, especially. and they translates into good consumer demand as we go forward. these energy markets are continuing to price in what will be, not what presently is on hand in terms of supplies. >> all right, thank you very -- john? is it worth buying oil? i -- we talked to the experts and i'm totally confused. i mean, they tell me that we're discovering new oil, demand is not that good, and on the other hand, if we're coming out of the recession, shouldn't demand pick up, isn't oil a good long-term buy? what do you think? >> well, what i think, mark, is that we're going to be caught short again. in other words, we were tight in 2007 when it got to $147, and it'd been that way over the past number of years. so, until we build out more infrastructure, more productive capacity and refining, we're going to run into these price

spikes. and until that rectifies itself, that's what we're in for. >> all right. i'll take that as a moderately bullish stance on oil. >> a mildly bullish one, but when it's self-corrected, mark, we'll have the booms and busts that we've seen over the years. >> thanks, mr. kilduff. now tyler mathisen. >> earnings central. we've got the a-list, at&t, altria and abbott labs. let's start with at&t. it was a pretty good quarter for at&t, even considering the idea that they had to take a 59-cent-a-share charge for that health care-related things. there's the number. there's where it's trading right now at $26.51. the numbers -- 59 cents for the eps versus a 54-cent-a-share estimate. the problem here was revenue it came in a little light. let's look at some segments in at&t's business. wireless subscribers above forecast, 1.9 million, looking for 1.5 million. added lots of postpaid

subscribers. above forecast but down from last year. broadband subscribers up 255,000. so, business moving nicely there. let's move on to altria, big mo. eps 42 cents a share versus a 40-cent-a-share estimate. why was it such a good quarter for altria? it was basically smokeless tobacco. ust, skoal, openen hagen and the rest doing very nicely. cigarettes were down but smokeless tobacco up, cigars were down, and who knew, altria has wine? beautiful little merlot with hints of skoal and copenhagen and marlboro in it. a wonderful thing before your dinn dinner. moving on to abbott labs, 84 cents a share was the eps number versus an 80-cent estimate, but the company lowered 2010 guidance. why? just as with lilly a couple days ago, they are saying that the health care reform is going toly away some of that money that they had both for retiree medicare costs, prescription drug costs and the loss of

certain other subsidies. that is the report right now why we come back on "the call," we will have at&t, more on that. we'll wait for amr and we will give you lockheed martin. mark, back to you. >> all right, thank you, sir. quick check on the markets for you right now. the dow is to the plus side by 22. the nasdaq, which was supposed to be, well, you know, i guess that is stronger on a percentage basis, obviously, but not as much as we thought, up about 0.33%. s&p is up about 0.2%. let's get the info on the early tick. joining us now, adam bowls, founder and ceo of the mutual fund store. and in chicago, thanks for sending the cubs to citi field, jeff lehman, chief investment officer with bkd wealth advisers. jeff got up an hour earlier. we'll let him start. jeff, where is this market headed? >> well, the interesting thing, we've had the start to another

earnings season where most companies are beating expectations by a fair amount. we've had a fantastic rally that continues here over the last year, but i think it's justified. if you look at the improving corporate fundamentals, they're getting a lot of mileage out of lean cost structures, increased productivity and the market should move higher if we continue to beat expectations as we have. >> i've talked to a lot of people, jeff, and half of them say this market's come too far. the other half say, you know what, that was a panic low a year ago, and you can't really, you know, say it's come too far based on that low because that was really an outlier. do you agree with that? >> you know, i really do. and this would be a real difficult thing for any investor to do today, but if you just try to forget the path of where we've been and look at valuations as they stand together today with the market

on 2010 estimates at about 16 times and companies generally beating earnings estimates, that's in our view a fairly valued market, and we have come a long way. it leaves us susceptible for the sorts of short-term, minor declines like we had in mid-january through early february, but we feel pretty good about the valuation of the market at this juncture. >> adam, i know you're also relatively optimistic, but you're worried about what retail investors are doing right now. >> yeah. i mean, what i'm starting to see is that the retail investor is all of a sudden starting to buy into the fact that this market is for real. they didn't buy in at 7,000 or 8,000 or 9,000. finally at 11,000, they're okay. but what we've really seen that really concerns me is the fact that over the last 12 months, we've seen $500 billion in net flows into mutual funds. of that, more than $400 billion went into bond funds. and so, you know, people are buying bond funds at the exact moment that interest rates are almost zero, where there's, you know -- >> there's nothing to lose. >> what's the upside potential? if interest rates go up, and i'm

not saying they're going to go up next month or the month -- but eventually, they've got to come off the bottom and it's the same behavior, just like they bought tech stocks in 2000 after the big run in '99. they're buying bonds after they had -- >> would you recommend buying equities at this point? >> yeah. i think stocks look pretty good and we're starting to see some of that money repatriate back into the market. and i agree with what mark said. look, we were poised for a global financial collapse. that didn't happen, so we got that big bounce. and while we have come a long way from 6600 on the dow, we were at 14,400. so, we're still way off the highs. so, there's still a lot of opportunity to the up side. >> adam, jeff, thank you both very much. appreciate you sharing your thoughts with us. >> thank you, mark. a tale of two automakers. one returning to profitability. the other trying to break even. one of them took government money. both out with big announcements

