>> all right. >> ruger. >> doc. >> nuance. >> pete. >> mastercard, v. >> that does it for us. we'll see you tomorrow. more "power lunch" begins right now. and three hours to go in the trading day and the bulls are trying to take some ground an inch at a time this year. no drama, no roller coaster though. no triple-digit advances and big swings, but major averages post solid gains. is the slow-motion stealth rally the best thing for your portfolio. simon? >> ben bernanke facing fire from congressional republicans. bernanke taking shots on fed policy, inflation, housing, but issuing a stop warning right back at them. >> plus love is in the air. money from matches. match.com that is. just one of the dozens of websites pumping up the bottom line of interactive court. the stock up more than 60% in the last year. and at a 52-week high. the ceo will spell out the

strategy for this web winner. >> i'm simon hobbs with sue herera. "power lunch" begins right now. so jobless claims down, productivity higher. but calling the fed chairman rich into the deficit but still the markets are broadly steady. this is where we stand at the moment. the dow flat on the session overall. the s&p flat on the session overall. and the nasdaq up just very slightly. but bear in mind where we've been so far this year. that's a 9% gain. that's over a 5% gain. and hanging on in there. the pulse of the markets right now this thursday lunchtime, well, oil is down on strong inventory numbers. natural gas trying to recoup those recent losses. and silver actually hitting a high for the year. our midday movers here on "power lunch" gap up sharply today. up 9%. the retailer projecting q-4 earnings that are ahead of estimates. losses meanwhile at electronic

arts are narrowing. the stock higher. battlefield 3 selling extremely well. and green mountain coffee roasters surging. q-1 profits up big though it has to be said that cnbc's herb greenberg is still not convinced. more on that. on the downside so far today abercrombie & fitch getting hit quite hard. it's now projecting weaker sales margins in q-4 results than the market was expecting. jds also down. and ryder system down almost 7%. q-4 profits are up 31%, but the guidance there fell below expectations. let's go straight down to the new york stock exchange and talk to bob pisani. bob, are we picking up volume here? >> no, we're not, frankly. don't talk about volume anymore. we avoid that subject. here's what's going on. it's really a mixed bag. i think simon mitt on all the high points. even on the advanced decline line. just off the lows for the day but even know a very narrow trading range.

look at modest breakouts in some of the sectors. multi-month highs. the airline index, bank index, oil service index that's been outperforming some of the oil majors recently and the semiconductor. a modest bunch of breakouts. very strange retail sales in january. simon hit on a couple winners and losers. here's the bottom line. very split. only 50% beat the estimates for same store sales. normally we get close to 60%. warm weather really messed up a lot of people. now, these companies raised lines, not just gap, limited, macy's, kohl's, even though numbers were somewhat disappointing, they still raised guidance. most of these companies, january is the end of their quarter. at the same time a number of companies lowered guidance. that's what i mean, very confusing company by company. not just abercrombie & fitch, wet seal, ann taylor, stage stores all lowered numbers. you can see some have been hit rather notably. sue, back to you. >> thank you, bob.

switch on the "power lunch" power surge right now and drill down on the stories driving the day. we begin with the fed. fed chief ben bernanke getting grilled by lawmakers on capitol hill and issuing new warnings about the budget deficit and overall economy. steve liesman has the highlights. >> sue, thanks very much. there was a bit of an exchange from congressman paul ryan, a republican, and the fed chairman, over the long-term goals of the fed higher inflation, get to those in a second. first i want to give you the monetary and deficit headlines. he issued a stern warning on the deficit saying increased possibility of a sudden fiscal crisis from the deficit, he warned interest rates can soar quickly if investors were to lose confidence in the american government. he did say on the economy that it's gradually recovering from a recent deep recession, but the pace of recovery has been frustratingly slow. the outlook is uncertain. on the jobs marveket, bernanke says the situation is improving but appears to have improved modestly over the past year but

