i'd go to $109. if jeff is watching, stop with the free shipping. i won't go there. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good morning. welcome to "squawk on the street." today could be the day facebook files its much-anticipated ipo. i'm carl quintanilla with melissa lee and jim cramer live at the new york stock exchange. david faber is back at h.q. after coming off their best january in 15 years, since '97, stocks are set to begin february in the green. take a look at future this is morning, set to open up by more than 80 points. europe as well responding to better-than-expected manufacturing numbers, some signals the contraction over there might not be as bad as some thought. that came after some reassuring pmi numbers in china. >> let's get to our roadmap for

this wednesday. facebook may file for its ipo as early as today to raise $5 billion. morgan stanley clinching the lead underwriting roles. we have all the angles covered on what could be the biggest tech ipo. >> adp comes in line roughly with expectations but december is revised down. ism comes in less than an hour. >> amazon shares sharply lower in the premarket trade on disappointing earnings and forecast. can the stock maintain its premium valuation as it subsidizes prime customers in kindle sales? >> and mitt romney triumphant in florida but gingrich vows to keep on campaigning. 46 states to go, as he says. will the money keep flowing to gingrich now that romney has claimed what some are calling front-runner status. a lot of people will be hitting the reset button on the s.e.c. website waiting to see when this prospectus gets filed.

>> anytime you have something that is being used by people -- i remember when aol came public, starbucks. anytime you have something that engages a lot of users, everyone wants in. and i don't blame people. they love the product, they want a share. they loved google, they wanted a share. >> do you think facebook should? it is this platform for users and for people to connect with one another. what a great way to connect to -- to somehow do its ipo so that it harnesses its own power of networking and allows actual users and retail investors a place, not just after it prices and after it opens at which point there's going to be a huge pop. but at the offering price, whatever that may be. >> one of the things i think you'll hear is they'll say, we're going to make many shares available and you can get in. >> if you're a good customer and you have a certain amount of money in your account -- that's not -- >> i hate that stuff.

that's wall street gibberish. subtle discussions with s.e.c. behind scenes indicated that we could have given shares to people who were subscribers. but investment bankers don't like this. morgan stanley is going to like to give its shares to the retail investors if they can, of course, institutional. that's one of the reasons why this is such a big deal. this is a nice plumb to get people open accounts and trade. >> i love the graphic. seven years ago, jim, $12 million to $100 billion. is this going to be a carrot to bring in mom and pop in a way that's larger than facebook? >> i remember when google did it. and it did cause some excitement. but there isn't a lot of great deals behind facebook. i also want to point out that when we were talking about the life or death of morgan stanley not that long ago, we were

talking about like france having impact over morgan stanley. this is not a huge revenue generator for these firms. what matters is consistent generation of earnings revenues from investment banking. david, you know that if things are one off, it just doesn't matter. >> no, it doesn't. you're right. it's bragging rights. you point out, it might help morgan stanley in particular. we forget what a large brokerage firm it is, with alcohol of the old smith barney. may help on that. but to the overall idea here, you need a consistent level of ipos to start to contribute significant revenues in terms of the investment bank, no doubt about it. will we see that? it's never going to be 1999 again or '98, the period when you took thestreet.com public. but it's not just facebook. maybe not big names. but you're going to get some p/e

firms trying to take over portfolio companies public. 55% of the ipos done last year were done in seven weeks. shows how choppy things can be in terms of the window opening and closing. >> in terms of this particular ipo for facebook, it's interesting to note that the $5 billion number is half of what had been reported earlier. $10 billion was expected. david, what's your take in terms of morgan stanley? this is their chance to sort of save face from the zynga ipo which offered many, many more shares than, say, a groupon or some others that have gone public. didn't price or trade very well after the open and now is struggling to reclaim that offer price. >> yeah. you're right. that was not a good performance-breaking syndicate but as it did soon after the offering -- there's a look at zynga. it has still quite a nice market cap and trades off of facebook. but to your point, melissa, yeah, it will be an opportunity -- and it's going to be the most closely watched ipo

in years, since google, i guess. that was more interesting because of the way they went about doing it with the dutch auction. but if facebook breaks syndicate bid -- absolutely important to their reputation and to the market overall that this thing be priced well and maintain price. >> this is the kind of year where you really are starting to get people to say, wait a second, europe's not causing a problem. the earnings weren't that bad. look at morgan stanley in the premarket. the stock is trading up. this is animal spirited market talking. when you have an animal spirited market, you start thinking, i have to get in. there's a tremendous amount of money in bonds, in treasuries. that money is going to be coming out of -- into stocks all year. hasn't even started yet when you look at the aggregate numbers. >> but you're not saying this is the catalyst. i was driving in this morning and commercial topped 40 radio

in your news block was talking about -- they used the words, facebook going public. we're going to see this in "usa today." it's going to be on the network news tonight. >> that does matter. maybe there's a pulse down there. this is a generational stock, by the way, procter & gamble, they felt that facebook is -- almost 2 billion impressions. they are saying that facebook's a better way to reach these younger people than the networks. it's a tectonic shift and i believe it will bring in more people. we need it. there's no volume. >> i think it will be really interesting if facebook makes an effort to reach out to the user of facebook and say, you know what, you're a user, we will give you shares at the offering price. >> that will be great. >> to keep you in. >> but the tension will be morgan stanley does not want that. everyone loves democratization. in practice, it's very hard to

do. and syndicate desks don't wake up in the morning and say -- >> if zuckerberg says, no, i want to give shares of the offer price, do you think morgan stanley is going to say, take a hike because we don't want that to happen. >> we don't know if he's going to say it. >> that's a lot of users. who gets the opportunity? you have more users than you're going to have shares. >> have a lottery on facebook. >> all right, a lottery. >> if i friend somebody, do i get a couple of shares. if i friend you, will i get a couple -- >> you need to join facebook. that's job number one. there's a whole swath of the country that has little to no interest in being on this game, right? >> i personally don't. >> they could probably raise another -- >> hello, cramer! i do not put pictures of my

family or pictures of myself in lewd positions. nasty. >> thanks for the image there, thanks. >> i'm a young-looking 66. >> you look fabulous for 66. >> faber, are you on facebook? >> no -- well, i went on because i interviewed zuckerberg years ago and i wanted to see what it was about. i went on for a bit and i didn't stay with it. >> did you create a real account or a fake account? >> no, it's real. >> but then someone friended you and you said, i'm done? >> i kept getting those requests over and over again. i didn't use it. no, i'm not an active facebook user. >> parents, don't look at your kids' pages. you'll see things you'll never thought was possible. a nightmare. giving you a heads-up. >> good worng. we're still digesting adp this morning. 127k. adp's been running a little hot, which doesn't portend good

things for friday. what do you think, jim? >> i continue to see good signs in the economy. i continue to see little thing like whirlpool saying things are better. m manitoa saying that cranes are better. i put this with d.r. horton which has been saying, things are a little bit better. you listen to the commentary out of florida and they say businesses are doing well. there's job creation going on, building going on, no non-residential. >> citigroup says a lot of the strong cyclical indicators we've gotten so far this year are tough to extrapolate out further into 12. still thinks we're going to get 2% gdp in the first quarter.

are people running with data more than they should? >> i think it's still too negative. we'll -- i continue to see more robust commentary on the analyst -- david, when you go to an at&t or verizon, the land line business isn't that bad? >> no, it's not. on the call, randall stevenson last week -- i wouldn't say he was in any way overly optimistic. but at least he did talk about business formation to a certain extent and said there's a slight tailwind to the economy. your point is a good one, jim. there is a pulse. there's no doubt. >> we're in a moment where if you're optimistic, you sound like a bozo. you say, things are better -- what is that. did he not read the polls? the president is saying things are bad. every republican candidate are saying, things are bad.

the credibility of people who say things aren't that bad are nil right now. i have to rely on the empirical mosaic of things right now. >> where in that mosaic does amazon fit? on just about every metric, it was a little disappointing and they're not just talking about europe, right? >> no. i hate it when companies talk about foreign exchange as being a reason why they didn't make the numbers. >> i don't understand why amazon has a big foreign exchange exposure enough to actually impact its earnings. david, maybe you have some answers on that. we know procter & gamble or coca-cola has foreign exchange impact. but amazon? i don't know. >> yeah, that's a good point. they've got significant sales overseas, no doubt about that. and it's growing, as it is for so many of these company, the likes of ebay and everything else. international is an important component. but not clear as to why it would have such an impact.

>> the video game component is really big. xbox on the microsoft conference call, xbox was very, very strong. but sony getting killed. nintendo getting killed. everything out of japan is awful. everything out of japan is doing terribly. david you mentioned yesterday worries about japan. it always seems to be hard to get your arms around it. but some of the consumer companies have been doing well until the last two quarters. >> experts for the fir-- export lagged behind imports for the first time in a long time. and there's concern whether japan is going to hit that keynesian end point. >> keynesian end point! >> that could be well down the road. but if it comes, look out, ri t right? >> there was a time when apple

pantsed sony. now i'm finding microsoft going into -- >> who has pantsed before. >> right. it's an important show, i have to be a little more dignified. i find this again and again. we haven't even mentioned apple in the context. what is apple doing that's taking away from amazon? i'm seeing apple on the offense ipad. that could be a big issue. there was cannibalization kindle fire versus kindle. but undercurrent throughout this, apple, apple, apple, taking share. >> s&p earnings for the december quarter are up 9.4. take out apple, it's 3.7. >> you're kidding me. what a great stat. >> that's amazing. >> jim, to be fair to amazon, revenues were up 34%. >> that wouwhy be fair? >> profitability was better than -- >> i would rather see margins cut in half and revenues

explode. bezos wants to take over the world. this was not a world takeover quarter. >> amazon loses $11 per customer for amazon prime. >> holy cow. can't make up that in volume. >> at least $15 for kindle -- >> procter & gamble does not lose that much on their razor blades. >> i feel like this is an argument we were having about amazon in 1999 and look what happened. >> made a ton of money. you're right. >> here we are again and yet this company is a great company that has proved its critics wrong time and again and it may just be a matter of waiting. >> david, could you have made that argument about walmart at its peak valuation? did walmart look like a juggernaut, did it look like it owned the space --

>> going international. >> spending money to grow and then look what happened to the stock. it took ten years to grow into its valuation. karen brought it up last night on "fast money." there's are interesting arguments in the context of a stock valued at 100 times current earnings. >> and that is a great point. no doubt. pointed out that multiple many times and it is. >> amazon has destroyed the competition. walmart was not able to. i agree. to bet against entirely against amazon is flippant because two years ago when they decided to turn on the jets -- i just need to see a little bit more profitability. profitability on the hardware and get -- >> metrics on kindle would be a good start. >> they don't like to break it down in the conference call. when we come back, a wall street analyst weighs in on facebook. whether or not he thinks you should bet on the social networking giant. a lot going on today. it could get very busy. ism in about 45 minutes.

dow futures up 88.

