>> jb. doc. >> bob weir. >> fast at 5:00, abi. >> short oracle. >> fast comes back at 5:00. you'll find power right now. scott, thank you very much. three hours to go in the trading day. and the dow trying to snap the longest losing streak since last summer. we know what you did last summer. stocks higher across the board. you lost money is what you did. investors buying into the big sectors, alcoa helping sentiment. are we ready to rebound? or is this a sucker's rally? julie. >> and turning clicks into cash. the search giant google reports earnings tomorrow. will they deliver for investors? and is the stock a buy? we'll get you ahead of the numbers. >> and investors hanging up on nokia. a 14-year low on very heavy volume. find out why they are lowering guidance. >> along with julia boorstin and

b shac, i'm tyler mathisen. "power lunch" begins right now. >> as i told tyler, it will be the best day of your week. european markets calmer today although worries about spain do continue. investors waiting for their daily fed fix. the beige book out at the top of the hour. look where we stand right now -- actually we were supposed to look at three major indices. they jumped ahead of me. oil higher after bullish inventory numbers. then we go back to the last one, please, so we can look at nat gas? it flip-flopped on either side of the $2 mark. right now just slightly above it. breaking below it will be a first since january of '02. the 10-year yield -- actually, crude is up about 2%. let's take a look at some other things here as we move along. let's go right to midday movers. alcoa is down there. up about 8% after earnings.

owens illinois up 7.5%. key earnings. and check out travelzoo. report it's planning to sell itself up 25%. on the downside, nokia getting crushed after warning on profits saying there's a software bug in their phone. more on this in a bit. and computer sciences down below estimates. and netapp down good for 3% to the downside. we have breaking news we're following right now. 21 billion worth of 10-year notes. we'll see where this falls in terms of where it's trading right now. rick santelli has all the news at the cme. hey, rick. >> hi, all right. $21 billion re-opened 10-year notes. and the ultimate yield 2.043. where is the one issue in trading before the dutch auction buttoned up minutes ago? it was 2.04 offered at 2.04. even though it looked to me as though the high yield low price was 2.04.

so you can say it priced where it was supposed to, but technically highest yield, lowest price of the wi session. bid-to-cover 10 auction average 3.03. 43% 10 auction average, what were directs? 11% on directs. below 14%. we're going to give this one a b minus as well. same as the three-year note auction yesterday. tyler, back to you. >> rick santelli, thank you very much. let's head now to bob pisani on the floor of the new york stock exchange. bob. >> hello, tyler. look at this, we're holding our gains near the highs of the day. why is everybody so confident again all of a sudden after being so rocky yesterday? alcoa was marginally a help. but i only think marginally. comments by the ecb official they might be buying spanish bonds if they need to in the future. that helped. but regardless, look at this. 1.5%, 1. 75% in all industrials here. financial stocks, all to the upside. i want to put up the crude oil

to nat gas chart that brian just put up because i want you to note here the ratio. look at this. 102 to 2. again, oil up, crude -- oil up, nat gas down thr, this is a ratf 51-to-1. has anyone ever seen 51 to one ratio? i don't think there has been. i think this is some kind of record. it's a sign things are really out of whack in this business. the obviously is why don't we short oil and go long natural gas? you think you could do that. there is a way to do that. there are several etfs out there. proshares ultrashort oil, any time you see whenever crude hits a new high here, you can see these things dropping rather dramatically like in february and march here. the volumes tend to spike up around here. people are trying to bet oil will drop rather dramatically. never works so far that bet hasn't gone anywhere. here's some of the drillers. reducing rig count on natural

gas to get the supply demand balance right. you can see some of these drillers are on the upside today. this has been a tough call, tyler, so far everybody's been wrong on it. >> a little off point here, bob, but it seems to me the past couple days the u.s. market has really been following the european markets. fair point or not? >> yes. yes. in fact they've been down. but i want to point out that so far like year-to-date for example germany is only down -- germany's down more than 8% from its recent highs. u.s. is only down about 4%. so, yes, it's been bound directionally but not as much. >> thanks, bob. >> now let's switch on the "power lunch" power surge and drill down on the stories driving the day. two tech giants in the news, yes, of course one is apple. but let's start with nokia. most stocks rebounding today, but it's getting crushed. shares at a 14-year intraday low. the struggling cell phone giant slashing its outlook. and just when it couldn't get any worse, a software bug in the new flagship smartphone.

