>> will we see more of this? >> i would not be surprised. >> carly, thank you for being here. >> my pleasure. >> a lot of fun. a lot of news today. >> a lot of news today. >> thank you, everybody. make sure you join us tomorrow. squawk on the street begins right now. ♪ >> starting off with music from the group boston on this 237th anniversary of paul reveer's legendary ride. good morning and welcome to squawk on the street. david is on assign meant this morning. the morning after a 194 point rally in the stocks and it opens lower with the dow looking to lose 72 at the open. europe markets in the red. spain the biggest loser as data show bad debts held by spanish banks have risen to 17 year highs >> get to a road map, the morning after, the broadest

rally of the year. do you dare step into this market ahead of key earnings and this week's spanish debt auction? jim o'neill still sees s&p 1500 in our future. >> putting pressure on, ibm and intel close to 52 week highs and both report mixed results and premarket are selling on the news. how worrisome is warren buffett's diagnosis? shares of berkshire hathaway are rebounding after selling off last night and why kramer is still bullish on the stock. >> and mark zuker boring leaving the bort in the dark about the deal. are you buying a one man show? with he begin with a wild right in the markets, coming off the best point gain since march 13 when it jumped 217 points. it is 11 trading days this month. we should talk about some of the charts, jim, and also through a

lot of long time market watchers for a real loop last weekend and going into this week. >> this technical market. you go over the 50 day, we love it. go under, we hate it. that is the prescription for not making money whatsoever. i do find just in terms of the day-to-day you pick up the f.t., risk appetite returns as spain fears ease and then tomorrow will be on easing as the fear back on? we're doing earnings now. don't let the day-to-day european market influence you what might be a medium to long-term investment strategy. >> don't get caught up in the day-to-day gyrations of the market as we have seen so clearly this week. one day we could say just as you point out fears back on, fears back off. >> right. i just don't like the kind of jumble we can do in the media or the analysts can do. while macro has been important, pick one from last night.

had you decided that intuitive surgical could persevere during this period, remarkable amount of money, united rentals, there is a cyclical company. making remarkable amount of money. had you just thought about the spanish tenure you would be selling, you would be buying, you would be selling, you would be buying. that's no recipe for making money. >> we'll talk about the tech earnings in a moment but broadly at least a dozen or so big companies reported this morning mostly beating although some would argue the quality of the earnings up is. overall could you put a characterization so far? >> i like earnings season so far. i can come up with positives. maybe people could spin yahoo! negative. i will spin positive because for the first time as meager as the growth was we have it. i can spin intel. we can go with the goldman sachs and he has been wrong and it is a transition quarter. i want to recognize the companies with phenomenal earnings power and great balance

sheets. >> in terms of yahoo! for so long you have been very tough taking they don't have a mobile strategy and if you don't have mobile, are you dead. be clear. this morning you're saying the yahoo! quarter was better than we thought and it doesn't necessarily mean the company is worth investing in. do you think it still has the parts to be a longer term investment? >> i think it is a great question. the answer is i think this new ceo thompson has finally recognized that there is way too many people there even after the restructuring. he said it again on the call. we have too many people. he is going to be talking about monetizing japan. an amazing comment about facebook. they're clearly going to try to exact their pound of flesh from facebook. they don't have the strategies, me lis a they're no longer road kill. >> let's talk more about the other two big earnings, blue chips in fact. ibm posting better than expected of 2.78 a share raising guidance for the full year and q1

revenues came in shy with a dro in hardware sales and intel beating the street despite a 13% drop and falling in the premarket one day after hitting new seven-year highs. the stories are different. for ibm you have to focus on the revenue slowdown i should say. this follows a slowdown that we saw in the last quarter, so overall the picture doesn't look good for ibm. >> stocks did run into space because they've had a habit of eating once again. you have seen a pattern developing with ibm. they do the earnings. people don't like it because they have subpar revenue growth, definitely flag the hardware, and even by the way spain and united kingdom up. spain so strong. germany just ploding along. here is what i would say. a few days later with income back say $15 in earnings, stocks 195, say it goes down and conscious of what a great run it's had and people will come back to that.

intel, stacy smith, cfo, comes on our network and these guys have been money in terms of projections. they're talking about a transition quarter. they have the ivory bridge coming out. they have this rick santoromleyt and pc chips for ultra notebooks. goldman e it rates i think the gross margins will be under pressure. that's saying stacy smith, you don't know what you're doing. i never made a lot of money and i have known stacy for multiplers yoo. i have never made a lot of money betting against him. i want the trade. >> five quarter low on intel, gap six quarter low, revenue a four-quarter low. a lot of transition quarters going on in tech right now. isn't that worrisome at all? >> it is a tough thing to come out here on squawk on the street and say i see positives in intel given that litany. let me give you the flip side. seagate reported an amazing number last night. they still have tightness and

distrust. >> it is not fundamental demand, simply that the largest competitor was hit by flooding so they're still seeing the benefit and the benefit is longer than expected. does that mean this business is actually on an up swing on a fundamental basis? >> absolutely not. >> not. >> that's why i am saying the intel quarter may be a trough quarter. it was head drive, disk drive shortage. stacy and cole point out directly about why this quarter was good. i stay the other side on seagate. i am going right now with what some of the detractors are saying which is this may not last great quarter. i know steve will come after me for that but j.p. morgan is saying margins are peaking. relate this to intel and say that intel had graf toss when they said part of the problem is everybody doesn't have as many disk drives to make as many p.c.s and i like the data storage play. i think we know that's a facebook play, and i believe the

company when they say gross margins will go from 62 to 64. as long as i have been following intel and for a long time, of 4 is the holy grail where you can explode earnings. i am not going to be drawn into the goldman sachs orb of negativity when i think it could be a trough quarter and two and three will be better. >> the orb of negativity, sounds like something out of "star wars." >> i am not going to use coviello as my semiconductor guy and that's different from different walks of life. >> the on going saga regarding roche and a alumina, deciding not to extend the $51 a share tender offer. we talked with david faber about it, how few corporate sagas we have to watch that look anything like this. >> and contrast that with xsc health solutions merging with

catalyst health, a win-win. like express scripts and metco. sometimes you're at home and say that is badly and why does it go down? there is people that know more than we do. >> moving on from the earnings, great story in the journal today reporting that facebook's board was all but out of the picture in the company's acquisition of insta gram. the paper says mark zuckerberg negotiated almost entirely on his own with his counterpart kevin sistrem, and he fielded the opening number of 2 billion, whittled it down to the sale for a billion dollars and when ann drees comes over to zuckerberg's house for a meeting he is not aware that sistrem is in another room talking to his board. is this as one-man show and are we really willing to put trust about m&a into a 20 something? >> a billion dollars worth. >> the joy of being private,

yeah, the joy of saying, listen, board, this is your job until we become public. this does feel like that, like the movie. remember the social movie, like here we have guys in different parts of the organization doing things and being cut out and facebook maybe hasn't changed its ways from the time when it was a harvard start up. >> shouldn't we think, though, that things really don't have to change necessarily either once the company goes public given the amount of control that zuckerberg and a few people have? >> i always think the sec periodically wakes from the rip van winkle snoring and comes back and says this isn't correct. you never know when they'll wake up from the slumber. >> the journal goes into anecdotes about zuckerberg seeing some of the activity when instangram launches an android app and sees the user migration happening quickly and makes it sound like he panics and that's why he has to do that on his

own. do you think he has his head about him? >> i think this is a company that recognizes that you can do no wrong at this moment in the market. you are not public. people want their -- i mean, the first thing i do when i see something is i go to my 1720 or what do you think. it is like instagram, where are you again, omg, dad, where have you been aspect and it makes me of course feel like a grandfather now but when you see something that is uploaded virally, these guys just want to take action. they don't think what will do do to my earnings per share down the road. we're private. we're moving. let's not lose sight of the prize, world domination. >> at the same time does this also sort of re enforce the concerns that people might have when they buy into a company where they don't have much power and i am thinking of google. ever since the announcement of shares google stock hasn't done too well as people are sitting with the idea there is a whole

class of stock that can be used for acquisitions even though management said it is not in the cards right now, it is there, and they do have the power to decide whether or not to do it and shareholders are largely left out of it? >> seem like family-run companies. >> yes. >> when you get a family-run company like the one we're about to talk about, you either believe that you're investing in a real smart guy or you don't. i prefer to look at earnings analysis. i prefer to look at mobiles. that's very out of fashion when it comes to the facebooks and the googles of the world and periodically the real world interferes and we saw google was in a 58 point slide and i don't want to be caught up in something like that. >> speaking of berkshire, talk about the story, a big one, warren buffett says he has been diagnosed with stage 1 prostate cancer. in a letter to shareholders the billionaire investor writes the good news is i have been told by

my doctors my condition is not remotely life-threatening or debilitating in any meaningful way. we decided on a two-month treatment of daily radiation to begin in mid-july. he goes onto say he feels great and his energy level is 100 approximates and he will let shareholders know immediately should his health situation change. now, we saw an interesting movement in the staff. after our session when the news first broke the stock went down a as well as b shares by easily more than 1%, sometimes 1.75%. today it is basically around -- actually it is back down. interesting move here as people are chewing on whether or not this actually changes the perception of the company. he is an 82-year-old ceo. >> zuckerberg inc., paige inc., buffet inc. they think i am buying a share in a man and that man is mortal. i think people should be thinking, wait a second, the man

has built a tremendous company. there is a lot of runway within the company that could go right now, housing, insurance pricing. we have heard from our board this morning csx talking possibly about what rail could be, burlington northern. my problem with all of this is once again you don't really know how berkshire is going to do because berkshire is run like a private company. >> the thing that's different, though, in terms of comparing because there is a lot of comparisons between buying into buffet, berkshire, buying into appearel and steve jobs and facebook and mark zuckerberg is warren buffett invests in a portfolio of companies and they're dispersate businesses as well versus apple that some will say at least has a history of innovation, of innovating great products. it is a product. there are different circumstances and all the reasons why you said that the company berkshire hathaway may have the wind at its back, there are a macro of reasons. that has nothing to do with

management or who might take over. it has to do with the u.s. economy and your stance on where the u.s. economy is going. >> i think when you made a gigantic housing bet and you see usg going up, an investment and mass going up on bad quarters and the housing stocks being some of the best during the first quarter, what you come back and say, listen, might have the wind at its back, it is difficult to come up with price to earnings analysis on berkshire hathaway as opposed to apple where goldman sachs comes out with numbers butting a $53 number on 2013 and you see i am buying a company selling at certainly vulnerable versus buying a company where i really like the fact that berkshire hathaway made a lot of money over the years. they're different styles of investing. some i am more comfortable with than others. you have to look at the prestige if not wild mosaic and decide the insurance business hasn't been so hot, maybe it is going to get better. the housing business hasn't been so great, benjamin moore paints,

look at the sherwin williams number. thinking, you know what, everything could be turning here and next thing you know you have a tim cook situation perhaps where the earnings turned out to be in a ramp you didn't realize and jobs set on that ramp. >> you would rather have a share of berkshire or apple. >> i am a p.e. guy in the end and apple is so dirt cheap. >> great piece in the journal saying it has more ground to cover if it will catch up to what the company is doing right now. o'meara's veteran technology analyst with eye opening thoughts about microsoft and facebook and we'll talk to him in the 11 a.m. hour. one more look at futures and a give back after the big rally yesterday and see how today shapes up. between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

[ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers financial services. for exceptional offers between listening to the numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

properly inflated tires can increase fuel efficiency by three percent. that's about 8 cents a gallon, and that can really add up over the next few years. see, going green can save you green the more you know.