still talked about the long-term unemployed. on the back of ryan and bernanke was the issue is the fed willing to tolerate higher inflation in return for bringing down the unemployment rate as perhaps some cold from the recent long-term policy statement from the fed. here's what the fed chairman said. >> mr. roseman, let me ask you about leverage ratios if i could. >> it looks like we don't have that, but fundamentally he said no. there are different speeds of recovery of these two things but ultimately the fed will not tolerate higher inflation. he also talked about the economy and said it was gradually improving but said households faced additional headwinds and also talked about europe. >> over the past two and a half years, the u.s. economy has been gradually recovering from a deep recession. while conditions have certainly improved over this period, the pace of the recovery has been frustratingly slow. particularly from the perspective of the millions of workers who remain unemployed or

underemployed. >> ultimately, sue, i did not hear the fed chairman signal qe-3 was on the way, but when you look at the challenges facing the u.s. economy, if they did it two or three months from now, you could point back to this assessment of the economy as justifying it. >> i think absolutely true, steve. talk to me about the economic data that we've been seeing recently. some of it has been very mixed, but the jobs data seems to be getting a little better. what can we discern from that in terms of the underlying trend? >> i think ultimately we have had some improvement in the jobs market. the 360 and change number for jobless claims has really confirmed a downward trend. we were worried earlier in the month that a lot of what we were seeing was noise relative to the hiring and firing around the holiday season. we're going to get some of that noise tomorrow in the overall payroll number, but there's a lot of folks out there that says you wipe away the noise and we pretty much have underlying job growth 150,000 maybe 175,000. >> thank you, steve, very much. >> sure. >> let's take that analysis over

to the bond pits in chicago and see how ben bernanke's moving things there. rick santelli is live from the cme. rick. >> well, you know f you look towards the marketplace, it's pretty difficult to extract the influences of bernanke testimony and q & a. look at an intraday chart of the euro, the euro was on a bond burner well before the meetings started on the capitol hill. and a lot of that is continuing to handicap whether greece is close or not close. and look at a 10-year, it's basically not going anywhere but still at a very low rate, about the same rate as the bund. many traders on the floor framed most of this morning's very much interesting discussions between congressmen and ben bernanke in the following way, if you look at just since the operation twist began by the fed a very large majority of long end issuance has been gobbled up by the fed. so we are making fiscal policy as ryan pointed out based on where interest rates are, and

interest rates are not where they normally would be if it wasn't for some of the fed interventions. and it's that relationship that has traders a little bit concerned. back to you, sue. >> i don't blame them. thank you, rick. to the retail sector now where stocks are on the move as the nation's biggest retailers reported their latest same store sales figures. abercrombie & fitch among those taking a hit today. courtney reagan is diving into the latest numbers. >> that's certainly true, sue. january is typically about 20% of the sales for the quarter but still a very important month for clearing inventory. the warmer than normal weather gave added incentive for promotions. overall same store sales grew 4.2%. much better than expected according to thompson reuters, but individual results were mixed. look at saks, but nordstrom disappointing. limited another stellar month, up 9%. triple what was expected.

this one all over the map but zooming past expectations this time around up nearly 11%. now, a very disappointing december. target posted an increase of 4.3% for january estimates, better than expected, big disappointment out of wet seal. you can see here down 13% for the teen retailer. and while december was a great month for macy's, january wasn't. disappointing there as well. the volume of earnings updates today greater than expected. abercrombie & fitch, ann taylor and wet seal guiding lower and trading lower as well. abercrombie & fitch, one of the retailers blaming that warmer than normal weather for weakness in sweaters, fleece and outer wear. slashing fourth quarter and full year guidance assuming flat comps, piper jaffry downgrading ann taylor to underweight. now, gap, limited, kohl's, macy's, ross stores, tjx and big lots, all higher. gap shares up more than 9%. one of the leaders of the s&p 500 today.

