i don't have a position yet. >> see you on monday. have a great weekend. "power lunch" starts right now. scott, thank you very much. three hours to go in the trading day and it looks like the fed may be right. economic worries back on the table. q-4 gdp weaker than expected. first quarter starting to look a little squishy. how do you invest against this background? sue. >> ty, investors are tapping the brakes on ford shares today. profits fell short, slower sales outside of north america. is the automaker ready to get back in gear, brian? >> and apple earnings blow past expectations. mcdonald's shares on a roll. right now, do you buy, sell or hold? we'll have the play on those two and more. i'm tyler mathisen with sue herera and brian shactman. and that can mean only one thing, "power lunch" begins right now. it is a friday. a huge week for earnings winding

down. not bad. not great. same trend for the economic numbers that has investors a little rattled. the dow down close to 100 points, almost in triple digits. s&p down half a percent. nasdaq bucking the trend slightly in the green. the pulse of the markets, rbob gasoline reacting big to the refinery closures. up 2% to the upside. euro stronger. commissioner saying the deal is close. and 10-year well below 2%. midday movers rubber maid sales higher. a lot of moves on eastman chemical and buying specialty chemicals, up 5%. and up big after earnings swinging to a profit. flipped it quick. i forgot the percentage. start with chevron on the downside. q-4 earnings missed expectations. actually posting a loss.

earnings dropped 90% the stock down 7.5%. and river bed beat estimates for guidance below consensus. that stock down almost 21%. let's get a little more on the markets. mary thompson looking sharp at the nyse. hey, mary. >> hey, brian. just as you mentioned its earnings and the economy which are the focus of trading and the dow jones industrial average right now very close to its lows of the session. the nasdaq managing to hold onto a slight gain. the nasdaq is on track to post fourth straight weekly gain, the s&p and dow right now on track to post their first weekly loss in four weeks. take a look at the sectors because we're continuing to see weakness in the utility sector. that's a reflection of the weakness in the gdp number for the fourth quarter. consumer staples and consumer discretionary under pressure for reasons we'll get to in a moment. and technology has been the better performing stock -- or sector i should say thanks to strength in semiconductors. but it has recently just turned lower. it's been in the green for most of the session. again, let's take a look at these consumer stocks. a wide variety of reasons here.

we had a number reporting earnings, proctor & gamble, dow component down concerns about 2012 outlook because of the dollar pressuring that stock. altria which of course is the former phillip morris benefitting demand for smokeless tobacco. still concerns about the company losing market share of its marlboro cigarettes. that has moved to its rival. and ford of course missing estimates as well for the quarter because of weakness in european operations. you heard brian mention def rye at the top of the show. one sector that continues to do well, this is the airline sector. keep in mind all the publicly traded airlines posted a profit with the exception of amr which is now bankrupt. stock still trades but you don't want to trade those shares essentially and extending their gains in today's session as well. they've had a very strong month up well over 10% for the month. right now though the dow is down 86 points. guys, back to you. >> mary, thank you very much. let's switch on the "power lunch" power surge and drill

down on the stories driving the day. ford shares taking a hit. the automaker revs up revenue but earnings miss the mark. ceo speaking with our philip lebeau first on cnbc about the automaker's road ahead. phil joins us with some of the details from ford's hq. hi, phil. >> hi, sue. on a day when ford posted its largest net profit since 1999, the focus is instead on the miss in the fourth quarter. the company reporting a profit of 20 cents a share, a nickel short of estimates. you mentioned the revenues about $2 billion stronger than the street was expecting. but here's one of the stories that investors are focusing on. look at the break down of ford earnings by the four regions of the world. north america doing very well. not bad in south america, but europe with that loss of 27 million, that's the bugaboo in this quarter's report. they believe they're making adjustments necessary to put europe back in the black. >> with the slowdown going so fast, it hurt us in the fourth quarter in the year. but based on our restructuring

of the business itself plus the new products on the revenue side we have a number of new global platforms coming in. >> and alan explaining what went wrong with ford at the end of the fourth quarter. couple interesting notes. one being that they're seeing commodity price increases easing into 2012. they were caught in the commodity trap if you will where the prices went up, they hedged against those, they lost $2.3 billion in 2011 because of that. and as you take a look at shares of ford in the last year down more than 30%, tyler. the question for a lot of investors is this pullback a buying opportunity? or do you look at this and say these guys have plateaued for a while? that will be the interesting thing to watch happen over the next month or so. >> phil, thank you very much. you know, if the economy were a company, you would have to say that this morning's numbers were a miss. a bit of a hiccup in today's gdp report. economic growth slower than expected in the latest month. so is it a reason to worry?