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welcome back to "squawk on the street." i'm mike huckman with your "realtime flash." and it looks like fewer americans are putting their money under the mattress and more are putting their money into the mattress. tempur-pedic shares are definitely not falling out of bed this morning. in fact, they're trading at a new high. the mattress maker beat the street and significantly raised its financial guidance. in the first quarter, u.s. bed sales bounced 57%. mattress sales is an economic indicator. carl icahn is reportedly still in bed at this hour, and lions

gate is telling him to stay there. the movie studio is urging shareholders to reject the billionaire investor activist's recent buyout offer, saying it's "inadequa "inadequa "inadequate, opportunistic and coercive." and mgm is not just a mirage anymore. the hotel and casino operator is asking shareholders to vote in favor of changing the company name from mgm mirage to mgm resorts international at annual meeting in mid-june. yesterday, separately, mgm announced that one of its vegas properties will be the permanent home of the to-be-developed michael jackson cirque du soleil show and that's your "realtime flash." >> that i want to see. >> the new cirque du soleil? >> the new cirque du soleil based on michael jackson. i bet that's fantastic. >> finding ways to monetize that, for sure. a new structuring plan from fiat that could change the company and chrysler as we know

it and a huge turn-around plan for general motors. both due to reveal the game-changing details today. we're covering the automakers here and overseas. phil lebeau is in kansas city and claudia is live also. >> this is a big day for general motors because paying off the loans will free up billions in restricted cash and now the company will be able to use that cash as it ramps up production and add more jobs around the country. essentially, general motors has repaid back the united states and canadian governments all the money it was obligated to pay back under the bankruptcy government. that's $6.7 billion to the u.s. treasury. they repayment coming nine months after exiting bankruptcy. today in the "wall street journal" in an op ed, gm's chairman and ceo ed whitacre said nobody was happy gm needed government loans, not the governments, not the taxpayers and, quite frankly, not the company. we think we can best benefit the citizens of the u.s. and canada

by making sure their investments are hard at work every day. we'll hear from ed whitacre later on cnbc and one hour from now, we'll hear from the vice chairman of general motors, steve girlssky. we'll talk about where gm goes from here and setting the stage for going public later this year. that's the story in kansas city with general motors. also a big day for chrysler and fiat. for that story, europe and clisa pensotti. >> yes, it is a big story involving an american company and it is chrysler. fiat today is presenting its new restructuring plan for that american group as well as fiat in general. it's doing it with a new chairman, the grandson of john aniandi that was just named the chairman. they plan to reach break-even in terms of fiat for bottom line, and for chrysler, the numbers are break-even at an operating level. this is for 2010. the numbers are promising for the first quarter for chrysler.

$9.6 billion in terms of top-line. that is a growth of 3% from the fourth quarter in 2009. so, 2010 is starting to look just little bit better for chrysler, but there's still a long way to go and feo sergio marchionne is working very hard to put that plan under way. we're moving from the auto industry to the future of energy. tomorrow is earth day. i believe it's its 40th anniversary. earth day -- >> oh, i remember the first one so well. scary. >> tomorrow night on cnbc, don't miss the premier of "beyond the barrel: the race to fuel the future," an in-depth look at where we stand when it comes to battery-powered cars, biofuels, wind power and solar power. and before we bring in our guest, mark, you should know, jason goertz, who you said did such a good job today, is the producer of that. >> i'm sure it's fine. >> let's hope he did an amazing job. we bet he did. meantime, we're shining a light on solar with president and ceo of the solar industry's

association, roan rash. thank you for joining us, we appreciate it. first of all, we've been hearing about solar power for decades, talk being it since the 1970s and here we are, it is still not mainstream. why not some. >> i think most americans don't realize that the oil and gas industry has had permanent federal subsidies since 1916. the solar city had to wait until the 2005 energy bill before receiving tax credits. and even then, congress only enacted them for two years and put a $2,000 cap on them. ultimately, you can't build an industry around a two-year policy. >> but can you have solar power without subsidies yourself? >> ultimately, you can, but right now, the entire energy industry receives subsidies, and i'm happy to say that the 2008 bailout bill, they extended the tax credits for solar for eight additional years, so opening the door for future growth of solar. and when you look at the recovery act, there are strong provisions for going solar as

well. so, what we've seen in the last year is a growth in the solar electric market of 37%, a full 100% growth in the residential market and over a 200% growth in the utilities scale market for solar. >> i hate to sound like a cynic, but, oh, well, i'll sound like a cynic. let me tell you what would light up the solar industry, pun intended. develop an efficient, affordable solar cell. you've had 40 years to do it and haven't done it yet? >> you know what, we have, actually -- >> that's not the fault of government subsidies. >> what we've seen in the last 20 years is the price of solar come down by about 97%. in fact, in the last year, the cost to the consumer has come down by about 40%. so, where we are today is, yes, we're still a little bit more expensive than traditional sources of energy. however, there are federal tax credits. there are also state incentives that lower the cost of solar. in fact -- >> i don't see -- i'll tell you, we're running out of time. i want you to respond to one more thing. >> sure.

>> what i don't see is a lot of creativity. i see solar panels, which are ugly. why can't roof shingles be made to gather solar energy? i heard about that ten years ago. i have yet to see it happen. >> well, you're going to see it, mark. there's a new factory being built by dow chemical up in michigan that makes solar roof shingles. there are other companies that are currently making them. yet, the reality is that solar can be put on homes and buildings on rooftops, which nobody actually sees. so, you can turn your roof, which is wasted space, into an electricity-generating power plant. it's a great use of that area. >> all right. thank you, sir. >> thank you very much. we appreciate it. >> thank you, mark. thank you, erin. >> for much more on the future of solar, mark, watch the mighty gowertz and "beyond the barrel," tomorrow night, cnbc original production, 8:00 eastern and again at 9:00 pacific. more on this morning's big earnings, and there is big earnings news. four dow components reporting. plus, the volcano and your

