john. >> intel. nice rebound holding today. >> b.k. >> still like kra. >> regional banks, grasso. >> lng. still more upside room. >> joe. >> buy quality, ibmeic. >> don't forget to catch more "fast money" tonight. "power lunch" begins right now. thank you very much. three hours to go in the trading day. and so far a split decision. apple dragging on the nasdaq and the s&p, but the dow -- it's not part of the dow trading higher. find out how the ultrarich are playing this market and whether their strategy might work for you. welcome back, sue. >> thanks, ty. good to be back. so much for the spring fling. home builders see clouds on the horizon. what does a disappointing survey tell us about a possible recovery in the housing market? >> and johnson & johnson, both of the johnsons, prepping for its first earnings report since announcing a plan change at the top. find out whether there is still room to run for j&j. i'm tyler mathisen, sue's back.

"power lunch" begins right now. >> welcome to "power lunch." i'm courtney reagan at the realtime exchange. markets are split in afternoon trading after mixed housing and consumer numbers. a safety trade going on. if you look at the major averages, the dow is up by about 90 points. the s&p up just a hair. the nasdaq though trading in negative territory. taking a pulse of the markets, a slight easing of the tensions contributing to a slight pullback in oil prices. wti crude down just a hair. yield on the 10-year moving below 1%. 1.9542 exactly. and we're going to keep an eye on the euro. just a hair above 1.30. let's check in on midday movers. a strong earnings report from citi has it trading higher. i don't want to steal all of mary thompson's thunder. she'll be on in a little bit with more. revenue falling short in quarterly report. sales of the hot wheels not so

hot. be still my heart, barbie sales decline. proctor & gamble announced another dividend hike. you can see shares up about 1.5%. let's get to the trading floors. bob pisani joins us from the nyse. bob. >> this is one of those days where it doesn't feel like the dow is up 90 points. we're about even on the advance-decline line and it doesn't feel that way. feels like a down day in a way. that's because people are worried about nonconfirmations today about apple and google not helping the nasdaq. but these worries started way back in february. the transports failed to confirm the industrials advance. that was the first sign people were a little bit concerned. and of course remember the -- we had gasoline prices really high. and in april the russell 2000 didn't confirm the s&p as it was advancing. more worries. and now today more worries because the nasdaq for the first time this year isn't really advancing with the rest of the market. and that's because apple and google are on the weak side. so take a look at the major sectors today. you can see nasdaq underperforming the overall

market. the s&p is kind of weak. and, remember, google and apple very important components there. there's the russell 2000 just fractionally on the upside. oddly the dow transports, which have been lagging for a couple months, is the one sector actually on the upside today. elsewhere we did get some good news. the steel companies reliance steal gave good commentary on what they were doing. this is a big, big shipper of steel around the united states and other metal products. they raised their outlook on better pricing and on slightly stronger demand. all the steel companies are fractionally to the upside. elsewhere, i watched newspapers because i love newspapers and i keep waiting for a bottom and i don't see it. look at this. the disaster du jour. it's down almost 10%. that's because they came out with some commentary print ad revenue down 8% for the quarter. earnings down 25%. and circulation, tyler, continuing to drop. the bottom line here is ad revenues continue to drop for these companies. and, tyler, they can't replace them quickly enough with internet advertising because it's just not there right now.

one major problem for these companies. >> and, boy, the pricing is different in the internet space as opposed to in print. but the point is absolutely true. bob, thanks. let's switch on the "power lunch" power surge and drill down on the stories that are driving this day. new fears about housing. fresh data showing the outlook from the nation's biggest builders is plunging. our real estate correspondent, diana olick, has the truth and the consequences. diana. >> well, that's right, tyler. a big drop in confidence among the home builders reversing course after seven months of gains. here's the quote from the nahb getting a lot of play today "interest expressed by buyers in the past few months has yet to translate into expected sales activity." that from chief economist david crow. that's what i want to hit on here. you can see optimism starting to build last fall as the jobs picture started to improve. then really jumping in the winter months. december through february. but, a lot of that was based on sales expectations over the next six months as buyer traffic

improved. we saw it in an open house ourselves over president's day weekend. the sales expectations component of the index jumped 10 points from november to march higher than either of the either two components. now analysts are now blaming that overheated optimism on an overheated winter. temperatures well above average across the nation and breaking all kinds of records. so, if all of this demand was pulled forward, pulled ahead, then we should be looking back right now at winter as if it were spring, right? the trouble is that sales of newly built homes are down 7% since december. so if that's your spring, tyler, you get the message. there's more on the blog, realtycheck.cnbc.com. >> i am walking, talking overheated optimism, diane. let's talk about housing starts. what's the expectation? and how do multifamily units fit into this? >> that's what is messing with the expectations. some analysts have them slightly up and some slightly down. looking for a surge in single