or senior economics correspondent, steve liesman, breaks down the numbers now. steve. >> you putting a sell on america, tyler? here's the deal. no one was happy with today's report that gdp grew just 2.8% in the fourth quarter. even though it was the best showing for growth in 18 months. there's two reasons for this. first below consensus of 3%. some whispers higher than that. second, detail of report showing weakness at the core of the economy. on the surface you can see the performance of the economy looks good. a steady bounce back from that swoon of the first quarter up to 2.8, but it's the makeup of growth that has economists worried and puts the bears on a rampage. decline in government spending took a percentage point away from growth and paced by a sharp decline in spending. housing added a quarter point, that's about the biggest gain. below estimate for prior two

quarters and consumer spending just okay adding 4.5%. and the biggest contributor and that's the problem, was inventories and the 2% gain you see there is not expected to last. so that goes away. overall the data seems to back up fed chairman ben bernanke's economic view with a strong top line but weak details underneath. on the upside lowest inflation numbers in about 18 months. and new york fed president bill dudly saying the growth in the fourth quarter not expected to repeat in the first half of 2012. >> you answered my follow-up question, which would be who got it right, jamie dimon or ben bernanke. >> i don't think it's necessarily decided yet. we don't have the data for the first quarter. there's very limited data in so far. it is possible that some of the better consumer sentiment numbers we've seen and some of the better jobs numbers we've seen could lead to additional consumer spending and business investment in the months ahead. it's just the expectation right now if that big inventory chunk

goes away, if government keeps declining, that it's going to be hard to do 2.8 again. >> steve, thank you very much. just moments a fitch downgraded belgium, italy, spain and other countries triggering a bit of a selloff in the euro. all of this as the markets are bracing for that big summit of european leaders on monday. the debt crisis of course front and center. our chief international correspondent, michelle caruso-cabrera, has a preview and perhaps what impact this fitch move might have. >> well, obviously, sue, you just mentioned we had seen the euro just go to above $1.32 within the last hour and, bam, fitch comes along to remind everybody that, yes, while american growth may be slowing somewhat, so is european growth for sure. you can see what the euro's done there, pulled back definitely on the news with fitch cutting ratings on those six countries. rising home buys in the allocation of capital. this has been a big theme out of davos. banks retrenching and only lending within the country that they're in rather than across the continent.

and that is leading to a contraction in credit which is really problematic for growth. one of the big issues coming up at the eu summit. flee big agenda items, first of all work on the fiscal compact. essentially how are you going to have real discipline when it comes to countries that violate spending rules. also they'll talk more about the european stability mechanism. a big pot of money they want to have put together to replace the financial stability fund. and that's going to be for bailing out banks, bailing out countries. and then the third one is probably the most important. growth boosting measures. we are told that angela merkel finally backtracking from this whole idea of you have to cut spending and instead focusing on liberalization and reforms, things that make countries grow. this is going to be the hardest part. just one example this week earlier this week in greece the parliament refused to deregulate pharmacies. in greece in countries like italy, the parliament dictates what days pharmacies can be

open. you have to open up a paper and see is the pharmacy on my block open today? is it open tonight? it's like the u.s. congress deciding when cvs and walgreens can be open. that's the kind of regulation and bureaucracy that exists a lot in europe. they have to get rid of a lot of that if they're ever going to see real competition. mario draghi speaking in davos earlier today said there has been a lot of progress and things have changed dramatically. look at what he said earlier. >> we look at the progress that countries have made in your area in fiscal retrenchment and undertaking structure reforms, it's amazing. if you compare today with even five months ago, i think the euro is another world. >> he's right. but, tyler, there's still so much more that needs to be done. >> michelle, thank you very much. and of course it is the final weekend of campaigning for the republican presidential candidates before tuesday's crucial election down in florida. our john harwood is here.