simon. >> thank you very much, courtney. let's get to it then, facebook with the ipo filed, what is now next for that social media giant? it's clear to many that that growth will depend on its relationships with other companies. so who is facebook intending to friend? our julia boorstin is at facebook headquarters in menlo park, california. julia, over to you. >> simon, two of those friends are paramount, music studio and american express. facebook gave them a call out. but would frankly like to friend every major advertiser. facebook success in hinges effectively connect with customers. s-1 mark zuckerberg describes utopia marketing on facebook. doing good that's also good for business. saying "we think a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services." in the s-1 the company lays out

how its combination of free facebook pages as well as paid ads allow companies to not just reach their target audience, which is people who are already interested in them, but also lets those customers, those interested customers, spread the word to their friends and reach an even broader metric. now, the results are as wide ranging as proctor & gamble growing u.s. sales for its secret dee ode rant 9% to paramount reaching 65 million u.s. users in just one day with ads for the latest transformers movie. and american express, which used facebook promotions to boost transactions 23% on its so-called small business saturday. the better the results of these promotions with this big corporate friends, the better a chance facebook will have of continuing to ramp up its advertising business. simon. >> it's clear, julia, from the s-1 it's clearly that zynga is absolutely critical or companies like zynga are critical to that silicon synergy, no? >> absolutely, simon.

zynga is the ultimate example. zynga pays facebook up to 30% of all of its revenue for payments when people go to zynga, play a game like farmville and buy something like a virtual cow. now, that's not all. zynga also advertises to drive people to its games. so all in zynga contributes a total of 12% of facebook's revenue in 2011. now, that's huge. and that kind of take is fantastic. the problem is is that facebook's relationship with zynga is really one-of-a-kind. facebook hopes to grow its cut of virtual goods business which it has with zynga and expects that whole market to about double to $15 billion market in 2014. but as facebook points out in its risk factors, what it really needs is another zynga. another one of these megapartners. and i deally it might be in a different category. the s-1 says the company may seek to extend the use of payments, like it has with zynga, to other types of apps in the future. i think we should expect

facebook to encourage partners to develop apps in retail might see social commerce apps or entertainment. i could see facebook trying to grow a business to compete with apple's i tunes to take 30% of the sale and movies like it does. if you have any questions about the facebook ipo, go to cnbc's facebook page. i'll do a live q & a as soon as "power lunch" ends. >> excellent. >> everybody needs a virtual cow, don't you think? >> did you see how cold it was in california? come over to the east coast. >> i know. it's 60 degrees today. straight ahead as simon and i continue, no fireworks certainly, but still a steady climb for the markets this year. the s&p up 5%. nasdaq more than 9% higher. so far anyway. is this goldilocks market just right or forget the day-to-day and look long-term? >> in the meantime here's the action on the s&p sectors so far this thursday. down at the bottom health care,

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welcome back to "power lunch." one of the biggest complaints from investors has been lack of yield, but in fact the dow has surged about 28% in the last ten years, even with the mortgage meltdown and the financial crisis. so could the key to investing be a very long-term strategy?

joining us from the t.d. ameritrade conference in orlando, florida, is george evans, director of equities at oppenheimer funds. good to see you again. welcome back. >> thank you very much. >> let's talk a little about your strategy and time frame. you don't pay attention all that much to the news events that occur every single day. you try and look through that. is that a correct read? and how do you do that? >> i think what happens is the news events can provide the opportunity to get into great stocks at a good price. so if there's some negative news and we think the fundamentals of the long-term are still very much in tact, a cheaper price can be a great opportunity to establish a position over a three to five year holding period. >> as a matter of fact, i think one of the examples you gave was bububry. >> we've owned them for quite a long time. in 2008 in the financial crisis and most lehman, there was a

view all would hit the skids and this would particularly effect the sales for discretionary spending at very high luxury goods end. so burr berry went down by over half. we still thought that the luxury goods phenomenon was going to run have much, much further to run, particularly driven by spending in the emerging markets. we added to it pretty aggressively in late 2008. and the stock is up seven or eight times since that time and it's still in our view not very expensive. >> so tell me what you're watching right now. you take a look. you hold stocks for quite a long time. you don't have a lot of turnover in the portfolio. and you look for longer term trends. what trends are you watching right now? >> i think one of the keys at the moment is that everyone thinks that because we are in a slow-growth environment and we have the obvious fiscal crises and the debt crisis in europe, is that slow growth means that there's no growth. the fact is that economies are always very, very dynamic.