family starts and big drop in multifamily starts. if more people are buying then perhaps the apartment sector's pulling back. then a strong rental demand out there. a lot of investors going in for that. it's a toss up tomorrow. look for it at 8:30 though. >> diana, thanks. >> from the economy to earnings, citi group giving a boost to the financials today. profits at the struggling banking giant dropped, but it's still comfortably beat the street estimates. the big question is is citi's turnaround for real? mary thompson is taking a deep dive if you will into the latest results. >> the bank's better than expected results by a strong performance in international operations, strength in trade finance and in its investment bank. earnings excludeing charges for the tielgtening of credit spreads as well as gains on investments came in 11 cents ahead of estimates at $1.11 a share. excludeing those charges, profits also rose in its three main business units. of note strength in equity business and investment bank with the bank crediting the improvement to changes in personnel. in the quarter, loan growth rose

12% linked to gains in loans in latin america and asia. cfo saying loan demand in developed economy like the u.s. and europe is flat to waning. as for its outlook, citi noted the operating environment improved in the last quarter, but the ceo says there's much macro uncertainty. then also saying the bank is in talks with the federal reserve to resubmit capital plan. the fed rejects most of its plan but the mid-june deadline followed by a 75-day review by the fed. says a final decision on a new 2012 request may come at year end, close to when it's set to submit 2013 plans. the bank may wait and not resubmit meaning it could be another year before the bank boosts its dividend or buys back any shares. sue. >> meanwhile, mary, the big european banks facing a major downgrade possibly. credit suisse may be gearing up for thousands of job cuts. give us a thumbnail sketch of what you see happening there. >> let's first of all talk about

credit suisse. there was a report over the weekend saying the company could cut another 5,000 jobs. the company declined comment, but a person familiar with the situation noted the source on that story was not someone with inside the company and credit suisse announced in q-2 and q-3 last year jobs of 3,500. that's across the board, not just the investment bank. those job cuts remain on track. they'll be executed in 2012 and 2013. and as of right now there are no plans for additional job cuts. for the downgrades, moody's saying it's going to take about another month to review possible downgrades of about 113 banks or so. in a note jpmorgan noting this may give the banks more time to get their balance sheets improved. back to you. >> thanks, mary. appreciate it. >> one of the most closely watched battles in tech heads to court today. it staked the future of google's mobile operating system, android. google claims -- oracle claims the device infringes on its patents. jon fortt is at the courthouse in san francisco with the latest

on this high stakes battle between two tech titans. jon. >> that's right, tyler. oracle's claiming that the google android operating system in smartphones and other devices uses java in ways it shouldn't. the question is will a jury agree with that? if so, how much will google have to pay to oracle? i was upstairs a few moments ago in the courtroom. very interesting going through jury selection naming off witnesses including larry ellison, larry paige, one of the fun things i think in jury selection is they asked the jurors have you heard of any of these people and if so, what do you think of them? so you kind of get the pulse. it turns out three or four people of the 18 had heard of larry ellison. nobody heard of eric smid or larry paige or scott mckneelly. litting surprising. anyway, this android operating system particularly important to google at this point because mobile is beginning to effect earnings. we saw that last week as costs per click were down in part because mobile isn't yet driving

the same kind of revenue per click that desktop search is. this is going to be a tough trial for google it looks like. the judge has already signalled in pre-trial activities because of e-mail. one of google's engineers wrote this e-mail to others in google "we need to negotiate a license for java when discussing negotiations with oracle." another e-mail from andy reuben five years earlier in 2005, he's the founder of android, the creator of android, he said we have a couple options. we can work with another language. or we can do java and make enemies. that is what they have done. now, the judge signalled this is going to be at least an eight-week trial, probably ten. in three phases. and, you know, jury selection as i said still going on. very interesting. the first juror who they pulled turned out she worked for oracle and interned. she was dismissed quickly. another juror complained of dry eyes, judge said put in eye drops, you'll be okay. >> those jurors may not have