some very recent poll numbers out. i don't know whether that's your area of concentration right now, but what is the latest state of the race? >> well, i an interesting dichotomy because nationally we have a new nbc "the wall street journal" poll shows newt gingrich leading mitt romney by 9 percentage points. by almost precisely that margin mitt romney's leading newt gingrich in florida. he appears through effective debate performances including another one last night on cnn and a heavy dose of negative ads against newt gingrich, he appears to have breaked newt gingrich's momentum from south carolina and taken the lead in florida. now, the question's going to be since we've seen this race bounce up and down, when we move beyond florida, we've got a little gap before we have states and super tuesday's coming up in early march, there will be a lot of southern states on the ballot there, more favorable to newt. can newt survive that quiet period? he's going to be entering that

sort of by-month with a loss if these numbers are right. then can he reflat numbers when he goes south to more favorable conservative audiences. we don't know. >> very interesting how romney has battled back this week. let's talk a little bit about your own performance, john. last evening on steven colbert's report. let's look at mr. harwood here. >> john harwood, you're a political analyst, who takes florida? >> well, first of all, i'm in an open marriage with my political predictions right now. >> good man. good man. that's appealing, evidently. >> yeah. but the one i love the best at the moment mitt romney comes back, wins florida, wins the nomination. >> had a good prediction there, john. an open marriage with respect to your political predictions. that's very good. >> great time. >> how was the experience with my neighbor? >> it's fantastic.

i'm sure that all mont claire was proud. look, it's so fun to work in a different environment like that. communicate with a different audience. >> you're not saying we're not funny here, are you? >> no. i'm saying my college daughter can't make herself watch cnbc, but she's on colbert and stewart every night. be able to reach out to different people. the panel that i was on. >> yeah. >> katrina from the nation, she was the liberal, i was play it down the middle, the third member of the panel was david cassidy from the partridge family that i know sue had -- >> total crush. >> in her room when she was a kid. >> you're completely right. >> how is the harwood super pac coming along? >> i have not opened a superpac, i don't believe in that kind of dirty politics. i believe in accountability. so i'm playing it clean and straight. i like colbert to take the wrap

for going in with herman cain. >> you did us proud. and you're right about david cassidy. moving along -- >> straight ahead. gdp lackluster earnings a little bit squishy. no deal yet on greece. how do you play this odd mix? top morgan stanley portfolio manager will tell you where he's putting his money. as we head to break the commodities complex on the move. a lot of green on the board with nat gas, gasoline and heating oil on the plus side. copper is on the plus side as well -- or downside today. but the crb overall, fractional moves. back in a minute. unbelievably nice.ryone has mornin'. i guess i'm helping them save hundreds on car insurance. it probably also doesn't hurt that i'm a world-famous advertising icon. cheers! i mean, who wouldn't want a piece of that? geico. ah... fifteen minutes could save you fifteen percent oh dear... or more on car insurance.

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welcome back to "power lunch." rick santelli here on the floor of the cme group. we did have some disappointment regarding gdp today. don't take my word for it. look at the markets. now, let's start out with the currencies. we can see that the euro currency really came in strong. very little impacted that. we touched 132, we did it again. this is, what, highest level should we close here since december 9th. more importantly certainly doesn't look like anybody has anxiety that things will fall apart in greece. this is a market to pay attention to. intraday of 10s more disappointing with today's data. a beeline for 2%. gdp at 2.8 while the rest you can see we closed last week at 2:03 down 11 on the week. if you open to the chart going

back towards december you can clearly see the fed meeting changed the week. we are clearly at the highest levels of 2012. and, boom, once the fed depicting a very, very soft economy moving forward, you can see how rates were effected. the last chart, the lqd, the etf that reflects the price, not the spread, continues to make passes at record high closes. sue, back to you. >> thank you very much, rick. appreciate it. economic worries back on the table today. so how do you invest in this type of environment? our next guest says there are still plenty of opportunities here and abroad provided you know how to hunt for them and hunt for yield. specifically. joining us now the managing director of global investment solutions at morgan stanley, he ov oversees nearly $2 billion in assets across several platforms and funds. welcome back andrew, good to see you again on "power lunch." >> thank you. >> let's start first of all with the opportunity. last year was such a difficult year for so many sectors in particular. you feel as though this is kind of a rebound year for those. >> sure. keep in mind the market was flat