some of the storying squawking about, mortgage apps up 16.9% last week and this as reif is jumped 1%. pfizer near a deal to sell the baby formula business to nestle for 9 billion and they say nestle appears to have out stripped meade johnson nutrition that teamed up for a bid. as jim said, two pharmacy benefit managers hooking up, sxc

health solutions agreeing to acquire catalyst health for 4.4 billion and deal values catalyst at 81.02 a share, a 28% premium to the stock's tuesday closing price. >> we told you that according to the wall street journal facebook ceo negotiated mostly on his own for the acquisition of instagram, bringing in the board when the deal was all but done. we ask you to pull out your crystal ball. what is the next thing zuckerberg will not tell facebook's board? you can tweet us and we'll air your responses throughout the morning. not going to tell the board, a negative. >> your take is essentially it is the way a private company acts and that they will change once they're public. fair? >> do you want brothers to come back and run this with the green pants? they play by the rules, right? say how we doing? >> if you're on the board, is

this embarrassing? is it embarrassing to be portrayed as being out of the loop? >> and at the mercy of 20 something-year-old ceo. >> i mean, i think when you serve on the board of a foois book, you are probably mouthing all of the first mover advantage stuff and i remember when i started the street.com. you see these investment bankers and board members saying, listen, don't wait for us. okay. sometimes you feel under orders. now i would have -- i may have lobbed in a call, maybe an e-mail. >> imagine that. >> it would awful if you tweeted it to the board and others saw it. right? hey, guys, oh, jeez, i hit the wrong one. i meant to reply. >> great corporate story today. >> yeah. we'll share your responses throughout the hour. in the meantime next the run you want to go on the morning after the rally. mad dash is on deck and take

another look at futures with pressure from ibm and intel and much more straight ahead. they have names like idle time books and smash records and on small business saturday they remind a nation 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.

just under six minutes until the bell rings. time for kramer's mad dash. this is a deja vu story. didn't this happen in 2008, the ceo taking out loans and getting in trouble. >> mcclen done is a true

gunslinger and been on mad money a number of times including after he took out loans before, personally liable, lost a lot of money, had to give up a lot of stock and what did he do? he swore, as close as you are to me. >> on tv. >> that he would not do this again. i am a big fan of the company that aubrey mcclendon has built but natural gas at $1.90 yesterday says it may not work out and i question the judgment. >> you say the money he borrowed from the company to continue having stakes in the wells they drilled may not work out or the company itself may not work out because natural gas prices are so low. >> i think the collateral may be claimed from him. i think you are risking a lot when you see natural gas. we've had many people on the show. i don't know a soul. maybe this is the best thing. i don't know a soul that thinks it bottomed yesterday.

wet the ceo of shenear. they will be exporting. we're flairing more natural gas, burning on of than we are using in this country. that does not go well for chesapeake that had to cram in an oil surface deal right here because they need the capital. it is worrisome. >> the other issues are the control of the board. as a shareholder i would be concerned if you have a co-doing this. here it is happening again after he swore on television that he would never do it again and he did it again. that's a problem. >> here we are talking today. zuckerberg and facebook. we're talk about warren buffett and berk share hatters away and aubrey mcclendon inc. and costco. i want to know from karl. >> thanks, guys. opening bell more than three minutes away. we'll get this bad boy started when squawk on the street comes right back.

[ grandfather ] that a boy!

this is my grandson. and if it wasn't for a screening i got, i might have missed being here to meet him. the health care law lets those of us on medicare now get most preventive care for free like annual wellness visits, immunizations, and some cancer screenings.

and that's when they caught something serious on mine. but we could treat it before it was too late. i'll be around to meet number two! get the screenings you need. learn more at healthcare.gov. you don't want to miss any of this! like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.

a day after the biggest gain in a month in the dow and there is the opening bell on wednesday morning and a look at the s&p 500 at the big board. energy company and over at the naz clayton williams energy, an independent oil and gas company. yep. >> there is so much to watch here at the open and apple is higher by 30% and goldman sachs raising the price target this morning along with the estimate 750 is the new price target up from 700. they expect a solid march quarter with upside there. this is ahe had had had of the earnings. >> right. >> it could be considered a bold move. >> obviously we had an incredible reversal where people buried apple and the press was saying what the world will be like without apple and would have been great if goldman came out yesterday. that's how you make the impact

call, not up 27 points and follow through. right. >> true. >> timing is everything, people. >> true. they talk about this notion that the quarter, next week by the way, the notion that it would be catalyst light meaning wanting for catalyst to get the stock moving is miss guided and that iphone, ipad, earning projections for the year will make investors happy next week. >> i think that apple is very much an event stock and you want an event. you want not just the earnings but you want to see a television and you want to know whether that television is going to be your holiday season present because what it is is you talk to it and it says go to cnbc right now i want to watch the costco documentary and it switches from another nbc show right to it. >> april 26th. >> april 26th, a week from tomorrow. >> i can't wait. i am a costco aaholic and i was

once on the cover and jimmie kimmel said it should have been my proudest moment. >> costco magazine. who knew. >> i think i saw a copy of it. >> very excited. >> the city news, the say on pay, denying or voting against pandit's pay package is on the cover "new york times." what was your take on this. >> they citi didn't understand the state of play. he did much better than the other execs but didn't understand the state of play what the federal reserve would say and now looks like a bit of -- trying to search. he is not a dope. he did get it wrong. >> tone deaf. >> he did take a dollar in pay for each of the past two years so this is all in context. $15 million, not saying it is not a lot. it is a big chunk of change. >> there is a school of thought

that if you're going to lead a bank into the massive regulation that's coming and into an administration that's at times hostile to pang banks, you have to pay up. you have to pay someone to take the job. >> len inonce said and i am not talking about john but my great uncle vlad, he once said if the rich are unhappy, it is their own fault. i think that one of the things that he should have recognized here is he was going to make people unhappy with his money and i am surprised he didn't. he made a tremendous amount of money. i am always surprised the bankers weren't more ashamed. this is a wake up call from the point of view someone is looking but it is the compensation committee that does this and they'll look and say, wait a second, this guy made this and this guy made that. don't tell us what to do. corporate america is ruled by a couple of consultants that determine what you make and the compensation committee is too busy to disagree. >> speaking of financials, the thing that i look at every single day at the open is how

the european banks are fairing because we usually take the lead at some point in the session and taking a look, no surprise, down sharply almost 4% for bbba, sb down by 3% and the likes of barclays, deutsche bank, rbs, and they're also down and now soft innocence the likes of morgan stanley, bank of merks, goldman sachs and something to watch as we are sitting here down about 77 points, whackness in the financials could lead to weakness in the overall markets. >> here we are yesterday the goldman sachs conference call. linked to activity and one of the points the c f o made is the long tail risk meaning at home the big worry about europe is behind us. every time you say that, you have three eggs over easy on your face. you just don't want to say it.

i like buying runny, you know. >> a little tabasco. >> head over to berta coombs here for bob this morning. >> good morning, melissa. more or less a bit of broad decline right now the highlight are the oil services stocks, halliburton with the first quarter handling beaten expectations and one of the things you have to hear is the fact it was the north american drilling that was the highlight. going forward here halliburton ceo says with this pullback that we're seeing and fracking and the problems in natural gas, expect the revenues to be a little softer here in the next quarter. nat gas still below $2, around 1.96 or so, a 2002 low, certainly under scores that issue. chesapeake in addition to the issues with the ceo's debt, chesapeake according to reports, is looking to sell shares in its fracking business, basically sbrat that out, how much interest there will be in that at the moment with the big glut

on in nat gas remains to be seen. in mines ivanhoe up better than 5%. the company reached a $1.8 billion write offering deal with rio tinto. they have a stake in the company. there is realignment on the board there as well. there will be a conference call later on this afternoon to talk about it. the shares also moving higher and you will recall earlier this week ivanhoe was in speculation because it looks like kkr would like to combine diamond mine ago long with bhp's diamond mining to take a stake in the business. best buy shares getting a boost. the minneapolis star tribune saying that with the departure of the ceo best buy is now attracting a lot of interest, p.e. interest and take over talk there, about a billion dollars in cash, very willing debt, makes it fairly attractive. when you talk about apple this morning and with goldman sachs raising the price target to

$750, at $750 a share it makes apple a $700 billion company which would make it the most valuable company of all time. shows shares this morning are trading at levels we saw last friday. they're quickly regaining the losses we saw over five days. back to you. >> thanks very much. the etig holding its tenth annual commissions for charity day, it draws dozens of celebrities and bob is there with the co-founder of btig. good morning, bob. >> good morning, karl. this is one of my favorite events for the year and i have been doing this for many years. this is the co-founder, one of the great wall street guys and great traders out there donating all the money to charity. >> it is our tenth annual and i think the good side of wall street where we're betting together with our clients, et cetera, to give back to over 300 children charities. >> it is a great charity and a worthy idea here and i want to get your thoughts on the trading activity. starting a little soft here

today. teches here, ibm, you can't ask more but trieding to the downside. what are you seeing in early action? >> asia was up over 1% on positive comments on the im f. europe has been down. it has been soft all morning led by the financials. we're opening a little soft, a mixed bag in tech. ibm, intel, good things out of yahoo! and apple i see price targets raised at goldman and that's strong. i think ibm should come on. >> double-digit 15% earnings growth. can't ask for more than that. you had a big call. last week down grade apple from a buy to a hold. that kautds the a little earthquake. what are we seeing today. >> it did. apple is up about 7, $8 on the goldman news and definitely ruffles. i thought basically they thought the stock had moved almost 50% this year and estimates up 30%. he saw down points that caused it to be a little soft and a little concerned. it was not a call on the quarter. he is close to the wireless

carriers and said the stock needs a breather. >> ipad and iphone sales still already. didn't hit on that. >> more of a technical one. >> i see action in health care stocks. we did have a merger this morning. >> big $4 billion merger with a lot of activity. the whole room is financials in health care right now. >> a lot of people complaining about the volume. does it matter at this point? is it an issue? >> in the last week or so volume has been better with volatility. we've had a bunch of plus or minus 1% moved. a lot of market players are on the sidelines, the high frequency players, the stat people, a lot of retail investors and some of the prop desk. until you see the players come back into the marketplace, i don't think we will see sustained volume. >> raised 4 million dollars last year, $20 million in the last ten years.

dozens of people will be here all throughout the day. >> what a great event. thanks for bringing that to us. in the meantime we want to take a check on shares of halliburton, oil services company. berta mentioned it before, higher by 2.5% right now, much better than expected earnings certainly benefitting from a shift from natural gas to oil and liquids and also it is heavier exposure to the north american market compared to its peers and that's why we're seeing a split between the plaintiff answer of halliburton and schlumberger and both are up and halliburton is up more steeply because of the shift. >> difficult transition, obviously with the collapse of natural gas in this country and the huge decline in rigs. they're saying the 12% increase that drilling in oil is almost offsetting the 17% decline in natural gas and the rest of the international is quite strong. a lot of people were betting could see a squeeze here. >> we didn't get a chance to get your take on the president's

statement about speculation. he made the announcement in the rose garden and immediately we went to nymex where traders said he is targeting speculation for spikes in crude paying no attention to what the same traders have done to nat gas over the past year. >> we have this thing called the justice department. if you're fixing and co-lewding the justice department gets involved. there is no need to go to congress. we have seen remarkable things from the justice department in new york so maybe someone should say a cue from that. i like prosecutions and jail a lot more than fines. fines are a cost of could go business for a lot of people in the business. >> speaking of energy. >> yes. let's go to courtney reagan at the nymex. >> good morning, melissa. we're seeing a lot of weakness, gasoline hovering near the six-week lows and we have seen the spread narrow further between brent and wti as the concern about iran's nuclear

program continued to diminish here. we're seeing the spread really narrow. any of the commodities tied to brent are falling here. the trade had been go long, go long, and gasoline go short and all that far is unwinding and we're seeing weakness ahead of the inventory numbers due out in an hour's time from now and not expecting to see a lot of builds across the complex and we'll come back with the numbers do cross the line. back to you. >> courtney reagan, thanks so much. mark zuckerberg reportedly kept his board out of the mix when negotiating a deal to buy instagram. what's the next thing he won't tell the board? tweet us. we have your responses straight ahead. as we head to break, take a look at the early movers on this wednesday on wall street. i went to a small high school.