known sergei, but they know jon fortt. what about his bar tab i gather for getting in the way of an fcc investigation over how search engines collect data from street maps and whether those cars that were going around shooting houses to map every street, we're doing just that. what's going on? >> exactly. it was about a $25,000 fine. that's probably what the google founders lose in the couch in your average evening. but this is the vans driving by taking pictures for street maps. in some cases they were collecting wi-fi signals as well. and e-mails. they got in trouble for that. the fcc saying they wanted to know from google's side who are the employees who were involved in the engineering of this? and what teams were they working on? what are some of the corresponden correspondence? google saying we don't want to tell you that. and there was a legal issue underlying, the fcc not happy

google didn't cooperate more. >> but $25,000 is nothing. why not more? >> i don't know. maybe you should be at the fcc. >> all right. i'll ring that one up. thanks, jon. devastating weekend in the midwest. and that area is just beginning to pick up the pieces. more than 100 tornadoes swept through that region killing five people and leaving a wave of destruction. the impact is being felt in business as well. a key supplier to boeing suffering a direct hit. the stock of boeing is down today. phil lebeau is in chicago with the latest. phil. >> and, sue, it's a day of going through all of the debris at spirit arrow systems in wichita and figuring out how long will it take before the fuselage maker is able to get systems back up and running. it may take time. they have suspended operations in wichita through tuesday. they do say the manufacturing capabilities inside those plants appear to be in tact. that's certainly good news. what they're checking now the

structural integrity of the buildings. they still don't have electricity in that part of the city. it's going to take a while before they get everything up and running. they make nine fuselages a week that they're shipping to boeing in seattle. those are 737 fuselages. they head out there every week. and a 737, that's the meat and potatoes plane for boeing. they make 35-737 per month at boeing. they have orders for about 2,600 in the backlog. that's a backlog of 3.2 years. naturally the question is how much might we see production slow down. the company is out saying the production schedule has some cushion, not a lot, but some cushion. so they're going to be able to weather a bit of a slowdown. but they say it's too soon to determine how much 737 production might slow down depending on what happens with spirit out of wichita. again, you're seeing shares of boeing down fractionally today, sue. this is one people are watching closely because the 737 is so important at boeing. and as we know, spirit is the primary supplier of the fuselages. >> indeed.

phil, let's switch to the automobile sector. ford is going to radically overhaul the iconic mustang. >> right. >> pretty bold move. >> well, they need to do something. listen, sales have slowed down dramatically. the retro styling has been here since 2005 on the current model. and when you look at what the history of the mustang is, sue, they go through periods like this where they go back to the retro look and then they update it. when they update it, you always have the hard core fans of the mustangs saying, no, you're ruining it. why are you doing that? believe me, they need to do this. they need to freshen this up in order to bring in younger buyers. >> thanks, phil. appreciate it. my mom had a mustang. >> yeah. great cars. >> fabulous car. >> up next on "power lunch," demand for treasuries soaring. the dow below 13,000. s&p below key technical levels. where should you put your money? we're going to tell you where the super rich are investing. >> as we head to break let's check major averages pretty much all in the green. the transportation average up just under 1%. and the utilities up almost a

full 1%. [ male announcer ] while others are content to imitate, we'll continue to innovate. the lexus rx.

why settle for a copy when you can own the original? see your lexus dealer. [ crickets chirping ] [ traffic passing ] ♪ [ music box: lullaby ] [ man on tv, indistinct ] ♪ [ lullaby continues ] [ baby coos ] [ man announcing ] millions are still exposed to the dangers... of secondhand smoke... and some of them can't do anything about it.

♪ [ continues ] [ gasping ] welcome back to "power lunch." rick santelli here on the floor of the cme group. this morning you pretty much got to see it all within about an hour and a half. at 8:30 eastern as you look at an intraday chart of 10-year note yields. they popped up to the highest levels of the day because of the

broad based strength initially represented by retail sales. but then a funny thing happened on the way to the 10:00 eastern. we had a very weak national associate of home builders sentiment index and that reinforced a common denominator between housing and retail sales. that is weather. and it really played on the psyches of investors. open the chart to one year and you can see we're probably in line for a lot of squeamish selloffs as you see the pulse in october and the pulse that we've had about a month ago close to a 2.40 yield. we keep coming back home. very good correlation. the bund had the same optics regard to 8:30 and 10:00 reflecting much of our fundamentals. the last chart, this is a wild one on the outskirts of what people are looking at. the dollar making a correction versus the dollar/yen. one and a half month lows but you see up on the year-to-date chart. sue, back to you. >> thank you very much, ricky. stocks giving up some of their gains but almost a triple digit advance in the dow jones