♪ welcome back to "squawk on the street." rick santelli here live on the

cme floor. a couple of big issues. 170,000 on adp. it's job creation. it was a little bit light. but if you look at intraday chart of tens, really nothing has changed. rates really not moving much. the other big story, it's their money and they want it now. no, that's not a commercial for an annuity. it looks like the most recent headlines from mf are that the money is somewhere in the system. i'm not sure exactly where. but i have a feeling we'll find out. there seems to be a little less anxiety regarding mf. we'll continue with that story. next week, $72 billion in threes, tens and 30s. and the treasury announced they're studying issuing more floating rate note. nobody would get a floating rate mortgage. but i understand a study is important. but with rates this low, stick with the fixed rate notes. when facebook submits its ipo value, it's expected to be about $5 billion.

tell us the first thing you think facebook should do with that money. tweet us and we'll air your responses throughout the morning. surely they can do lots of things. >> how would you know? you're not even on facebook? >> give me a break. >> i check out that time line feature nobody likes anymore. i know about facebook even though -- >> you need to own social media. so you get twitter. and then you -- twitter valued at $7 billion in that ethereal third market, whatever. then you own social media and then you can go and get a cpn and the procter & gambles will go nuts. they cannot reach these people any other way. once people start -- use crest versus colgate by the time their 19, they never switch. >> but you still use crest? >>, no i switched to colgate. coming up next, finding new

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♪ five minutes before the bell rings on wall street. time for cramer's mad dash ahead of the open. we have to talk about the financials. morgan stanley no surprise, looking to open much higher, maybe all this talk of a certain facebook ipo is helping them. but the financials overall are doing well.

>> citigroup, this stock has been creeping up. they have good international exposure. a lot of the international markets really percolating here as interest rates come down. that is not an expensive stock. first horizon upgraded by wells fargo. i had the ceo on recently. unbelievable share take. i think the story there is taking share from bank of america. f i like the financials for a trade. >> the wells fargo upgrade, though, to me, seems a little peculiar. capital return, expansion and valuation make it an uncommon value. we could have said these things last year. >> that's right. in the end, the action, i think, is still in the cyclicals because when you have europe, when you have a uk pmi good, when you have china pmi saying soft landing, the money is going to return to caterpillar every single time. you can put a multiple on that. >> of the 400 points the dow gained in january, 34%

caterpillar. >> that's amazing. >> wow. >> whirlpool's been painted as the gang that couldn't shoot straight. but their forecast, you believe it? >> they did close a lot of plants. whirlpool is what i regard as being a very paternalistic company. when hershey closed plants in pennsylvania is when the numbers exploded upward. i think whirlpool is saying, we have to lay off, got to move manufacturing. i think housing starts are going from 600,000 to 700,000. i'm willing to go with that. >> a lot of giants jerseys on the floor today. as we get closer to sunday. >> and amazon, which you think -- >> a lot more "squawk on the street" in just a moment. aying .

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the bet against the euro. the bet against europe is not panning out. italian ten-years turned out to be a great place to be. >> take a look at the cnbc realtime exchange. at the big board, silica celebrating its ipo at the nasdaq. models for water providing drinking water in impoverished nations. i know that got your attention, jim. >> supermodels, tom brady, may be a subtle play for the patriots this weekend. >> take a look at shares of apple. opening at a fresh record high in today's session. very positive quarter. >> apple is gaining momentum. i continue to think that the apple iphone with siri, i talk to her every night, i think the apple ipad coming up, some say it's going to give amazon a very big run for its money on these

e-readers. >> you should ask siri if there's a broadcom chip in her phone. >> i should ask her. >> apple is a major consumer of its chips, samsung as well. the guidance in the commentary was very bullish on that conference call. they said they were gaining market share at a faster pace -- >> texas instruments seems to be losing share. these companies can't mention apple, per se, on the call. it's like customer x. >> it's like the elephant in the room. there it is. the dividend was lifted by 11% as well. seagate is also flying in today's session. amazing quarter. >> thailand taking out a lot of production. steve russo saying, we're going to sell direct. it's an incredible average

selling price up for disk drives. against the grain, 4.7% yield. murray says, we're speechless, too. and we've been bullish. jpmorgan says it's not sustainable. >> but it's really a tale -- we have breaking news before we continue this conversation. phil lebeau has the ford sales numbers. >> ford out with january auto sales. increase of 7.4%. that's a little below what the street was expecting. the street expecting an increase of 9.5%. ford increasing sales in january 7.4%. one other quick note on auto sales, vw out with january sales of an increase of 47.9%, best january sales for vw in the united states since 1974. guys, we'll have numbers all day long. back to you. >> thank you very much, phil lebeau. as we watch the ford stock, not too much of a reaction. still holding on to its gains right now. >> i have a vw bug.

they really are amazing cars. >> a new one or -- >> these things are just -- volkswagen has the worldwide momentum. so does fiat. phil lebeau talked earlier to navistar about the engines -- >> they took their guidance for the year down, which is a minor issue. >> could exxon be a force in getting lng to be used in autos and trucks? just a disappointing conference call. i did not like it. >> clean energy is moving in today's session off the back of this notion that there could be a natural gas engine off the navistar news. you had clean on last week or so? >> they are opening a nationwide chain of natural gas. you need it on the interstate. clean energy is doing that. i do want to point out that westport is the maker of the engines. that stock is too hot to handle.

i had the ceo on last week. it was at 32. the stock is now -- it's up ten. that's not sustainable. up 11 now. geez, guys, come on, be careful. >> take a look at whirlpool. it's up by about 9% in today's -- >> short covering. a lot of people thought whirlpool could never get it right. the guidance is being too aggressive, you could say. but they did have good gross margins. given the fact that the raw costs continue to go higher. >> i wonder if this is a positive for h.d., lowe's, best buy, sears. >> lowe's has been hitting it out of the park. the stock creeping up, up, up. sears, kenmore, whirlpool, always a very hard call. rumors that cit is going to cut off credit -- i hate what cit is doing. >> or a rumor about cit, that seems to be the lever up or down -- >> that is not right. you may hate sears or like

sears. but what's going on with that stock, i would call the s.e.c. and i say investigate it. >> one last check of seagate, up 14%. we could check western digital as well. western digital was the one that had more exposure to thailand. seagate did not have as much exposure to thailand. but it is benefiting from the tight supply, pushing prices higher. >> the direct deals to suppliers, average selling prices for disk drives go down, down, down. i once owned 4% of western digital and i got to tell you, they missed quarter after quarter after quarter because average selling price s godown. union pacific is my favorite, once again hitting a high. you cannot hate this economy with the transports on fire. you cannot hate the world's economy with china getting the pmi it did last night. >> and india, the fastest pace in eight months. that was a strong pmi.

>> international 65% of citigroup's business -- i go back to the banks, they're a trade, not an investment. caterpillar is an investment. >> carl, you have bob? >> yeah, watching seagate but also whirlpool. >> i'll tell you what impressed me about whirlpool. sales were up 1%. but they're components of units and prices. it's about 60% of whirlpool sales. units sold were down 3%, prices were up 4%. that's how you get the sales. units sold down 3% is better than most analysts anticipated. we all know the housing market is crummy. prices up 4%, they have pricing power in this kind of market. that's one of the reasons the stock is up in addition to the very aggressive guidance which is part of the component being the pricing power that they have now. this was an excellent report for whirlpool. kudos to them. they're up 10%. i want to talk about -- i had lunch with a large equity desk

yesterday. the first thing they said to me was, what the heck is going on with the volume? our desk is dead. that was a quote. it's the number one topic on the street. we were supposed to have great volume. january traditionally is an excellent volume month. you see new flows coming in. numbers came out yesterday at the close. we crunched them. 17%. volume at the nyse 17% below january of last year and the lowest numbers we've had since july. this is supposed to be the best or the second best month of the year. nothing happened. volume did not come to the rescue. you all know the reasons. lower prop tradings that's going on. less prop trading going on. concerns about the eu, people moving to the sidelines. we also heard concerns about high-frequency traders trading less because lower volume begets lower opportunity to trade. here's one thing i've heard in the last few days that's interesting. several traders said, you know all these headlines about people

getting investigated for insider trading? maybe that's having a chilling effect. people don't go on to dot-com sites and trade on rumors they've heard or comments they hear from their friends. >> err on the side of caution, in other words? >> sure. i keep asking people who trade, why is the volume so crummy. i've heard it several times brought up. one thing about earnings, we are now at the 50% mark on earnings. almost 50% of the s&p 500 has reported earnings. here's the problem. only 57% of the companies have beat estimates. is that a little, is it a lot? the ten-year average is about 65%. 66% beating estimates. we are well below at the 50% mark the ten-year average for beating the numbers. >> hey, bob, you've hit upon a key point. a lot of people in retail think this is a total mug's game. two things make that change.

one, facebook. second, the idea that a rip-roaring bull might bring people back -- >> >> here's my question to you. what do you think of this idea that part of the reason the volume is down is traders trading less on innuendos, rumors, on all of these reports of insider trading activity? does that make any sense to you? >> look, i think if you know that your phone lines are tapped, if you know they're going after the biggest guys, maybe you don't take fliers. i always hesitate to think there's insider trading -- >> those cases are impossible. those are very difficult to prove. >> forget about insider trading. how about just going on rumors on dot-com sites and trading on those kinds of things and everybody saying, i don't even want to do that. >> s.e.c. hasn't brought a lot of fomentation cases but i think

retail believes, i'm done losing money in the stock market. you don't like to disparage retail, but this was the wrong time to get out. >> finally, facebook, you want to do a bid on -- >> everyone keeps asking me, sit going to be the nyse or the nasdaq? they haven't decided. they're going to do this filing and they're not going to announce whether it's nyse or nasdaq. nay don't hathey don't have to. but the key question is, what does mark zuckerberg want? h he probably does not care about listing fees. is it $100,000 more here or at the nasdaq. he probably cares more about relationships and co-branding efforts. looked like groupon had a deal with nasdaq. they were going to do co-branding efforts. more of a relationship kind of thing. i know that sounds nebulous. other than that, everybody is very, very mum about this right

now. >> david? >> i assume it will be a fun day if it goes public on the nyse. it's a company that's -- it's ready for this day in many ways, facebook. i talk to people who have already been shareholders for some time. let's not forget they had been there for some time. they talk about what is a professional organization already that is looking to be there for a very, very long period of time. by that, i'm talking about facebook. but there's the nyse. the deal itself was officially voted down, prohibited by the eu. and the company did rezoom that $550 million stock repurchase program, just like we told you they would yesterday. but nothing beyond that. again, yesterday, i spoke to the fact that there were some rumors out there that perhaps should

get a larger buyback, a one-time. that's not the case. but you see the stock has been okay of late, having found a level here and actually done better since it appeared this deal was on the ropes. and now, of course, it is off. added to what is a growing list of deals that have fallen due to regulatory impediments. the big steal of last year was t-mobile's expected purchase by at&t. that deal having died in the waning days of 2011. there's a look at that. real questions here on what at&t will ultimately do, what deutsch telecom will do in terms of their strategies. we know at&t needs more spectrum and t-mobile really has to figure out -- deutsch telecom has to figure out what they're going to do. and the big one is medco's

purchase of scripts. when the fees don't get paid because the deals ultimately don't happen, there's bankers who spent years trying to get deutsche boerse and the nyse back together. >> david, see you later. let's check in with rick santelli at the cme group in chicago for a check on the bonds and the dollar. >> if you remember in 2011 when the dollar was down, dollar index down close to half a cent, usually equities were up pretty large. that is the case today. you could call it risk-on, i guess. but if you look at the interest rate markets, we've seen a bit of movement this morning. post-adp, looking at the big numbers on equities, they're creeping up a couple of basis points. treasury had a lot of information today, not only the 72 billion mst for the threes, tens and 30s next week, not only the fact they're studying fixed rate notes, not only the fact

they may issue more tips in 2012, but also germany had a negative bill auction. second dare markets in the u.s. are filled with negative yields. they are going to quickly, it looks to me to make sure these auctions can't have negative yields. that's an important step. but think about what it says. and top of the hour, we have ism that could be a market mover. melissa lee, back to you. >> thank you very much, rick santelli. want to take a check on amazon.com which is one of the biggest losers on the s&p 500 right now. an important level here has been breached. the 50-day moving average. to put into context, since its october high, the stock is down 21% up till yesterday. so here we have another 9% down. >> long term, if they can harness somehow what they want to do in the back end with kindle fire, i know that the bill for the kindle, the next generation, is just huge.