last year, but utilities and consumer staples were up mid-teens. >> uh-huh. >> and you had financials and industrials down mid-teens. that's a huge swing in differential. >> yes. andrew, hang onto that for a second. we'll come back to you. we have breaking news with jon fortt. jon. >> well, looks like some headlines in the "the wall street journal" saying that facebook very close to filing an s-1 for an ipo. the headlines say morgan stanley close to winning facebook deal. so a roll in that that they could -- facebook could file ipo documents as soon as wednesday. they are of course coming up on that deadline based on the number of investors they have to disclose more financial information, but there's been questions about whether or not they would move ahead with an ipo, "the wall street journal" at least saying that could be happening as soon as the middle of next week. back to you. >> and probably coming between 75 and $100 billion. thank you, jon, very much. we'll have more on this on "power lunch" in just a short while.

andrew, thank you for your patience. >> sure. >> we're back to you now. so this year dividends were one of the hot plays, the dividend yielding stocks last year. what's hot this year? >> look, again, as i said, i think the quality dividend stocks were the hot stocks last year. and they're very expensive relative to the market versus the value, the cyclical stocks, they're very cheap. and it reminds us of early 2009 when there was a lot of very bad news priced into a lot of more cyclical stocks. that's where the opportunity was. i don't think the economy is going to accelerate meaningfully, but it doesn't mean that there aren't opportunities to hunt for bargains. and i don't think that's in the quality dividend stocks. that was a hot trade of last year. >> a couple of the u.s. stocks that you do like happen to be among the hottest stocks of last year. namely mcdonald's, which i do believe pays a dividend. and apple, which does not. >> sure. that's true except apple beat their numbers.

their estimate went up by 20% earlier this week and the stock's up six. that stock trades at 11 times 2012 earnings versus, you know, your utility, not to disparage your utility, consolidated edison, trades at 17 times earnings. it was up 30% last year. and their earnings growth is 1%. so it's a very crowded trade these high yielding stocks. >> you're also very courageous in that you like a number of stocks that have a large presence or are based in europe. >> sure. well, again, europe was down 12% last year. a lot of bad news is priced into europe. and you have the ecb basically backstopping the banks. and, again, i think that's an opportunity. keep in mind, germany dropped 30% last summer when the gdp numbers were positive. then germany confirms negative gdp numbers in the fourth

quarter. and the stock market has risen every day since they did that two weeks ago. so, again, it's a question of what is embedded in stock prices. and i think there's a lot of bad news priced into european stocks. >> andrew, thanks a million. come back and join us again soon. >> thank you. take care. >> up next, words to live by. buy, sell and hold. blowout numbers from apple as we just touched on. mcdonald's 52-week high. what do you do about those stocks right now? >> plus, facebook's ipo. it seems like it's coming to market. they will probably file their papers next wednesday. we have much more on that coming up as "power lunch" continues.

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updating you now on a story we brought to you just a few moments ago and that our reporters are working on right now. facebook looks likely to be filing its papers for its ipo as soon as wednesday. it looks like morgan stanley will be the lead underwriter on this deal. they also say that goldman sachs may play a major role. and it looks like the valuation will come in between $75 to $100 billion. our kayla tausche is working the phones and she'll have details on that for us shortly. and we also have julia boorstin working the story. so stay with "power lunch." we have a lot more on this still-developing story for you straight ahead. before that though, it's time for three in 30. seema mody. >> three stocks to watch here at the nasdaq.