industrial average. there are concerns about spanish borrowing costs overshadowing better than expected retail sales. where should you put your money to work right now? let's bring in our power player, global head of managed investments at citi private bank. he manages money for the ultrahigh net worth clients. good to see you. >> pleasure to be here. >> tyler, i aspire to be a ultrahigh net worth client, but we work in cable. how much advice are you seeing these investors seek? we all assume they're the smart money. >> they are the smart money. i think they are seeking more advice because they need more information about where to invest and when to invest. >> you say that they're having high portions of liquidity in their portfolio. that suggests cash or short-term instruments of that short. is that smart money in your view? or is that dumb money? >> i think it's smart money. if you look at how they're investing, sort of a barbell. investing on the short side and also investing in long-term assets. things they think are

particularly good buys in real estate and private equity and the like. >> when you say real estate, commercial real estate, reits? >> they actually prefer to invest in private real estate versus public. they think that the public real estate equity reits are particularly expensive. they're looking for trophy assets in major cities and assets distressed. >> is the liquidity level -- let me come back to that. because they are defensive or holding their powder to find better things down the road? is it a real risk aversion? if i were in their category, i might be saying exactly the same thing given the way the markets have performed so volatilely over the past few years. or is it more an idea to wait for better opportunities? >> i think it's a combination of both. i think when you are rich and made a substantial amount of money, it's important you protect your capital first. and then that you allocate your capital judiciously. i think to some degree that defensiveness is going to be to

take advantage of opportunities and then when markets become more trend oriented, there will become more investors over a long period of time. >> gold was a great play last year. do you find that the commodity play for the ultrahigh net worth clients is not as attractive this year as it was last year? >> that's generally the case. i think we've had a small allocation to gold in portfolios. but in general we're sort of neutral to negative on commodities right now at the private bank. we don't see the economic activity levels justifying higher prices and they're typically long. >> what kind of hedge funds are they seeking out? >> there are really three main areas of interest the ctas, the trading advisors, global macro funds and equity long/short players. in most cases they expect volatility will rise from its currently low levels. and all three of those strategies i think will benefit from that directly. >> what are they most worried about? >> i think they're most worried about the degree of the global slowdown and the fact that what's being priced into the market today is actually not what's going to take place.

they're very concerned about europe as is the private bank and its view of the world and the fact that the slowdown can be worse than expected. look at spanish bond yields which you've been talking about. in addition they're concerned to the degree chinese and asian markets can slow down more than expected principally due to real estate activity. and valuations in america look particularly expensive on a comparative basis. so there's a general sense of worry leading to the amount of money that they have -- >> so does that suggest their appetite for u.s. equities is lower than you might expect? and to the extent that they do have an appetite for u.s. equities, where are you putting them? >> first of all appetite for u.s. equities has e baded to a degree and we're asking them to switch to europe. valuations for europe are particularly less. you're getting paid for taking that risk. if you take a look on a forward p/e basis, it's like 22 in the u.s. versus 12 in europe. and you can buy a comparably priced multinational stock for

considerably less with the same exposures to growth markets in the world. >> david, pleasure to have you with us. come back again soon. >> thank you, we will. >> david bailin, citi private bank. >> citi's report this morning kicked off a big week of earnings. still ahead, the play on j&j, the company reports its profits in the morning. we will tell you how to play the stock today. and jaws dropped when facebook scooped up instagram. well, we're going to show the companies some are saying could be the next or maybe even bigger than facebook. we're back in a minute.

the chevy cruze eco also offers 42 mpg on the highway. actually, it's cruze e-co, not ec-o. just like e-ither. or ei-ther. or e-conomical. [ chuckling ] or ec-onomical. pa-tato, po-tato, huh? actually, it's to-mato, ta-mato. oh, that's right. [ laughs ] [ car door shuts ] [ male announcer ] visit your local chevy dealer today. now very well qualified lessees can get a 2012 chevy cruze ls for around $159 per month. e.p.a. estimated 36 miles per gallon highway. i have to be a tree in the school play. good. you like trees. well, i like climbing them, but i've never been one. good point. ( captain ) this is your captain speaking. annie gets to be the princess. oh... but she has to kiss a boy. and he's dressed up like a big green frog ! ewww. ( announcer ) fly without putting your life on pause. be yourself nonstop.

american airlines. and on small business saturday bothey remind a nations of the benefits of shopping small. on just one day, 100 million of us joined a movement... and main street found its might again. and main street found its fight again. and we, the locals, found delight again. that's the power of all of us. that's the power of all of us. that's the membership effect of american express. greetings from the people here sure are friendly but some have had a hard time understanding my accent. so to make sure people get every word of the geico savings message i've been practicing how to talk like a true chicagoan. switching to geico could save you hundreds of dollars on car insurance... da bears. haha... you people sure do talk funny.