the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college. you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us.

we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense.

take a look at what is weighing on the dow at this hour. intel, ibm, and microsoft all of course in the tech sector and all could be feeling some of the effects of what the ceo paul ottolini said on the conference call that mature market consumers are gravitating towards tablets versus upgrading pcs or laptops and that of course would be bad news for ibm, bad news for microsoft. >> and ibm no longer pc and i would point out i know we're playing the song one direction, playing the group one direction and this market does have a one direction feel for it. we were up yesterday, down today. i want to go back over intel. i know that intel as ibm, it has been on the move. we suddenly look for checks and can i urge people to go over the quarter?

read the conference call. we may be at the verge of a next generation series of chips. they basically are saying, i know this is a hazardous thing to say, but apple, they're saying great line in the conference call, at one point the ceo says that apple, we know where they are and they know where we are. this reminded me of dennis green after a critical loss by the arizona cardinals that for the chicago bears that said they are who we are. they are who they said we are. they are who we thought they were, paul, you have to do it better than that. you need apple. don't make apple the enemy. i will have the chicago bears. you have to get the apple business. somehow you got to get apple. >> i love the sports metaphor especially off of jamie moyer last night. what a game. >> apple does desktop stuff but they need p.c. jamie moore, may i when i get to the age of 49 throw a game like you do. >> you have yearsing to before you're that old.

>> the winner, i think the pitcher that he beat wasn't born when he started playing. crazy. >> 49 years, 150 days, the oldest ever pitcher to win a major league game. facebook ceo mark zuckerberg reportedly negotiated most on his own for the $1 billion acquisition of instagram and brought in the board when the deal was practically done. we're asking you to consult your krystal ball. what is the next thing he won't tell the board? >> i think it is justin timberlake joining the board. he obviously gets his insight from the social network. >> hahn tweets selling facebook to apple and my real name isn't sgruker berg, it is gates junior and this may not entirely have been my idea and michael tweets i just bought yahoo!. you're okay with that, right, which echos a little what the journal talked about this morning. >> we do have a remarkable moment where you have young people running companies and

maybe i am just in awe of these guys and they move fast and do a lot of right things and creating a lot of money and i worry that people get caught up but i know that if i were still in my hedge fund desk i would ask for 10% of the facebook deal. >> absolutely. >> i think i would make a lot of money. >> you mentioned earlier our costco documentary next week, the fact that you were once on the cover. >> do we have it? >> or in costco, the costco connection. >> what are you doing there? what is that? >> i am throwing money around. costco, you know, more than anyone is a company that people pay to shop. how many other company doos people pay millions to shop at? >> incredible. 60 million members, $150 a pop year after year after year. >> and increased membership fees. >> the 90 plus renewal. >> are you a member. >> i am not a member.

i live in a new york city apartment. what am i going to do with 24 rolls of toilet paper. >> go to harlem. there is a great store. >> every other saturday. >> i am a gold star member. frankly, i live at my one in ocean. i love my one on route 10. i think these places are remarkable. i cannot wait for the documentary. >> a lot to talk about as we get closer next week. the trading day is still young. a lot more squawk on the street still ahead. between listening te numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

♪ where the sun never goes out ♪ ♪ and the sky is deep and blue ♪ ♪ won't you take me american flight 280 to miami is now ready for boarding. ♪ there with you fly without putting your life on pause. be yourself. nonstop. american airlines. ♪ ♪ ♪ [ 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-benfinan. for exceptional offers between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot

that powers sound decisions. duff & phelps financial advisory and investment banking services.

busy take shaping up. simon will tell us what's next in the next hour. >> it is a busy day. did you know it is all-star investor day on cnbc. every hour we'll bring a five star firm manager. our first in the next hour has $2 billion under management. we'll talk about yahoo! intel. if you buy intel stock now are

you betting against apple and of course warren buffett tempting as ever to control the message about berkshire hatters away and another action packed hour up next. >> we'll see you in a few minutes. 6 in 60, six stocks in 60 seconds and begin with hunting ton bank shares. >> people under estimated the power of regional banks to grow revenues. i want to buy t radioshack, bank of america, still worried. >> people are saying that best buy could get a deal. oh, please, radioshack shows you they've always had a lot of cash. >> i know you are watching united reynolds for awhile. >> people that want to own caterpillar, take your cue. they do similar business. >> csx, ceo on squawk this morning talking not so much about coal you about intermobile. >> we're told a good story and in the end people will default to coal and won't buy the stock. >> black rock. >> i think it shows you where the retail money is going, to et fs and that's the hidden volume

everyone talks about. >> polaris q1 beats. >> i have the ceo on today. this is an amazing story i have been recommending for some time. it is off road vehicles. talk about something you don't need and selling like hot cakes. >> ihop. do you have an atv or snowmobile. >> should i get one? >> yeah. >> do you have one. >> no. >> wouldn't it be cool? >> what's on tonight? >> polaris obviously. don wood, this will be good. we had brian skpm we could say how it don wood doing because of the closing of the best buys. let's ask. >> chesapeake, not good action today aubrey needs rapid adoption of natural gas as a surface fuel. i had waste management on. this he have more than 1,000 trucks and buying natural gas trucks. it is not happening fast enough for chesapeake. they need the president to say all our post office trucks must use natural gas and the military has to come out. someone has to come out. the stock is going the wrong way. >> you talked about the controversy regarding mcclendon.

is he just typical gunslinger aubrey or out of control? >> i still think he is a gunslinger. i am not happy with this. he has been a pioneer but you don't gamble twice. hey, shame on one time, okay, shame when you second that. give me a break. >> you don't like to talk about centralbacks in general? you don't think the markets in general is about central banks >> no. >> bank of japan said we'll get to 1% inflation, the nikkei is up 2% on that and they will turn to stocks. >> the bank of japan cannot prop gate individuals. they have a declining birth rate. one of the great things, you know how we add people and gentleman s pan needs to change the demographic. do you know that russia changed the demographic? russia, the wrap against russia is when will they get back to 1939 levels. russia is growing again. their economy is more robust than japans >> after you said you look like len in, i will never say of you

the same. >> i was stopped in front of fifth avenue, don't i know you and i was thinking, oh, boy. have you to be related to lenin. jeez, whatever. >> we'll see you tonight. >> thank you. >> 6 and 11 eastern time and when we come back we'll talk to tobias lekvich. zap technology.

departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. looking for a better place to put your cash? here's one you may not have thought of: fidelity. now you don't have to go to a bank to get the things you want from a bank. like no-fee atms -- all over the world. free checkwriting and mobile deposits. now, depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account.

open a fidelity cash management account today and discover another reason serious investors are choosing fidelity.

get to the road map. big day for tech. intel and ibm weighing on the dow as yahoo! heads higher on the back of the first quarter earnings reports. what's the read through on the big boys of tech? we'll break down the numbers with the top analysts next. >> and the oracle of omaha announcing he has stage 1 prostate cancer. what does this mean for the future? we'll talk to buffet author jeff matthews for his take gl and 100 days to the kick off for the summer olympics. what's on tap as london gears up? we'll sit down with the chief marketing officer for the

latest. >> and rush deciding not to increase the offer for cash shierz in a alumina, trying to fend off the offering and they have a strong independent future ahead. >> pfizer reportedly closing in on a deal to sell the infant nutrition business to nestle for at least 10 billion. that could be announced as soon as next week. >> back to the earnings front. halliburt halliburton, the largest provider of fracking service bheeting expectations in the top and bottom line and net income climbing to 627 million, up 56 cents from the prior year and of course the important thing about halliburton is it shows the success when you have shift ago way from natural gas oil and liquids rich drilling and it is benefitting them. also, their exposure to north, slightly more exposure, about three quarters from the u.s. versus schlumberger with two fifths of revenue so the split

is showing when you take a look at the performance of stocks interday, a much bigger pop. >> as chesapeake falls away. >> and that's another big story there. >> yes. >> in the meantime get to yahoo's earnings as well. showing signs of progress under the new ceo reporting tuesday afternoon that first quarter earnings rose 28%. taking a look at how shares are fairing right now and shares of yahoo! it is up 3%. mark is an analyst with citigroup and joins us now. great to have you with us. did you get enough detail from scott torp son about his direction. >> we're starting to go down that path. he mentioned one thing and said he was going to shut down 50 different projects. what he didn't do is say which 50 projects but that's all right. give us the list when you can, scott. they're move ago long. this will be a slow, long turn around but maybe making steps at least on the bottom line in terms of managing expenses. >> it is still neutral in your view. what sort of clarity do you need

or to have you consider moving the rating on this? >> if you want to buy yahoo stock have you to believe there is going to be a shareholder wealth creation event out of asia, sell the allie ba ba stakes at some premium or with yahoo, japan, so either as an asia sale catalyst or you believe fundamentally he can't turn the business around. the display advertising business, the banner ads, the video ads are not growing in a market growing 20% year-over-year. it is an enormous amount of under performance and will take a long time to recover. i don't think have you to be skeptical on the first part but you have to be on the second part. >> any read through to other companies you cover from what yahoo reported, whether it be directions ally when it comes to ad rights or whatnot? >> i think it is another sign of seeing broad deflation in internet ad rates due to a lot of different factors. one is the rise of ad networks

and secondly you're seeing display advertising going away from premium priced companies like aol, like yahoo!. google is a part of derivative positive playoff this. there are other companies as well >> i want to ask about another company from the recent all-time highs and has fallen quite a bit, mark. the last time i spoke to you about price line you said it was probably the safest buy in one's portfolio. do you feel the same way? do you feel it is a minor correction in the stock? >> yeah. it was our number one pick until it got to 750 in our internet portfolio just to be clear about that and i think you have one of the best management teams. evacuation at around 20, 21 times earnings i think is reasonable for a name like this with this kind of growth and this is a very shareholder friendly company. you're unlikely to get wild card events like you had with the quote, unquote stock dividend out of google. >> always good to speak with you. >> thanks, melissa. >> we should get price line on the program. we should get them on the show.