chip equipment maker climbing higher on an upbeat earnings report and increase in bookings showing perhaps a recovery in the chips sector. on the flip side shares of river bed technology droppto its lowest level in six months after management warned of a first quarter dip in growth. lastly, check out juniper networks down 3.5% moving lower after fourth quarter came in softer than what the street was expecting primarily due to weak demand from service equipment makers. tyler, to you. thank you very much. here we are with another edition, another edition, ladies and gentlemen, of buy, sell or hold. >> because you had no one else to get. >> we have three quarters of the anchor team of business center. how about that. this is the alumni edition. if maria were here. let's go to the stocks and go quickly here. texas instruments out numbers earlier this week. >> you know, i like big cap technology generally, tyler. but i would swap into intel. i still think it's a better deal

all the way around. intel has the possibility of increasing dividends on a regular basis. integral to the entire revolution going on in the technology sector. so rather less volatile more dependable stock. >> move onto tuesday. mcdonald's came out with its earnings. very nice. the stock sold off just a little bit as you see there. but it's one of the best performing stocks of last year. >> yeah. one of the best performing stocks since 1971. a lot of people talk if you bought gold at $13 an ounce, you're a genius. you would have been better fit. i think you add to it on weakness. and as a strategy i would take mcdonald's and to a certain extent starbucks and combine them as kind of a pairs trade where you're playing big brand names and barbelling value and barbelling luxury. so mcdonald's and starbucks against each other or together

makes an interesting pair. >> so skip ahead to thursday afternoon when starbucks came out. i take it you like both of those. >> the brand names are great. howard schultz doing a great job getting paid a lot of money and adding as you know a happy hour to some starbucks. higher margin business in the afternoons. so, yeah, i think i pullback -- >> i just knew i loved starbucks. >> get your mexican coffee, get your bailey's and coffee thing. she used to make those at work. >> i did. >> let's talk apple out wednesday with numbers that were laughably good. >> well, $8 billion more in revenue than expected off the charts. i think you have to own it. if you own it, you add to it on weakness. i would wait for a pullback to buy it. doesn't look like it will come back. they're coming with the iphone 3, iphone 5. look at the voice recognition software that allows these devices to do just about anything. my 9-year-old son owned the stock for a little period of time and a friend of mine asked

him when he was going to sell and he said i'll sell it when they stop making things that work. >> simple products. streamline product line. let's talk about caterpillar at the other end. this company's been a good one. >> best in breed benefitting from the boom in energy and in mining. again, hold it, buy it on weakness. it's had a fantastic run. i'd be a little careful and look for as much of a pullback as you can get. there are other ways to play the space, but this is still the best way to play it if you're going to play there. >> ron, great to see you. >> you as well. >> sue. >> thank you very much, gentlemen. straight ahead, breaking news on facebook. the "the wall street journal" reporting it's looking to file its ipo documents on wednesday. we have all the reporters here and we're going to talk about it when we come back. stay with us.

welcome back to "power lunch." before we get to some facebook fever and we have you covered from top to bottom, let's reset the marketplace for you. we have a 10-year note firmly below 2%. seeing more dollar erosion well below 80 now. gold up $6. the crude is flat. dow off and nasdaq the

outperformer up 5 points. look at s&p winners and losers right now. rubbermaid up. eastman chemical up and earnings up 4% at the bottom mason, frontier down 5% plus and the biggest loser if you will 9.5% for robert half international. tyler, over to you. brian, thank you very much. we are following news about facebook possibly ready to file paperwork for an ipo as early as the middle of next week. we have scrambled the jets and joined by kayla tausche, jon fortt, julia boorstin, john carney and on the phone from davos, david kirk patrick. >> the headlines out of "the wall street journal" at this hour facebook looking to file ipo dock yums with the s.e.c. as soon as wednesday and morgan stanley is close to winning the

facebook deal. that's something we have reported here at cnbc based on things we have heard from our sources and also the fact morgan stanley has been the leader in internet-related ipos here in the u.s. for the last year and has been on a lot of the flagship ipos that were somewhat tied to facebook. as far as valuation goes, there's a headline in the journal saying that facebook is eyeing valuation between $75 to $100 billion in its ipo previous reports had said as much as $100 billion. my sources had told me earlier this week to expect something in the range of the $80 billion. this is because the most recent trade of facebook on the private market valuated about $34.50 a share or just below $75 billion. there's an obvious premium on those private market trades once you become public. so you can expect something a little larger than that. but that $100 billion circulated from rk kelly in june when the market for ipos was stronger. groupon's valuation from $20 billion to $12 billion.