jon fortt is in silicon valley with the fallout. jon, what's going on here? >> yeah, julia. it's the glitch with the lumia 900. we knew nokia's older phones were on a burning platform thanks to the infamous memo. but this is a stumble right out of the gate for the phone suppose today save nokia. i've had it for a few days and the screen is not as good as an iphone or galaxy. there aren't as many apps. the argument it was making is it's a polished hassle-free phone that works. this glitch blows a hole in that argument right off the bat. nokia is offering $100 discount off the owners' phone bills. but there's always a risk that they'll just return the phones. we've also got nokia announcing they have a hand set operating margin going to be negative 3%. it was expected to be about break even. that's bad news also. but, again, this lumia problem going forward is the bigger deal, julia. >> have to see how many of those people return the phones.

now onto apple. the justice department today slapping apple with a lawsuit over price fixing e-books. attorney general eric holder speaking about it in the past hour. we also have quotes from the latest from steve jobs. what does this really mean for apple? >> the quote that is in the lawsuit from steve jobs has him basically saying, yes, consumers will pay a little bit more under this model. we'll get our 30% cut. but consumers paying more. that's what you publishers wanted anyway. this doesn't really hurt apple from where i stand because the main issue was that amazon in some cases with more popular books were selling those books at or below cost. amazon likes to sometimes give things away below cost in order to gain market share. if anybody can afford to match them on that, it's apple even though they generally don't like to do it. the people who really get hurt here are the content creators. you know as much about this more than i do, julia. you know more about this than anybody. the media business is really the one who is have to figure out

how to get a profit in the digital era. this is the justice department saying you can't do it this way, julia. >> those jitters are already hurting. jon, thanks so much. >> u.s. economy front and center. a number of powerful fed members speaking this week. fed vice chair giving her economic forecast later today. investors will be listening very, very closely. outside of bernanke, she's the one maybe more than any other with real power to move markets. steve liesman joins us. what can we expect, steve? >> tyler, three down. two to go today. a deluge of fed members, but the most important speech yet to come. atlanta fed president dennis lockhea lockhart saying "i'm somewhat reticent to consider another round of quantitative easing at this time. i view it as a policy that would respond more to a fairly dramatic negative change of

direction in the economy. he would not take the risk off the table and remains open to all policy options. lockhart is a voter and seen as a center. he represents where the center of the board is. those comments seem to confirm the emerging market sentiment that additional fed easing is not imminent under current conditions. those comments contrast with those made last night by a more hawkish minneapolis fed president. he said it could be appropriate to tighten policy in the next six to nine months. there is more fed speak on tap. the beige book comes out at 2:00 p.m. the collection of anecdotes from the 12 federal reserve districts. 5:00 p.m. st. louis fed president and then the speech by janet yellen tonight. as tyler suggested, the yellen speech will be most closely watched. at times the comments could be advance guard of the chair. the two are not far off. >> how closely is the fed watching europe? >> i think it's a big part of

fed policy right now. i think it may be a reason not to do qe-3. if europe remains to have potential for shock to the u.s. economy, the fed's going to want to have at least a couple bullets in its gun to be able to help the u.s. economy, tyler. i wouldn't want to shoot those bullets before it had need to. >> steve, thank you very much. >> thank you. >> the struggling housing market still a major drag on the economy, but could 2012 be the turning point? diana olick with a new report that's giving a number of home builders a boost. diana. >> well, that's right, julia. 2012 may be the long awaited recovery year for housing. that's the headline from analysts at wells fargo after a record positive response on their monthly home builders survey. 63% of 150 sales managers sur y surveyed report d better than expected new orders. that's the highest rate they've ever reported in third consecutive month of peak result. the they recorded highest levels in february. so a sign that some of the

spring market was pulled forward due to warmer weather. and on prices, 36% of sales managers reported increasing base prices versus just 30% the previous month. not since april of 2006 has the survey shown such strong pricing. strongest markets, phoenix, northern california and the midwest. the weakest markets are in philadelphia, orlando and tampa. optimism is one thing. but the mortgage numbers aren't as strong as we might like them to be. weekly applications out today were down yet again although the four-week moving average on purchase applications is up a bit 2% and up 5% from a year ago. buyers may in fact be getting in now fearing that rates and even home prices may start to rise. >> thanks so much, diana. certainly some optimism to watch. let's get you up to date on the massive earthquakes that struck off the coast of indonesia earlier today. a tsunami watch has now been called off following two very powerful 8-plus magnitude