i don't want to count these guys out. that's always been a mistake. but it was a conundrum. the call was a conundrum. i always like to see revenues blow out on growth stocks. i don't like to see earnings blow out. >> it's tough to see where margins where stabilize -- >> you have this third-party action, the video game conundrum. how bad are video games? i didn't know that video games were that important. >> yeah. that's a good point. >> that's true. and you have to take a look at a name like gamestop. it was trading higher. >> and facebook has a huge gaming component to it that is really taking the world by storm. when we come back, facebook's multibillion-dollar ipo, what should the social networking giant do with the proceeds of that ipo? tweet us and let us know what you think. we have some of your answers coming up. as we head to break, take a look at this morning's early movers on wall street.

whirlpool, good guidance for the year. up 13% so far. as if friday's jobs report didn't already have your attention, we're about to raise the stakes. how would you like to win -- wait for it, wait for it -- a mug? but not just any mug. it's a cnbc mug signed by the "squawk on the street" gang. if you can get the nonfarm payroll number, it's yours. tweet us your guess. watch on friday to see if you -- >> enjoy -- >> are the lucky winner. you know you want it.

here's some of the stories we're squawking about. 19 minutes into the trading session. this morning, president obama is set to announce a plan aimed at letting millions of homeowners refinance their mortgages. the plan could cost as much as $10 billion. mortgage applications down 2.9% last week according to the

mortgage bankers association. but the four-week moving average is up 4.1%. the former cfo at avon has triggered an s.e.c. investigation. the probe centers around questions charles cram shared investigation regarding a case involving chinese bribery with a citigroup analyst. >> story keeps getting more and more complicated. "squawk on the tweet" this morning, when facebook submitted its ipo filing, the value of the offering is expected to be $5 billion. so we're asking you, what's the first thing you think they should do with that money? elizabeth tweets, i love this one, send the winklevoss twins a fruit basket. jason tweets, get rid of time line. nick tweets, take the money and run before someone digs up some type of dirt that i'm sure facebook is hiding. and john tweets, the first thing facebook should do a admit that it's finally about the money. interesting take.

>> they ought to combat that by giving a third of it to charity. >> very possible. hard to read people's minds. zuckerberg has done things in an unconventional way. i think you're suggestion was to write a check for twitter right now. >> yes, $7 billion to valuation. own social media. you need mobile, you need social, you need cloud. they can dominate social -- >> do you think there would be an antitrust concern if they were to make a bid for twitter? >> antitrust has gotten very tough. but i think they'll be able to say, there's a gazillion sites out there and we are taking one of them. there's a lot more "squawk on the street" still ahead. >> really, jack? there's a problem with the computer system where it confuses 6 and 60? >> i don't like your tone. >> cramer would never confuse "six in 60." that's why we love him.

six stocks in 60 seconds. don't make a mistake by missing it. >> we all make mistakes. >> we'll be right back. 20 pages. boom! the other office devices? they don't get me. they're all like, "hey, brother, doesn't it bother you that no one notices you?" and i'm like,

"doesn't it bother you you're not reliable?" and they say, "shut up!" and i'm like, "you shut up." in business, it's all about reliability. 'cause these guys aren't just hitting "print." they're hitting "dream." so that's what i do. i print dreams, baby. [whispering] big dreams.

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the dow just a few points from triple digits. time for "six in 60," first off, earnings from aol, not too bad. >> impressive. revenue decline. big believer in armstrong. he's a terrific guy. >> yum! brands, 76 bucks from 63 -- >> china's going to have a slowdown, that's wrong. the pmi in china, very good. >> marathon, 2 billion share buyback. >> they're talking about doing an mlp. they're red hot. >> broadcom beating street estimates. announcing a dividend increase. >> we had mcgregor on the show. apple is on fire.

>> newmont minding downgraded. >> we had the ceo on the show. they can't find gold. costs a lot of money to find it. >> and lvs earnings estimates raised. >> macau numbers were out last night. they're terrific. this is a very powerful story. >> for more on the stocks, go to sots.cnbc.com. >> a sign of how easy concerns are in europe, germany pays a 1.8% ten-year. the second lowest ever. is it going to get better than this? >> germany's economy is so strange. we're making no money in this country on ---ive to tell you, this is all about blooding the rest of the continent with money and there are people who want to be in a hard money situation. i guess they feel it's germany. guess what sf it's the same currency.

i would be a seller of german bonds. >> tonight? >> core labs. i want to find out whether you can switch quickly enough from drilling for natural gas to drilling for deep oil and regular oil. i think you can. and we're continuing the series. people are spending money on things they don't need. big ticket things. >> quickly, dow jones is reporting amr is going to cut 15,000 jobs. also, a double dose of breaking economic news on the other side of this break. stay tuned. mber the day my doctr told me i have an irregular heartbeat, and that it put me at 5-times greater risk of a stroke.

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welcome back to "squawk on the street." we have january institute for supply management index at 54.1. that is a little less than expected. but it is above 50. and if you're looking at last month, it was originally 53.9. but we had benchmark revisions. so really it was 53.1. that's positive. construction spending, this one overperformed. 1.5. that's three times the expectation of up .5%. and it is followed by a downward revision, though, of 1.2%, which was november. currently now, only up .4%. and there's more breaking news. we're going to go to phil lebeau

on his favorite street corner with gm numbers. >> rick, we'll get to the gm numbers in just a bit. but first, we have breaking news regarding american airlines. amr, the parent of american, will be cutting between 10,000 and 15,000 jobs. that announcement will be outlined for employees later today. they are going to be meeting with the three unions as they outline their reorganization plan. again, amr, the parent of american airlines, plans to cut 10,000 to 15,000 jobs as part of its reorganization. we will have details throughout the day as they outline where those job cuts will come within the airline. now let's shift gears to autos and breaking news from general motors reporting january sales coming in a little bit better than the street was expecting. a decline of 6.1%. the street expected a decline of 8.9%. so there you have the numbers from general motors. a decline of 6.1% versus on estimate of 8.9% on a day, guys, when there's a lot of breaking news going on in the industry

right now. and now we have don johnson joining us from gm headquarters. don, thank you very much. i appreciate your patience on a day with a lot of breaking news. let's talk about these numbers. a little better than the street was expecting. from your perspective, are we looking at january right now coming in and setting the table for a year where the sales pace takes off to 14 million? >> yeah, i think we are looking at something like that, phil. we came in a little bit better than expectations. tough year-over-year comparison. when you look at the industry, it looks like the industry will come in at a 13.5 million pace for this month. that's the same as we saw in december. it sets the table well for an industry between 13.5 million and 14 million. i think the other important thing that came out of our sales numbers for january was the strength of our passenger cars, particularly chevrolet where

cruze is up 10% and sonic had a strong month only into its fourth month of sales. >> no doubt there's strength there. but i want to talk about cadillac. decline of 29%. not a single model within the cadillac lineup was up on the month. in fact, buick outsold cadillac last month. how much of this is because you're long in the tooth in terms of the model lineup there? >> i think there's a couple of things happening. probably the biggest thing is the size of the luxury segment in january. as we looked at some of the data, we can see it's turned out to be very weak. in fact, cadillac looks to gain share in the retail luxury segment this month. at this point, it's really more of a segment dynamic. having said that, we're also looking forward to the launch of the all new sts in the spring and the ats at the end of the summer. >> don, you're bringing down production on your pick-up trucks. you've announced that some time ago as you adjust to the lineup

changing a little bit. what do you see for that pick-up market relative to the economy, because it was picking up in the second half of last year? what do you see for at least the beginning of this year overall, pick-ups relative to the economy? >> we see pick-ups continuing to grow with the industry. we think it will come in about 12% of total industry, as it did in '11. and that it will grow as the economy grows. we're seeing the economy grow slowly but steadily, similar to what we saw in 2011. so we're optimistic about fullsize pick-up sales. but we're not going to see a huge jump-up in sales as we have in past recoveries. >> don, chevy volt sales, just over 600,000 for the month. that's a drop from what you saw in november and december. are you seeing people pulling back and questioning whether or not to buy the volt because of the controversy involving the battery pack? >> clearly when you look at the investigation and a lot of the

exaggerated negative press that came out of that and the hearings, there are a lot of people sitting on the sidelines right now. as we look forward to 2012, we know we've got a job to overcome some of that misinformation that's out in the market. we'll do that by continuing to advertise, educate consumersful we'll see where that market goes. we're still very confident in the product and its benefits to the consumer. that's what we're going to be communicating. >> don johnson, head of gm sales joining us from detroit on a very busy day where we have news coming from the automakers and from the airline industry as well. melissa, back to you. >> phil lebeau, thank you so much for your reporting. we're watching shares of amazon down by almost 10% after reporting a sharp drop in fourth-quarter profit on heavy spending. the online retailer also warning of an impending quarterly loss. ken santa keeping his overweight rating on the stock. ken, great to have you.

i want to just delve deep into this report. 60% of the total revenue miss is electronic goods and other merchandise. a big part of that was international. the other part of that was just this notion that the thai floods caused shortages of stuff. what sort of stuff are we talking about? we didn't hear that from the likes of a best buy or other retailers of electronic goods. >> exactly. in truth, it probably had more to do with the europe macro weakness. but given amazon's secular growth story, i think they highlighted that too much. in terms of the thai floods, while it may have had an impact on their retail business in terms of electronic items, i would still focus on the fact that there was probably more european weakness there. >> that was the kitchen sink, let's put the thai floods in there to distract from the international miss. >> i think when you look at the revenue guide, not only did they have kind of a -- did they guide on the margin to potentially

break even to even a strooigt slight loss, but the revenues were also light. they are probably concerned about overall macro weakness and it will be in the european numbers. >> you can forgive some shareholders when you say secular growth story for smirking. right? >> right. >> where is that growth? >> when you look at the top line, you're definitely seeing it. the company still did post strong topline growth, mid-30s, year over year. but in terms of what the street were expecting, we were looking at 40%. still i think you're right. when you look at the spending, though, i think that for most investors continues to be the concern. if the revenue doesn't show some acceleration, i think there's certainly -- the definition of what is amazon, is amazon a retailer hitting the peak where walmart was as far as a retailer? or is this really a platform play where ultimately they're kind of retailer agnostic and their audience is limited.