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i'm jane wells in los angeles with the farm report. you may notice salmon prices

spiking over the next several weeks as the volcanic ash from iceland has disrupted shipments of fish. the "baltimore sun" reports that canadian and u.s. fisheries are hiking prices 30% of that, leaving lots of questions about fish. this is for the first time since 2007, the pacific fishery management council is advising there may be a salmon season off the coast of california/oregon because there may finally be enough fish! >> well you never know what you're going to catch until you go fishing. >> ain't that the truth? aaron newman is one of the many fishermen who got through the last few seasons with the help of federal disaster funds from the taxpayers. nobody really knows why the salmon from the sacramento river, which usually head out in the pacific, have pretty much disappeared. lots of questions. last year, instead of the normal 750,000 king salmon there were less than 40,000, the second year in a row where the population collapsed. some blame warming oceans, others blame habitat damage. nobody can say for sure. the season will be limited along most of the west coast, but nowhere as much as central california, and that could keep

wild cot salmon prices high. >> the bulk of the state of california's only going to get eight days of fishing, when normally, they get five months. so, the small amount of fish that's landed, i am sure will be quite precious. >> right now the market seems pretty strong. people are very in tune with where their salmon are coming from now. >> and dan oberdovich who leads the team of pacific seafood says wild caught salmon could go up for consumers, the prices in consumers' favor. there is a lot of farm-raised salmon and the downturn in the industry is pushing prices lower, but at least there will be some salmon fishing off of california this year after two years of nothing. we're waiting on big news from gm and we'll have that when "squawk on the street" returns.

live from the financial capital of the world in the heart of lower manhattan, this is it, the second hour of "squawk on the street." it just keeps getting better. i'm mark haines. four dow components out with

earnings today. of them, boeing shares are taking off, up more than 3%. leading the s&p, huntington banc shares and keycorp. both up about 10%. stronger than expected earnings. and tempur-pedic, tupperware and emc hitting fresh 52-week highs. right now in kansas city, where everything is up to date, general motors about to officially declare a major victory. ceo ed whitacre to announce its loan repayment of $5.8 billion to american and canadian taxpayers. the press conference about to get under way, and of course, our phil lebeau is there. phil? >> reporter: mark, the press conference is going to be beginning in just a few minutes, but yes, this is a huge day for general motors, so big that you look around here, 3,700 workers here at the fairfax plant applauding some of the dignitaries, including kansas governor parkinson, who are here for the announcement from

general motors. again, ed whitacre's going to announce that they have completely paid back the loans to the canadian and american governments, totaling more than $8 billion. also announcing putting about $250 million into this plant and a plant in michigan, bringing back more workers. don't forget, coming up at 10:45, we're going to be talking to steve girsky, vice chairman of general motors, first on cnbc. we'll ask him what's next for gm, including the move towards going public. erin, that's the latest from here. we'll talk to you in a little bit. >> going public. it will be an interesting topic indeed on that. when you look at the overall markets today, the nasdaq continues to be the standout, and that is thanks to apple and the iphone in particular. different story for yahoo! though, weighing down little bit, disappointing the street, and revenue was a disappointment there. let's get to bertha. bertha, on balance, if you're looking at a see-saw, apple on one side, yahoo! on the other, who's winning? >> yeah, well, apple definitely winning. chris matthews likes to talk about the big number. the big number today on apple is three and the power and

multiples of three. $3 billion in profits yesterday. and this morning, apple's move to new record highs providing about two-thirds of the move as far as the nasdaq big caps, which are the big performers. right now up about 6%, another multiple of three. now a three handle is the standard on the street with deutsche bank boosting its price target to $350 on apple, which keeps it still at a number three when it comes to market cap for now, but it might boost it to number two if it does reach that $350. meantime, some of apple's competitors are doing pretty well. hey, they make phones, too. they may not be selling 9 million in a quarter, but google and palm and r.i.m. are all higher. yahoo! disappointing on guidance, not the only one. cree also disappointing guidance, although upped it above analyst estimates. gilead cutting guidance. and huntington banc shares leading the regional banks to highs today after it posted a

surprise profit, its first in more than a year. things are looking better at the regional banks. >> thanks to you, bertha. she mentioned the regional banks and that's exactly what bob pisani was sit hearing saying, let's talk about the regional banks. >> well, it's important because they're all big up today. they're all hitting new highs. the most important ones have now essentially reported at this point, and the story is very simple -- credit equality is continuing to improve. now, there's one thing that worries me a little bit here, and that's that we're not seeing any real increase in loan demand. wells fargo actually mentioned that. i thought that was very important. >> right. >> here's the achilles' heel for the banks. we're getting what they wanted. they said credit's going to improve. they also said -- these are the bulls on the banks -- the second half of the year, long demand's going to improve. well, let's hope it does because the banks are priced as if loan demand is going to be improving. >> but again, i mean, that comes down to the split between business loans and consumer loans. you could see it maybe happening on the business side, but on the consumer side, even if employment picks up, people still have a lot to pay off. >> yeah. we're not even seeing it in a

big extent on the business side either. i look at ryder's number. they did good on earnings. leased driving was up, commercial rentals were up, but they said the businesses weren't spending to any appreciable amounts, though. got to keep an eye on comments like that. that's going to be where things stall out, unless we see that kind of turn-around. finally, i just want to know, you know all this volatility we've had eventually around the goldman sachs numbers. traders just love it when volatility goes up. >> they sure do. >> well, guess what, folks, it's basically gone back down again. so, we had a great time last week with the numbers, good volume. now it's coming back down again. >> crude trade is looking up, up 47 cents. john kilduff is at the new york merc, chief investment officer at round earth capital. good to see you this morning. >> erin. >> what do you think of this headline, near and dear to my heart, worldwide pirate attacks

falling 34% in the first quarter. that was something a lot of people were talking about. i mean, it's still going on, but it was at one point relevant to oil prices. is this a good headline? >> however brief, yes. >> yes. >> i guess it will still take some of the security premium out of prices to a degree. i guess we've learned to deal with those folks, though in terms of either paying them off or shooting them. so, that's kind of gone out of the equation for me, anyway. i'm more focused on the headline that came out little bit ago from the imf, which raised its global economic growth forecast to plus 4.32% from 3.9%. that's one of the things i'll be watching. all these earnings news, erin, and all the other stories we've been seeing go to improved growth, improved recovery. but the imf did warn about the problems that sovereign debt risk poses, and i'm sure that's going to be hurting things potentially in the bond markets and that's what our friend rick santelli watches closely for us all. >> well, i'll tell you what, it's awfully interesting to