quakes. there have been a number of aftershocks and residents along the western coast of sumatra have been told to stay clear of the coastlines. the quakes were felt as far away as the thai capital of bangkok. happened in roughly the same area as the 2004 quake that caused the deadly tsunami. we're monitoring the situation and bring you any new headlines as we become aware of them. straight ahead meanwhile, the markets trying to bounce back from their worst day of the year. was the five-day selloff just a bump in the road after a big run-up? or was it the start of a major pullback? we'll have your spring stock strategy. and here's the action in the s&p sectors. take a look. financials up by 1.8%. discretion their -- consumer discretionary up by 1.5%. and utilities up by 0.3%.

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nchs well, let's take a look at the dow industrials. well, as you see them there, they're higher by 109 points at 12825. dow bouncing back after suffering its worst trading day of the year. was the five-session skid worse since last summer a bump in the road or a sign of something more serious? joining us with their spring stock strategies are cnbc contributors, the two michaels. i'm going to start with farr

because he's probably closer than yoshikami. michael, i know you hold stocks for a long time, four to five years. you have to tell me what i should do now with my portfolio. and especially with any bonds or bond funds that i have? it occurs to me that bonds keep giving me this chance to get out at a nice point. >> tyler, you know, i agree with you. i'm an old school guy. i hang onto stocks for a long time. and people i've talked to and clients i've consulted with over the years who have a whole lot of money always have that position name of general electric with a $2 cost base that's grown to be huge. they don't buy and sell a lot. i think there's an opportunity right now to make sure that your discipline for investing is being applied properly. it's time for some spring cleaning. a lot of prices have run up. there's some positions that can be trimmed. among those i think that has outperformed now for 30 years has been the treasury bond. certainly the last ten years

treasuries have performed beautifully well at a 2% yield on a 10-year treasury. what's your upside? so i would start taking a look at my bond funds. any kind of a long bond fund i would view as a source of liquidity. you've got stocks like johnson & johnson yielding 3.5%. why buy bonds at 3%? investors need to take a close look what you can trim and where you can find opportunities. >> got it. perfect. >> michael, what's your take? spring cleaning? >> i think it's more than spring cleaning. i think the market's run on expectation and sentiment. the data isn't there to support the gains we've seen so far. so we're actually in the process of actually reducing our net risk exposure. i agree with what tyler said in terms of the long-term bond. certainly you want to trim that down. go short to intermediate at most. but i think certainly from an equity standpoint as well you have assets that have run significantly so. in some ways almost anticipating

qe-3. when you look around the globe, you see china inflation ticking up. you see what's happening to unemployment in the united states. you see the spain yields. i think it's time, at least for the short-term, i'm a long-term investor as well, don't get me wrong, but at least for the short-term i think it's time to start taking some risk off the table. i think the market's run about as far as it can run without getting more positive news. we'll see what earnings holds this coming quarter. >> but michael yoshikami, if you're recommending moving out, are there still areas, stocks and sectors where you see opportunities right now? >> yeah. i'm not saying sell all equities. i think they're way oversold even though things are difficult in the world economy right now, i think armageddon is being priced in. technology stocks are still going to do well. i do think global names, companies like mcdonald's will continue to do well that will capture emerging market growth. i think you need to take a little risk off the table after a record setting first quarter in equities. >> michael, two questions for you. michael farr, as michael says,

he's not saying get all the way out of stocks. i know that's not what you do. or maybe you're saying don't get all the way out of treasury bonds. so if you're tweaking, if you're looking at your portfolio, how do you translate your advice into real action? am i talking about trimming my positions? and second question is what do i buy? >> tyler, i think the portfolio determines what you have to do. you go through and apply your valuation metrics. that's what we do. we'll take a look at the valuation metrics that we apply to stocks. and those that are exceeding those valuation metrics, we will take the time and go through and make sure we reduce them. and then we'll try and find things, you know, if we can't find opportunity, we'll go to cash. what we don't do is this in and out stuff. so the old line of sell in may and go away, it's worked for the last two years. it worked in 2010. it worked in 2011 sort of. >> uh-huh. >> 2011 we had a 14.5% drop between june 30th and september