and they're also fantastic growth opportunities that are still growing in spite of a slow-growth scenario. with mass affluence with this luxury goods is part of that theme. there's still very, very good sales growth potential, particularly during buying emerging markets. we're looking at that and branded goods and spirits a breweries. we like new technology a lot, particularly within new technology we have a lot of stocks related to the growth of data. >> uh-huh. >> so cisco reckons that data is still growing at the rate of about 100% per year. and that is sustainable for the foreseeable future. so slow growth in the economy in general, but very, very fast growth for data. we're looking at companies that operate data centers, satellites that have components that are -- the demand of which is driven by increasing transmission of data. ageing. >> oh, ageing, great. go ahead, george, finish up with ageing. >> so ageing, basically, in

spite of the economy, we've still got an ageing population that's going to grow by a factor of three over the next 40 years. and there are a lot of companies that are going to benefit from this particularly in discretion spending like people that make lens, hearing aids and things of that nature. >> all right. george, thanks a million. good to see you again. >> thank you. nice to see you. >> coming up on "street signs," mandy drury is live at the t.d. ameritrade investor conference in orlando, florida, and she'll be joined by t.d. ameritrade ceo and wharton school as well. >> it's interesting, sue. the market is taking a breather today. bear in mind the context, the dow hit almost a four-year high yesterday. we haven't seen the huge moves this year that we did at the end of last year. just slow steady gains. you saw this chart just now. have a look again. look at the nasdaq there up almost 10% so far this year. importantly then the question is

will the rally continue? let's bring in the chairman and chief executive officer and ceo of rose. thank you for joining us. >> how are you, simon? >> we have gains already in just one month and two trading sessions that many analysts thought we would get for the entire year. where do you think the market will go from here? >> i can't tell you where the market's going to go from here. i do think this rate of increase is clearly unsustainable. it certainly feels good and it's fun to watch and even more fun to participate in. but it's not sustaining, that's for sure. >> so how would you position yourself within the market then? or would you not be in the market? >> i think that's a very complex question. i think there are lots of ways to look at this market. your previous guest noted there are opportunities within any kind of market. i think that's the situation. this is a matter of picking sectors and within sectors picking stocks. it's not a matter of getting into the market generally. i think there's still a ton of

cash sitting on the sidelines, but there's always a ton of cash on the sidelines. people have used the cash as the proverbial category ride to the market and it's never shown up. i think this is a very, very difficult problematic market with lots of issues exogenous and intrinsic. >> sorry. i didn't mean to interrupt you. i was going to say a lot of the money sitting on the sidelines at the moment will be controlled, managed, by professional investors. does that set up a dynamic of its own that will see those in the market have got great gains but relative performance is poor and therefore in a sense they are forced buyers and we could debate where they might buy? >> i think that's partially true, simon. but i think there's the old adage about fear and greed motivating wall street. i think fear's a big one. i think people look at almost every sector and almost every opportunity in which to invest and do wonder if there's some

associated apocalyptic risk there. so that does cause some hesitation if not in fact intransigence. who knows how the lemmings will respond when the markets -- if the markets sustain any kind of rally. i don't think the market's going to move as one. >> but your assumption is there are not those bad things out there? >> i'm sorry? >> you're assumption is there aren't horrendous things about to happen? >> no. i think something horrendous is about to happen, but i think it's a very uncertain market. i don't think europe is resolving itself soon. i think japan is a real problem. and i think obviously iran is a real problem both its impact on oil prices and its impact on international political stability. so i think there are a lot of factors out there that are causing people to really hesitate. >> okay. thank you, sir. we'll leave it there. >> okay. >> up next on the program, the collapse of mf global. what did they know and when did they know it? did anyone ring the alarm bell? we'll show you what mf's risk