geico®. fifteen minutes could save you fifteen percent or more on car insurance. welcome back. i'm seema mody. nasdaq biggest stock in focus today apple of course hitting a low of $582.30 this morning. investors are simply taking risk off the table booking profits. that's leading to a price decline, which is causing more selling. so somewhat of a snowball effect is what we're seeing. some guys telling me they're still bullish on the stock though however there's no near-term catalyst that can help drive the stock higher. we got the dividend news. we know about the ipad 3, the next major catalyst in their eyes is iphone 5. but to put it in perspective, apple still up around 45% year-to-date. pretty strong performance for america's favorite stock. tyler. >> seema, thank you very much. on the eve of tax day, a crucial senate vote set to take place hours from now on a bill to tax millionaires and billionaires. eamon javers in washington looking at what is at stake for

the so-called buffett rule. eamon. >> hi, tyler. the president has made it a campaign-style stump speech about the buffett rule for the past several weeks. the idea here is that he wants to see millionaires and billionaires, those who earn more than $1 million a year pay at least 30% in taxes and don't pay a lower rate and lower than their secretaries as is the case with warren buffett and his secretary. that vote is a procedural vote this afternoon expected however not to pass. they're not expected to get the 60-vote threshold they need. democrats will then be unable to move the buffett rule forward up on capitol hill. this has been a political thing all year, tyler. what the democrats really want is not a piece of legislation, but they want an opportunity to put republicans on the record as having voted against this thing. then you'll hear a lot more about it on the campaign trail as the year goes on. >> political tactics. let's talk about the man the

president chose to head the world bank. what are the challenges he fa faces? >> this is gym yong kim. the lesson we learned today despite some disgruntlement among emerging nations, americans still control the world bank slot. the emerging nations ran two candidates against kim, but the world bank saying today that kim is their man. that's what president obama wanted. and that's what president obama will get today, tyler. >> eamon, thank you. >> you bet. >> facebook isn't even public yet and making waves already. so next on "power lunch," the changes coming to the nasdaq and what every tech investor should pay attention to. and later, tax day is tomorrow. huge changes coming to the tax laws next year. we're going to look at some of the money saving tax strategies you may be missing when "power lunch" returns. [ tires squeal, engine revs ]

♪ ♪ ♪ [ male announcer ] not everything powerful has to guzzle fuel. the 2012 e-class bluetec from mercedes-benz. see your authorized mercedes-benz dealer for exceptional offers through mercedes-ben financial services. one golden crown. come on frank how long have we known each other? go to e-trade. they got killer tools man. they'll help you nail a retirement plan that's fierce. two golden crowns. you realize the odds of winning are the same as being mauled

by a polar bear and a regular bear in the same day? frank! oh wow, you didn't win? i wanna show you something... it's my shocked face. [ gasps ] ♪ [ male announcer ] get a retirement plan that works at e-trade.

welcome back to "power lunch." time for your market reset. as you can see here major

averages are mixed. dow higher by about 85 points. the s&p just a hair lower. and the nasdaq is lower too. way down by what we're hearing from apple that seema just went through. there's still some concern looming about spain's rising bond yields. we're going to continue to pay attention to that as the market continues today as well. take a look at the vix. we are below 20. we were above that earlier in the session though it looks as though volatility has backed off a little bit. move to the other side, you can see crude oil now changed direction. we are now slightly higher on the session. gold is lower. i know we've got bertha more on that in just a minute. i don't want to steal her thunder. if we can take a look at some of the winners and losers in the benchmark s&p 500 and see how we're shaking out at the moment. we're on the bottom, mattel, baxter, all down ga net down. right now winners slightly outpacing decliners with about two and a half hours to trade. that could flip at any moment.

gold and other metal prices are getting ready to close right now. bertha coombs at the nymex. what's going on? >> we've got gold extending losses here today. not a whole lot. silver finding a little bit of a bid. the cme group with the pullback that we've seen in silver, copper and palladium has lowered margins starting this afternoon. that could help those commodity strengths tomorrow. the big story today is the collapse of the brent premium. enterprise and ambridge now start the seaway reversal on may 17th. on and maybe even before that. that's two weeks before they had initially forecast. the tariffs somewhere in the range of 2.75 to 3.82 and 3.25 to 4.32 for heavy crude. they'll initially have 150,000 barrels a day. still not clear how quickly they might ramp up to that 400,000. they're still targeting a year from now. nonetheless taking a look. you can see brent really pulling back today on that news and gasoline going right along with