30th. they brought operation twist back and went up 14%, 14.5% in the fourth quarter. so basically you'd be ahead now had you not done anything. i don't know how to get in and out. investors are there for the long-term. and i think that's what you have to do. but position yourself, take a little risk off the table. always go to lower risk whenever you can. >> one thing, michael farr, that's a value today. maybe michael went away. >> i continue to like johnson & johnson at these levels would be one stock. 3.5% yield. come on, i can wait. >> gentlemen, thank you very much. see you again soon. >> thank you. >> thank you. >> brian shactman here. i'm looking at bond town doing small cap consumer discretionary. i'll have a report on that in about ten minutes. right now let's get to seema mody at the nasdaq. >> couple tech stocks in focus at the nasdaq. start off with f-5 networks. william blair suggesting could report a lack of revenue upside in q-2. that's why the stock is feeling

the heat. switch over to acme package shares of a networking equipment vendor currently up 5.8%. barclays capital riding that acme could benefit from the increasing use of voice over internet protocol. stock also upgraded to overweight. and a biotech stock, being listed as city's most preferred stock in the biotech arena taking out gilead. that's what's helping motivation. and citi saying their prostate cancer drug could be approved in the second half of 2012. back to you. >> thanks, seema. straight ahead facebook is no longer on private market, but the $1 billion mark zuckerberg shelled out could be a game changer. >> the hot issues in the private market and what's the fallout from the loss of facebook shares? we'll ask sharespost ceo on the other side of the break.

man: 1939 -- my parents ran across an ad for a hot dog cart. my mother said, "well, maybe we ought to buy this hot dog cart and set it up someplace." so my parents went to bank of america. they met with the branch manager and they said, "look, we've got this little hot dog cart, and it's on a really good corner. let's see if we can buy the property." and the branch manager said, "all right, i will take a chance with the two of you." and we've been loyal to bank of america for the last 71 years.

we have two car insurances that we're going to have you taste. the first one we're going to call x. go ahead and take a sip, and then let me know what the baby thinks of it. four million drivers switched to this car insurance last year. oh, she likes it babies' palates are very sensitive so she's probably tasting the low rates. this is car insurance y, they've been losing customers pretty quickly. oh my gosh, that's horrible!, which would you choose? geico. over their competitor. do you want to finish it? no. does the baby want to finish it? no.

imax now showing on the big board. take a look at mattress firm holding. up 18%. new high of 45.42. they raised their guidance. a firm quarter for a firm mattress. nice rally in consumer discretionary today. it is the second best sector on the day behind financials. but i want to look beyond the s&p for perspective here as people try to put today's context in rally. you see the sector up 1.5%. i've been looking at small cap russell names.

niche department stores up right now. 7% gist a few minutes ago. you have to stretch yourself for understanding still hasn't made up for yesterday's losses which were around 10%. you can see one week down 9.5%. that's the case with a lot of discretionary names today. they look good, but put it against yesterday, not so good. having said all of that, you can't blame some people for selling this name yesterday. it's still up 129% year-to-day. take some profits. triple digits for 2012. amazing. other small cap names worth looking atd, rally, liz claiborne, k smith and winnebago. what do private markets do next? how can fill the hole when facebook no longer trades privately? and which start-ups will fill the revenue gap? or is the pipeline so thick there's nothing to worry about? we'll get answers now from sharespost president and founder greg barger, welcome to "power

lunch." what are you guys going to do? >> we're going to broaden the market. we've already seen that happen over this last year. sharespost now making a market in more than 40 different companies. in some ways the facebook ipo i think is going to freeze -- free-up i should say a great deal of investor interest. we'll be able to show those investors more opportunities. and there are a large number of them looking for the next facebook. >> what is the next facebook? where are you seeing investor interest right now? >> well, we're seeing it in a bunch of different places in a bunch of sectors. mobile, cloud, social networking companies of course. we're really focused more on creating a broad platform, an access in letting our investors pick our stocks in particular. >> now, the instagram acquisition, facebook paid $1 billion for instagram. how does that change valuations and investor interest in the kinds of shares that you trade? >> well, i think it's indicative of the maturity of companies in our marketplace. that size of acquisition is