so there's a natural decrease to what we will see facebook go public at from that $100 billion number. my sources telling me it should be in the $80 billion range. >> kayla, stay with us as well as everybody. we have david on the phone now author of "the facebook effect." he's in davos. nice to have you with us. >> good to be here. thanks for having me. >> your reaction to the story, the valuations, does it fit with what you just heard from kayla? >> yeah, i mean, this company could value itself extremely highly and still have tremendous demand. facebook is becoming the communications architecture for the world. and let's face it, a lot of its users want to invest and it's the hottest internet company in certainly this decade. i wouldn't say our lifetime, but it's moving in that direction. so i've been thinking $100 billion made perfect sense. whether i would personally invest at that level is another matter. we'll have to see the numbers. >> jon, is there any buzz around the floors, around the corridors at davos?

i gather was one of the attendees there. i know the company itself is not commenting, neither is morgan stanley, which is apparently in the pull position to get the lead role in the underwriting. >> there's a bunch of people here from excel including jim and sheryl on the board of course but they've been keeping a pretty low profile. they've been having a lot of meetings making -- being very careful not to talk to people like certainly about the ipo. the thing that's being discussed here constantly is what happened with sopa and how facebook and twitter were so determinative in changing congress in one day. >> john carney, what does this deal with morgan stanley does become the lead underwriter on this? what does it mean for morgan stanley? kayla pointed out and reporting on the fact that they have been the lead on some of the internet ipos and goldman sachs reportedly is going to get a piece of the deal as well. >> goldman is very tied to facebook. so everybody expected that they

would play some role in the deal, but morgan stanley is really been the breakout winner for all the big internet ipos. so far we've seen, you know, a deal after deal after deal getting the lead role. and this is a huge boost for their business. just having their name on facebook, i don't think they'll make that much money off the deal, but it's like a giant, you know, advertisement to every other tech company. we're the guys to go with. facebook chose us. it will bring them lots of business not just from this deal but from all the deals that follow that. >> kayla, can you comment on that? you were on "power lunch" and talked about what it means to morgan stanley. and you also brought up the fact that it's not just about the money that they will make. >> it's not just about the money, sue. and my sources are also telling me that people at facebook are jockeying for what could be one of the lowest fee prices on this ipo. remember, gm was 75 basis points. edf in france, another government owned entity did its ipo at just above 1%.

this could very well be the lowest priced corporate issue ever because they have such a competitive advantage here with the people who actually will be running this. it's not about the money at all. it's completely about the prestige and pedigree and everything that comes with what they call being the lead left on that pros pecktous. sometimes it's not the bank that makes the most money or has the financial prowess behind underwriter. it's the person with the most responsibility. if something messes up in the ipo, morgan stanley would be on the hook. >> jon fortt, let me ask you, and clarify on this, the total valuation of facebook may be something north of $70 billion. maybe $100 billion. but they in this offering do not stand to raise anything close to that, do they? >> no. it would be somewhere in the $10 billion range, i believe, kayla might know a little better. that's still a lot of money by any kind of ipo standard. and the psychological impact on

silicon valley would just absolutely be huge. this is kind of the central company of this era. on the web, in the internet and even on mobile in terms of applications. so this would just be huge for tech in general. >> julia, i know you were working the phones that's why we didn't come to you before this. i could see you with your cell phone up to your ear whachlt are you hearing from your sources? and do you agree with what jon just said this would be an amazing development for silicon valley, this company decided in this type of market environment to go public? >> well, i think it would have ripples across silicon valley. we'd see a whole ne generation of facebook millionaires. but i would point out, sue, this isn't a decision to go public. facebook does have to file its financial information by april 1st in order to comply with the 500 shareholder rule. the reason why they're filing now and this is something i've been talking a lot to my sources about, facebook is filing soon because even though they have until april, facebook is really eager to make sure they can start trading by mid-may or so

before we get into this whole lull of summer. facebook does not want to start trading in the middle of july or august when a lot of people are no longer there and are off on vacation. the reason why they're filing now is my sources tell me that facebook expects to be the subject of intense scrutiny by the s.e.c. and they really are expecting to be taken to task for a lot of different things on this. and they're very, very cautious. facebook wants to make sure they want to build in time for back and forth to the s.e.c. and some sources have been telling me they wouldn't be surprised if the s.e.c. tries to make an example of facebook for various things and tries to change the law using facebook as an example. so that's why we'll see this company be incredibly careful about things like talking to david in davos. >> and back to david. julia now on the phone from davos. david, tonight is -- wrapping things up there but there's a big cocktail party tonight. it's like the vanity fair party at the oscars.