watch what is going on with the numbers that came out from the mortgage bankers association this morning. i continue to point to the fact that on a 15-year mortgage, according to this group, 4.34 is the yield on that mortgage. a year ago it was closer to 4.5. 15 year's actually down a bit. this continues to be an important point. in terms of treasuries today, they're not moving. in the last hour and a half, haven't seen any movement other than in the two-year note, which yields continue to creep up. remember, in greece, two-year maturities jumped up almost 60 basis points overnight. we want to continue to monitor that. and some continued strength in the dollar. canada holding yesterday's big gains. back to you. >> thank you, rick. some industrials taking front and center in the earnings lineup, namely boeing and utx, united technologies. is now the time to be adding industrials to your portfolio? jerry castellini is bullish on the sector, president and ceo of

castle arc management. john merrill is neutral on the group, founder and ceo of tanglewealth growth management. jerry is farther west. we'll start with him. moderately bullish here, why? >> i think, mark, you have a unique position here. it's been since the '82-'83 recession that you have the opportunity in place for industrials that we're seeing today. so, it's been over 20 years since we've had a very, very sharp, hard inventory liquidation cycle throughout the world economy. that had a much more pronounced effect on cost structures of those companies. and we see that having a huge impact on earnings surprise now, starting probably in the quarters, the second, third and fourth quarter this year. the companies are telling you this in their announcement. they're saying they feel more confident today in the forward earnings outlooks and revenue outlooks than they've had visibility now for years, and we just think these companies have much further to go in terms of

earnings surprise, which is a great thing to have at this point in the cycle. >> john, what do you think? >> well, i agree with almost everything jerry said, except a lot of it is already priced into the stocks. i mean, these companies had a great run since the beginning of this year. ge up 25%, boeing already before today up 32%. and we look at the price earnings multiples of the group as a whole, and going back as far as you can go back, which includes the period jerry's talking about, they're at the very high end of that pe multiple. so, that along with a few leading indicators makes us a little bit more cautious on the group. >> hmm. >> and if i could make a point -- >> by all means. >> it's the p multiple that we think is much, much overstated. in other words, if a company is going to actually have 30%, 40% higher earnings, its multiples actually 20% to 30% lower. and that opportunity is what we feel the stocks are going to be able to price in.

hold these multiples, but just go through a much higher earnings environment and you'll see the stocks appreciate as the earnings expectations grow. >> john, what about that? he doesn't think the table is tilted against him at all. >> if they continue to produce earnings surprises like they did in the fourth quarter, where they were up 10% above the analysts' expectations, i think they're getting a huge snapback from cutting their operating costs. but as you look forward, a lot of their material costs are rising as base metal prices increase. we have things like, you know, the stimulus program is helping municipalities buy their products, but what happens when the stimulus runs through? and even china is tapping on the brakes. they're pulling back some of the credit, you know, through their local banks. that's going to pull the plug on some long-term projects and may even stall some of the shorter-term projects. we watch a basket of chinese securities that are leveraged to the capital goods sector in china, and they've taken a huge hit since the beginning of the

year. so, that could be a warning sign for the future. >> all right, gentlemen, thank you very much. jerry castellini, john merrill. still ahead, freeport mcmoran's profit soars. the company boosts the dividend. we'll ask a shareholder with almost $3 billion under management if he is buying more of freeport-mctionz right now. >> and we have the ceo today to talk about that as well. also on "squawk on the street," gm's big turn-around from vice chair stephen girsky in his first ever on-camera interview since taking the job. and our poll question, jobless benefits. many of you got very passionate about that one. do jobless benefits encourage unemployment or not? we'll tackle it. let us know what you think.

all right, on "street signs" today, along with the ceo of freeport-mcmoran, president obama will talk exclusively to john harwood ahead of the meeting on wall street tomorrow. they'll talk about everything economy-related, wall street reform and goldman sachs. that's coming up on "street signs" at 2:00 eastern. >> got an exciting show coming up. >> yes, very exciting show.

not every day we have graced with the president, talking about issues everybody's on fire about. >> i look forward to seeing it. >> yes, i do too. want to bring your attention to some stocks on the move. what is -- did nesto get a new contract and doesn't have to work anymore? is that what's going on? >> it might have been. it might have been. >> meanwhile, we get to enjoy mike huckman for the few remaining days he's here. what's going on? >> mark haines, he is on vacation this week and i am pinch hitting. but at least a few earnings reports are perhaps providing antido antidotal evidence, polaris shares are throttling up to a new high. the maker of snowmobiles, motorcycles and off-road vehicles beat the street and guidance. bike sales soared a whopping 83% in the first quarter. it's rise and shine for shares of tempur-pedic, also stretching to a new high. the mattress maker beat the street, raised guidance and said that global bed sales bounced

42% in the first quarter. and investors are throwing a big tupperware party this morning. those shares, too, at a new high after the company beat and boosted. no burps. the company said that first-quarter sales in canada and the u.s. were up 4% compared to a slight decline in q-4 and the sales force grew by 10% by the end of march. full disclosure -- my mom used to throw a bunch of tupperware parties and had a cupboard full of tupperware and a separate drawer for the lids that was neatly organized and i would get in trouble if i messed it up. that's your "realtime flash." sorry for not a better segue to you, david. all right, mike, thanks for that historical reference. appreciate that. well, we're going to stay on the earnings front here as well and start off with apple. how can we not in some ways talk about apple? you know when you step back and look at the success that this company has had and look at this quarter in the larger context of a company that has remade itself, and it is, oh, just dominating in so many areas. and of course, also reflective