>> we should. >> absolutely, absolutely. anyway, it has been interesting. when you take a look at price line as well as a lot of other momentum stocks, remember the day that apple had the huge turn to the downside? that day all of the stocks close to 52 week highs fell apart and they're momentum names in the market. chipotle, starbucks, apple, all on the same day turning lower. >> we went through a similar period late last year where momentum fell off a cliff and came back. >> last year was different because there were major concerns. we were talking the prospect of double dip at this time last year and at least this time around it is spain in the distance. that's the only major, we said major concern, and he has a list of major concerns. should we take a break? let's take a break. up next, the best of the best, all-star investor day and we'll talk to be a five-star portfolio manager about his strategy for

profits when squawk on the street returns this wednesday morning. e announcer ] when a major hospital 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 ]

stocks to watch 45 minutes into trading, abbott labs, third quarter earnings topped estimates and improving sales of

prescription medicine, prescription products and medical devices and krooe below street cast for the current quarter and video game marker thq raising the fourth quarter revenue outlook. in the meantime intel reported first quarter earnings after the bell yesterday and beat the street on the top and bottom lines and net income did fall 13%. intel shares slipped in after hours trading and still trading down almost 60 cents, about 2% to 27.88. mike mcconnell is an analyst and good morning, always good to see you. >> good to see you, too. >> obviously some of the bulls say it is a transition quarter, trough quarter, some of the bears say a lot of metrics they were posting, things like margin, unlikely to get back up there as arm based chips and mobile is just not the baylywick. where are you on this. >> if you look at the near term execution has been outstanding. i really think they're hitting on all cylinders. you're right. i think the issue is the

multiple. the multiple is trading near all time low. they're putting up numbers in the near term. it is the longer term view and really coming down to the company's ability to break into the mobile computing segment albeit tablets or smartphones which we're seeing in those markets is rapid consolidation for the customer base. you're seeing samsung and apple really begin to take material share in those two markets and unfortunately for intel they use their own processors, so it is going to take time for intel to maybe indirectly put pressure on samsung and apple to consider their own processors and doing this through manufacturing. that's one reason why they're spending so much in terms of capital spending and that is going to weigh on the margins. we really i think need my personal opinion is we're going to need to see some progress on that front to see the multiple expansion and really get out performance in the shares. >> when you say it is going to take some time, how much time? >> well, we estimate probably

two to three years probably until they ramp, not this current node, but the follow node, which will have a lower cost profile. there is also a certain technology they're adding that the arm ecosystem does not have now, so probably two to three-year timeframe until apple and/or samsung will start to consider them. >> and two to three years, mike, you're confident they can still along with gaining share in smartphones as well as tablet chips also move with the times because two or three years back the landscape was completely different when it came to the demanding for the chips that go into the devices we're using today. >> yeah. i think it is absolutely right. i think what they're going to try to do is really push the manufacturing side of the equation as fast as possible. that brings about lower costs. that brings about better power envelope, and athat's something that will be attractive. >> that sounds like lower gross margins to me. >> it could lead to lower gross

margins because they'll need to spend to get there. that's going to weigh on the gross margin line if we look at next year even the year beyond that. i think the street, though, is prepared for this and this is one reason the multiple is where it is right now on the shares. >> but to be clear when you talk about the decision by some with apple down the line, are you essentially discounting this huge move over that they've got to ivy bridge and we'll get hour information monday about the processes and that's not a game changer for you at the moment. it still comes back to whether apple or samsung will use the component parts. they can't change the world on their own. >> yeah. i think that's exactly right. i think again we're talking about the multiple here. people are looking for growth in this company. ivy bridge probably a great product line but again it is going to be selling mostly into notebooks where they already have a dominating position. it is again looking for new avenues of growth. >> in the mean sometime is it mutually exclusive if i bet on intel am i effectively betting

against apple and sam saung and vice versa? >> you're betting for an opportunity maybe down the line if they can extend that and indirectly force apple and samsung to are consider the processors. i think that's what the bet is. >> before we let you something is $30 always going to be a pipe dream? do you see that happening any time in the next 12, 24 months? >> i think it is possible. i think the one thing that again if you look at this big wave and this data push that's been going on, albeit smartphones and tablets, intel does directly play into that because we have a strong server decision. if they put up the numbers, i think we can see a path to 30 to 3 dollars in earnings maybe over the course of the yeex year and i think the multiple will stay around ten times. >> thanks so much. >> it is all-star investor day here on cnbc.

throughout the day every hour talking to a five star fund manager to get their best advice on where to put your investment dollars in the present market. joining us now, his funds surprisingly up about 2% so far this year and as you look at jason brady, fixed income and managing director and he controls $14 billion. good morning. >> good morning. how are you? >> what do you think of the market? >> i think it is pretty federal reserve driven, pretty global central bank driven. i am feeling pretty cautious right now frankly. >> what does that mean in practice? what are you looking for? >> if you look at the landscape about risk and that can range from stocks obviously here at nyc to high field to convertible bonds and anything but treasuries. really being driven by the move out of risk free assets, ie treasures. when you make treasuries uneconomic to hold, they're

below the level of inflation and people move to other things and that's being done by the federal reserve, the ecb, the pboc and everybody is in on the party. >> we had your performance clearly and what sort of dividend do you return to people? >> i brought in several different funds ten years and in, investment grade, so not particularly exciting right now. it is a little over 3%. >> why invest in treasuries when you can go to buy corporate bonds? >> it is not high yield. that particular fund is investment grade. i think high yield it be interesting. for example, if you look at the ten years, 2000 to 2010, it was like 8%, high quality bonds five, stocks zero, and there is return there converting the same way and equity upside and really the difficulty i have in that particular fund is really trying to have capital preservation. that's the idea of that one. capital preservation in this market is probably the hardest job to have because if you take away the risk free assets, you

make it risky because you put prices up art fiblly, it is difficult to say there is 3% inflation, ten-year treasury at 2 and what does capital preservation mean anymore? you have to think about risk assets partly as capital preservation and that's driving people into stocks and converts and things like that as well. you have to have a much broader view of risk right now and i think it is frankly a challenge for a lot of people. >> talk about convertible bonds. i think a lot of investors are intrigue and had put off by the structure. where are you seeing a value right now? >> at times the convert market is driven by levered players and people when they buy the convert and shorten stock and take an order between them. sometimes it can be attractive when people are scared of risk and less liquidity in the market and can take advantage of that as a professional money manager. philosophically, not to get too abstract but what's need is there is some income, right, and also potential stock upside.

thq, you ex mentioned earlier, a pretty distressed company and i haven't seen the prices recently but i imagine given the recent news the converts are up nicely. have you an income component as well as an appreciation component. it is true with the impact stocks as well, a similar idea. >> what do you think was behind the recent spike in ten year yields and will that repeat itself and do you see us cracking three by the end of the year? we're wondering what impact that would have. >> i think that you'll have to seeined economic fundamental situation in the u.s. i don't see that as very easy. in other words, we have a bunch of free money. when you start to move the free money, it is challenging. the reason why the treasury moved up in yield a few months or last couple months is because there is a prospect of that occurring. we have a little worse economic numbers and comes back down and i think ultimately there is a self limiting effect. if you sta rt to get 3 or 4%, it

is a big move not not that it has happened before. you will see a lot of valuation arguments for riskier assets go out the window. similar to the intel guest where there is really an investment for growth and some time to work through what they have going on and it is the same thing in the overall economy, and i think that's one of the big drivers of risk assets and one reason why i don't really see ten-year yields or bond yields shooting up. >> do you believe that the feds, is there now almost permanently for two or three years at low interest rates and rating the prospect of qe and operation twist and whatever they need to do, is this now almost a semi permanent state of affairs? >> i will tell you that every time i read the minutes or sort of hear them have a view, it is not surprising. they said they're on hold anding i think that the folks that are in control in that situation,

that's what their line. they haven't changed that line. i am going to take another word on that one and so if that's the case, that anchors yields and provides a nice background and doesn't solve the broader problems in the u.s., it is growth, and in europe absolutely growth and just low yields doesn'ten gender growth. it has to be other things going on. >> it makes life tough for you. >> it does. it does. it i managed fej funds that invest in dividend paying stocks so there is opportunity there, but i think you really have to understand your assetal locations and why you invest in things. the high quality bond fund, it is really designed to be an set allocation. do you want your fixed income portion to be doing the same thing? you don't. you need to stay in the game. it is what the high quality fixing is doing right now and i can't make any other sort of fundamental argument for it

given what the federal reserve has done to overall yields. >> thank you. jason brady there. >> still to come breaking news on crude oil inventories and citigroup's chief u.s. equities strategist on whether or not the rally we have seen so far has legs. they have names like idle time books and smash records and on small business saturday they remind a nation 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. 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.

with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. it's another reason more investors are saying... today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe?

let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. the >> take a look at shares at wind resorts jumping up by 5.5%.

apparently the governments in macau may sign a land grant that would enable them to proceed with the casino project. obviously good news for wynn. >> shares of genworth financial taking a hit following news the initial public offering of the australian mortgage insurance unit will be delayed. genworth is the biggest lose inner percentage terms on the s&p 500 so far today. not surprising perhaps with a 19% loss. >> all right. make a right turn here. how will this week's spanish fund auction and bank earnings affect the u.s. dollar in time for the money in motion currency trade. annie bush is with bmo capital markets. always great to speak with you. what do you expect in terms of how the bond auction will go? >> right. tuesday we got a pretty good note auction out of spain. everybody of the relieved about it. seen the ten year yields drop in spain and i think thursday as we head in you will see back ago

way from that. the reason being is ten years, you know, length is a lot different than one or two years on the note. that's where the concerns will show up. we also got news out over night on spanish bank loans deteriorating further from the bank of spain, so we know there is issues there, the ibex down 4% at one point today. >> you're going in and advocating selling your euro u.s. dollar. >> right. let's look at tomorrow and say there is a couple things coming out. overall, the euro is down trending. we know this because we're getting lower highs and lower lows. we want to keep trying to sell the euro until proven wrong. that's why i want to sell it. tomorrow is a nice opportunity to look at what happens and then how the market reacts to it and that's when you should put your position on. if the market reacts like the euro sits there on a bad spanish auction, you don't want to short it because it is showing you stronger and there is demand for it. you want to keep that in mind. i am advocating selling the euro

around 131.30 and i got a stop above 132ish and about 300 points lower and 128 and 128.0 and let the market dictate in the reaction during what happens during the auction to tell us what the position on or not. >> there may be investors who may be interested but if the euro doesn't tip to 131, we haven't seen that level in a few days now, would you still recommend going? you would leave it be? >> i mean, we were there i think last night. >> okay. >> 131, it is not that far away. i want to throw in, also tomorrow we get additional bank earnings and if they miss it is another advocate for selling risk. i think the market and the street is looking for 6 cents and 20 cents and closer to the 6 cents than perhaps another opportunity to add additional negative things out there. you want to continue to sell the euro and buy u.s. dollars on that. >> your take profit level

interestingly and importantly is actually below the low we saw in february so where you're looking for major moves here in the euro in this trade. >> right. broke ahead in childers pattern and i do like it going down. as you get to 128.30 you may say i only want half a profit here and see what happens. keep that in the back of your mind. >> good to see you. thanks so much. be sure to catch money in motion every friday and if you want more education go to currency class at moneymotion dot cnbc.com. >> breaking news on oil inventories. the numbers spike a rise in crude or a pull back like we're seeing at this moment and later on citigroup's chief u.s. equities strategist tobias leckovich on where the market will take your portfolio.

according to the signs, ford is having some sort of big tire event. i just want to confirm a few things with fiona. how would you describe the event? it's big. no,i mean in terms of savings how would you sum it up? big in your own words, with respect to selection, what would you say? big okay, let's talk rebates mike, they're big they're big get $100 rebate, plus the low price tire guarantee during the big tire event. so, in other words, we can agree that ford's tire event is a good size? big big laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done.

there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? [ e an the united mileageplus explorer card. get it and you're in.

i am here live at the nymex and just seeing the numbers cross for the weekly date a looks like we're up 3.9 for crude oil, gasoline down 3.7. that's off what we had previously expected. i want to look into the reaction in crude oil. it looks like we are still weaker below that key technical level of 105.49. we'll continue to watch this. really the energy complex is fairly weak across the board today. in reaction to these numbers just crossing again, crude oil up 3.9 and gasoline down to 3.7.