>> how can you compare it with facebook? the margins are fantastic for facebook. >> when you think about what facebook is or google even, they offer the promise of a very commercial platform. but they monetize on behalf of the merchant at different points in the click funnel. you're basically monetizing for that merchant a few clicks back whereas for amazon you actually monetize for that third-party merchant when they sell the item. same for facebook. they're going to use likes, referrals, et cetera, to help merchants sell more goods. amazon is investing a lot in terms of the back end to make sure they're offering a very strong experience for merchants to ultimately make sure they have the best platform, not just to be the best retailer for themselves but ultimately for all retailers. >> but it's more than that. he's locked himself into this long-term bet that he will push volumes up and push costs down. that's why you have the big

investment. he's locked into it. that's the longer-term game. and to a certain extent, he's winning. look at amazon prime, $17 for unlimited mailings or deliveries, he may still be making $11 loss on each customer. but he's changed the environment. other retailers had to offer free shipping over the holiday period and they won't be able to do it at the sort of cost base that he's doing it. longer term, he's locked into a model and it may be succeeding. >> there's a good point there. there is a perception that this could be a race to the bottom in terms of ultimate margins. but what they're looking to do is put buyers together with sellers and make sure they both have the best experience for the long-term good of the platform. and prime is genius in that respect. all the services they're offering for merchants on the back end in terms of fulfillment by amazon drives that cycle stronger. from a user perspective, it's reinforcing that behavior. >> does a crunch point come?

he's going for convergence in the sector -- you get the margin compression continually and maybe going into a loss -- >> you could argue that you're going into a persistent or relentless drag on margins accept wh except when you look at what they're doing with their -- ultimately they're creating a platform to put buyers together with sellers. there's higher margin opportunities for them to push into, assuming they can actually drive higher yield for these merchants on their platform relative to others. >> big tech would raise big sums of money with that explicit goal. ultimately the shareholders may not stick with that. >> to your point, when you put amazon's -- amazon's trying to own the audience still for its platform. when you look at how that audience and that retail experience is changing in mobile, you have competitors like apple and google with major

arsenals and own mobile eco systems. for amazon with their current margin structure and cash on hand to try and compete in that environment, that's going to be a tough one more investors to swallow. >> the bottom line is it's a wait-and-see story at this point? you did make the comparison to walmart that this could be the walmart story right now -- >> i think on the retail side. but like amazon showed, 36% of their units this quarter up from 32% last quarter were from third-party sellers. amazon is making money on those sellers versus on their own goods where it's questionable how much they make. that's the big difference from a walmart versus an amazon where as a retailer, it game somewhat saturated. but as a platform, they've never been able to expand beyond that. >> one last question on the fire itself, dung it's disappointing or not? it's so hard to tell given their disclosure on that.

>> it is. they don't provide really a base. they say basically millions of kindle units. it's not clear if that's just fire or the other kindle units. with the fire 2, it's a wait and see, as far as how much adoption you're going to see in 2012. >> ken, great to see you. >> thank you. the other story of the day, of course, facebook expected to file preliminary paperwork for a $5 billion ipo soon. maybe today. maybe not. michael pockter joins us from los angeles. thanks for being with us. >> good morning, carl. >> we're sort of in this odd vacuum of information until it actually pops up on the s.e.c. website. what are you taking as reality and what are you trying to weed out? >> i think that what we really should focus on is strategy, not numbers. we know that they have 800 million users. we know pretty much how many minutes those people spend on the site. you hear numbers like 58 minutes

on average. i think the more important number is how many minutes these guys spend per month. in the u.s., that's about 400 minutes a month. in japan, it's 50. in israel, it's 2,500. so it shows you the potential to get people to use a site more. the more people are engaged on the site, i think the more opportunities for facebook to monetize those users. when you're talking about an $80 billion to $100 billion valuation, that's somebody saying they're going to make $8 billion to $10 billion someday. to get there, you need the average user to generate about $1 a month in revenue. that's not very much revenue. you could get there pretty quickly if you can get these users engaged. >> i saw a stat the other day, by this summer, one out of every seven people on the planet will be on facebook, which your point is well taken. $1 a month can get you pretty far pretty quickly. but i don't pay anything right now. it's just fine. how does that experience change and is the ipo the catalyst to make that happen?

>> yeah, you don't pay money but advertisers pay money to capture your eyeballs. i think we're going to engage these consumers, get them to like a product and perhaps advertise that product to them through a living social or groupon-type offering or you can maybe purchase music. right now, we have spotify on there. there's no real way for you to access a music download directly but why not? a lot of people are buying virtual items on social games right now. so i think once facebook's public, they're going to be accountable to investors. they're going to have to show revenue growth, which means they're going to find a way to get those 800 million users to put a credit card down. once you have a credit card down, it becomes one click order and you can buy all sorts of stuff. >> that's the issue. this could be the biggest trap of a generation that you're looking at here. who's to say once you've gone through the ipo, zuckerberg believes it's no longer his company, it's owned by somebody else and he needs urgently to monetize those people.

we don't know that's what he's going to do. and once they do start attempting to monetize it, it may no longer be cool. they may kill the goose before it lays the golden egg. >> simon, i completely agreened i think that's the biggest risk with zuckerberg as ceo. the guy is a visionary. he's a genius. we have no idea if he has any business sense. his mission was to build the biggest, the most robust social network ever. he's done that. does he know how to monetize. it reminds me of steve jobs. remember steve jobs at 27, he wasn't really a great ceo. he got booted out. he had to come back. he mellowed out and he figured out how to keep people happ happy, give them products they wanted and make a lot of money. if zuckerberg is that mature and ready for that next step, he'll be a great ceo. >> michael, from an investor standpoint, investors in other internet stocks, does facebook suck the oxygen out of the room? are we going to see portfolio managers have to allocate away

from certain internet stocks in order to get into facebook? >> fortunately it's only a $5 billion ipo. >> so far, yeah. >> it's not going to suck that much out. after you have the first and second and third and fourth secondary and suddenly there's $80 billion afloat, you bet. they'll suck a lot of oxygen out of the room. but i don't think that's going to happen this year. >> i think we have a picture of your facebook page. there it is. can you think of a single advertiser you've seen place an ad on facebook? >> many times. i have to say, i like the movie "pulp fiction." i can't say this on television but they advertise the wallet that samuel l. jackson told tim roth to fish out of the sack and it says big, bad m.f. on it. i also am a lawyer. i get ads all the time for j.d. programs, for l.l.n. programs.

they're very targeted. not that i'm going to go back and get another l.l.n., i have one. but i notice those kinds of ads. yes, i see ads all the time. >> that is one tasty burger, michael. thank you very much for your time. >> thank you for having me. here's what's coming up next -- >> coming up, something's afoot at facebook. is today the day they file for their ipo? if so, what can we expect? if you like us, you'll stick around. "squawk on the street" will be right back. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪

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>> senior administration officials are claiming that this plan could help 3.5 million underwater borrowers who don't have fannie and freddie-backed loans refinance in today's record low mortgage rates. it would go through the fha, which is already deeply in trouble, in a hole of thousands of defaults and foreclosures. it would cost $5 billion to $10 billion this would be paid for by a bank tax. but it all has to go through congress. when you say the word bank tax, a lot of critics say it's dead on arrival. to qualify, borrowers need to be

current on their loans, no defaults, no missed payments for six months. they have to prove they have a job. a fico score of 580 or above and they have to have a confirming loan. that's up to $729,750 in the highest priced markets but no jumbos would be included in this. the cost of the program would go toward covering closing costs, if and only if the borrower agrees to use some of the savings from the refi to pay off principal on the loan. it would also go toward covering the higher risk of these loans. the loan would have to be written down to 140% of the value of the home. officials say the tradeoff would be the banks get to get rid of a risky loan. then the government gets that loan. again, it all has to go through congress. that is going to be a tough sell today. on another story we're covering, we've been talking about it for a while. today we hear that the conser conservator of fannie mae and freddie mac is going to announce

the first phase of a program to sell fannie and freddie's thousands of foreclosures in bull tock investors. again, we've talked about how much money there is on the sidelines. just waiting for this type of plan. they will announce the first phase which will be prequalification for investors. we're waiting for more details on that. but we've talked to a lot of companies, done several interviews with people who are gathering billions of dollars to buy up those foreclosed properties and rent them. rent rates are high and supply is very low, especially for single fachlt carl? >> diana, thank you for that. want to take you through the markets. the dow up 146. only had one triple-digit move all year long. this would be the second one. a bit of a ripper here with the s&p now at 1,326. quick look at commodities as well. oil, gold and copper, watching the euro very closely as well as some optimistic continues to build around europe today. adp showing the u.s. private

sector added 170,000 jobs in january, pretty much in line. northrop grumman beat expectation. revenue fell short of estimates at just $6.51 billion. shares up about 1.25% today. and chrysler's january u.s. sales up 44% last month on some strong demand for jeep's sport utility vehicles. chrysler had very good numbers today. here are stocks to watch 45 minutes into trading. archer daniels midland upgraded. c.h. robinson downgraded. that stock is down 7%. and ppg industries, price target increased to $101 from $92 at barclays capital. that stock up by 2%. in six minutes, we'll have breaking news on crude inventories on the program. and we have a street fight on where gold is going to go next. it had a great january. stick around. we're back in two.