of the willingness, as mike just said, of the consumer to open up his or her wallets. certainly when it comes to what apple is offering in both iphones, ipods, ipads, and well, let's just wait, as well. there's a look at the stock. $235 billion market value now for apple. far exceeding at&t, its partner, ibm. i mean, you name it, apple the king of the hill in so many ways at this point. of course, $40 billion in cash. don't forget that. so, many people x that out in terms of the market cap, but you get the story, incredible growth there. and here's something i noted from last night's call, and i think we may have mentioned this. it's not just growth here in the states or internationally as we think of it. take a look at what apple earned in greater china iphone sales. $1.3 billion for the first six months of fiscal '09. that was up 200%. that is not insignificant, $1.3 billion for six months. and that indicates significant

growth in a market that so many have always talked about its promise. well, it actually is happening. that certainly helped aid better-than-expected number overall from apple. and we'll see. but a couple of people latching on to that, saying, hey, they've just started in terms of what they can accomplish in some emerging markets. certainly, greater china amongst it. all right, mentioned at&t. i did a full report on it earlier. the stock not doing much. you know, the margins much better than anticipated. the revenue number, perhaps just in line, if not a little bit light. the earnings per share number, though, better, again. but here's a stock that, well, you know, it's benefited a lot from apple. apple's benefit aed a lot from , but apple's certainly done a lot better when it comes to the stock market. the call just began at 10:00. haven't seen any real headlines. want to update people as we get them. and again, i did say this earlier, when it comes to the enterprise space, certainly, they have interesting visibility at at&t into how business spending is going, so important

to so many other things. finally on the disappointment front, although i've talked to a couple holders of yahoo! who going into this number were happy to own it, buying more, and now saying don't quite see it i guess you can argue it was a revenue miss, and perhaps the guidance is a little less than had been anticipated, but at the end of the day, the company hit on a lot of important metrics. you can see the earnings per share number in terms of versus estimates. but we're seeing this to a certain extent in this earnings season. it's more than just expectations it may be still a great deal of caution on the part of investors about what is ahead in terms of the overall economy. many might say apple should be up more and are wondering why yahoo! is down quite so much. mark, back to you. >> thank you very much, david faber. just ahead, still a lot more to come. freeport-mcmoran's stock more than doubling over the past year. now a fund manager with $3 billion to invest tells us if he

is doubling down or dumping out. the ceo's on "street signs" today at 2:00 p.m. and do jobless benefits encourage unemployment? we're debating it this hour. we want to know what you think. vote at squawkonthestreet.cnbc.com. and as we head to our commercial, a check on the greenback as we're getting ready, by the way, for a very special event in washington about the dollar. we've got a new benjamin and we'll be back.

gold prices are higher today, just slightly, up about $4, but we're still north of $11.40 per ounce. today's earnings trade, american airlines is down. obviously, all the airlines taking a bit of a hit. it was interesting, delta, by the way, only canceled 400 flights and lost $20 million during the snowstorm. they canceled something like 7,000 flights and only lost $60 million. shows you how lucrative that atlantic route is. let's get to phil lebeau who today is on site at general motors for the big announcement. i know there's a lot going on behind you and maybe you'll get comments in a moment from the executives at gm. >> reporter: well, this is the big announcement, erin. it just came from chairman and ceo ed whitacre jr. you can see him over here. he has just announced that general motors has completely repaid the u.s. and canadian governments more than $8 billion. that means that their obligations of what they had to pay when they came out of bankruptcy, including interest, have completely been repaid.

the governments of both u.s. and canada gave them until 2015 to do this, but they have done that in nine months since exiting bankruptcy, far quicker than people on wall street or in washington were expecting, but as you can imagine, for ed whitacre jr., this is a big day and he's sharing it here with the people at the fairfax plant about 3,700 employees. bealso want to point out, they also have announced they will be sink being $250 million into this plant and a plant in michigan as they ramp up production of the next-generation malibu, and they're going to be bringing back more workers and a lot of workers were shed as they went through the bankruptcy process. we're starting to see those workers coming back. so, that's part of the announcement going on with mr. whitacre. we'll be talking to him in a matter of seconds. the interesting thing to keep in mind is that for general motors, this doesn't mean everything's clear. they have two things in the future -- getting back in the black, which probably will happen in the third quarter, early fourth quarter, and then going public. if they get a couple good quarters of financial performance under their belt, first quarter, second quarter, then they are likely to say to

wall street and to the people who would be underwriting going public, look, we have the performance benchmarks here, we're ready to start going public. and that's what we have to see from this company over the next six months. once they go public, then you see the federal government getting the opportunity to sell shares of gm over time and make back more of the $50 billion that was funded to this company as part of its bankruptcy plan. so, a huge day for general motors, and that's what ed whitacre is talking about right now. guys? >> and i know, phil, that he may be taking some questions and you'll jump in on that. but what i'm reading in his op ed today, it's interesting, he talks about, hey, look, we've invisited $1.5 billion in these facilities, restoring or creating 7,500 jobs, the volt is going well. we've got record sales in argentina, brazil, china, india. he lists so many great things that, frankly, fly in the face of public perception of where gm is right now. what's the truth? this incredibly rosy op ed or the negativity in the market or somewhere in between?

>> reporter: i think it's somewhere in between, erin. when you look at what general motors has gone through over the last six months, a lot of the important building blocks this company put in place didn't get a lot of attention. people were fixated on when do you repay the government, how quickly can you do that and how quickly can you go public. now that they have this out of the way, i think we're going to start to see, at least some of the analysts on wall street, as gm prepares to go public, focusing on other things. ed whitacre now talking. let's see if we can come up here and talk with him. mr. whitacre, phil lebeau, cnbc. you're live, "squawk on the street." >> how are you? >> reporter: this happened far quicker than you expected, didn't it? >> it did. >> reporter: what do you attribute that to? >> a lot of hard work by a lot of really good people. a lot of hard work by a lot of good people. >> reporter: how much do you say this is because the market has started to come back, it allowed you guys, once you shed the debts of bankruptcy, that you could say, okay, we're starting to turn, or we're getting close to turning a profit, now we're in a financial position to repay the government? >> well, we've had a great first quarter. we won't announce our earnings