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welcome back to "power lunch." i'm seema mody. time for three stocks in 30 seconds. let's start with novo, the world's largest insulin maker

stock up 4%. moving onto merck, they also reported a profit of 97 cents a share, two cents higher than analyst projections. why is the stock down? guidance came shy of street expectations as they expect to lose sales to competitors once the number one drug goes off patent. and gilliad sciences, topic of conversation on the call will certainly be $11 billion acquisition of pharma asset and when they plan to launch the hepatitis c drug. lawmakers holding hearings today on capitol hill about the collapse of mf global. this time they're focusing on the role of risk managers at the business. kayla tausche has the latest. >> simon, at this moment we have the reps from moody's and s&p testifying. they're in the thick of it. after this morning mf's former risk chiefs were grilled on the missing money. their answer they don't know and had nothing to do with that. but there was some familiar

territory like whether mf global purposely placed a conservative risk manager in michael roseman with a more lenient one in michael stockman in order to make the bigger trades. >> it almost looks like they took mr. roseman out and replaced mr. roseman with the yes-man. does it look that way to you guys? mr. roseman, would you comment at all you gave them information they didn't like and replaced you and put someone in that gave them information that they liked? >> i would say some of my views would have played a part, i believe. >> stockman disputed being a yes-man but then faced the question of whether once those trades were made keeping the risk off the balance sheet was actually ethical. >> as it relates to accounting and accounting treatment and how the -- >> you don't have to keep going. i get the drift. $1.2 billion worth of people got the drift.

we're hiding around the corners. we're doing stuff that we don't know is legal. we certainly will not say it's ethical or unethical. and we're deeply sorry. >> one thing they both agreed on is that they warned the board and ceo jon corzine. >> oh, really? >> at different times, the former risk chief said he warned him at the end of 2010 before he was replaced. and the newer risk chief, michael stockman, said he warned him in july of 2011. both rang the alarm bells i, as you guys said. >> we're hearing new things, but what's the next step then? >> the next step -- it seems we have a different hearing every day. >> it does. >> i'm sure people are getting news fatigue about this story, but there are a lot of people out there who still want their money back. they've had 72% of assets returned and still waiting for a quarter of that to be returned. as my sources have said, that money can be traced. they know where a lot of it is.

and mf global sold commercial paper $1.3 billion worth in several tranches to goldman sachs and some of those proceeds were held up at jpmorgan. the issue was if it was done legally, if those proceeds held up legally, you can't really claw that back. and so the only thing that you can really do -- you can't point fingers at a whole lot of people. the only thing you can do is say this can't happen again and this is how the cftc is going to put regulations in place to keep it from happening again. >> you're a busy lady between facebook and mf global. >> who needs sleep? >> right. straight ahead, now the hard part for facebook, how do they grow their business? and is that a good thing that mark zuckerberg controls more than 50% of the voting shares? we'll talk to a top vc and head of interactive group about that. >> and speaking of the iac, the stock is up more than 60% in the last year. match.com is just one of their hot properties. their ceo will talk earnings and

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welcome back to "power lunch." let's get a check on the markets. today investors are digesting corporate earnings. those statements from bernanke. and some important economic

data. we had jobless claims come in lower than expected point to signs of recovery in the jobs market. dow right now is currently down. s&p and nasdaq though the nasdaq in specific is showing outperformance. a lot of upbeat earnings out of technology sector. gold higher and crude down. banks are on a tear. that's why financials are up. in terms of other bright spots, energy's on the rise and technology, as i said, continues to show strength. that's adding strength to the tech index. let's go to the commodities and sharon epperson, over to you. >> the reason gold is higher is due to in part to bernanke's statement about the sluggishness of the economic recovery and that has sparked some buying. we're looking at gold prices at a new high for 2012. above that key 1750 resistance level. and the next target is likely to be 1805, traders tell me. we're also looking at the tense selloff here in the oil market. after we got those very weak demand numbers for gasoline from the energy department in the

previous session and gasoline's falling as well. the story to watch though is definitely natural gas. the pop we're seeing there after that storage report that showed a greater than expected decline in the storage level. let's see if this bounce continues for natural gas. back to you guys. >> thank you very much, sharon. so facebook pulls the trigger, now comes the hard part. here to talk about the latest ipo filing, the largest ipo filing in internet history, and how it's going to shape the digital economy is jon fortt, our tech correspondent. along with menlo ventures managing director who's founded dozens of start-ups and lend to dozens more facing hundreds of millions in the process. greg blatt also importantly with us the ceo of iac, a network of 50 internet properties with 3 billion monthly page views across sites including match.com, city search and college humor. jon, let me kickoff with you. where are we then now that we