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welcome back to "squawk on the street." i'm scott cohn. a major european bank is about to take center stage in the ponzi trial of alan stanford. the bank is societe generale. we have details about how closely it was involved in stafford's affairs. $95 million apparently vanished from a stanford account at soc-gen in switzerland. the evidence list includes a soc-gen debit advice dated

december 16th, 2008, for $95 million. they allege that soc-gen took the money to satisfy a personal loan that stanford has taken out four years earlier. prosecutors have alleged that bank account was a secret slush fund that stanford used to pay bribes which he denies. it's not the only stanford/soc-gen connection. his soc-gen banker happened to serve on alan stanford's board of advisers. soc-gen is declining comment on reports the bank itself is under investigation by prosecutors saying only that soc-gen is cooperating with authorities. . the connections are likely to come up when james davis takes the stand. he's the government's star witness. the defense says he's lying to save his own skin. >> thank you very much, scott cohn. we're up 146 points on the dow. the dollar is down. it's a risk-on day. euro is riding high. this year has been very good for the single currency.

what happens here on in. it's time for our "money in motion" trade. andy busch joins us from chicago. andy, you must be really surprised with the moves we continue to get. >> yes, things change quickly all the time for the euro. here's how 2012 worked out. first of all, the ecb took away the funding risk downside, their massive funding they doi did in december. the fed came out and made a very dovish statement saying 2014. and there's massive shorts in the market of euros. we're at 170,000 contracts right now. it led to a 5% rally up to 1.3225. why sit stalled out around these lels? the greek deal isn't done yet. i think the troika is going to negotiate with these guys all the way to march 20th. keep an eye on that. secondly growth has been mixed going forward here.

i'm not sure what we're going to see into february. that's taking some of the risk away. and finally, the ecb next week, we'll see if they cut rates. >> andy, got to wrap you up there. thank you very much. we have breaking news with sharon epperson at the nymex. >> just dropped below $99 a barrel here for crude oil as we're getting the information from the energy department. increase of 4.2 million barrels, far greater than what analysts had anticipated. crude supplies up 4.2 million barrels in the past week. gasoline supplies also increasing by much greater than expectations, up by 3 million barrels. of course we know gasoline demand has been extremely weak recently. we're also looking at distillate fuel supplies down fractionally, down about 100,000 barrels. we're looking at a selloff right now in the oil complex with oil prices below $99 a barrel. we're also watching what is happening with the refined

fuels. the march contract, the front month contract. but make sure to keep your eye on natural gas as well because natural gas prices continue to fall. we are hearing from some traders we could approach last week's low, right around $2.23 for natural gas and perhaps fall to $2 in the next couple of months. we know that scenario. it's 62 degrees out here in new york. that's a big reason why with plenty of natural gas and no heating demand we're continuing to see the heating prices drop. gold gaining by about $8 an ounce in today's session. it's up more than 11% in the month of january. is there room for the metal to move even higher? bulls and bears in goal next. (

here are the stories we're squawking about. more than two months after filing for chapter 11 bankruptcy protection, american airlines saying it may cut up to 15,000 jobs. the institute for supply management's manufacturing index rising a full point to 54.1 in january. readings above 50 indicate manufacturing sector expansion. apple, autozone, tjx smong the stocks hitting all-time highs this morning. we have triple-digit gains on the dow up more than 1%. >> you have to love the price action. in january, the s&p gained over 4%.

and on the first trading day of february, we are gaining on that yet again. let's have a look at the breadth of the move. down here at the nyse, we are in a ratio -- wow -- of 7 to 1 advance/decline. and the nasdaq, about 3 to 1. time to talk the talk of the town. facebook is coming to the market. we're still waiting for that s1 to be filed. what will it tell us about zuckerberg's beloved company? joining us now is julia boorstin. what are you hearing on the west coast? >> reporter: well, there's a lot of chatter about this s1 filing today. everyone's waiting for it. we'll have to see if the social network with the nearly 1 billion users is as profitable as it is popular. sources tell us that facebook is finalizing its s1 filing right now. we could see the company file the s.e.c. as early as today. the big question then is, what will we learn? sources tell me the company earned about $1.5 billion in operating profit last year on

about $3.8 billion in revenue and about 90% of that revenue comes from ads. but not all ad revenue is created equal. investors will be curious to see about some non-financial metrics and what they say about facebook's advertising potential, like how many of facebook's users are active and how much time do they spend on average and are they gaging with those ads? microsoft, zynga, groupon and living social are also big spenders on facebook ads. the filing may reveal whether any of them account for more than 10% of the company's ad revenue. wall street's also eager to hear about the rest of the company's business. just how big a cut does facebook take of e-commerce including virtual goods for social games and movie and music sales. the question is how mark zuckerberg plans to grow facebook's e-commerce revenue down the line. now we'll see just how rich mark zuckerberg will be.

we could be sitting on as much as a quarter of the company which would make him worth between $20 billion and $25 billion, depending on the company's valuation. this ipo will also mint a couple of other new millionaires. we'll have to see how much of their initial stakes in the company they have sold. a number of institutional names should also turn a hefty profit. the s1 are reveal the stakes of microsoft, goldman sachs, as well as excel partners. this ipo is certainly the buzz of menlo park this morning. we were at the starbucks across the street. a couple of the customers were joking with the baristas that no one's coming to work tomorrow because everybody will be at home counting up their facebook millions. >> and what will be the lock-ups -- will management --

will zuckerberg be able to sell his shares -- >> reporter: you know, typically it's a six-month lock-up. what my sources are telling me is one of the reasons why facebook is so eager to get this s1 filed now is so it can start trading in such a timely fashion that it would have that six-month lock-up period expire before the end of the year so those insiders could sell some of their shares before the capital gains tax hike happens in 2013. >> interesting. >> reporter: in 2012, sorry. 2013. >> i heard that, too. if it goes public in may, there's still time for the bush tax cuts expire. >> julia, thank you. still to come, we have a one-on-one with goldman sachs chief investment officer for private wealth management. and before we head to break, take a look at shares of apple. 458.99 is the latest. it is now down, though, for the day. it until the end of the quarter to think about your money...

♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see the same information your advisor does so you can get a deeper understanding of what's going on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement.

as if friday's jobs report didn't already have your attention, we're about to raise the stakes. how would you like to win -- wait for it, wait for it -- a mug? but not just in any mug, it's a cnbc mug signed by the "squawk on the street" gang. if you can guess the nonfarm payroll number, it's yours. tweet us your guess. and watch on friday to see if you are the lucky winner. you know you want it. welcome back. bob pisani down on the floor of the new york stock exchange. the s&p 500 at the highest levels since july. why is that? that's because the two most important components are leading the market. those are techs and financials. look at the s&p tech sector. we are setting at a ten, almost 11-year high on the s&p tech

sector right now. it's half what it was at the height in '99 and 2000. but it's notable. big movers, companies like seagate sitting at a four-year high, broadcom, junejuniper, s.. others, financials along with techs. morgan stanley, citigroup, bank of america. big weightings in the financial sector. wells fargo also pushing the index forward. look at the dow jones industrial average. we're 100 points away from a new 52-week high, the old high, 12,876. that was back in the beginning of may. back to you. >> thank you very much, bob. talking jobs, jobs, jobs this morning with steve liesman back at h.q. interesting adp number. we'll talk construction spending, too. >> if your viewers get it right, a signed mug. >> hey -- >> are you discouraging the mug, steve? >> the guys in marketing went

all out on this one. that's the kind of thing that's going to really boost our viewership -- >> just wait. and you're welcome to enter, steve. you can send your own number in. >> do i get to play, too? >> if you wish. >> and i would get a mug with your significant on it? >> absolutely. >> fantastic! i want to go back to the data which reinforced the consensus view that job growth remained positive in january but likely slowed from the strong pace of december. let me show you the data here. total private, 170,000. it's been running a little hot, a little above the numbers of the b.l.s. about 80,000 in the month of december. about 60,000 over the past several months. december was revised down by 33,000 to 292,000. and there's the nonfarm payroll estimates. that's come down, 170,000 earlier in the week. it's kind of deteriorated to 125,000 right now. i want to show you by industry, goods producing, 18,000.

services, 152,000. this is not an unhealthy mix here. manufacturing up 10,000 and construction finding a way to add some workers there, up 2,000. the manufacturing employment out was supported by the data we got at 10:00. it was a miss. we were expecting 54.5. but it was still up a full percentage point. new orders up. production was done. employment down but it's still a decent number at 54.3% suggesting growth in manufacturing. prices up. and backlog up 4.5 points. you can see the downturn we've had from the high levels of the 60s earlier last year. it's been eking its way back up steadily and slowly. some respondents says business in 2012 is looking better right now than 2011. so, folks, use all that data, put that into your own algorithms and spreadsheets,

send your number in and win a signed mug. >> can i just pick up on the ism figure, steve? >> sure. >> deutsche bank reckens there's a strong correlation at the moment between ism and the s&p and that it's actually quite accurately reflecting where the market goes over the next three to six months. sick reid said if we came in at 54, the s&p would be you have 136 points from here, a 10% gain. are you aware of that correlation? >> i'm not. but it's a long-running index. we've had it for several decades. it does a pretty good job of flagging where the company overall is heading. i don't know about you, simon, but when i watch the ups and downs of the market, i see it very tied to economic prospects. i think the market is reasonably comfortable we're going to do 2%, 2.5% growth. another factor in the market right now which the ism can't pick up is what the fed did. that's had a big impact on

people saying, you know what, i can't do it in bonds anymore, i have to move into the riskier end in stocks. that's played a role in where we have in stocks right now. >> we'll see if it has anything to do with the gains we're seeing today. thank you very much, steve. take one look at microsoft, by the way. this is a 52-week high today. a penny from $30. >> and if it trades above $30, that will be the first time it's traded above $30 intraday since may 5th, 2010, according to rich peterson at s&p. we'll see if $30 is resistance. but good news from microsoft here. and also ibm, just about 20 cents or so away from a fresh 52-week high. when it comes to large cap technology, really leading the way here. >> first, though, rick santelli, what are you working on for the next hour of "squawk on the street"? >> if it's february, there must be a new housing program around the corner. think back to three years ago. we're going to talk about housing. we're going to talk about taxes. and believe it or not, there may be some more information on mf global.

all that at the top of the hour. my job is to find the next big sound.

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gold has a great january. up over 11%. will it climb back to last year's high over $1,900? time to ride the gold bull or

should you be hibernating with the bears? suki cooper is a bull. richard hastings is a macro and consumer strategist with hunter strategies. suki, why do you believe? >> we still believe the key factors behind gold rallies from last year haven't gone away. we saw corrections last year. they were led by technical reasons, by the need for ri liquidity. we expect those to persist in 2012. real factors like low interest rates and fed pushing out its guidance for the next hike are still very positive for gold. those key macro factors are still likely to lead gold higher in our view. >> richard, is that enough reason for you to buy or recommend others buy? >> no. we would disagree with that, simon. gold has done a pretty good job in the last few weeks of

rallying off the breakdown in december. we've got to go back to 1765. hold that, a little correction after that and go higher in order to prove gold can trend closer to 1800 and 1825. there's a big test right now at about the 1750 level, 1765 very critical. until we see gold surpass that we would not be strong believers in a very big gold story. the cme will crack down once again if the little guy starts running back into the gold trade. pay a lot of respect to what the cme was saying at the 1900 level in september 2011. they don't want the little guy running into this trade. >> suki, you skipped over at the beginning of your commentary the technical aspects richard highlights as being very important here. what would you say about those? >> we do think that gold's done very well for january so far. those technical hurdles, a key

technical resistance levels are the 200-day moving average and 100-day moving average. we're above those levels. we need to see if the physical -- technical levels can provide short-term limitations. but we do think those will be very much short-term factors rather than things that will hinder the rally longer term. in terms of investor -- etf flows have turned positive. they're not as aggressive as they were, say, in july last year. there's much greater scope for the investor positions to actually be more positive for gold. >> how much are you undermined by the argument that maybe the u.s. economy will decouple and grow significantly and that the stock market could gain on that basis, which would all be dollar positive and almost automatically, therefore -- >> the strength of the dollar can be -- we've seen that in december as well, it can be a hurdle for gold. as we saw back in march '09, the

dollar can strengthen and gold can perform as well. both benefit from safe haven flows. our longer term factors for gold are not necessarily linked to how the dollar performs this year. i think the dollar will provide some resistance for gold but not necessarily something that's going to hinder gold performance. >> thank you, richard. thank you for joining us. richard hastings and suki cooper. a quick check on the miners over the last three months. not doing so great. >> all right. quick check on the markets. we're off our highs but the dow still holding on to 137-point gain here. more than 1% in the s&p 500. 1325. we might actually test that 1330 level sometime soon. meantime, it is tweet time. of course, we're talking facebook. today's twitter question, when the social media giant submits its much hyped ipo filing the value of the offering is expected to clock in at about $5 billion. we're asking you guys to tell what you say the first thing you think facebook should do with that $5 billion.