>> the best wine in davos. >> and i'm sure there's some good wine in davos. tell me what you expect the buzz to be like. who will be there and what does this news do to change the conversation? >> well, i mean, at the party everybody goes who likes good wine, which is the majority of people here. i remember last year i was talking to paul jacobs of qualcomm, those are the kind of people. ceos and michael dell will be there. two competing venture capitalists but not too many. and sheryl will pop in. another senior executive with facebook is here. i just want to say i think it's interesting that they're not going any kind overunconventional route with this ipo. the blue chips, goldman and morgan stanley rather than innovative auction approach and allowing customers to somehow buy in which is a new idea emerging in the industry.

and so it's weird that they're not, but if julia says they are at risk of being scrutinized, maybe it's sort of an insurance policy. blue chip firms will help them get through what could be rocky waters. that does make a certain amount of sense. >> david, thank you very much. we'll wish you a good evening and enjoy some of that fine wine. >> and let's bring in president of ipo desktop. francis, react if you would to what david just said and what julia is reporting that her sources say that facebook may indeed be the subject of an awful lot of scrutiny and perhaps some criticism before they are able to launch this ipo. what do you think? >> well, i think that they flinched. i think they've shown a weakness. i think there's been a lot of pushback from institutions. before it was a $100 billion market cap take it or leave it. and now it's $75 to $100. groupon those people take a hit when the ipo comes out. so facebook is thinking they'll

do billion dollars for 2011. the growth is flat lining. they're at 800 million users. >> but would that be why they would choose a morgan stanley/goldman sachs tag team to do this? >> sure. that's the right one. those people are the internet people. i think what they're doing is pushing it up also because the economy looks like it's flat lining. the numbers are down -- revised down for 2011. if you have a flat lining economy, hard to find growth areas. >> what would you say the critics will say about the way this is being handled or rolling out? will there be criticism? >> well, i think they should have done it last summer when these social networking stocks were hot. there's about ten of them out there now. you can look at the metrics and you can see that people look at sequential quarterly growth. i just don't think they can do that and going to be criticized for not doing it earlier.

>> three cheers for him. just one cheer. thank you very much for being with us. >> thank you. >> and we're going to continue our conversation, sue. >> we are. >> this breaking news on facebook after this short break. >> want to get our reporters' reactions to what he just said. >> we'll be right back. i love that my daughter's part fish. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare.

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on the trading session. >> and the volume really stands out there. >> it sure does. joining us once again are our reporters who have been following this story all along. kayla tausche, julia boorstin, jon fortt and john carney. john, could you react to what ipo desktop said before the break that facebook basically in essence what he was saying was they missed the window when a lot of other internet companies were coming public show we should note a lot haven't done that well. do you think that's going to be a criticism of the company? is it a valid criticism of the company? or were they simply waiting to see how the economy played out, how europe played out and maybe they're going to look brilliant? >> looking to fort or carney? >> carney. sorry, jon fortt. >> i think facebook did a very good job waiting. they wanted to see what the market appetite was. this was a giant ipo. of course they're not raising $100 million, but if they raise a tenth of that, even just $5

billion, it will be the biggest internet ipo ever. you don't want to do that in an atmosphere where people are worried about europe melting down. now seeing what's happened in the market so far this year, people have moved beyond those kind of fears. i think facebook did the right thing by waiting. sure the valuation has come down a little, but i think that $100 billion valuation we kept hearing about all last year was always a little bit of wishful thinking. it was never really reflected in the secondary market. there was not a lot of conviction or commitment at that number. >> kayla, i believe it was as we wrap up here, kayla, i believe it was julia who said that they want to get this out there while the getting is good, still good, and maybe you've got some indications that the economy is going to slow. do you feel that wind blowing a little bit? >> yeah. but you know there's a lot of -- there's a big volume issue in the summer when the trading desks are only at half-mast and a lot of stocks move sharply because the volume isn't that heavy. they wanted to get out before