something you probably would not have expected to see two, three, four years ago. and as these companies are able to grow much larger in the private space, i think we'll expect to see more of those. i think it's healthy for the market. >> now, the jobs act makes it easier for small ipos, but it also makes it easier for companies to stay private longer if that's what they wish. how do you expect the jobs act to impact the kinds of companies you share and investors' interest in them? >> sure. i think you're exactly right. the jobs act makes it both easier to stay private and to go public. but ultimately we think the impact will be due in large to private capital markets because for the companies that we focus on, private growth companies, they're not going public -- they're not going -- they're not leaving our marketplace because of relatively minor auditing costs that the jobs act addresses. they're staying private because during a period of hyper growth it's a difficult environment to

be public. to give earnings guidance and forecast for the street when your revenues are doubling. groupon is an excellent example of what can happen there. >> a quick final question. instagram mobile apps, are these the hottest things? if you had to pick two of the net big hot apps, what are they? >> as i said, we're not really in the stock picking business, but i think the social networking space given how high profile it is and how easy it is for people to understand the value proposition will continue to be the most active in our marketplace. >> one i'm watching is tumbler and another is pinterest. now let's check in with scott wapner and see which stock is on his radar. scott. >> hey, julia. thanks so much. with financials leading the way im looking at bb&t. notes from the goldman commentary today. they say it's creating value in

multiple ways. loan growth should grow above expectations. and finally one of the highlights is that it says it's positioned to add value by a creed of acquisitions. take a look at your chart here and up about 3% or so on an interesting day for the financials, guys, ahead of some pretty big earnings, tyler, tomorrow as well for this group. >> all right. scott, thank you very much. up next, brian is going to update the market action for you. we're going to go live to nymex for the closing metals prices. plus, don't look now, but shares of google are, yes, down for the year. it's been one year since larry page took over, little more than that. and the company reports earnings tomorrow. what should you expect and what is your best trade now on google? top analyst will make the call.

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brian shactman here at the realtime exchange as we reset the market for you. the markets of course to the upside in equities above triple digits. the things i want to point out, the vix now below 20. i also want to go to the end bottom left of your screen and look at nat gas flirting with going below $2. we'll keep an eye on that. also want to look at the dow 30 heat map. not quite the sea of green that

it once was. alcoa of course the top of the heap. financials coming in right behind that. i want to point out anyone notice microsoft heading back toward 30 perhaps? it's at 30.34 down about 5% now in the last month. first the patent purchase, today a drag from the negative news on nokia's lumia phone. microsoft still positive for the year. not the case for johnson & johnson. they have to pay a $1 billion fine in a case involving the antipsychotic drug. j & j with 240 violations. we have breaking news on natural gas. let's go to bertha coombs at the nymex. >> we just dipped below $2 mark even where it stopped earlier. this will be under pressure as we look towards the close of nat gas in the next hour. mike fitzpatrick says watch $1.96. that was a 2002 low that we'll be watching for. after that $1.85 which was

september 2001 low. as far as the metals close, traders saying gold here sharply unchanged. we saw some profit taking in silver and copper continues to extend its three-month low as well. continued pressure on global demand issues. boone pickens will be on "street signs" to talk about nat gas. that's likely to be a very volatile close over in that pit. back to you guys in the studio. >> fantastic interview at 2:00 on "street signs." meanwhile, google ticking higher today but showing lackluster performance so far this year down nearly 2% on the year so far. the internet giant set to report earnings tomorrow after the bell. so what should you expect and how should you play it right now? well, joining us to get ahead of the numbers is citi internet analyst. >> good afternoon. >> google's last report was not a good one and the stock really tanked the next day. what do you expect tomorrow? what specifically will you be watching not just on the

headline numbers but deeper in the report? >> well, you're right, the stock did tank last quarter. it traded off as much as 10% because it was a clean missed quarter. i don't think that's likely to happen this time. it looks like the numbers should come straight down the fairway. we think numbers are relatively in line with the street. that's where our numbers are. the market was also a little spooked by those declining click prices last quarter. i think the trends we're going to see this quarter are very similar to last quarter. we actually think there's an overreaction to that metric. we think the overall numbers you want to look at are the search revenue growth. when you look at thart, you're not seeing a major trend. growth seems to be strong still. >> question about mobility, dennis calling motorola google's $12 billion toy. >> i think it's already impacted the stock. when we look at how the stocks traded year-to-date, it's traded off because of the q-4 miss and concerns over social networks