looks like distillate down 2.9. >> courtney reagan, thanks so much. one hour to trading. here are the stories we're squawking about. the gaap among the stocks hitting new 52 week highs, up about 47% year-to-date. shares of catalyst health up 30%, the benefits manager agreeg to be acquired by xsc health solutions and xsc rising on the deal and stock up 6%. groupon falling more than 3% to the lowest level, down almost 40% from the ipo price of $20 a share. >> to the spinning wheel. yesterday of course we had a rally that made you think perhaps what went up might come down. certainly when you see the european markets rallying as they did and boy was it at the shortened. consumer discretionary is holding out its own. as you were saying earlier we

are coming back to the financials helping us do that. look at the breadth. there you go. 2:10, declined to advance at the nyc and the nasdaq easy numbers. there you go. 3:1 at the nasdaq. we want to turn our attention to tech for a moment. oracle versus google is playing out big time in court. larry paige taking the stand for a brief period yesterday after larry ellison attempted ed ted the courtroom. >> google ceo larry paige arrived at the courthouse in san francisco moments ago. our cameras were there as you might be able to see if we can get the video up. paige is undergoing his second day of testimony. he was the first with itness yesterday appearing in a videotaped deposition being questioned by oracle attorney david boyce who represented al gore in the recount and took on bill gates in the microsoft antitrust case and yesterday

wasn't a strok day for paige. he seemed evasive in the video being questioned about a presentation he got from the android team years ago when they told him google must take lance from sun for java and we didn't think google needed a license and wasn't sure what must take license meant. oracle ceo larry ellison also took the stand making the argument google is the only company that is using licenses in this way which google judges to be -- which oracle judges to be improper by the rules of the road for java. right now google is making the case that overall the licensing terms for java were want that onerous when sun had possession of it, that sun knew all about what google was doing with android and java and didn't have a problem. it is only after oracle got krl of the sun through buying it out and figured out they couldn't get a deal done with google to get their version into android and they decided to go ahead and

sue, but we'll see how this all works out. oracle folks have been messaging me making the case that larry paige being questioned by boyce is reminiscent of bill gates being questioned by boyce and of course that case is kind of flattering for oracle because bill gates was seen as being very squeemish and not doing himself favors on the stand when boyce questioned him. we'll see if that is how it turns out. >> so fascinating. they have to get a better courtroom artist. i think i could draw better than that. >> didn't look like that. >> nothing whatsoever. >> just saying. >> thanks, john. >> i will let the producer know. >> thanks. as we're one hour in, bring it back to the markets and head over to the cme and chicago and see what traders are watching. the president, chief investment officer of nation shares is at the scene. good morning, scott. >> good morning, karl. >> a lot to watch today. i know you're keeping an eye on intel and ibm and talking about how there haven't been real

disasters in earnings so far although there is a lot to quibble about so far. >> that's absolutely right. we look at intel and ibm which kind of beat on the top line and i think what this really points out is how much expectations have fallen since, say, the first of the year. pretty good number from intel and ibm. end up causing problems for those companies and i think largely because at least in the case of intel it was priced for perfection and melissa and i spoke about intel on monday when i was bearish and intel had this problem we would have expected and that is in margins and missed margins by over 100 basis points and that's obviously a problem for a company like intel. great company, but it has to reinvent itself to a certain degree because people aren't buying pcs, and they're buying tablets and i don't know who makes the chip in my ipad. >> why would anyone want to jump in on a day like today knowing what the spanish auction may look like when we come in tomorrow morning? >> i think it is a great

question. our market got really sick when the span inten-year-year-old got above 6% earlier this month. that's what you need to know here. you don't need to delve into the complexities of the spanish economy. it is just going to be bad for our stock market. >> finally, you say you're bullish. you're not going to get crazy bullish until gold takes a leg down. talk about that. why? what are you thinking? >> first of all, i am not a believer in the gold story and i think as long as there are people that are believers this gold we won't see stocking really get through the 1,400 level that's so important. as long as people still believe in gold, that means they're still fearful. they mighting fearful of economics here, oil prices here, what's going on in europe, or whatever employing on in the middle east. >> you know, as long as people are still afraid. >> that isn't going to change. this is generational, the degree to which people believe in gold and the belief right or wrong that you need to have 5% in your

portfolio. that appears to be here to stay, however you might argue, whatever the reality is. >> if that's the case, thatten moos the qe is generational. qe was the rocket fuel for gold that got gold to the level it is at now. if the fed wants to be accommodating the rest of my life, so be it but if they're not gold is going to come back to earth. >> the fed has not formally issued any window regarding your lifetime and monetary policy. >> really? >> i wouldn't put it past them. >> you have three years by the looks at it as things stand at the moment, possibly to 2015. >> scott will be around a long time after that. scott, thanks. >> we hope. >> we'll talk to you soon. scott nations. of course you can catch more of scott every friday, 5 p.m. eastern time. >> we want to check on shares of berkshire hathaway, how they're trading. we saw the a and b sell off yesterday and continued weakness

this morning as we got news that warren buffett is diagnosed with stage 1 prostate cancer. the oracle of omaha writes the good news i have been told by my doctors that the condition is not remotely life-threatening or debilitating in any meaningful way. we have a bucket watcher to talk about the future of berkshire. it is a pleasure to have you with us. >> nice to be here. >> we wish warren buffett well and wish him a speedy recovery. as a shareholder, jeff, a large part of the reason why you invest in the company is presumably the buffet magic touch that he has, the midas touch. you know maybe more than anybody else out there that he has a special knack for identifying value in companies. shouldn't there be, isn't there reasonably a buffet premium embedded in the stock and now that we are actually faced with the fact he is a mortal being

and like everybody else on this earth will face death, that premium should at many point come out. is that what we're seeing now? >> we're seeing a little of t i think it is more of a short-term issue today, some people reacting to the headline. the reality is that the market has been reacting to buffet's eventual passing for some time because buffet has been taking himself out of the stock market business in a big way by shifting a lot of berkshire's assets from stocks into real companies. 15 years ago two-thirds of berkshire of the stocks. today it is only 20%. 80% is companies that other people run. think of it this way. warren buffett only runs about 20% of berkshire's businesses. other people are running 80% of them right now. he has really been moving himself out of the picture and preparing for his eventual not being on the scene anymore for a long time. >> sounds like you as a shareholder accept the fact the stock will have a lid on it

because you're still dealing with this fact that there will be a transition and you don't know who the transition will be to. >> right. exactly. and there is another bigger issue here than who the guy is who replaces buffet. that issue is the law of large numbers. berkshire is a very large company now. it is essentially a big conglomerate. what people have to understand is that this is not your father's berkshire anymore. this is not a mutual fund run by a genius that grows at a very big rate. it is really a bunch of operating companies. it has a railroad as its biggest asset and a bunch of pipelines and a lot of other things ranging from lollipops to jets and it is not going to grow much more than the overall economy. it will never be what people have in their mind as far as berkshire hatters away is anymore. >> i realize that to even question warren buffett is an act of blas fem i in the united states and i may be beaten with big sticks into the hudson river suggesting there is a discount which the assets trade at, 25,

30%. a conglomerate discount if you like. isn't there the possibility further down the line if we talk about changing strungt there is a possibility that you could unlock shareholder value here? >> that's a really interesting point. buffet is very aware of this and very fearful that once he is not on the scene somebody will come in and try to do exactly that. so one other thing he is doing besides appointing a ceo in his own image is he is also appointing his son howard buffet as chairman of berkshire to kind of oversee the company and make sure that the culture doesn't change and also make sure that a corporate raider doesn't come in and do exactly what you're saying. >> doesn't that -- isn't that a corporate governance issue? isn't that actually, forgive me for suggesting it, against the interest of shareholders who may want to unlock value further down the line? >> you bet. i have written about it in my book. buffet does certain things that don't fit with the rational point of view that he takes

about most issues. on the issue of berkshire hatters away itself, it is a very personal thing for him and he does not want to see it ruined by somebody else even if technically that creates more value down the road for shareholders. i am not going to rationalize it because he can't. >> we'll leave it there. thanks so much for joining us. we do appreciate it. >> i was going to say it is interesting the way in which buffet is presumably attempting to control the message here in that he knew he would have to attend hospital visits further down the line so taking charge of it now. it isn't threatening the man's life. this is not and yet he wants to ensure there are not rumors when he is seen going to a clinic. >> we went through this with jobs at apple. i think it would have been considered material, don't you think? >> absolutely. >> and failure to disclose this once you had the diagnosis. >> he had a liver transplant. that might be slightly different from phase 1 prostate cancer,

notice? >> pancreatic cancer was at the time a seriousish auto for jobs, too. i think if buffet didn't disclose we would have had a different conversation. >> especially because he is a ceo that is up front and out front with shareholders. >> yes. >> he is such a hands on ceo that it would be shocking if he did not disclose this. >> interesting. when we come back this morning times square turned into a mini olympic village. we'll talk to one of the top execs with the olympics organization and see how much money the games really mean and the wall street journal reporting mark zuckerberg kept the facebook board out of instagram's negotiations and we'll talk to a key reporter behind the story next. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out.

see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. hey, heard any updates on the game? i think it's final seconds, ohh, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. 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. covering 2000 more 4g cities and towns than verizon. at&t. ♪

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.

nasdaq turns positive, a fascinating story in the wall street journal that facebook's

board was all but out of the picture when mark zuckerberg negotiated the acquisition of instagram. apparently the ceo talked directly with instagram's ceo on the $1 billion acquisition, facebook as largest ever and we wait for it to come it to the market. suspense certificate deputy bureau chief for the wall street journal and joined us now. good morning. so didn't talk to the board at all and at one point did he start doing so? >> mark zukerburg reached out on thursday and they basicsly began negotiating soop after that and the negotiations continued throughout the weekend and on sunday morning it looked like the two sides were going to reach a deal, so mark zuckerberg sent an eli manni-mail to his b directors that he was pursuing instagram and a deal might happen that afternoon. the deal was almost virtually all but done by the time he reached out to the board and

later that afternoon the board did approve the deal but it was largely symbolic because mark zuckerberg controls more than 50% of the voting shares of facebook. >> given that he is tied up deals with everybody, what is the feeling within facebook about behaving in that way? was that to be expected? how do they feel? >> i think the story is interesting for several reasons. the main reason is i think it reveals a deep truth about facebook which is that it is truly a mark zuckerberg production and what that means is that he really is in control of the company and he does like to call the shots and so shareholders who are thinking about buying facebook during its ipo need to think about what does that mean? one thing it means is that the ceo of the company can go off on a weekend and can spend a billion dollars on an acquisition with virtually on his own and some people might say that's a good thing because if you look at the way the internet works, a very fast-moving industry and you

need to be able to move fast because the threats emerge quickly and clearly mark zuckerberg saw a huge threat with instagram and acted quickly to take it out. >> there is a great part of the story where zuckerberg is clearly getting worried about the android app for instagram. >> yes. >> that's when really he steps it up. i wonder, does it try to read between the lines, does it seem like an emotional buy or that due diligence even for a private company. >> you have to realize mark zuckerberg has been tracking instagram over a year and reached outlast summer and made an overture and sounded them out on a potential acquisition. at that point the instagram team wanted to remain independent. the company kept going like crazy. it doubled its user base in the first three months of this year. it released the android app and going north of 35 million users and so zuckerberg decided we have to act now because if we don't act now, it could be 50 or