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let's get to squawk on the tweet. when facebook does submit this ipo full-timing the value of the

offering is expected to be about $5 billion. we're asking you what's the first thing they should do with that money when they raise it. start changing a membership fee if they want to be the new mcdonald's. richard tweets what does mark z. gain by going public? he could end up fired from facebook like jobs was at apple. nick writes i agree with cramer. buy twitter and integrate it. melissa, simon, as you heard jim say earlier today it's the first thing he would do. write the check. what did he say pay, melissa? pay 12? >> get it done. own social media entirely. think also outside of the united states. they could buy a stake in a chinese social media company like sina which owns wybo, a microblog of china also referred to as a facebook of china. all of that's out there now. >> a lot of those shares are trading in tandem with the excitement. >> you are assuming the guy is going to behave like a normal ceo. you're assuming he wants to work with twitter.

he's not a corporate man, is he? >> that's a good point. >> the idea that he could get fire from it, where does the power lie after the ipo? i assume it's still with him and those guys that have the big holding. it's still not going to be a public company that profit mac m maximizes as you expect other people to do. >> one of the interesting things people are going to see in the filing is risk factors and the degree to which they see chinese rivals as a threat, google as a threat. all more clearer than it is now. how about tonight on "fast"? >> one guest to talk both sides of the facebook story. they made a $5 million investment in facebook back in 2006. they sold half of it. we'll talk about what the ipo could be valued at. also, of course, facebook and ads, they go hand in hand. both sides of that. green mountain coffee out with earnings. we'll be on the conference call. >> sounds good. see you tonight, melissa, simon. don't go too far. we'll close up europe in about

half an hour. welcome to the third hour of "squawk on the street." check on the markets. dow near highest levels since july. about 100 points -- 102, in fact, from a 52-week high. 12,876. s&p a nice gain. tech index at 11-year high. microsoft and ibm flirting with new highs as well. nasdaq up almost 30 at 2841. all ten s&p 500 sectors are trading in positive territory right now. led by financials. all the big names. b of a, citi, jpmorgan, citi and wells fargo seeing nice gains. amazon one of the big losers after a disappointing report last night. stocks down more than 9% as investors take stock of their efforts to build market share even at the cost of profitability. time for the road map today. facebook is the word on wall street today. we'll see what analysts and investors are saying about the social network's possible ipo filing. also the bank marketing itself

to the occupy movement has some backers like john mac and red mccombs. we'll get an inside look at how it operates. one of the top minds at goldman is here with her outlook for the markets. see where she thinks you should be putting your money and how to prep your portfolio for the rest of the year. and a first on cnbc interview with the head of the rnc. what does he think of the race now that mitt romney ostensibly has reclaimed the lead after a decisive victory in florida last night? all that and more coming up in the next hour. first we'll start with what everyone's buzzing about. facebook, the social giant, preparing to go public. how much of the deal will be open to retail investors? is there a chance you and other facebook users get shut out of this ipo? kayla tausche has been following that story all morning and joins us now from headquarters. hey, kayla. >> hey, carl. regardless of whether you're a retail investor or run of the mill facebook user you better have a good broker if you want

some of these shares. roughly 20% of the shares that actually get issued will fwo to retail investors. that will be hard to come by. the idea facebook would democktize the ipo process is a little farfetched considering how conservatively they've been viewing this process the whole time. first, since the offering is so massive, any small fluctuation in the price means a lot of money is moving at any given time. when you have a user base of 800 million people and a market with a mind of its own you don't want to risk alienating that user base if the stock goes down. a second reason, the volatility of the price range would be heightened without registered financial professionals choosing that allegation. people who hate facebook mite bid 10 bucks a share. people who love it might bid a multiple of that. the reason facebook ended up choosing investment banks would be to control the volatility and make sure it's priced appropriately and valuation doesn't get out of hand offering the shares in a more democratic way would throw that engineering off pretty wildly. coincidentally, sources tell cnbc while morgan stanley is

leading the deal, jpmorgan is likely to land that number two spot meaning goldman would fall to number three. a move that might strike some on wall street as a surprise. when it does seem to favor not only banks with institutional connections but also those with strong retail franchises. carl? >> there was speculation earlier in the week that maybe if goldman tid did lose the lead it would be because of private placements earlier than didn't go as well as facebook had hoped. when you open the prospectus today or tonight, kayla, what's the first thing you're going to look for? what page will you turn to first? >> the first page i'm going to turn to is the one where they talk about the percentage of the company that will actually be issued in the float. that's what's going to control whatever happens to the stock on day one. obviously we know that that boilerplate number on the front of it is going to be $5 billion. that, of course, could change throughout the process. but the percent of the company that facebook is willing to put out to the public will be key as far as how it trades. >> having covered this kind of

rodeo before, and knowing some of the unconventional ways facebook has done business in the past, do you see this being much different from your average ipo? >> you know, i do just because this has so much liquidity in the private market. one thing we'll also be watching is today there will be an auction on second market. it happens every wednesday. as many as half a million shares get traded every single week, carl. there's already a lot of liquidity in the market. you could argue valuation is pretty full plus a little premium. that's why this is so much different. we have such an eye into the company's valuation if not some of its business strategies. into the valuation we do have a good beperspective. >> it's going to be a big day when that happens. we think it might be today. talk to you soon. mitt romney claiming a decisive victory in florida's primary, reestablishing himself as the front-runner for the gop

nomination. our eamon jabbevers is live in tampa. >> we're here in tampa. they're going to be back here for the republican convention in august. it's going to be a little hotter here in august than it is today. but a big night here for mitt romney last night. a 14-point win over newt gingrich, fending off that insurgent campaign and making the case romney hopes that he's got the staying power and fighting instinct to stay in the race, win the nomination and go on and take it to barack obama. last night we learned a little more about exactly what's fueling romney's success as we got the first look into the super pac fund raising numbers. take a look at who some of the big givers for mitt romney have been. starting with bain capital. three different folks contributing a total of $750,000. phil singer of elliott management, big hedge fund, $1 million contributor. julian robertson of tiger

management another hedge fund superstar. $1 million from him. robert mercer of renaissance technologies rounding out the million dollar club for mitt romney. newt gingrich on the campaign trail has been hitting romney very, very hard for his wall street connections. he says romney is connected to new york elites and washington elites, but newt gingrich also, his superpac revealing its donors last night. we saw some of the big money donors contributing to newt. a different cast of characters, a little bit here. the casino owner, his relatives put in $1 million all told in the report that we saw. what we didn't see there is edelson has since this closed put $10 million into newt gingrich's super pac. that's part of the fuel keeping gingrich going on the campaign trail. harold simmons of contra incorporation in texas gave $500,000. w.s.propst, $500,000. big money in the race. >> as the attention now turns to

nevada, the question will be whether gingrich needs to go back to the bank of sheldon. >> in the past we've had campaign finance laws that tightened would people could give. now we're seeing unlimited super pac giving. these guys can write very, very big checks. one or two billionaires can keep the candidate in the race. that couldn't happen years ago. you needed to have a broader base of donors than that. now you get one guy on your side and you can go the distance. >> eamon, thank you for that. we'll see what happens in a few days from now in nevada. the cme group, rick santelli with the santelli exchange on another busy market day. some of the bulling enjoying this stock action today, rick. >> absolutely. we've talked many times, carl, but when you put a lot of liquidity and you have accommodating central banks, eventually even though that capital in many ways is kind of worth less in some fashion, it's

going to find a home. there's not enough dirt to bury it all. i do think some of it's going to go in equities. i suspect if you're a good stock picker it's going to be a good several months for you. lerts let's get to the current issues of housing. i don't like to comment about housing programs before i'm holding the paper work as to the details but let's try to decipher what we're going to be expecting today. there's two programs coming out. let's start with one. the fhfa federal housing finance agency that oversees the gses like freddie and fannie. they want to implement a program that will facilitate renting. here's the issue. even though they may be blowing out some of this inventory, these foreclosures in bulk, investors can do it right now. why aren't they? it's an issue of price. used to be an old adage in the bond market, there are no bad bonds, just bad bond prices. the real issue is going to be if you can't get these inventories and foreclosures moving at the real price, this program's going to set a price that isn't

necessarily the real price. we want to see why the rental part of this can't be facilitated by investors on their own. if the rental markets are so hot, then why don't they do it on their own? we're going to wait and see. the other program is a little bit different. there's about 3.5 million homeowners that could benefit from low rates. second program is going to be announced by the president as kind of this mass refi. the issue there is cost. $5 billion to $10 billion. if you raise taxes on banks for certain transactions or financial ongoing issues to raise the money, it's going to get past the long. it's probably not going to get through congress anyway. but the tax part is the big part. whether it's swipe fees or charging banks extra fees for programs like this, in the end what it's about is somebody has to pay for all these losses in the housing market and they want to do it in the most painless way. what is that, for all of us to share. in this one we're sharing indirectly. banks pass along. final issue, mf.

looks like the -- investors going to get a lot more than 72% back. that part of the story is changing. we'll keep you abreast of all of those changes. back to you. >> as you were just pointing out, the president is talking housing today. in falls church, virginia, there's a live picture of the president addressing in some part what rick was just referring to, these efforts to create a mass refi program in this country. and somehow right the housing ship. we'll see how that works out. there's a new bank on the street. they call themselves the anti-bank. a big name comedian is behind it. the question is, is it safe for your money? before the break, the big market board as the dow is up 145. we're back in two minutes. do you think you have what it takes to win a mug? an autographed mug? who knows how much it will be worth when the "squawk on the street" gang signs it.

>> tripled in value. >> sign it again! it'll go up! >> if you can guess the nonfarm payroll number on friday's job report, it's all yours. tweet us your guess @cnbcst with the hashtag nail the number. see on friday if you are the lucky winner.

♪

marketing itself as the anti-bank bank, mango money is out to capitalize on consumer anger against the big banks. but with a 6% annual percentage yield, how does this bank expect to make money? jane wells is live in los angeles with that story. i love this story, jane. >> carl, thanks. it's been a big year to hate the banks. the 99% don't trust them. how do you exploit them? new types of financial institutions are trying to reach the tens of millions of americans who are either unbanked, underbanked or unhappy like mango financial and george

lopez. >> with mango, you can only spend what you have, so you can't go into debt. you can use it to shop at all your favorite stores. >> now, austin-based mango is a prepaid debit mastercard company that also provides savings accounts with limits and low fees competitive with walmart's banking services. it's hired lopez to pitch both in english and spanish because distrust of banks is particularly high in the latino community, something lopez remembers growing up. >> i understand how everyone can be upset at banks. i come from a place where we're probably occupying america, jane. so, you know, we work hard. we come from a good, you know, blue collar, hard working people. we understand financial di difficulties because we've always had them. we've got money in a sparkler's bottle, ashtray, clothes. i've washed thousands of dollars in my pockets. >> you've literally laundered money. >> i've laundered money. >> mango co-founder behr trand

sosa who earlier created net spin is also -- 6% interest on the first $5,000 of a direct deposit savings account. the rate drops to .1% after that. it's a $300 investment to encourage new customers to save. how can the bank make money on that? >> we're basically betting on ourselves that we're going to deliver long-term value in an array of services that when put together, they're going to yield us the right return investment. >> they're also saving money by not doing a traditional ad spin. mango is fdic insured, occ regulated, tied in with mastercard and it's part of a portfolio of companies whose board members include john mack of morgan stanley claim, redmond combs and ebay founder.