until may, but i think you'll be pleasantly surprised. we've got great products and we're on our way. >> reporter: are we looking at profitability in the third quarter? >> what'd you say, the third quarter? >> second quarter or third quarter for profitability? >> i'm not going to speculate. wait until you see our first quarter results. you'll be impressed. >> reporter: is there an expectation of profitability in the first quarter? >> you'll be impressed. >> reporter: there's talk about going public before the end of the year. how certain are you that's going to happen? >> well, i'm not certain at all, but we are working hard at it and it is a real possibility. >> reporter: so in your eyes, this is a real possibility? >> oh, sure. >> i've got to ask you, congratulations, first of all -- >> reporter: guys, there you have it. i think we're looking at a company that's telegraphing that it's going to be profitabili profitabilitiable in the first quarter. it's interesting. if you listen to ed whitacre jr., clearly a far different tone in the messages. coming up in a few minutes, we're going to hear from steve girsky, vice chairman of general motors, first on cnbc. we're going to take a break and come back in little bit and talk with mr. girsky. guys, back to you.

>> all right, phil, thank you. phil getting that interview first there with mr. whitaker. smooth work by phil lebeau, who owns that beat and he will be back with that interview in just a couple of moments. let's bring in frank holmes here for some reaction. he's going to talk about commodities prices, but ceo and chief investment officer at u.s. global. frank, on the back of the general motors interview, and that was ed whitacre there with phil lebeau, is this -- you know, he's talking about record sales in argentina, brazil, india, you've seen a resurgence in auto sales around the world. obviously, to make all those cars, you're using a lot of commodities. do you believe this is enough to justify a further run-up in copper and aluminum and palladium and all the other things that go into these cars? >> absolutely, erin. what's so exciting about free markets is that president obama made $5.5 million. ed whitacre has been able to pay back -- a great texan, by the way, that's been able to pay back $8 billion of government,

and apple and freeport are selling different products to china. so it's just very exciting. >> so, do you right now go long commodities, and if so, which ones? >> well, the math says that people should have up to 25% exposure to resource-based companies. that would include energy and the base metals and gold, all inclusive, and rebalance that every year. so, when it comes to freeport, who had spectacular earnings, and freeport's much cheaper than the barrick gold, much cheaper than gold corps on a pe ratio and revenue per share. so, i think they are able to pay a higher dividend. and if you go back to last time they had dividends of 30 cents a quarter, they paid $1.50 special dividend, throwing off $1 billion a quarter of free cash flow. and a year from now they could probably be debt-free. so, it's very exciting. >> and so, freeport, you know, we say freeport-mcmoran copper and gold. yes, gold, but really, that's about copper. have we seen a fundamental turn-around and permanent

resurgence in copper prices on the back of the crisis or not yet? >> i think we have. i think the big issue is everyone's still pervasively negative about china, even though we're selling a lot of apple phones to them and copper. but people have to remember, this whole move to hybrids uses a lot of copper besides -- all cars are using more and more copper. and i think this is going to continue. and what's also really important, erin, is the grade from these mines is declining. so, bhp has results and they've lowered grade. and i think that any supply disruption can easily take copper higher. and if it revalues against the dollar, you could easily see copper at $4, oil at $100, gold at $1,300 an ounce. >> wow, oil at $100, copper at $4. we've got the ceo on with us later today, so we'll ask him about that. before we go, you mentioned oil at $100 and we have these breaking oil headlines. crude oil stocks are in. a build of 900 million barrels,

frank, and we had anticipated a drop. so you have seen crude oil prices turn around just a little bit, but what do you make of that? if inventories are building, is this a concerning sign or would you go long? >> it's not a concerning sign because it's a shorter month and this historically happens during these months. oil starts its rally out of the lows in february and then goes sideways with dips until june and then starts this climb. so, i don't think it's a non-event. what's really important is what's taking place in the emerging markets where all the car sales are taking place. people are buying, they're buying cars, so that's good for metals, but they're also using a lot of oil and the surge in demand for emerging markets has picked up the slack that's happened in the recession in europe and america. so, i think it's an ongoing theme. >> frank holmes, thank you very much. we appreciate it, as always. got a lot in there. and next, gm's vice chairman stephen girsky. you heard phil lebeau promise that. mark, you should have seen phil lebeau it was like it used to be

in the exchange. people were pushing and shoving and pushing around. i was impressed he was able to speak. oh, there it is! just unveiled, the new benjamin. >> that's the new $100 -- >> why does it have -- i don't like the look of the new security -- >> it's like monopoly money. >> it looks like it's ripped in half. >> all right. well, we'll -- you know what's most important is how you spend it. >> we'll be back.

7:36 on the west, 10:36 on the east. and in the headlines at this moment, stocks are in positive territory across the board. better than it looked at the open. the dow is led higher by boeing, bank of america and jpmorgan. shares of appm, though, are the standout of the session, up nearly 6%. quarterly profit ahead of expectations. 13 analysts have upgraded this stock today. revenue was up 49%. and general motors chairman and ceo ed whitacre spoke to phil lebeau before he spoke to anybody else, and as phil said, they're looking for a first-quarter profit at general motors and a chance of the company going public. in kansas city, phil lebeau is talking with gm vice chair steve girsky in his first camera interview since taking the job. take it away again, phil. >> reporter: thank you very much, erin.