60 million before we knew it. i don't think it was an emotional decision for mark zuker werg. i think it was a very calculated rational decision by someone who knows that these companies can come out of nowhere and start out of nowhere and start biting at your akels. >> so, spencer, the bottom line for potential investors on facebook would be that this deal could have happened just as easily if facebook were a public company? >> yes. i think that there's a whole class of these companies coming up right now that are founder led and founder controlled in silicone valley. and that's because it costs so little to start these companies in the beginning. and so the founders end up controlling a lot more of the equity. we're going to see a lot more of this. after facebook goes public, zuckerberg, i won't be surprised if he goes out and does another deal like this. you have to go back and look at the shareholder letter that mark zuckerberg wrote and get perspective. there were two core values he

called out in that letter. one was move fast and the second was be bold. how do we move fast and bold here? some let's be clear. that man could also bet the -- on an acquisition that is bad and there's no one to stop him. >> yes. well, that's the risk that you take by investing in facebook. so as a shareholder, you know, you have -- you know, some people would say, well, this is anti-shareholder because he controls the company and the shareholders don't have a lot of say. on the other hand, what is the point of being a shareholder? the point of being a shareholder is to make money. mark zuckerberg has taken a company and created a $100 billion company. i think shareholders will be happy with that. the question now is l continue to raise value for shareholders going forward? >> we've got to run. thank you for your time, sir. >> still to come this morning, what if microsoft were to hand over bane. we're going to get top analyst

rick sherwin's thoughts on the potential game changer in just a few minutes. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz.

just 100 days until the summer olympics.

the olympic village has sprung up in times square in new york city. darren rovell is there live with a special guest. >> good morning, carl. yes, we are here in times square where the united states olympic committee sponsors are out. the athletes are out. they will be signing autographs later this morning. joining me now is the chief marketing officer of the united states olympic marketing committee. >> thank you for coming out to times square and see our ath lees. >> what is the value of the ring? you have mercedes, samsung, what's the value of the olympic ring? >> our research shows it's one of the most valuable properties for sponsors because everybody in america connects with the olympic athletes and the paralympic athletes. we're really excited. we also have new sponsors.

and they love american athletes. >> tell me the rule regarding athletes and having sponsors that are not olympic sponsors and when they can promote those sponsors. because there's a short window for them to capitalize, but there's also some restrictions. >> well, there are. what we have, we have our 40 which protects u.s. sponsors. and we give sponsors at the global level and domestic level of the olympic movement the right to use ambassadors in all kinds of advertising, marketing materials during the duration of the game. so the short time before the game, there is a rule in effect where any competing at least cannot do it. they have to be competing in the games and they have to preserve the spot. >> so if they're not an olympic sponsor, they can't use that for the two weeks before the game? >> that's right. most americans don't know that it's the sponsors and private

donations that fund. we get no government support. so we're reliant on those donations to help fund the ability of our athleteses to train. >> and the announcement today that nbc is live streaming all the events on the web if people want to see it. how big do you think that is for what you do? >> i think it's going to change everything. 3,500 live hours of competition events are going to be coming to americans. and they're viewed more than anything else. if they want to tap into the olympic games, they can do so wherever they are, particularly in new york because they're commuting, they're able to see that and those events live. so we're really excited. >> and the chief marketing for the olympic team, thank you so much. >> thank you. >> 3,500 live hours, every single event will be on

nbcolympic.com. if you want to watch it live now, we gave into your demands. nbc is finally bringing it to you. >> just 100 days until you and i storm london, darren. i can't wait. tomorrow, we'll have the ceo of price line joining us at 10:30 a.m. eastern time. stick around. back in a couple of minutes. after a morning of walk-ups, it's back to more pain, back to more pills. the evening showings bring more pain and more pills. sealing the deal... when, hang on... her doctor recommended aleve. it can relieve pain all day with fewer pills than tylenol. this is lois... who chose two aleve and fewer pills for a day free of pain. [ female announcer ] try aleve d for strong all day sinus and headache relief. [ female announcer ] try aleve d you know, those farmers, those foragers, those fishermen.... for me, it's really about building this extraordinary community. american express is passionate about the same thing.

they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant. when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade. well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering, web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account.

tomorrow on "squawk box,"

southwest ceo gary kelly. >> earnings there and earnings from another company, too. >> dupont's ceo alex coleman. >> we want to get to what's coming up tonight on fast. >> the company that made the two-pop hologram. >> that was a big deal. >> that will be fun. >> we'll see you tonight, melissa. if you're just joining us, here is what you might have missed if you're just tuning in. >> welcome to hour three of "squawk on the street." here is what's happening so far. >> warren buffett did absolutely the right thing. as a cancer survivor myself, i chose to be very transparent when i was diagnosed. warren buffett is a far more public figure. >> if you don't address the problem on the deficit and debt, raising taxes is like throwing good money after bad. >> it's kind of hard to take a balanced approach at costs which we have to make. we made a trillion. we need to make more. and revenue, if you've got one

party that says they absolutely refuse to generate any revenue for the purpose of generating the deficit. >> i think the gross margins will be under pressure. that is correct. we say you don't know what you're doing. i've never made a lot of money. i've known stacey for several years. i've never mete made a lot of money betting against them. these guys just want to take action. they don't think, wow, what does that do in to my shares down the road? we're moving. >> a look at the s&p 500. >> when you make treasury totally uneconomical, treasury yields are below the levels of -- then people move to other things. and that's being done by the federal reserve, the ecb, the boj, the pboc. everybody is sort of in on the party here. >> good morning. welcome to the third hour of "squawk on the street." let's get a check on the markets today after a big broad rally for the dow yesterday.

giving a little bit back, most of the morning so far, down for 3 points to 1382. the dow down, s&p down almost 2 points to 1389. starbucks, one of the biggest gainers on the s&p getting a boost after announcing plans to expand its operations in china. credit suisse raising its price target on the stocks from 56 to 57. just some big energy hitting lows the stock hasn't seen since the summer of 1999. we're going to talk more about that story later on this hour. let's get to our road map, though. the markets taking a breather after two triple digit gains. we'll get ahead of the market's next move and see what the hockey season may look like in the postseason. then, new york jets coach rex ryan gave us his take on the season ahead. plus, should facebook buy bing? we'll find out why swapping the search engine for some social network stock could be the best

move ever from microsoft. also, our vgdz continues, five-star investing strategy rt for the small caps. that's coming up in the next hour, as well. first, though, get to our capital markets and gary kaminsky who i know wants to talk about a bunch of different things. >> first of all, big show today. rex ryan has a lot of answering to me as a life-long jets fan. let's talk about chesapeake first. you mentioned the reuters story. graham reported by reuters earlier today. the fact is, we discussed this six months ago called chesapeake is not an energy company. it has not been an energy company for many, many years. in the opinion of many institutional investors, this is a hedge fund. it has been a hedge fund. they create a lot of cash flow by selling out of the money calls. it was a good strategy when the price of the commodity came down. this has been a controversial name for many, many years.

this is all i want to say. and it is my opinion. take a look at this board of directors. i'm now going to say, given the news that was reported today, this has got to be the worst board of directors in the united states in terms of corporate governance. the fact that this information is coming out and it is coming out the way it is coming out and that this has been a pattern at this company over many, many years. so we have the board of directors? i don't know. here we go. the question is real simple. we talked about -- you talked earlier this morning about facebook and the idea that zuckerberg was able to create a transaction and put it together without the board being fully -- that is nothing compared to what's going on here. and so i question every member here of the board. i don't know any of them personally other than charlie max well. good analyst. was a good analyst in the energy sector. but how could -- i just ask every one of these board

members, how can something like this have happened if it was any due diligence on your part? >> is there any way to defend this, even if you don't agree with that defense, is there any way the board can make this look less bad? >> let me try to come up with something sort of on the fly here. i guess they could respond that this was in the best long interest of the company so that they could extend loans and work these side car deals given the price of the commodity. i mean, it's a very, very hard thing, in my opinion, to come to a long-term investment in this company and say that this is a good thing. we would look for any of them to come and join us over why i should look at what's happened in this company. >> they might also come back and say, look, he's always operated by his own rules. >> correct. >> no different. >> and by the way, if you have a board that allow eggs you to do

that, you will continually do that. i see no reason -- the stock is down about 7% today. if you're thinking about investing in this company or trading in this company, just be aware that this is a hedge fund. this is not an energy company. >> all right. let's talk some broad markets. what do you say? >> we should, we should. >> were you talking about strategies recently? >> first of all, let me just say that tobias, i have to apologize because we were recently talking about how most strat gichts miss the big move up in the poll and tobias correctly reminded me that he was one of the few that he had advised people to get extremely aggressive right before the 30% move. >> gary, i appreciate it. >> where is your head right now? >> you mentioned nhl playoffs. probably a little bit too much there and watching the west coast games. i'm a little bit more cautious in here.

not because markets are up, but because the voluntary primary sentiment showing complacency. valuation isn't as good as it was back in october/november. and i'm concerned about the earnings issues as we're going from very low single digit earnings expectations from the first quarter to 16% in the fourth quarter, which seems pretty aggressive. very hockey stick like. and i am not sure what that emphasis is going to be in the second half. i think we're going to see through the summer some of that adjustment downward underneath expectations. the last thing i throw out there is i think there's been a lot of attention paid on spain and i would actually be a little bit more worried about france when the leading contender right now, the socialist party leader is talking about not letting financial markets dictate french economic policy. could that be a disrupter in the next few weeks for expectations around europe? >> let's talk about spain for a second. we were preempted yesterday

11:30 by the president. was it so much surprising that the equity markets not just in the united states, but around the world was so excited about this spanish auction which in a sense is not really any kind of confirmation about the credit on a longer term basis? >> i think a lot of pedestrians are confused by yesterday's action. i had one person tell me, well, it's because a poll showed romney ahead of obama. and i said, i find that hard to believe that that alone would do it. but i think people have gotten maybe a little scared in a day or two. we have had a four or five-day training of downward markets. all of a sudden, you have this big fear around spain is mitigating a bit. oh, quick, i'd better cover. then you get these fast and rapid moves. you're not getting a lot of volume on any of these moves, which is a little distressing because many people are staying out of it and kind of letting it settle. >> it sounds like you think we're back to these possible days, plus 100, down 100. you think we're back there? >> we were saying we expect

volatility to continue the next few months here. because there is a fair amount of things going on. it was interesting. the background come november, we have interstock correlation. markets are going up directionally up or down on whatever that news or event was. it goes down to 20% by the time march occurred, which meant macro was no longer important. apparently we had resolved all of europe. the u.s. has no fiscal flip. all the issues are settled. iran, no issues to worry about. and that was kind of extreme the other way. so you were putting yourself at more risk. i referred to the market a bit as being somewhat accident prone. before we let you go, your concern about fourth quarter earnings? do they translate to the things we're seeing now? ibm, did they miss? >> the specifics of ibm, i would say that i think companies are going to be reluctant to get bullish outlooks because they've seen some uncertainties. i think the quarter we're going to have to watch on that is going to be the july reporting -- the june quarter,

but the july reporting season where they're going to have to give more insight in the second half. that's where you'll see the guidance issues that i'm concerned about. >> get some sleep. hockey goes away. >> i have to watch the games. the kings are exciting. >> thank you. >> you could have a career in sports if you wanted. >> i'd love to. it would be fun. meantime, drawing in dozens of celebrity traders for the day's activities, bob pisani is there with one of those celebrity traitors. hey, bob. >> we've been having a great day. lots of sports figures, actors all coming in here. this company has raised $4 million. last year, $20 million and the last ten years for a whole bunch of different charities. let's talk to rex ryan, jets coaches, one of many important people. you're representing the lions for research here. tell us what the charity is about. >> first of all, it is a great honor. find ago cure for lupus is

something that, you know, obviously, all of us are passionate about. and that's really why i'm here today. >> and what about a couple of hundred charities being represented here raising money. but your boss here, woody johnson founded that charity, as well. is it a personal connection? >> yeah, it is. in fact, the entire organization gets behind this and, you know, it's really important for our organization to help find a cure for lupus. there's been a lot of graid great strides. even since i've been here now, this is my fourth year with the jets. you've seen a lot of advances in the research for finding a cure. so we're really excited about that. >> now, we're on the trading desk. i came in and i said, i'm talking to rex ryan, guys. what do you want to hear about? he said what's the trade? what is going to be happening this year? you have mark sanchez and you have the new guy, tim tebow in there. how do you play that trade this year? >> well, i think first off, we were excited about the opportunity to have an excellent football player.