and concerns over this motorola acquisition which should close relatively soon. they just need one or two governments to sign off on this. and this is a -- i don't know the word but this is an odd major bet that google is making. okay, we need the -- the company needed the patent protection, but does it need hardware manufacturing assets? i think it's going to be a bit of an overhang. when the deal finally closes, you'll see a bit of relief but a long-term worry. probably stops the multiple from expanding too aggressive from here. >> that's a very interesting point, mark. you're saying in other words does google need to decide what it wants to be when it grows up? >> i think what they're doing is they're hedging themselves. and they are chasing the apple bandwagon. at least they want to have an apple hedge in their business. our sense is long-term they don't need to be in the handset manufacturing business but they need the patent protection for android. we think they got that. once this deal closes so they have the ability to shed some of those assets.

>> apple was always a manufacturer of devices. and google has not been, right? >> that's right. >> you're talking about the apple relationship, but i have to ask about facebook as we head towards facebook's ipo. the acquisition of instagram many sources told me was reaction against google to make sure google didn't get its hands on it. do you see facebook as a threat to google and perhaps even the growth of its social network google plus? >> well, i won't comment on facebook. but i will comment on the point as to whether we're seeing dollars go away from search and usage to search toward social networks. we've done a lot of checks. i think we're talking about two very different pools of span by advertisers. google remains the most efficient way for direct marketing dollars to be spent. we haven't seen any change in that. i think that these concerns have been overstated when it comes to social networks' impact on google. >> what's your price target on the stock as we show another chart on where it is today. where do you think it can go? >> we think there's a 20% upside

to google shares. we think google can generate sustainable 20% earnings growth for a year or two. that gets you $50 in earnings next year. market average multiple of 15 times on it 850 is the target price. 20% upside for a large cap stock underperformed year-to-date, we think that's very attractive point. >> we will certainly be watching earnings after the bell tomorrow. mark, thanks so much for joining us. >> thanks, julia. >> up next, forget the carl icahn's of the world. the new breed shaking up the boards. >> and m&a rainmaker with three companies that may need an activist to help boost their stock. if you are one of the millions of men

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us to tell us what to expect from nat gas and oil next. now back to the team on "power lunch." >> thanks, brian. i'll take it from here. despite some soft march traffic numbers, southwest airlines outperforming up about 1%, slightly outperforming even with oil prices back on the rice. traffic and capacity with southwest down almost 1%. but if you think all airlines and a lot of people think they trade in lock step, think again. look at southwest versus u.s. airways for example year-to-date. fascinating. lcc outperforming by about 60% in 2012. take a quick look. u.s. airways up 53, southwest down 6.5%. today though everyone to the upside. all the major airlines catching a bid, united, jetblue, u.s. airways and delta all outperforming and many by a wide margin. you can see u.s. airways up almost 4% and jetblue almost 2%. julia, back to you. >> thanks, brian. annual shareholder meetings are in full swing. all day on cnbc we're taking a close look at shareholders activists what they mean for companies and investors. carl icahn is one well-known

name, but there's a new breed of activists shaking things up. kate kelly is looking at the new establishment. kate. >> thank you so much, julia. activism is off to a solid start this year, but not necessarily from the usual suspects. there have been 53 proxy fights so far in 2012. about half the activity we saw five years ago. but then again there's still a few weeks to go before annual meetings begin to occur in earnest in may and june. what may be more interesting than the number of boardroom battles however is who's actually waging them. you mentioned carl icahn, of course john paulson and other members of the activism establishment are busy as usual. but so are third points dan loeb who hasn't been on the scene much for the last five years despite a long history before that. he's criticizing yahoo! for what he calls insouciance. and poor management as he nominates himself and three others to their board. he's been joined by a host of little-known money managers whose names you may not have heard much about.