let's point out here that i heard from several people with general motors. they said, hey, listen, we're not telegraphing a profit for the first quarter, but you saw the enthusiasm from ed whitacre jr. the vice chairman of general motors is joining me now, steve girsky. i have to ask you this, because it's clear when we were talking to ed, he said just you wait and see what we do in the first quarter. are we looking at gm being back in the black in the first quarter? >> we're making progress every day, phil, and we take it one step at a time, and we'll see when we get there. >> reporter: but the sense is on the street that you guys are out-performing even your own benchmarks. accurate? >> we're feeling better about everything we do here. >> reporter: let's talk about paying back the government. this is happening roughly within nine months of coming out of bankruptcy. and it frees up some restricted cash for you guys, allows you to make even greater investments in the future. did this happen even faster than you expected when you guys were first going through bankruptcy? >> i think everybody who sat here in april and may and june of last year never thought that we'd be able to pay this loan off by april. in fact, they gave us a lot -- they gave us five years to pay it back, and we paid it back in

nine months. >> reporter: how much of that is attributed to the fact that the market is starting to come back, you're starting to look at your financial situation and saying we're close to getting back in the black, we can afford, let's get this out of the way, frees up some restricted cash and allows us to even become more aggressive about growing the company? >> well, the market has improved. our results have improved. we're showing more discipline. the cash flow is improving here, and we feel comfortable enough that it's time to get the taxpayer some of their money back. >> reporter: there's so much fixation about when gm goes public. ed whitacre wouldn't say, but the sense is you do it before the end of the year. how certain are we that that's going to happen? >> well, two things have to happen, both of which are uncertain, right? one is, are the financial markets going to hold up? is the car market going to hold up? and second is how is our performance going to do? so far, so good. we take it one step at a time, but we're making good progress. >> reporter: have you guys started the process of working with banks on wall street about laying the groundwork for when you start to, the process of going public? >> there are people thinking about how we're going to go public and the process of doing

that all the time. >> reporter: but you haven't officially locked in any investment banks at this point? terms of doing that? >> not yet. not yet. >> reporter: what's the biggest change for you, because i think most people may not realize you spent years covering gm and the industry on wall street. what's the biggest change you've noticed from the old gm, the one that you covered versus the one that you're now vice chairman of, in terms of how the company functions day in, day out? >> i think people are impatient here. they've tired of playing defense so many years and want to play offense. so, you're seeing a lot more impatience from the team up and down, all across the board. i think you're seeing more discipline in the company. last month was a big month. a lot of incentives came at the market. toyota led the market with a lot of incentives. old gm would have thrown a lot of money at this market just to catch up with everybody else. this gm is showing more discipline and i think you'll see that in the financial results. >> reporter: your inventory is already lower than you would like it to be. how much do you have to ramp it up here in the next few months, especially if the auto market really starts to take off and the consumer starts coming into showrooms? >> we're exploring ways all the time right now of how to get

more product into this market. we have undercalled certain products -- equinox, terrain, some of these products we've undercalled and we're doing whatever we can to get more product into this market. >> reporter: but you're already at three shifts in this plant. the question will start coming up, does gm need to start considering reopening some of the plants that it earmarked for closure or delaying the closure of some of those plants, because it takes some time? >> i think we're looking, we're exploring a number of ways of how to get more capacity into this market on a number of products. >> reporter: but third shifts is the optimum idea for -- >> third shifts is the optimal. we'd like to get more capacity, even if it costs a little bit more, but we like to have flexibility, and that's important to us. we'll pay a little more for the capacity on the up side if we can get more flexibility to protect us on the down side. >> quickly, put on your analyst hat. forecast for sales rate for the industry their year? where do you think it's coming in yet? >> i think 11.5% to 12%. it's a slow recovery here, but there's signs of optimism out there. >> steve girsky, good to ee you again. >> phil, good to ee you again. >> a gentlemen i used to talk to

all the time covering gm. now he's running gm. big numbers for general motors, the company officially paying off all its obligations coming out of bankruptcy to both the united states and canadian governments. guys, back to you. >> thank you, phil lebeau. and apple is a big winner today, not just gm. several upgrades. i think 13 is what we said? at least 13 upgrades. lucky 13? after last night's blockbuster earnings report, thanks to the iphone. more on the stock that is a little bit more like a cult religion, up next. plus, do unemployment benefits make jobseekers lazy? we started that debate yesterday. we will continue it today. >> and that's the focus of our street poll. squawkonthestreet.cnbc.com is where you can cast your vote. are jobless benefits too generous right now? first, another check on oil following the inventory report. we had a build of 1.9 million barrels, though a decline had been anticipated. crude was up. it's now down nearly 60 cents at

$83.26 a barrel.

all right, today on "the close bell," sir richard branson, founder of the virgin group. tune in, 3:20 eastern time right here on cnbc. now, let's get huckman's latest installment of the tupper-time tupperware flash. >> good morning, again, erin. investors are waking up on the right side the bed thanks to restful earnings out of testimony purr peedics. tpx shares are at a new high as the company beat the street and raised guidance. maybe called it the goldilocks effect, but it's boosting the stocks of sealy, zz, and select

comfort. testimompur-pedic up 5%. domestic mattress sales jumped 55% and pillow revenue increased by one-third in the first quarter. and after a 63% rise over the past year, shares of juniper networks are falling out of bed this morning. the stock's now down about 6%, almost, even though the company beat the street and said customer spending is going up, but the shares have rallied 20% over the past few months. by the way, shares of its competitor, cisco systems, are fractionally higher right now sh and that's your "realtime flash." back to you. >> did you say pillow revenue? >> yeah, pillow revenue up 33%. >> okay. >> why do you laugh, mark? when's the last time you got a new pillow? >> about a year ago. >> i take it cindy would know the answer to that question. >> no, actually, i'm the one -- >> you buy the pillows? >> yeah. she always gets them too small. i like the big, fluffy pillows. >> you do? >> you know, the king-sized --

>> like the body pillows, basically? >> a big pillow. that's my -- anyway, straight ahead, do unemployment benefits encourage unemployment? >> the debate that started here 24 hours ago will continue, will likely not ever be finished, but it will continue in a moment. and we want to know what you think, so go vote on squawkonthestreet.cnbc.com. what do you think? tell us. gecko: uh, you wanted to see me sir?