he just was what we want in a player. i mean, he's competitive, he's tough, he's -- you know, he's a winner and he's a passionate guy. he's a great teammate. that's what we're bringing to our football team. and, you know, we're -- he is -- you know, we have a great quarterback in mark sanchez. we bring another guy, you know, in. tim tebow. mark is our starter. tim will do a lot of things for us. >> my understanding is woody johnson, an owner who is here, as well. he wanted tebow. how much input did you have in that decision? >> well, i'd like to think i contributed a little bit of that input. we had to go against tebow. if we would have beat him, honestly, we would have been in the playoffs last year. he drove the broncos down 95 yards with the game on the line to beat us. we certainly have that. i remember that. but the thing about tim tebow is we know he's such a competitive guy and he just really fits us. and when we have that opportunity to add to the group of guys that we already have, we

thought it would be, you know, a great decision for our football team. >> coach, thanks very much for joining us. always a great pleasure and a great day for all of us. tom coughlin, they're off bhund me. dozens of them. it's going to be a good day raising money for charity. >> don't forget cindy lauper. talk to you in a bit. when we come back, should microsoft bring in bing in exchange for some facebook shares? we'll find out why the software analyst rick sherm win thinks that's exactly what the tech giant should do. ay to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? [ male announcer ] the united mileageplus

explorer card. get it and you're in. foil your house to reflect the sun's rays back into space to try to reduce climate change. but there are easier ways to go green. like turning off the lights when you leave a room. you could save the tin foil for leftovers

th

and, of course, the $656 million prize, the record, of course. the winner here will accept a check for $218 million in the southern illinois town of redbud where the winning ticket was purchased, according to the illinois lottery which was on monday. a single winner. gary, we talked about the mega millions winners the other day and all the choices they have in front of them now. >> indeed. hopefully this gentleman will be in the very small percentage of lottery winners who investor that money wisely and looks for the long-term future, right? >> he looks happy. >> nice guy. >> as he should be. >> we would all be happy. >> congratulations to him.

last week we took a look at the insider. one of the issues was swapping bing to facebook for some facebook stock. would that be a good move? rick sherlund joins us here to discuss. welcome back. >> thank you. >> did you see that snch. >> i saw the reference to that. >> what was your thinking? >> i thought it was a pretty good idea. microsoft loses probably about $2.2 billion on bing. and they generate revenues of $2.9 billion. so for every dollar that they carry in revenue, they cost them $1.75. so microsoft margins would be higher and i think people are asking, why is microsoft in the

search business any more? but i think any more, with small market share, 15%, investors say, well, if you could partner with somebody like facebook that could leverage their social graph, the information they have to make a better search engine, wouldn't that be a better thing? so you get out of losing money and strike a deal with facebook where they could pay you perhaps 80% of the revenue back. >> you know the microsoft people better than anybody else on this planet. the idea that you said part of bing was to make sure that google diblt completely control that aspect of the world, this was also a way that they can continue to -- if that is their objective, they can try to accomplish that without having to compete directly.

if they don't do a transaction like this and they decide they need to continue to have that as an objective, what sh are some of the other things microsoft can do? >> right now, they're trying to work with yahoo!. it's proven very difficult, but there is slow progress. you'll lose less money over the next couple of years at it. but i think if you want to change the game, facebook has entirely different sets of data to use as a search algorithm. information about people as opposed to the number of page links that a server has. and a number of analysts pointed out last week, yahoo! has a reversal on a transaction, with bing. >> i think microsoft and yahoo! are both in the same. they don't really have scale. and as enormous scale advantage,

i think by combining forces, the question is why does facebook need to buy it? >> and it could be a three-way consortium where you have three players get together to try to defend against google here. >> sure. and if microsoft does what we need to monetize our traffic, it's like, well, fine. still use bing/facebook to monetize and you'll get 80% back in traffic acquisition costs. >> would search be a markedly difference experience for the user in a facebook platform? >> i think the potential is that the relevance of the information will be so much higher in monetized search if you have all of facebook data. they know who your friends are, what your search engines are. chances are, they will be much better to serve up a relevant result to you that you're going to click through. that's the anticipation.

>> what about impact on google market share. >> they don't have the volume that facebook does. facebook is in a unique position to try to change the algorithm for search to do something that google should be more concerned about. >> and we know google is concerned because we brought viewers the letter that was written where he basically said, he recognizes there's a huge difference between lengths and likes. >> this would be game changing and disruptive. if microsoft wants to be more competitive against google, i think this is a smarter way to go about it than just continuing to have small market share and try to have a real impact. >> but not really willing to say more likely than not? >> no, no. i think microsoft has to let go and facebook has to be motivated to say i'm willing to buy this as opposed to i want to do it all myself and take a number of years to get the skill advantage.

>> great insight. we'll see what happens. come back soon. >> thanks. >> rick sherlund. straight ahead, why serious done flikt could be brewing at chesapeake energy and we'll watch the closing bell of just in just about six minutes and 9 seconds.

[ 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. hey, heard any updates on the game? i think it's final seconds, ohh, shoots a three, game over. so two seconds ago... hey mr. and mrs. harris, where's kevin? say hi kevin. 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. covering 2000 more 4g cities and towns than verizon. at&t. ♪ at&t. 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.

the dow hovering in the range of mot moderate loss. down 65 points. s&p down almost 6 to 1385. belts are about to sound all across europe. we'll see how that changes the picture here stateside when we come right back. people with a machine.

what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense.

about 1:30 until things close in europe. it has not been a pretty session for the italian banks or the market. >> and you sum it up very well. there is a real concern about what exactly is happening with corporate spain. we'll come to that in a moment. on the major indices, london, paris and frankfurt. you can see the moves, we've had to cut the losses here in the united states has been reflected across the atlantic, as well. they are down -- well, the paris market is down 1.5%. the bigger issue is clearly where we are with italy and pain. let's put that on the board .show you the destruction of shareholder value that is occurring there. the ibex, as you can see, continues to track lower. it continues to be under a massive amount of pressure and there's loss of almost another

4% of its value today. this is at a time when the yields are moving below 6%. so what i'm saying to you now is that we're witness ago phenomenon that is beyond simply sovereign debt. >> across the screen, you can see in particular, spain has fallen. ireland is up on its own, floating away. they're in positive territory. but there is a north-south divide that is emerging out with the spavenish market being down so heavily. let me show you, some of these are stocks you may not know enough. they're not big international stocks, but they tell a tale that is very important. this construction company here, controlled by the president of real madrid, has for three years been trying to build a stake in iberdrola. today ultimately they threw in the towel and said we're going to sell some of our stake in order to raise cash to pay down ded debt.

so the point of it is the long held hostility corporate battles are being put on hold in spain because the situation is so bad. today we saw the debt rising in spain, nonperforming loans now over 8% of total loans. the fear is what will the government have to do? will they to come & more with the economy? we don't employ with the 24%. and if so, does that mean that the rest of europe will have to help them or can they hear the press argument about whether they can access international funds straight into the banks in order to support from them? so just be aware that the corporate whirlwind is taking on, if you like, a mind of its own. i'm trying to check the facts here. we are now down, i believe, to about 2% or 3% of where we were at the low, the 2009 low in the spanish market. that is a huge issue. let me just mention one more thing. as we head towards the first round of the elections over in

france, sarkozy is still behind in the polls. basically, he told the french government to vote for him. if sarkozy loses in the second round, which is in may, early may, we have a huge issue there because the man coming in is a socialist. he intends to raise taxes, from our point of view, the issue here is that he may draw a line with angela merkel on a lot of when we think we know about europe and what we think we have on the table may no longer be in place. >> that figure being close to the '09 lows. amazing given where the s&p still sits twice where it was at that point. simon, thanks. i want to get quickly to bert bert bertha kooms. >> we're likely to be cautious and range bound. a lot of people are waiting to see what happens tomorrow morning with the spanish debt auction. we'll see whether this is the

beginning of a trend. meantime, overall, the markets right now fairly flat. in terms of the nasdaq, 100 big caps with apple rebounding today. but at the moment, everything sort of somewhat flat to the down side. some outliers getting a huge boost after surging once again at a fresh all-time high. the company's revenues reporting across the board and it says that they're seeking some expansion and surgery using its product in surgery for urology. consumer discretionary has been fairly strong today there led by the likes of wynn, which has a potential land grab approval for its property and mccow, according to some reports. services higher today on the back of halliburton's strong earnings. halliburton says the pullback is likely to be an issue in the center. and technology, this is a big week for technology. ibm, the big drag, they're responsible for about 40 points to the down side on the dow. one trader telling me, you know,

they needed to not only get earnings, revenues and guidance right. they also have to walk on water. it was priced to perfection. when you miss that walk on water part. intel, same story there. a bit of a drag, as well. when it comes to the chips among the big losers today. and genworth financial, delaying its australian ipo. as you can see, there's the performance at the s&p. back to you guys. >> thanks a lot. sitting here with gary talking about yesterday's rally quickly. and some of the things that -- >> let's just take a quick look at a picture i wanted to show at 11:30 yesterday. this is, again, credit in europe. and it shows you that this was not the type of action. and the credit market. it's very simple. there was some euphoria related to spanish t-auctions and the idea that there was a huge bid to cover ratio right there. remember, you can have tremendous amount of bids put in at crazy prices. yields of 20%, 30% will count as

though it's heavily bid. tomorrow's auction is much more important in terms of the real access. and i have to say, simon pointed out about france there. lekovitz was right there. and he told you there would be tremendous focus on what is happening in france and as it relates to the overall european solution. >> you're talking about political rift now. >> correct. if, in fact, it has ramifications on the relationship between france and germany, because as we've said all along, all roads ultimately lead to germany. it's something we will start to pay much closer attention to. >> a lot of people have come on this week being asked, why isn't m&a catching fire? a lot of it has to do with political uncertainty. not just here, but how long it's going to take the helm in france. >> absolutely. and you cannot underestimate what will happen if it begins to be concern about germany sort of spearheading this entire rescue effort plan. >> let's get to pbob pisani, as

well. >> and the important thing, eli manning just walked in here. hello. congratulations. how is it going to look for you this year? >> it's going to be a good year. we start our spring training the other day. great to be here today. it should be a loud, exciting day to raise a lot of money for a lot of charities. and a lot of your sports fellows are here, a lot of your competition is here today. what's the charity you're representing today? >> i did a lot of work with the march of dimes which is very dear to me. i've been doing that for a number of years here in new york city. it should be fun. >> eli manning, thanks for coming by. it should be fun. $4 million raised last year. $20 million in the last ten years. the managing director of this, let me get your thoughts on the close. we had some discussion a few minutes ago, closing lows of the day in europe. obviously, spanish financials down about 4%. >> yeah. and italy, as well, with the

spanish auction tomorrow. there's a lot of people waiting on why they can't get out of their own way. two and three-year rpos, $1 trillion in tax rebates, i think that's going to be a big issue for people. >> and yet here in the united states, i see no big sell-offs. i don't see the financial easy down in a big way. i don't want to bring up this decoupling. but the fact is, they do buy the dips here in the united states. >> the dollar index is up 8% and u.s. equity is out by 208%. >> and that is dollar money coming back into this game with u.s. equity. and that money flow, dollar off deciding -- >> and despite the concerns about sam, we have the s&p trading in apparently narrow trades here. >> yes, that's right. and you're still seeing money come out of europe and back into u.s. equities. we suggest it will be a team for the rest of the year. >> thank you very much. many people here besides eli,

tom coughlin will be here, as well. guys, back to you. >> great stuff. when we come back, our all-star investor day continues. we'll see how one money manager keeps his five-star fund profitab profitable. that's coming up next. but first, the winners and losers, with the trading day just ending now in europe. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