it. back to you in the studio. >> thank you very much, bertha. it is a monster week for earnings. johnson & johnson reports latest earnings tomorrow before the opening bell. the stock's had a wild ride over the past year or so. and it's lagging so far this year. so what is the street expecting and what's the smart trade ahead of those results? damian covers johnson & johnson for morning star. >> thank you. >> you've liked the stock for a couple years now. it has faced some headwinds. what do you want to hear from the call and the numbers in order to confirm your bullish stance? >> i think that's a good question. i think what we're really looking for out of the pharmaceutical division is some good growth rate on some of its recently launched products. johnson & johnson in contrast to most of the other pharmaceutical firms has already passed its patent cliff and launching new products. the growth rate on stolera is going tor very important.

new drugs, blockbuster opportunities. these will be really important for the branded pharmaceutical segment for j&j. >> if you find you get the answers or the comments you like, what would your price target be on the stock? >> well, you know, if things track in line with our expectations, which is you know largely where we're at right now, we expect a fair value of $77. we think there's significant upside as is if the tracking goes ahead of our numbers, you know, definitely we'll tweak it up or down depending on which way the trajectory goes. but this is really the key story here for j&j are these recently launched products within the pharmaceuticals segment. >> let's switch to the consumer segment. they were troubled by recalls. there were some issues with some of the manufacturing plants as well. hut how much of a headwind is that? can they overcome it? >> another good question. i think this is part of the reason why the stock hasn't performed well over the last couple years. i think within the

pharmaceutical industry whenever management talks about correcting a manufacturing issue, you always want to add you know six months to a year to when these problems will be corrected. i think we're finally in the ninth inning here as far as getting some of these manufacturing issues resolved. and we'll really see a return to growth in the over the counter and i think people will start to digest this over this quarter, next quarter and build momentum in the stock within that division. >> what would be a warning sign to you? in other words, what would make you change your rating on johnson & johnson based on either the report or the call? >> well, i think there's a few things. one, like we were saying before, if the new drug trajectory is going lower than what we expected. that would be a big red flag. another thing would be if we continue to get further delays in some of the manufacturing problems. this has just been a problem for

j&j for many, many quarters. if we get another red flag there, we may have to delay the uptake that we're anticipating for the consumer products group. and that, again, might cause our fair value to drop a little bit. within the device segment, which we haven't really talked about much yet, it's a really important element to that story is the closing of the deal. if for whatever reason that deal doesn't look like it's going to close, that's another setback for j&j. i don't anticipate that. that deal to close likely in the next one or two months. >> thanks, damian. good to see you. >> thanks for having me. >> up next, the nasdaq changing rules to let facebook become a blue chip listing. we're going to tell you what it means for investors and discuss the best nasdaq 100 stocks to buy now. plus, who's the next big social media power house? we'll tell you who's stealing some of the limelight from facebook. be right back.

coming up on "street signs," apple now down 7% over the past week. is this the beginning of the end for the stock's rise? blinged out investments, could diamonds be the new gold for investors? and the extreme diet that gives new meaning to liquid lunch. sue and tyler, you've got to see this story. you're going to be appalled, enthralled, disgusted. i promise. >> oh, good. can't wait, brian. >> disgusted. that too. we'll all be tuned in. thank you, brian. the nasdaq lagging today. but outperforming so far this year. and just wait until facebook starts trading in may. we're learning new details about how the exchange won the big listing and what it could mean in terms of a big change for everyone. kayla tausche is here with the story. kayla. >> well, tyler, nasdaq is the home of tech luminaries like apple and dell. but facebook is not just any tech company, it wanted to be a blue chip. it wanted to be on everyone's portfolio. so nasdaq bent some hard and fast rules on how long it takes to get into its nasdaq 100

index. now, previously the rules said that companies had to be publicly traded for at least two years before being selected for the index except in the cases of spin-offs or biotech companies and until friday night when nasdaq said under new methodology a security must have seasoned the word traded on the nasdaq, nyse or nyse amex for at least three full months excludeing the first of the initial listing based on the current month end data. this was the key that unlocked nasdaq's facebook pitch because like the older dow and s&p indices, roster changes don't happen very often. nasdaq said on friday texas instruments will replace first solar on the nasdaq 100 because that index is weighted by market cap. first solar's value has dwindled so much in the last year to such a small percentage of the index that now the mammoth texas instruments since changing from the nyse will be knocking it off. we don't know who will be the