boss: come on in, i had some other things you can tell people about geico - great claims service and a 97% customer satisfaction rate. show people really trust us. gecko: yeah right, that makes sense. boss: trust is key when talking about geico. you gotta feel it. why don't you and i practice that with a little exercise where i fall backwards and you catch me. gecko: uh no sir, honestly... uh...i don't think...uh... boss: no, no. we can do this. gecko: oh dear. vo: geico. fifteen minutes could save you 15% or more on car insurance.

a must-see cnbc exclusive. president obama talk to john harwood tomorrow. you can see the president today at 2:00 p.m. eastern on "street signs." erin, of course, will be in charge of that. erin? "squawk on the street" we started the discussion but we ran out of time. here's something that came up during the conversation. >> because unemployment insurance exists, people are going to quit their jobs. >> all the evidence shows the

more you have unemployment insurance the longer it takes people to find jobs. >> this caused a huge, wow, i can't even tell, except for dan you're wearing something different it looks like this is the same shot. we brought them back. keep talking about it. there was passion in the conversation, boy the way, our e-mail box was full of passion on both sides of this issue. i pulled up the study here and i want to throw this at you first, dan. it is a study that was done, journal of economic perspectives where they actually said and jpmorgan has also been citing this for every five days someone is unemployed, unemployment benefits tend to extend by a day. that may or may not be nefarious but that is what the numbers tend to show. dan, does that make sense? does it show they're holding out for the right work or show that they're choosing not to hang out at home. >> i don't think people are lazy and hanging out at home and don't want that job and not just that study but research from the

brookings institution and research from the congressional budget office over and over again people who are looking at the numbers are saying that unemployment benefits make people hold out for higher wages. they don't make them, but it gives them an incentive to hold out for a better job, so it does extend unemployment. >> is that a bad thing? >> it's a bad thing if it means we're subsidizing unemployment and causing our economy to grow at a less rapid rate. >> on the other hand, when they get the better paying job, they pay more in taxes. >> the key thing we find out is that not that they get better jobs, per se, they wait until the unemployment runs out. >> keith, that is a fair point. they say they're holding out for a better job and last in the right few weeks before the unement mroement benefits run out, they'll take whatever job is available. >> the study and other analysis

assumes we have normal economic conditions. we are do not have norming economic conditions. we are just getting out of a deep, deep recession. the reason people are not getting jobs right now is not because of unemployment, but businesses are not hiring. in fact, the most recent study that came out from the federal reserve in san francisco, the federal reserve bank in san francisco unemployment benefit exz tensions only have a modest impact on increasing the unemployment rate. i think this is quum pleatly false to assume this will encourage people. >> you still said they have a modest impact on increasing the unemployment rate. nobody would want to hear that at all. >> of the six percentage unemployment increase only 0.4% of that might be attributed to the unemployment benefits. >> you're saying half a percent? so it would have been 6.1 versus

6.5. >> of the increase that we're talking about. the unemployment rate is now 9.7%. this is whaumdz under normal economic conditions. you have to think about this, right now the average unemployment check is $293 a week. can you imagine most people living on $293 a week. new york state it's $350 a week. >> in california it's 400 something. >> people are not choosing to stay unemployed because of that, they're staying unemployed because they cannot find jobs. businesses are not hiring. >> i'm very worried because i'm agreeing with keith and that almost never happens. >> every now and then. >> i will add one thought which i added yesterday. if they're studying what extended unemployment benefits do to people, then they are by definition studying, as pete said, at a time when there

aren't any jobs. i would like to hear dan's rebuttal. >> no question if the national economy is weak, that does complicate everything. but keith has agreed with me that even the research that is more towards his side causes hundreds of thousands of people to stay unemployed. we're really just talking about how much unemployed is created by unemployment benefits and i fully agree with keith and this is sincere, this isn't a debating point. we need to get the national economy growing but that then gets us into the much bigger issue is the tax and spending of the regulatory hindering job creation -- >> this is where we have to hit pause again. >> we're just getting into it. >> that's why we have to bring them back again and wear the same clothes again. >> we're just getting into it. >> they saved us the special time and bring it back another day. >> all right, heres rrb the question that i was going to ask

so they can think about it and people at home can think about it. what was the question? senior moment. oh, yeah. oh, yeah, i mean, tell me that -- that's life. there are going to be free riders and do you cut off people who are trying who are trying to provide for their families. >> if there's way to reform that. in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio, wherever -- whenever. and we'll be on call around the clock, while you trade around the globe. fidelity investments. turn here.

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the discussion continues on set and hopefully in living rooms of people watching this program. are jobless benefits too generous? if you make enough money and you got savings -- >> too generous right now, 57%. i respectfully disagree with the majority. anyway, we're out of time. that went fast. >> we are. >> thanks for watching "squawk on the street." coming up on "street signs." >> we have the president.

very excited about that. >> sounds good. see you tomorrow. good morning, everyone. ce welcome to "the call." as i watch the big board here, up 16 points right now on the dow and pretty much flat on the s&p. better than expected earnings continue to pile in. the question now is whether there's more room in this market or whether it's already all been priced in. we're going to discuss it. larry? >> i'm larry kudlow. as congress closes in on financial regulation, we ask, should the banks be barred from trading derivatives. >> we'll discuss it, larry. i'm melissa francises. spirit ceo will talk about his plan to charge for carry-on luggage is our favorite topic. this is "the call" on cnbc.

another round of strong earnings led by blowout earnings from boeing and morgan stanley. right now take a look at the s&p 500, it has just moved into the red and down not even a full point. essentially down on the session 1206. look at the dow how it is trading right now. trading to the plus side about 20 points. 11136. apple stellar earnings but right now you can see it's off the highs of the session and in negative territory, as well. slightly up more than a point. let's head to mary thompson who has more on morgan stanley and wells fargo earnings. >> melissa, those two firms the latest in the financial sector to post good results. trading paying off this quarter. the firm earned 78 cents a share as revenue more than tripled to $9.1 billion.