consider starboard value. founded just last year by a group of small cap experts that now manage over $500 million. they've gotten to work quickly amassing a 5.3 position in aol and using that to dress down the company for wasting money on failing projects and generally poor performance. aol recently sold patents to microsoft, caving to one of starboard's demands, investors are still threatening a bigger fight this spring. then a pair of funds called corvex management. with a combined 7% of the stock in the prison operator corrections corp. of america, they've teamed up to pressure the company to save on their tax bill by turning into a reit. keep an eye out for these folks, tyler -- sorry, as well as other less known players. more to come. >> kate, thanks very much. and so which companies could use

a good shake-up? how do you spot the troubled ones before they go off the rails? let's ask an activist investor, chairman and founder of casa blanca capital where a kiss is but a kiss. >> good line. >> let me start before we get to specific companies in the news these days, do activist investors make companies better or just make their shareholders and themselves richer? >> well, i'm not sure there's necessarily a divergence between the two. but they certainly have a history of making shareholders richer. and if that's what the public markets are about. >> so can i make money following a guy like you following an icon following a dan loeb. is that a good strategy? >> all three of those -- >> he said modestly. >> i would love to be in that class. but dan has had fabulous results. icahn is over 30% a year. he's been so successful that he doesn't even take other people's

money anymore. >> so watch what they do and maybe follow. you might not know when they're getting out either though. >> and, i mean, dan i guess has been pretty 100% accurate, but carl's had some notable ones that didn't turn out so well. on average he's returned more than 30 -- 35%. >> there are two companies in the news, one just yesterday would be best buy. another really today as well, sony. could those companies use an activist investor to come in and shake up their boards? >> well, best buy has gone through enormous changes over the last five years. "the wall street journal" had an article today about whether the big box is dead and whether they should downsize. at the same time the ft had an article that they had $2.5 billion worth of free cash flow

and compared to amazon margins are better. so don't exactly bury best buy yet. so the theory running around wall street is that some private equity firm or an activist should jump in there and restructure the company with all that cash flow. and maybe, you know, transform them into what the next generation of best buy should look like. >> let's look at sony. what about sony? i don't know what the different legal structures would be and how easy it would be for an activist to get in on a tokyo domicile company. >> tokyo takeovers are tokyo activists only been one or two actually in the last couple years. but sony's been a major disappointment over the decades. i think it had a $6.4 billion writeoff again today. they're engineers. they come up with the same thing steve jobs did, in some cases sometimes before them. but jobs just had the magic touch and changed the world. >> and they had a moment there

where they could have been -- they were the dominant music player. >> they were the first. i had one. i'm sure you did too. >> absolutely i had one. >> but it was so hard to use with your computer that as soon as the ipod came out, gone. everybody knows the legendary beta max vcr. beta max was better than vcr, but vcr took over the world because beta max was improperly marketed. >> i want to get to another company that was in the news yesterday. and that is instagram. facebook coming in and buying this sort of fledgling outfit north of $1 billion. >> i downloaded it yesterday. >> what do you think? is that a real product? a real company that facebook can turn into something that's really literally worth a billion or more? >> we've all been debating that for the last 24 hours. i guess only zuckerberg knows what he wants to do with it. although the people running facebook are very good. there are many sites that let

you manipulate photographs. and there are many sites that let you e-mail. this one has about 30 million users. what they intend to do with it? do they intend to let you order prints? or is this meant to be the twitter of pictures so that facebook's ahead of the curve? >> so take me into the activist investor's playbook and tell me what it is you look for when you're sizing up a company that you say i can go in there, make a difference, maybe make a rate on this -- not a raid but come in, make a difference. what are you looking for right now? >> we look for a number of things. one, a stock price that's underperformed the market for some period of time. three, five, seven years. >> that's your starting point. >> and the one we went after was ten years. we look for bloated sgna. >> selling general administrative -- >> i'm sorry. selling general and

administrative that's bloated. ceo salary. lots of planes, that kind of thing that's way out of line with their contemporaries and competitors. in many cases we look for companies that have divisions that -- >> don't belong. >> -- don't belong together. >> a golf ball company and a liquor company. >> you know, they exist. we look for that. and where you can really unlock value by breaking them apart. so it's companies like that where there's something wrong or management hasn't done a good enough job. or even they've done a good job but they're afraid to take the next step to use their balance sheet or whatever to return shareholders more money because they like being kings in a bigger kingdom. >> who doesn't like being king? it's good to be king. >> it's good to be king. >> good to have you with us. take care. >> yes, it is, good to be king.