next to get knocked off in in fact facebook does come on because a lot can happen in the next four months. and facebook with an expected float of at least $5 billion would appear to be a shoe-in but if your money manager invests in the ndx, you could get into that stock longer term even if you can't get it on day one. tyler. >> kayla, thank you. with entry into the nasdaq nearly locked, tech managers have been crunching numbers to figure out facebook's potential weighting in the nasdaq 100 and how its inclusion might impact other holdings. joan, president and cio of gra mercy capital management. good to have you back. >> thank you for having me back. i appreciate it. >> what does this mean to the nasdaq 100 that facebook almost certainly and very quickly will be included in it? >> well, i think that we should

step back a minute, tyler, and look at this. groupon went public almost six months ago. it's five months and a week or whatever at this point. and the lock-up on groupon is going to expire almost to the day that facebook is -- begins trading. now, facebook in my view is a real company. and i've been on your network before to talk about the fact that groupon i don't believe really is. >> yeah. you're saying groupon isn't. >> no. i don't think so. and i warned people before it went public that there were accounting issues, there were whatever and then three months later we have this interval where they suddenly say, oh, gee, our first quarter was no good. i don't expect any kind of problems like this with facebook. >> something like seven stocks in the nasdaq 100 make up something like half of the

weight of it. this is going to exacerbate that, isn't it? >> well, they'll rebalance, don't you think? >> well, i don't know. look at apple right now at 18%. and they rebalanced on it some time last year. now you get into facebook immediately would be in the top ten if you looked at that. so there would be much more concentration. do you think, by the way, that any of the decline in apple over the past few days is in anticipation of facebook's entry into the 100 and that people are moving out taking some money off in anticipation and kind of arbitrage play? >> i don't know so much it has to be even an arbitrage. but in the first quarter if you are a large hedge fund manager and you didn't own apple, i think the first quarter was the story of the haves and the have notes. those that had apple had much better quarters than those that didn't have it. and i would think that some of

it is just the rapid rise it's had. when any stock goes vertical on the charts, you need to watch out. and it needs to take a breather. and it could be nothing more than that. now, i could be a smart alic and say to you we know that 70% of all trading is now computer-to-computer that maybe you should have a computer sitting here in the chair you've put me in and ask the computer why they're doing what they're doing. >> i'll just ask siri on apple. >> okay. >> she can't tell me whether there's a chinese restaurant nearby, by the way. that's another matter. i'm angry with siri right now, joan, we'll get past that. if i owned the qs right now. if i'm an etf investor and own the qs, is there anything i should be doing or not doing in anticipation of facebook entering that index sometime this fall? >> i'll revert to my computer argument because what i am is an old fashioned stock picker. i don't think in that way.

i think in the way of what's the value here. i look up these numbers and i hope i've got them straight. but it seems to me that facebook's revenues last year were $3.7 billion. their operating profits were just about half that at $1.8 billion. and net income was $1.1 billion. there are not too many companies that go public with that kind of income production right at the start of being a publicly traded company. and that's why this is so fascinating. >> or that come with a valuation if those numbers are correct of something like 100-to-1 because the valuation looks like it's going to be something north of $100 billion. but that's a lot of price to pay for those earnings. i'm sorry, we got to leave it there. we'll have you back with your computer next time. >> thank you. >> all right. >> on the heels of facebook's $1 billion acquisition of

instagram, everybody's wondering what start-up will be the next mega-acquisition or perhaps the next facebook. cnbc's julia boorstin joins us from los angeles with some exclusive data on one fast growing site. hi, julia. >> hi, sue. wonder which start-up is second only to facebook in terms of engagement? it's tumbler. a simple blogging service that allows anyone to set up a free blog to share text, photos and video. comscore revealing drew 22 million viewers in march. over two and a half times the numbers from a year earlier. the average tumbler users spent 2.7 hours on the site monthly. that's more than any site but facebook. and there are some positive signs for its business model. it charges to promote posts and a slew of fashion media and publishing companies like j. crew, reuters and nbc post on the service. when it comes to the trend setting generation, tumbler may be starting to steal time from

facebook. tumbler skews heavily to teens and college age kids and they're affluent. 40% of tumbler visitors have a household income of $75,000 or more. tumbler has raised $125 million in venture funding. as of this past september, its valuation was $800 million. considering instagram's valuation at $1 billion, it could be worth, well, more than that right now. >> wow, julia, that's amazing. we've also got some interesting new data -- or you do, better said, that shows facebook's advertising engagement is dropping a bit. should investors be worried if they're considering picking up facebook after it goes public? >> well, that's a good question, sue. here's the data. a new report from a company called tbg digital, an advertising agency, finds engagement with facebook ads dropped 8% from the first quarter of 2011 to the first quarter of 2012. tbg also reports the average cost for a thousand impressions for facebook ads increased