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. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya know, for whoever you are that day. it's just another way you'll be traveling at the speed of hertz.

coming up on the halftime report, all the big ben weather for technology, are they raising red flags? we have a top analyst giving us the trade. plus, apple tv may not be as close as we think. two of the smartest analysts are on that case. and donald yakman tells us what he's buying right now. lots to trade at the top of the hour. now it's back to carl. >> thanks, michelle. chesapeake energy reportedly taking out $1 billion in loans. stock obviously taking a hit on ta news today. chesapeake is down almost 10%. kayla. >> an executive borrowing a

figure representing 10% of a company's market cap, that's a red flag for investors, especially when it's backed by the company's own assets. you see that concern definitely represented in a stock today. but in this case, it appears the chesapeake ceo has long been involved in what they call a well participation program. it's a company that allows them to invest in a stake in all or none of its projects in a given year. and in the company's 10k, it says he must inform the board of its participation level after each calendar year. versions of this program have been around since chesapeake was founded and its current program was approved by shareholders in 2005 by what i'm told is a wide margin. the current program is up again for vote in 2015. executive investment in a company usually pacifies investors. they often have to commit mountains of personal capital to show outside investors they're confident in their investment

strategies. the concern here is not only mcclendon's wild reputation, but a person familiar with the program told me his interest is actually subordinate or secondary to the company's rights to those assets. even though, phil weiss told cnbc this morning, there's so much financial engineering at this company. i really worry it's a house of cards. but in a lengthy statement, chesapeake responded saying even though the program has grown, the founder well parpgdz program city effectively aligns mr. mcclendon's interests with the interests of chesapeake's shareholders during any period that mr. mcclendon participate necessary that program. now he spoke this morning and neither addressed the story knot nor fielded any questions about it, carl the for many familiar with the company and its

history, this is par for the course. >> the board responded, they contacted us. i think kayla just told you what they were saying, why this is beneficial to the company. you did point out in that report that shareholders in the past have approved some of these unusual gomts or unusual programs at chesapeake. that could be because they had a very close group of big shareholders that sort of got behind this. any sense of whether or not the existing shareholder base is as excited about some of the plans today? >> you know, it's really unclear, gary. and i think the fact that the program is ten years in length, it's been around since chesapeake inception. they won't have a chance, even if there's been concerns ray raised today to put that to a vote until 2015. it's a long standing program. but you know very well that private hedge equity firms commit that money. that's usually what investors

like to say, basically implying that if you're willing to put your own ranch at stake here, then obviously, my money must be in good hands. in this situation, $1.1 billion being borrowed by someone whose reputation has not always been shining for the company. we all remember in the financial crisis when he sold a map collection to chesapeake only to buy it back. $12 million is not a small price for a map collection. but he's been embroiled in scandal before and i think people don't trust that he has his head straight about some of these strategies. >> investors want to see that, but intercompany dealing is another. >> kayla, thanks so much. talk to you later. all day today on cnbc, we're turn to go some all-star investors for the top places on your money now. the five-star morning star rated can be our small cap fund. so far this year, the fund is up 9%.

brian, good morning to you. >> good morning. how are you? >> good. always fun to talk about small caps. they tend to be, obviously, rocket fuel in the early part of a cycle. what's your general view on that part of the market right now and whether or not you think we're going to see some sort of multiple expansion as we get through the rest of the year? >> i think the small cap market can continue to do well. you know, it's a very fragmented and diffused market. generalizations is tough. we're finding a lot of pockets of interest in technology and industrial, the energy, in health care and just continue to go be opportunistic. >> yeah. energy and tech still remains a favorite, despite, obviously, outperformance so far this year? >> yeah. but if you take technology, for example, it's been dominated by some blue chip names like apple and ibm and intel. but there's a very diffuse range of companies in industrial,

semis, speciality, software, various kinds of services and, you know, they might be up a little bit for the year. but they haven't done a whole lot and valuations remain compressed. so we like that. moving to energy, you're talking about chesapeake. the bear case on natural gas is very well disclosed. but that's led to have a lot of valuation and compression for oil names because people have gone out and shot the whole sector. so we find opportunity there, as well the. >> brian, good morning. with the small cap funds, there's always a question about portfolio construction in terms of how many names are on the portfolio, percentage of the bigger size. how do you approach that in your fund? >> well, we have a fairly distinctive approach there. we run with a very fixed position size. so each position goes in at 2% of the funds so we get approximately a 50 stock portfolio. and it forces our analysts to be selective in what they recommend. you can't just throw spaghetti

at the wall and hope it sticks. you have to have a high level of conviction and be willing to make some cuts. we found that fixed size of positions is very helpful in terms of keeping analysts focused on what are the most impactful and highest conviction ideas. >> and given that type of strategy, you haven't had problems in terms of liquidity exiting a position when you've wanted to get out? >> no, not really. i mean, some of them can take a little while. we're not trying to top pick names on the way out. if we feel stock has gotten to the upper end of a logical valuation rainl range and where the risk/return is starting to be, you know, balanced is not somewhat asymmetric to the downside. we'll begin selling and that process can take anywhere from a few days to a few weeks, depending on the name. but the point is, you don't try to do it all in one day. you plan it out. >> before we let you go, just a few individual names.

i think intersell is interesting, dar, darling processes waste foods and biofuels. but you say you would not touch in the oi linkedins or zinga where valuations are still very high. >> right. on the social media names, this is reminiscent of the late 1990s internet bubble where you have basically concept stocks. they're interested. i've played some zinga games. they're very interesting. i wouldn't get near it. on the flip side of technology, intersell is a diversified power and analog company. it's trading at near 52-week highs. has some interesting products over the next one on two years at a nice 4% year. darling international is a funny company. they process waste from slaughter houses and bakeries and places like that and trend usable oiles and biofuels.

very profitable business structurally. both of these stock have a high up side. >> brian, so good to talk to you. brian barish, small cap fund in denver. quick programming note, by the way, don't miss a first on cnbc interview with the president and eo of morgan stanley, jim goreman right here on "squawk on the street." we'll talk about the state of the financials, the future of morgan stanley and a lot more. when we come back, burger king going public again and they're pulling out all the stops, lit rayly. jane wells has been on one of those stops. >> joining us huge makeover, are fresh fruit smooth write hes part of the answer? we'll discuss that after the break.

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 mile gallon highway.

erence. it can give you a fever, make water boil, even lower your heating bill. just turn your heat down one degree, and you can cut fuel consumption. you'll save lots of cash the more you know.

jane wells is live in los angeles with that story. morning, jane. >> hey, carl, it's not just wom whopers any more. these trucks pop up and they go

elsewhere. let's go inside here. burger king is rolling out a few of these trucks. we're in here with scott and nicki and big john. this particular one, they're showing you've their brand new smoothies. they have mango, strawberry banana. it has been sort of an up and down decade for burger king. they've had a tough go of it. they fall into third place behind mcdonald's and wendy. . they're going private and public and private and public again they hope by the end of the second quarter. the company tells me it's spending $750 million to make over the brand, doing its largest man ewe expansion in history trying to jump on this food truck craze. 30 trucks hitting 40 cities and learning that when you do this sort of gorilla marketing, you run into security which shhs them off the station@today. but with celebrities backing it, are they trying to play catchup to mckee d's?

well, not just mcdonald peps. >> we no longer look at our competitive set as other competitors that sell hamburgers. the industry has changed. we're competing with coffee houses that sell wine, sandwich shops that sell breakfast. >> deutsche bank says this year they could hit $650 million, 26% higher than a year ago. but it's a whopper of a battle. goldman sachs says the combined so-called voice among consumers of wendy's and bk customers is less than half of mcdonald's. it is more than twice as much. as they get more of these ready, they're hoping this sort of thing, carl, is going to help close that gap. it is not just mcdonald's. it's everywhere. even taco bell is serving breakfast now. starbucks is trying to serve wine. they're competing with everybody. >> and we're going to get mcdonald's earnings on friday. a lot of people trying to copy that model. looks delicious, though, vein.

just in time for lunch. >> i like -- my own preference, this is the strawberry banana which i like, but the mango i think is better. >> jane has spoken. jans wells joining us with the burger king story. >> mark zuckerberg did not tell the facebook board about the isnta-gram deal been what's the next thing he's not going to tell the board about? your answers in a minute. for me, it's really about building this extraordinary community. american express is passionate about the same thing. they're one of those partners that i would really rely on whether it's finding new customers, or, a new location for my next restaurant. when we all come together, my restaurants, my partners, and the community amazing things happen. to me, that's the membership effect. standard keyless access, and standard leather-trimmed seats, then your choice is obvious.

the lexus es. it's complete luxury in a class full of compromises. see your lexus dealer. tdd# 1-800-345-2550 checking the charts. tdd# 1-800-345-2550 looking for support, tdd# 1-800-345-2550 resistance, breakouts, tdd# 1-800-345-2550 a few other tricks that i'll keep to myself. tdd# 1-800-345-2550 that's how i trade. tdd# 1-800-345-2550 and i do it all with charles schwab, tdd# 1-800-345-2550 because their streetsmart edge platform tdd# 1-800-345-2550 helps me trade quickly, intuitively. tdd# 1-800-345-2550 staying on top of the market is key! tdd# 1-800-345-2550 and the momentum tool, tdd# 1-800-345-2550 it lets me do it at a glance, tdd# 1-800-345-2550 so when things shift, i'm ready. tdd# 1-800-345-2550 then to track the stocks i have my eye on, tdd# 1-800-345-2550 i turn to schwab's high/low ticker. tdd# 1-800-345-2550 so i can spot a potential breakout tdd# 1-800-345-2550 before it breaks out. tdd# 1-800-345-2550 and get this...i can even trade, tdd# 1-800-345-2550 change my orders or check out my positions tdd# 1-800-345-2550 right on my chart. tdd# 1-800-345-2550 my system works for me. tdd# 1-800-345-2550 does yours work for you? tdd# 1-800-345-2550 get streetsmart edge tdd# 1-800-345-2550 from charles schwab for $8.95 a trade. tdd# 1-800-345-2550 open an account and trade up tdd# 1-800-345-2550 to 6 months commission-free.

tdd# 1-800-345-2550 call 1-877-586-5928 tdd# 1-800-345-2550 and get started today. a living, breathing intelligence helping business, do more business. in here, opportunities are created and protected. gonna need more wool! demand is instantly recognized and securely acted on across the company. around the world. turning a new trend, into a global phenomenon. it's the at&t network -- securing a world of new opportunities. ♪ yeah, scott. i was just about to use... that's a bunch of ground-up paper, lad! scotts ez seed absorbs and holds water better. it's guaranteed to grow grass anywhere, even if you miss a day of watering. [ scott ] seed your lawn. seed it!

time for squawk on the street. facebook senior mark zuckerberg reportedly negotiated much of this insta gram deal by himself bringing in the company's board when it was all done. what's the next thing zuckerberg not going to tell the board? >> you know that post you saw about me was private? it wasn't. and zuckerberg will not tell the meaning behind being poked. and warren buffett posted on my facebook wall that i've been selected to succeed him. it's going to be interesting to see how much enthusiasm ranks up before the actual ipo in may. tomorrow, we're talking about oil. >> right. >> a tremendous amount of feedback after yesterday. the president's press conference. we're going to