had the s-1 from facebook? what do we know about growth as far as they're concerned? >> i want to highlight something here that's really interesting. as you can see here, u.s., canada and europe take a look at the wall here, they're really big in terms of where facebook's users are. but taking a look at the bigger picture, emerging markets are now the majority, and they grew three times faster than the u.s., canada and europe in 2011. momentum clearly there just showing how quickly things are shifting at facebook. >> okay. we'll come back to that. the other thing we've learned from the s-1 is the degree to which zuckerberg is going to keep control not of just his own but other people's. is that good to have a controlled company from a venture capital perspective? >> i think absolutely for mark zuckerberg being in control it's a great thing for facebook and i believe for the world. i think we saw that we see jobs being booted out of apple too

early, the world probably lost quite a lot of innovation for 15 years when he wasn't there. and mark zuckerberg is one of the greats. he's one of those entrepreneurs that come around every once a generation. >> i guess the cutting edge concern would be how you term growth from what you're saying it would be user from an investor it might arguably be profits. those two things can be very different. >> oh, absolutely. it's unprecedented. facebook is growing to a billion users and more. the profits of the company are pretty incredible. it's also inspired a whole generation of entrepreneurs to build on top of this social platform. you look at zynga at 12% of the revenues of facebook, it's quite incredible. there's a whole ecosystem built up in companies that are tapping into social, into mobile and spreading around the world. >> greg, you approach this from

a very different perspective. iac's stock is up 60% this year alone. you are very much about execution. and execution arguably in a different way than we will get from zuckerberg, i think. >> well, you know, i don't know that it's different. i think, you know, facebook is obviously a huge component of the internet generally now. and we've sort of watched them go from virtually nothing to, you know, close to everything. and i think there's been tons of execution there. and i think, you know, they've been growing users considerably and obviously there's more room to grow there. but i also think through a lot of execution they've got huge room to grow and modernization through user. we advertise with facebook, many people do. i think they would be the first to admit that where they are now in terms of their ability to succes successfully and fully monetize their users is far off from where they could be. >> greg, question about referral traffic. used to be google and search was

the monster there. facebook increasingly an issue. with your properties, are you seeing facebook catch up to google and maybe surpass google in some cases as far as who is bringing you traffic? >> no. and i think that's the good thing for facebook. my sense is that facebook's been growing very quickly, but i think google is still far bigger by sort of every financial metric in terms of the ad dollars spent and the traffic in terms of referred through its advertisement. so that sort of goes to my earlier point. i think facebook has a long way to go. we've been advertising on both, obviously, and they're successful channels for us. but i think facebook has a lot of runway to go before it catches up to google. >> greg, as a ceo, how do you feel? and now that facebook will be a publicly traded company, how do you feel about mr. zuckerberg holding 50% of the shares and having pretty much of a lock on the way that the company functions? i mean, we look at other companies, you know, like news corp and the like where the ceo,

the head of the company, really has almost total control and it hasn't always worked out that well. >> well, i will tell you, i have worked at public companies for the last, i guess 13 years, both of the. [ inaudible ] >> oh, we seem to have lost greg blatt there. >> right at the wrong time. >> it's an important point to make on that. facebook is driving incredible historical change around the world. you're looking at the revolutions and movements throughout north africa. it's probably very important for facebook a public company for someone like zuckerberg to be in control. you would not want him to be thrown out by interests and institutions that begin to buy up stock in the company. it's doing a public service as well. it's a different kind of company that we haven't seen. it's as close to what the original newspapers and why the whole idea having control.

>> i think somebody put it they actually suggested it's the most private public company around. we'll leave it there. thank you very much for joining us. >> thank you. >> joining us from menlo ventures. and greg blatt as well. >> yes. >> and jon fortt. >> yes. up next on "power lunch," mastercard on fire on the back of its latest earnings. the stock near new highs. can you still get in on the credit card stocks? plus. [ male announcer ] let's level the playing field. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual.