>> with mack's name attached it's hard to dismiss it completely, right? >> if you look at it this way, on $500,000 you're going to get $300. generally you'll get $100. they're out $200 per customer for folks who might do that. it's a wash in the end. eventually they'll invest -- these are people not going to the bank now or often. they're a new audience. >> creating share. not just stealing share. we'll see. >> yeah, we'll see. when we come back, the chief investment officer for goldman sachs' private wealth management is here. we'll get her outlook for 2012, see what's in store for the markets and your portfolio. then we'll count you down to the close in europe. interesting day all around the world today. about 12 minutes to go. we'll be right back. [ male announcer ] we know you don't wait until the end of the quarter to think about your money... ♪ that right now, you want to know where you are, and where you'd like to be. we know you'd like to see the same information your advisor does so you can get a deeper understanding

of what's going on with your portfolio. we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement. weight losexpensive. can be

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ew. seriously? that is so gross. ew. seriously? dude that is so totally gross. so gross...i know. there's an easier way to save. geico. fifteen minutes could save you fifteen percent or more. we had a strong start to the new year after a tough 2011. will the momentum remain and how is the rest of the world positioned. goldman sachs is out with its global 2012 outlook. joining us this morning, sharmin mossavar-rahmani joins us along with our capital markets editor gary comkominski.

you've been optimistic on the u.s. for some time now. it looks like the markets, especially today, are beginning to catch up as you put it. are they accurately reflecting what you see for the year ahead? >> in terms of our outlook for 2012, we have three key themes, and they revolve around first a benign global economic backdrop. second, u.s. assets, both u.s. equities, u.s. bonds and dollar denominations. assets should be a core part of the portfolio. and there are a number of tactical investment opportunities out there. but obviously the second theme is core u.s. assets. we think u.s. equities will probably have a total return on a base case of about 10%. obviously, as you mentioned, we've already had 5% of those returns in the first month. we think there actually could be some good momentum and even maybe some upside. as we look at the different components, we have pretty solid earnings. if we end the year at about $97,

$98 of earnings per share for the s&p, we're thinking we could well be over $100, maybe $101, $102 even in terms of the kind of earnings we could see in 2012. and if we look at the market multiples, you could argue that they're actually a little bit cheap. we ended the year at about 13 times earnings. the average is 16. we don't even have to get to 16 to get pretty good robust earnings. >> right. on europe, which i think arguably has kept some investors on the sidelines, you say the debt crisis there unlikely to pose a major u.s. threat. does that mean that they won't have their own problems to deal with this year? >> we actually like european equities. we think that we are close to the end of the worst part of the european crisis. we think we are nearing a solution to the restructuring of greek debt. which we think is very important. but it looks to us like european

equities are already discounting a lot of bad news. typically european equities trade at about a 30% discount to u.s. equities. they're now at a 50% discount. and when you look at the major multinational companies in europe, these are world class gran brands. whether you're looking at the luxury consumer sector, automobile sector, energy sector. these are significant successful multinational companies. if one can buy them at such a discount to us it seems an allocation to european equities at this point makes a lot of sense. >> it's gary at headquarters. good to see you again. in terms of the investment management landscape i've got some proprietary data we're going to share with you shortly showing how most active managers are fully invested at the end of january. i'm curious in your mind if it's not swrinterest rates that's a possible variable for those managing money that may change

their allocations to equities, what might it be later this year? politics? earnings? what's the one variable that might possibly change the ideal of this tactical research piece you put out in terms of how you invest? >> we think there's certainly a lot of risks out there. when we look at some of these asset classes, we actually think that on average people are somewhat underinvested. for example, one of our strong tactical recommendations is u.s. high yield. when we look at u.s. high yield, we have an expected return for the year of about 12%. again, just like in equities, we've already had a 3% return out of those 12%. there's still significant upside. so when we look at the returns, we actually think that there's some asset classes out there that clients don't own enough of in general. >> let's just go back to the u.s. equity market for one quick second. you mentioned the s&p multiple. what do you think fair value right now given where the discount rates are and interest rates is on multiples right now for the s&p? >> well, the long term market

multiple is about, let's say, 16 times trading 12-month earnings. right now, again, depending on exactly what the market's doing and we're not exactly sure what ternings will be when all companies have reported for the end of 2011, but let's say the market ended the year at about 13 times. if the average is 16, and the political uncertainty is reduced once we get past the election, the uncertainty in europe is diminished, the risks of geopolitical events in the middle east are reduced, the worries about a hard landing in china is diminish we can see certainly multiple expansion there. that would be a good source of returns. >> how do you respond to those who worry about the so-called inflation trade, the value of the dollar in the context of everything else you've just said? >> in our view, the dollar is actually relatively cheap. when we look at the real effective exchange rate and look

at where the dollar is today relative to major trading partners, we think it's incredibly cheap. when it has been at these levels, typically looking four to five years out you can see at least a 10% appreciation. in terms of the dollar, we think it actually has very limited downside but, in fact, a lot of upside. so in terms of holding dollar assets, that's our view. in terms of inflation, we think that the odds of any inflationary scare in the foreseeable future is very limited. whether it's access capacity or whether it's the unemployment levels, whether it's the benefit of globalization all over the world, whether it's cheap labor, not necessarily in china anymore, but certainly in other asian countries, we're not worried about inflation. >> sharmin, thanks so much for being with us. come back soon. >> thank you. >> sharmin mossavar-rahmani, chief investment officer for goldman sachs private wealth. european close in 3 minutes, 21 seconds.

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let's count you down to the close in the uk and across europe with simon hobbs in about 40 seconds. a lot going on over there. somewhat drowned out by what's going on here, simon. >> phenomenal moves, actually, on the stock markets again today. obviously you have the news from china overnight. you've had details came out late last night of the debt swap potential and what the private sector might accept over in greece. have a look at how we're rallying. the german dax gained 9.5% during the month of january, and it's up now 2.25% today.

and it's a broad-based rally. very much a broad-based rally within that call. >> i've got better than expected manufacturing data, psi talks continue. >> the european markets are closing now. >> look at that sea of green. i would mention that actually italy's had a very good day today. some of the italian banks, bank of italy eased the rules on debt. we have got our first economy officially in recession. it's belgium. only a small contraction in the third and fourth quarter. let me take you back to today's action. one of the reasons we've had a rally in the prif ril bull markets. you've got big rallies on some of those big banks that are exposed to that periphery. let's have a look at where we are in the uk. some of the asset managers. i put schrodes in there,

barclays, lloyds. same is true in france. in germany it's a broad-based rally. big exporters. adidas, bmw also doing well. a good day there all the way around after a real phenomenal january, it has to be said. >> you got that right. don't go too far, simon. bob's here talking about how -- >> where's the panic? what happened to the panic? i hope you're all listening to simon there. that was really quite impressive. the story is, those of you who are still bullish on this, the story is they're throwing in sweeteners in greece. that's all i keep hearing about is sweeteners. instead of a 3.5% coupon they'll give them 3.7% or 3.8% if the economic conditions improve. sweeteners. they're talking about a bigger bailout package. imf is trying to get more money. maybe the esm will get more money. maybe germany will stop being in transit and agree to put more money in. these are the kind of things

floating around helping things. nonetheless, the numbers in europe today, the ism numbers, fair, not great. >> sure. >> asian numbers were better overall. i guess there's good cause for being optimistic. i'll tell you what i think is good cause. maybe we are moving independently, much more from europe in the last few weeks and again today p. i think that's encouraging. fundamentals are mattering. earnings are mattering. what's the sector that matters most? technology. 90% of the s&p 500. that's what's moving things forward. this is, carl, an 11-year high, essentially, within a couple points of an 11-year high in the technology index. there's our leadership group. before you get too excited, it's half what it was. remember the height in 2000? you were around then. but 11-year high is still nothing to sneeze at. look at some of the big names. disk drives are all big. seagate at a four-year high. other names like juniper and

broadcom. financials are number two. they're 14% of the weighting in the s&p 500. you can see all the big names. these are big cap names. all up 3%, 4%, even 5% in morane stanley's case. fundamentals, whirlpool had great numbers. it's moving the building material companies, stanley, black & decker, cemex all up 4%. unit sales were down 3%. but pricing was up 4%. everyone was shocked whirlpool in this environment actually can increase prices. back to our capital markets editor gary kominsky. is this true? single best indicator? >> over 20 years this has always proven to be the best indicator. case in point, we talked about the late january correction in the nasdaq the last three years. did not happen this year. talked yesterday about the goldman -- indicators are

always -- how do we say? subject to not working. i got to tell you, the relative performance indicator of what active managers are trying to do, aka to keep their jobs, has been the best indicator. and we're going to call this -- on tv this is the big reveal. here's the data. take a look. those that followed this over the last couple years know. you're going to be blown away to see that after january look at the numbers here. active managers adding value. basically, across every asset class, beating the benchmark many percents. at least by 250. many by 500. look at the russell 3,000. 18% of active managers benchmarking the russell 3,000, beating it by at least 500 basis points. if you watched this program yesterday, that's not a surprise to you because we showed you how the russell 3,000 got its january performance. this data, tom lee, strategist at jpmorgan who provides it to me at the beginning of every month, this is unbelievable if you've been tracking it.

because this has been -- the relative performance catchup has been an important component over the last several years. what does this say? tom says if you take a look at large cap, the fact that they're actually ahead right now probably supports the notion in his view that the pause is coming. again, you've got fully invested funds. you've got funds that actually had a value versus etfs and index funds. herb greenburg listened to that. what does it mean? see you in a couple weeks. what it basically tells me, carl, is that investors are fully invested which is not necessarily going to mean a lot of new money coming into the market. >> that's what you're always looking for. the marginal buyer stocks. >> the relative performance is the single biggest driving factor for those that manage money every day they go to work. it's not the facebook ipo. it's not what's happening in europe. it's how am i doing versus the benchmark? >> good stuff, gary.

we'll be following up on that in weeks to come. rick santelli is out in chicago talking a little more mf global today as it's been a crazy week for headlines on that front, too. hey, rick. >> absolutely. we're with jeff carter, he's an independent trader and a blogger. you've all read points and figures. welcome, jeff. i didn't want to start with that. with carl, let's do it. there's some new mf headlines at the forensics that all the transactions are pretty much complete. they know a lot. any thoughts on mf? >> my biggest thought is, you know, the client relationship is one of the most sacred in the futures industry. in my mind, they stole the money. nobody's saying that they stole the money. back in 1988 you remember what it was like on the floor here when we had the fbi investigation. >> talk into my ring. >> they threw the riko statutes at those traders right away. >> i was at drexel.