up next on "power lunch," the dow and s&p trying to snap a five-day losing streak minutes away from potentially market moving fed data on the economy. so how are traders positioning themselves? we'll head to the nyse. this at&t 4g network is fast. hey, heard any updates on the game? i think it's final seconds, ohh, down by two, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. hi. mom, put me down. put...the phone...down. hey guys. did you hear... the choys had their baby? so 29 seconds ago. well we should get them a gift. [ choys ] thanks for the gift! [ amy and rob ] you're welcome! you're welcome! [ male announcer ] get it fast with at&t. the nation's largest 4g network. at&t. ♪

nchtsz welcome back. welcome back to "power lunch." risk-on field, although that's catching flak. since the waiting in the s&p with the utilities is light, i want to look at consumer staples second weakest but still positive. one segment doing great today supermarket. strong numbers yesterday and the best in the entire sector today up almost 6%. interestingly it's down big year-to-date, but it yields over 6%. if you think the stock has turned taking a yield and impending and present stock appreciation safeway only yields 3%, but a similar thesis in that it's down for the year and does offer at least a healthy yield relatively speaking. whole foods whole different story. the stock's been a monster but the yield is minuscule. it's growth versus value in this space. today though just about every store that sells lettuce and ice cream, julia, is in the green. i'm going to take it from here. a few minutes away from the

fed's beige book. potentially could move markets and the report on the economy traders positioning themselves. we've gained a little strength in the dow in the last little bit. joining us from the nyse is joe grecco. do you see a little buying coming in before this comes out? >> yeah. it seems that the market's continued what we started the morning with which was a nice bounce off of yesterday's thrashing. clearly people are a little more optimistic perhaps ahead of not only beige book but then janet yellen speaking tonight right here at nyu. perhaps there may be some commentary towards easing if the market were to continue to pullback. >> there was a lot of discussion earlier in the day whether this rally could hold up into the close. getting toward 2:00 eastern time, are you confident that we're going to stay strong through the close? >> unless there were a truly negative surprise here, i don't see why the market would give any of its run so far today back. there really isn't any support for it. and still we're not looking at the volume right now we're not as thick as we should be given the fact we've already had a lot

of things priced in and it's wednesday. >> joe, have a good one. >> thanks, brian. coming up just over two hours left in the trading day. charts of the day "power lunch" back in two. ne's job, is to take you from where you are... to where you need to be. and we're not just talking about points on a map. with a more intuitive delta website and mobile app... and the most wifi equipped planes. we let you be everywhere at once. innovations like these are extending our reach so you can extend yours. and now, even at 30,000 feet you can still touch the ground. [ male announcer ] if you believe the mayan calendar,

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when you open a new account or roll over an old 401(k). so who's in control now, mayans? nchtsz take a look at the markets here. a bit of a story being told.

we have about 20 points better than when we started "power lunch." maybe some positive positioning before the beige book. see the nasdaq back above 3,000. the s&p back above the key level of 1370. we will see in just a few minutes whether or not it holds up. >> one of the other things that happened just in the past hour was that natural gas tipped very briefly below $2. let's look at a 10-year of nat gas. this would take it back right at $2. and i should point out that in the next hour on "street signs" they will hear from the sort of king of nat gas, that will be mr. boone pickens on in the next hour talking about it. obviously those natural gas automobiles that rick santelli was wiring up looked even more appealing. >> how cheap is it going to be to make a fundamental change in how we use the material? that's the key. >> yeah. absolutely is. there is natural gas. i keep asking why does it still cost me so much to heat my house? california girl. >> my stock of the day,

lionsgate. this is an example where the activist investors don't always win. carl icahn, he tried to do a takeover here of lionsgate. he sold his shares he gave up in august. look at that. the stock is up by 96% in the past year. so talk about activists today but they don't always win. >> "the hunger games" bounce. look at comerica. it was my number one pick. what does goldman sachs do? they resumed it a sell with a 28 target. depends on who you want to put your money with. i'd stick with goldman sachs. >> thanks everybody for watching. that will do it for "power lunch." >> "street signs" begins right now. are america's regional economies weakening? we are going to find out in seconds with the release of the fed's beige book. should more ceos be released from their jobs? herb adding two new names to his hit list of the worst ceos. we're going to show you those