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let's check in with scott wapner and see which stocks are on his radar this thursday afternoon. scotty. >> simon, thanks so much. i'm watching target today. there's a lot of same store sales data out and target was really good. twice estimates is what their number beat. out with a positive note just a short time ago. they say january sales trends encouraging. they're raising the eps also reiterating outperform on the stock. it's getting a lift today by about 1%.

hasn't done all that much year-to-date. nonetheless worth keeping an eye on a couple of notes. home and apparel, importantly we believe merchandise mix was favorable, clearance selling up only modestly from last year. what does that do? that helps margins, obviously. also highlighting the valuation. they say the stock trades at 11.7 times or lowest multiple in its peer group for 2012 eps. reiterating the outperform. tgt, sue, that's what i'm watching today. countdown is on. super bowl is sunday. but all day long right here on cnbc we're looking at the super bowl of cities. the new england patriots just outside of boston and the new york giants, which metro area is better for business you ask? this hour the fight to be the silicon valley of the east coast is on. mary thompson is in foxboro,

massachusetts, brian shactman is in new jersey, right behind us, basically, at metlife stadium. mary, you're up first here. make your case. why is new york a better tech city? >> well, before i make my case, sue, i want to make my kick. i had to take advantage of this. i'm here all by myself. how about that? >> yeah. nicely done. >> anyway, it was like an extra point, right? but here's the deal. no matter what happens in silicon valley, everyone still has to come here. they want to go public, they have to go to the nyse or the nasdaq and beyond that in the last two years 400 start-ups in new york, 140 of those were either internet or software-related. and beyond that, big names are big footprints. google, twitter, facebook, but you also have four square,

tumbler, gilt group. all based here. few more nuggets for you in 2011 $2.2 billion spent involving 262 deals. that's about half a billion more than boston, by the way. in terms of innovation, 3,000 patents a year awarded to people and businesses in new york. and from 2005 to 2010 bioscience grew here more than 100%. mary, i know you're going to talk about all the innovation, but take that. 100% growth in the last six years. >> yeah, i'll take that brian. that's all very well and good, but keep in mind that boston has been dominant in the high-tech industry since before the patriots were wearing these helmets. that's right. as brian mentioned, we don't need to build any kind of silicon valley. we have a high-tech corridor and that's called route 128. it's home to companies to emc, chipmaker, analog devices and raf on. add to that on a swath of boston

waterfront there's the city's new innovation center home to 100 start-ups. no high-tech rookie like some other unnamed cities, boston's rich history draws from elite universities like m.i.t. and harvard. and powered by the bay state's work force, which is the most educated in the nation. 44% of them have a bachelor's degree or higher. even the future looks very bright here in massachusetts. that's because the state's high school seniors scored first in math and science. now, home to internet companies that include trip advisor and monster.com, boston -- or massachusetts, i should say, has taken the title of the best state for the new economy five years running. and running away with it is what massachusetts and boston are doing. the dominance in the high-tech industry here on the east coast not even new york giants' defensive end can stop it. back to you, sue. >> this is tough. okay. >> no, it's not. >> before we give our verdict,

let's take a look at the scoreboard so far. it's halftime basically here on "power lunch "power lunch." "squawk box" weighed in. we're joined by jon fortt and because we're talking about tech and tech cities, who are you voting for? what do you think? >> well, i was all ready to just go new york. but then i looked up some stats and heard mary in boston. it's tough. by i have to give the edge to new york. >> okay. new york. >> i do. it's close though. a lot closer than i thought it would be. >> i would stay away from mary thompson when she's back in the studios. she's tough. >> simon, what do you think? >> i'm biassed. some of my best friends are amongst the start-up and technology. i know the efforts that blo bloomberg's making. i got to vote for my friends. >> in new york? >> sorry about that, mary. >> sorry. it's a bias. >> i think it was the kick.

i think it was the kick. >> so you were going to break the tie, but which way would you go? >> i would hold it for you if boston would win. >> we cannot be bribed. go ahead, brian. >> part of me is like i made the kick, part of me didn't care if we won the segment or not. i also wanted to say we did ours in a minute. mary and "street signs," you have to come in on time if you want to play and win the game. >> that's because you have nothing to say, brian. >> wow. [ laughter ] >> nothing to say. >> be sure to wear your pads when you come back to englewood cliffs. >> exactly. mary, do you have a monitor? >> i don't have a monitor, unfortunately. >> oh. all right. hang on. we wish that mary had a monitor because one of her favorite people is tom brady. and, mary, we're going to keep this for you because we have a picture of you looking very glamorous by the way, with tom brady. that's the consolation prize for you. >> that's right. it was photo shopped, obviously, right? >> well, you never know.