they threw riko statutes there too. >> why aren't they throwing riko statutes at mf now? >> the lawyer mind in me says there's no proof of wrong doing. but in both of those analogies, there was no proof, no trial at this stage either. why don't they dangle the riko out there? >> corzine obviously is connected to the right side. >> dumb question. sorry, viewers. >> in my opinion. >> let's go to another topic. charles plaser, philadelphia fed president. a lot of things he says i agree with. today he was doing interviews and one of his headlines in the wire services was, is that our goal was not to weaken the dollar. this says it all. listen, viewers, listeners, if i like to drive blindfolded on the eisenhower expressway during rush hour, i might not have intended to smash up my car, but it's going to get smashed, nonetheless. doesn't this really raise the philosophical issue why you and i always seem to disagree with the fed? >> we generally do in these sort of cases.

i think what the fed should say is the dollar value is just a price that the market interprets. they don't have as much control over the dollar value as they -- as they have had in the past, but they have acted in the last even ten years, you might say, to really bring down the value of the dollar to try to stimulate exports. and that's probably the wrong way to build an economy. you do not build an economy on a weak dollar. or a weak currency. otherwise we'd be zimbabwe. >> exactly. when i used to trade a decade plus ago, our notion was the dollar is like stock in the u.s. if you want a strong country, you want a strong stock. >> that's exactly right. >> carl, back to you. >> driving on the eisenhower brings back some memories. thanks, rick. when we come back, the head of the rnc is coming up. plus, julia boorstin was just invited to hang out behind closed doors over at facebook. she's going to tell us what happened next. first, some winners and losers from the european close which just happened a few moments ago.

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the big question of the day is whether facebook will file the s1 to go public today. we don't know. we know julia boorstin was given an exclusive behind doors at fact book. good morning. >> reporter: good morn wk carl. the nice folks at facebook invited us inside to have some coffee, use the restroom and give a little tour. about 2,000 of facebook's roughly 3,000 employees are in this building behind me. even though this looks like a pretty corporate building, it used to be owned by sun microsystems, it's actually much funkier inside. there are a lot of exposed concrete floors and walls that are painted with black board material so people can write on them with chalk. people are already starting to filter in. we're seeing a lot of people showing up here as early as 7:00

a.m. this morning. a lot of big buses coming in from san francisco. we do expect both mark zuckerberg and -- if there were to be an s1 filing we could expect them to have a little meeting and talk to the employees about the big news. carl, i have to tell you, this is a pretty cool office. no matter how corporate it looks on the outside, very cool inside with a lot of different lounge areas. they have a lot of different food areas set up so people can get coffee and cereal. never really have to leave the building. they are a little stranded out here in this office park. one of my favorite things, there are actually bars set up sprinkled around the buildings. i'm talking about having beers on tap, hard alcohol sitting out. if there is an s1 filing today, there are going to be a lot of facebook employees having a little early happy hour. >> you got to imagine they know that the eyes of the world are on them now, julia. interesting color and good to keep in mind as we wait for that filing to take place.

meanwhile, a quick check on the markets today. dow as we've said, nice gains here today and holding relatively steady. not too far off the highs. up 137. s&p at 1326. again, about 100 points from a 52-week high on the dow which is 12,876. number of stocks hitting all-time highs, coach, tjx, union pacific, autozone and fmc corp. all trading at fresh highs today. when we come back, the chairman of the republican national committee, reince priebus. ( i @

mitt romney is triumphant in florida in the latest primary battle. he's now setting his lights on nevada and the road ahead. reince priebus, head of the rnc joins us in a first on cnbc interview. good morning. >> hey, carl, how are you? >> i'm good. the argument lately is romney needs to be battle tested, he needs to show that he can take a punch, that he can throw a punch. after last night's results did he pass those tests? >> well, he had a good night. we congratulate him for a good showing in florida. you know, i think it's about vetting the candidates but it's also about them making the case to our base. our base is pretty diverse, as

you know. it's a tough road. i think primaries are difficult. but in the end i think it's all better for us and this will be a referendum on barack obama once we get a nominee. we'll have to make the case and do a good job of showing the american people we've got an alternative that's articulate and strong and can lead this country. >> yeah. a lot of the poll results, i'm sure you've been over them for the past few hours. electability, for those for whom that was a number one issue overwhelmingly for romney, what does that tell you? >> it tells us our base wants to make sure we beat barack obama. in south carolina, those things said differently. i think that's where our base is. we know that re-electing this president means our economy heading further in the ditch and more promises that aren't kept. i think this is about saving america. i think our base feels the same way. and that's why when you look at these polls and you analyze exit polls or whatever numbers you're looking at, beating barack obama and making sure that we can get

our country on the right track is what our base and what our supporters are most interested in. >> when gingrich talks about 1976, right, and going back to tampa and closing the deal there, how do you respond to that? is that healthy for the party? and can it be done? >> i don't know if it can be done. what i do think, though, i think this primary process is healthy for the primary -- for our chances of beating barack obama. you know, i go back, carl, i think the best example of a very difficult primary where the one side ultimately won very easily was just four years ago. if you look at hillary clinton and barack obama, you know, they went toe to toe through the end of june. it was no walk in the park for barack obama, nearly splitting their party in half. then he took a super majority with him in congress. he took 60 votes in the senate with him. so this concept that tough primaries with a little bit of drama is somehow bad for a challenging party, i just don't buy it. history doesn't support that kind of claim either.

>> is there a line -- if your argument is we have not crossed that line yet, does that line exist where the fight does drag on too long, and when is it? >> well, i -- obviously, we need to win in november. so i guess we'll be able to look back in november and figure out where that line is. but i think as long as we're talking about what we need to do to save this country, and, yeah, these candidates have to duke it out a little bit. as long as we're talking about what the american promised the american people and what he actually delivered and we get out there with our plans of what we plan to do to save the country, that's the magic formula. that's where you'll see this party heading. >> market today, the dow is about 100 points from a 52-week high. we keep getting data. today it was jobs and manufacturing that aren't off the charts, but show a steady slog forward. an economy that maybe not growing quickly, but is growing, not shrinking.

how does that change the argument for republicans heading into november? >> i don't think it does, carl. i think what does is how people feel they are in this economy and whether the president fulfilled the promises he made to the american people. number one, he said unemployment wouldn't be above 8%. our long term entitlement program, where are they at? where's our long-term debt? where's our deficits in this country? we have one of the most predictable looming economic disasters facing america and all we need to do is act on it. actually, the only thing president obama needs to do is fulfill the promises that he made to the american people in regard to those long-term debt problems and those long-term economic problems. and he's not there. and he apparently has no intention of going there. i think ultimately that will be the issue facing america moving forward in november. >> earlier this morning mitt romney was asked about gingrich. apparently not calling him after

the primary, after his primary victory last night. says, i guess he doesn't have our phone number. what is standard practice in a primary for the loser to -- does the loser call the winner every time? >> i don't -- honestly, carl, i'm not avoiding. i don't know what the standard practice is. i think in the end all of these candidates have said repeatedly that if they're not the nominee, they will support the nominee 100 times over to help make sure that we take out the biggest, most ardent liberal that's ever resided in the white house. and that's barack obama. we'll have complete unification of this party once we get a nominee. >> mr. chairman, always good to talk to you. come back soon. >> thank you, carl. >> things are not going to get less exciting. that's for sure. reince priebus joins us from washington. keep those tweets coming. facebook prepares to file for an ipo. we want to know what you think they should do with this $5 billion once they raise it. you could let us know

@cnbcsquawkst. we'll read some of your ideas after this break. ♪ there's a place i dream about ♪ ♪ where the sun never goes out ♪ ♪ and the sky is deep and blue ♪ ♪ won't you take me american flight 280 to miami is now ready for boarding. ♪ there with you fly without putting your life on pause.

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finance ministry official that greece is hours away from closing a deal with private sector creditors. on that news, stocks didn't move too much. the 10-year note did tick down a little bit to yield 1.835. no details really on how big the losses might be in this bond swap deal. again, this has been promised over and over and over. some said it was going to be before the weekend. and then by monday. it clearly has not happened yet. now in the words of a greek finance ministry official it is a question of hours. we will see if, in fact, that does take place later on today. get to squawk on the tweet this morning. the value of the facebook's ipo filing expected to be $5 billion. what's the first thing you think they should do with that money once it raises it? rohan tweets, invest in a dislike button. melba tweets realize it isn't $5 billion in u.s. dollars but

farmville cows. blakely tweets whatever it is they need to hurry up with the ipo filing so i can get back to sleep. gary, if that doesn't sum up the sentiment of a lot of investors out there, get it done, right? >> indeed. i'm glad you brought up that. peter vopar also sent that out. let's talk about facebook. in the middle of the night this is what i thought. my oldest son, 19 years old in college right now. think back, 19 years. he gets up every day. the first thing he does is look at facebook. i have no idea about valuation. i have no ideas what the numbers are going to look like. 19 years. eastman kodak, bankrupt. the fact that it's such an innovative, unbelievably game changing business, one thing. but don't forget about valuation. if we take a quick look at the chart of groupon, this idea of the second derivative or the impact of facebook, look what's happened to groupon over the last several weeks in anticipation of the facebook valuation. be careful. a lot of stocks have traded up

in anticipation of what the value will be, that's already been impacting those businesses, those companies the last several weeks. >> art cashman described it as a mini social.com bubble. you go along with that? >> that's exactly what it is. the point is those companies that have gotten the sort of lift, they've already gotten it. as far as the business, we both would agree. we don't know what the value is going to be. we certainly would agree when you think back on how this company has come and the impact that it has had, phenomenal. but valuation matters. it always does. >> yeah. i'm sure they're taking that into account as much as anybody else. rick santelli, going into the afternoon, what are you going to watch? >> i like what you quoted. i saw that headline that we may be hours away. all's i could envision when you said that, carl, is a representative of the ecb, a representative of the bondholders, a representative for greece sitting together trying to decide what's yours, mine and ours. i think that's really why it's taken so many hours. the other issue is, with that headline out, i saw rates did

tick up a bit. but that's probably because of the stock rally. the euro currency has been up all day. it didn't really jump. i think with that $5 billion they should buy everybody on facebook some new wallpaper. how is that? >> we'll see. it'll be interesting watching to see which comes first. this ostensible deal with the private sector creditors or an s1 filing. two of the big overhangs watching over the market today. gary, it was pointed out earlier the gain for the dow in january, 415 points, sounds impressive. a third of it was caterpillar. earnings for the december quarter up 9%. sounds impressive. much of it was apple. in fact, without apple it's more like 3% or 4%. the market can be a little squirrely depending on how you slice the numbers. >> again, after we did that hit at 11:30, i spoke to my favorite trader in aspen. he just pointed out to me, take a look at how the market has behaved over the last couple days. you could not buy stocks. they were giving them away basically 15 handles ago on