worldwide over the past year. but here's the thing, higher costs and lower engagement aren't necessarily cause for concern. the higher prices come from higher demand. and the click through is lower because facebook's actually hosting more ads which should outweigh the lower rate. now, this report actually has some interesting factoids about click through. facebook is now driving much more traffic to news sites like yahoo! as well as "washington post" and competing with twitter, which is known for its traffic in that matter. sue, back to you. >> thanks, julia. appreciate it. >> up next, they say there are only two things certain in life, death and taxes. the old cliche. federal income tax rates set to rise next year. >> how can you ease the pain? we're going to help you after a quick break. wanted to provide better employee benefits while balancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ]

with federal income tax rates scheduled to rise in 2013, this year offers u.s. taxpayers a way to take advantage of opportunities that exist in the current tax environment. sharon epperson is in studio with an expert on how to get a great return on your retirement. hi, sharon. >> hi, sue. you know, you probably already turned in your tax returns, right? but now is the time to start planning ahead. and joining me now with some strategies often overlooked when

it comes to tax savings is joanne johnson. thanks for being here. >> great to be here, sharon. >> we talk so much about retirement and the importance of considering converting from a traditional ira to a roth ira and pay taxes on money going in but take it out tax free. still a lot of people confused about whether it's the right thing to do. what do you say? >> i say this is the year to do it. now, when you consider converting from a traditional ira to a roth, the biggest consideration is the tax amount that you have to pay when you make that conversion. the time to pay this tax is in 2012. the federal income tax rates are slate today go up on january 1, 2013. the second reason you want to do this this year is that prior to this there were eligibility requirements to making this conversion. it used to be that you had to make either $100,000 or less to qualify to make the conversion. this year anybody regardless of

income can make that conversion. so very compelling to do this because we don't know what congress will do about eligibility in the future. >> and we don't know what's happening with the market. >> the third reason is the market is volatile. many depressed assets are trapped in those ira accounts. you can pay the tax on the lower amount and write it up tax free. >> another is trust. a lot of people think if i have highly appreciated assets, this may be something to consider, why? >> it allows you to contribute a highly appreciating asset into a trust. it is sold tax free. so 100% of those assets without capital gains are in the trust working for you. you take out an income stream. when the trust is over, either a term of years or at the end of your lifetime, what's left goes to charity. and the benefit to this is you stretch out the income stream over your lifetime so you stretch out the taxes over your lifetime. you don't pay them up front all at once. and you get a great income tax

deduction for the present value of what goes to charity. a great way to offset the tax you're going to pay on your roth conversion is by using this charitable deduction. >> so, again, that's a good reason to do it this year. again, keeping in mind that these tax law changes could have an impact. that's why it's important to do it right now. >> absolutely. what we are finding is people are doing the analysis. we at jpmorgan are running the numbers for people. you have to make sure you have enough liquidity to pay the tax on the roth ira conversion. and you have to make sure that you're truly philanthropic with the charitable remainder trust because what's left in that trust will go to charity. >> joanne johnson from jpmorgan private bank. for more on your return on retirement, visit retirement.cnbc.com. thanks so much. >> all righty. we're going to take a quick break and be back with charts of the day. >> two hours left in the trading day. everything that i've gained in life

has been because of the teachers and the education that i had. they're just part of who i am. she convinced me that there was no limit to what we could learn. i don't think i'd be here today had i not had a wonderful science teacher. a teacher can make a huge difference in a child's life. he would never give up on any of us. thank you dr. newfield.

you had a big impact on me. 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 ] you are a business pro.

monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro. less than 24 hours until the tax filing deadline. many people are scrambling to finish filing.

why not take advantage of the some of the freebies to alleviate some stress. kiplinger offering special deals. >> need that after filing my taxes. >> mccormick serve some nice things. office depot. p.f. chang. seattle's best coffee and many more. >> i vote for hydromassage. and a glass of chard nay. we've jumped about 50 points or so in the last 15, 20 minutes. up 133 points on the dow jones industrial average. the nasdaq not participating. and the s&p 500 is up about five points on the trading session. >> and notably apple is both a part of the s&p and of the nasdaq. but not of the dow, which partly explains that. let's look at the 10-year yield. look at that. about a month ago it was up around 2.4%. today