>> all right. >> thanks a million, guys. and thank you guys because you both came in with new york which means i don't have to vote. so i get to stay neutral. the battle of the super bowl cities is going on all day here on cnbc. which city do you think is better for business? is it boston? is it new york? go to cnbc's facebook page, like the page, vote in our poll. we'll be updating the results throughout the day. and of course you can watch the super bowl as we all will be, the giants versus the pats sunday on the nbc network. up next on "power lunch," mastercard soaring right now. earnings beating the street with shares near a 52-week high, should investors still take a swipe at credit card stocks? or are they too hot to handle? back in a flash.

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congratulations if you're holding mastercard. it beat wall street's estimates this morning. visa set to report earnings results next week. shares of the two credit card companies jumping today. and you know they've had a great run during the course of the last year. do they still have room for further upside? joining us now an analyst with william blare. bob, what do you think? did you enjoy the mastercard results today? >> yes, i did. some commentary within the

earnings call also we thought was positive with regards to the litigation of credit interchange. but the numbers were strong. the outlook, they raised their guidance. we feel very good about mastercard and visa. >> and interesting that europe is not as soft in their earnings as you might think. >> yes. there was less of a slowdown in europe. the spending in europe was up about 12.5%. that's only down 100 basis points from the last quarter. europe is abroad. it's 60 different markets for mastercard. the most troubled markets are probably less than 5% of their revenue. we were pleasantly surprised by the still strong growth in europe. >> and is that the end of the story for the litigation as far as you're concerned? >> it's not the end of the story, but, i think, some of the commentary out of the ceo of mastercard regarding the reserves that they took and credit interchange, their views on credit interchange, makes us

feel like the worst case scenario is certainly off the table. >> okay. bob, let's cut to the chase, which do you prefer? which do you think will run the highest from here after what is a staggering gain? >> you know, it's a very, very close call. they're trading about the sam valuation. you know, we had preferred visa slightly coming into this year. visa's outperformed by a little bit, but we actually really at this level we think investors should own both 50/50. i know that's a copout, but the current valuation and growth rates, we think that's reasonable. >> you wouldn't be tempted to perhaps reduce your exposure because you've had such a run? i mean, the risk/reward must be changing. >> you add 60% upside in mastercard last year, 44% in visa. however, they're still only trading about 14 times 2013 earnings growing earnings at 20%. just keeping the same multiples you have today, you should get 20%, you know, about 20% upside on each of the stock. >> wow. >> we still think they're still

top picks of ours. they're still attractive. >> clear call. bob, thank you very much for that. have a great afternoon. >> thanks. you too. >> sue, back to you. >> thank you, simon. little more than two hours to go in the trading day. charts of the day up next. 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.  so -- tell me again what happened. i was downstairs making coffee, and we heard it. it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this?

maybe. i just sorta threw a little money here, a little money there. and i loaded up on something my dentist told me was hot. yeah. ♪

take a look at where we are on the markets at the moment. if the nasdaq closes above 2873, that will be an 11-year high tonight. if that were to happen. i was going to get quite euphoric about that and then i've realized we've basically gone nowhere in 11 years. >> right. depends on the way you look at it. like everything else. let's get to our charts of the day. i wanted to look at the vix. a one-month of the vix and you can see that is why a lot of people feel that this rally has a little bit more to go, the question is whether or not we're putting in the lion's share of the year's gains in the first quarter or so. but the vix has taken a big turn. >> that's my charts. we got a 5.5% gain so far this year on the s&p 500. it's been a phenomenal start. but as you say, the context may -- >> yes, we will see. pleasure to have you. >> pleasur b