that window. and i think as far as we're talking about valuation, remember that a company can have a valuation of $100 billion, but oftentimes that set by someone buying into the company and giving it that valuation. that means that -- it doesn't mean the company has that valuation, it means those investors will be investing at a loss if that comes down. that's an important thing to point out here. but if you think about it, sheryl sandberg, we heard she was speaking on sunday in davos, dan from fortune she's now been added as the hbs keynote on may 23rd. there's your window right there. you can't speak outside of that. >> that's a very good point. final thoughts from julia boorstin and then jon fortt. julia. >> i just have to say i think francis is wrong because i think that we have to look at what mark zuckerberg and sheryl have been doing with the company. zuckerberg said many times he's interested in focusing on growing the company, growing its revenue and its earnings and that's something that he wanted

to do without the distraction of the public markets. >> jon fortt, what does this do to other companies or for other companies that may be wanting to come public from the valley et cetera? >> sucks all the air out of the room. nobody wants to come out at the same time as facebook. another thing i'll say as far as the distraction issue facebook should not have done this sooner. they had some major changes in timeline and other things they were rolling out at that time. it's going to be a big distraction for employees, they need to get that stuff done before this whole thing happens. >> sucks the air out of the room. >> that's perfectly well-said. >> great point. thanks all of you. >> yes. >> we'll follow this story for the rest of the afternoon and into next week. up next though, get ready for the trader triple play. not quite knowing what the next phase was going to be, you know, because you been, you know, this is what you had been doing. you know, working, working, working, working, working, working. and now you're talking about, well you know, i won't be, and i get the chance to spend more time with my wife and my kids.

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ben bernanke to speak about the economy next week. what else should investors focus on? time for the trader triple play. market analyst at the nymex, jeffrey grossman, brg brokerage and holly list director at am ral clearing. holly, ladies first. earlier this week the 10-year bond was up about 2.1%. but when the fed came out on wednesday and said what it did,

those bond rates went back down. what do you see over the next three to six months for bond yields? >> clearly in a good statement to keep in mind is don't fight the fed. with them on hold for a projected period of time and clearly underlying all of this is technicals remain friendly. so chairman bernanke testifying, you do have a refunding announcement in treasuries. that could back up yields a little bit in front of that supply. and of course we've got that ever present nonfarm payroll number at the end of the week. with the fed on protracted hold and bernanke testifying next week, it would not surprise me that these overriding technicals kick in and we still see lower yield. you saw 5-years made new low yields today. 10-years could easily approach their low too over a short period of time. >> jeffrey, all things sort of being equal, are we looking at oil at or just around $100 a barrel for the foreseeable? >> that's where we are now. gasoline is the only reason this market is here now. the gasoline has blown out

against the crude oil by about a 25% increment and a crack value. without that we'd probably be mid-90s right now. again, we have to see that. remember, usually the strongest markets become the weakest following. i have a feeling the gas is going to ease off next week. it's blown out against all rationales this week. >> peter, blue chips, the dow, the s&p, have been sort of going their separate ways from the nasdaq. why? and do you expect that to continue? >> it's simple. smart money's going back to very safe securities. they're looking more not towards the growth stocks but more towards big cap. it's easy money. companies pay a good dividend that are consistent upon dividends, it's very safe play. and i think that's where the market is right now, in a safe mode. >> gentlemen, holly, thank you very much. have a great weekend. >> you too. >> thank you. >> the markets paired losses by about 25 points, 30 points. we're back in a moment. [ male announcer ] you are a business pro.

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from the dow jones industrial average. it's positive on the trading session up by about almost 7.5 points on the trading session. the s&p down by .25%. >> in the last half hour we've been really in your facebook. there are other stocks worth watching. >> listen. take a look at chevron. i'm fixated on this concept of a stronger dollar, what it's doing to u.s. based companies have a lot of overseas business. a big headwind for them, the dollar weak in the last couple days. see what happens moving forward. devry, if the government takes away their money. and netflix, look what they've done since they had their earnings. up 30% more. that stock is really on fire. short covering or not, you got in at the right time you did well. >> up another 3.5% today. that will pretty much do it for "power lunch." what a busy hour we have had. >> brought to you by facebook. >> that's right. stay with cnbc for more on the developing facebook story. have a great weekend.