>> weiss? >> sorry, steve, short it. >> add it to my mcdonald's longs today. >> you added to your mcdonald longs. match the burgers you eat. >> i do not eat any burgers. >> that does it for us. don't forget to catch more "fast money" tonight at 5:00. "power lunch" begins right now. michelle, thank you very much. three hours to go in the trading day. and it's a day to take some profits. after two big up-days, the major markets trading lower across the board. is the volatility scaring off the retail investor? and what does that mean for the markets over time? insight from an all-star investors. sue. >> ty, we're going to invest in the auto rebound. audi could have a big impact on the luxury car market here. brian. >> and don't forget about microsoft. up about 24% in the last year. they report tomorrow. we'll let you know how to play it today. i'm brian shactman along with sue herera and tyler mathisen. "power lunch" begins right now.

both tyler and i got haircuts today. go to twitter or whatever, tell us who got the better haircut. i think his is better. yesterday green across the board. today red across the board. not as dramatic. some profit taking as tyler mentioned. big earnings, important developments out of europe, specifically spain. here's where we stand on 63 the s&p 500 good for a third percent and tech the laggard. pulse of the markets, inventories up, so oil prices are down. wti under $103 a barrel down 1.75%. yesterday nat gas is higher. that doesn't happen very often these days. starting above the yield on the 10-year note back below the 2% level. midday movers tech section getting hit hard. ibm $6 good for almost 3%.

revenue worries, tepid outlook late yesterday. jpmorgan down 1.25%. consumer discretionary having a good day. gap up 2% a very good example of that. of course the trading floors have a lot of action. bob pisani joins us from the nyse after a busy morning with all the superstars. hey, bob. >> and eli manning was there. rex ryan, great day for btig and the many charities that they report -- that they support. thanks very much, brian. 3-to-1 declining to advancing stocks. it's been a lot like that. three-to-one advancing, three-to-one declining to advancing. anyway, on the downside today. s&p intraday we hit our lows of the day essentially right at the european close. as often happens, we came off of those lows but not dramatically here. the problem of course very, very sloppy close. a lot of spanish stocks, a lot of the big financials names -- put up those financials in spain, down 4%, 5%, energy companies and construction companies down ahead of a

10-year auction occurring in spain. we saw most of the sectors telephonic and all the spanish names to the downside. let's move on and talk about tech sector today. with ibm giant down almost 3% you would think tech stocks would have a better weighting -- a much lower move to the downside, but really they're not. we have most of the big names here are just down fractionally. again, ibm is a big weight here being down 3%. financials just about either side are positive or negative as are materials and industrials. so the key point here is while we are down three-to-one declining to advancing stocks, percentage are very, very small today. what's up? not much. a small spattering of retail stocks. brian mentioned gap. other ones up in the retail space small group like limited also to the upside today. sue, tyler, back to you. >> bob, thank you very much. let's drill down on stories driving the day today. to the still unfolding

government waste investigation in washington we go. it involves of course the gsa a day after americans filed their taxes, the senate holding hearings this morning investigating that $800,000 conference among other things. eamon javers has the latest. eamon. >> hey, tyler. it's another tough day for the gsa on capitol hill. three days in a row of hearings and we're seeing pictures of gsa officials cavorting in hot tubs in las vegas. we're seeing videos of gsa officials apparently bragging about spending government money. that was the picture you just saw there. a picture of jeffrey neally. the other glass of wine in that picture was for his wife. his wife accompanied him on some of these trips to las vegas. and apparently spent taxpayer money. this video's been very embarrassing to the gsa for the past week or so. all of this provoking outrage on capitol hill. take a listen. >> and it makes me cringe for

the good people at gsa who work so hard every day and have been humiliated by a few bad actors. to those who betrayed the public trust, let me be clear, the party's over. >> tyler, the party may be over, but the scandal definitely is not. this is one of those scandals that kind of drips, drips, drips. each day we're getting new revelatio revelations, new embarrassing pictures and new embarrassing video and making people on capitol hill wonder how the gsa has been spending all of your taxpayer money for the past couple years. >> not good for the gsa or secret service. big changes coming, eamon, on the closely watched monthly jobs report is going to be released could have some impact on investors. what's happening? >> yeah, it really could have impact on how soon wall street gets access to the monthly jobs number. obviously that is one of the biggest market moving pieces of data that we've got. the department of labor changing

rules on media lockup. that's where those of us reporters invited in get to go about half hour early. now reporters must use government computers and telecommunications lines before they can use their own stuff. that's changing. they're not going to be allowed to bring wireless devices into the lockup room with them. there's no personal gear, umbrellas, bags, et cetera. and even pens and paper will be provided to reporters by the department of labor. the department of labor says they're trying to protect the integrity of the data, that's the most important thing to them. i can tell you, tyler, some of the wire services are really concerned about these new changes. they don't like them because they feel that they'll be at a disadvantage, it will take them some time to receive the information from the department of labor. electronically inputted into their own systems and published to the world, they're saying there could be variations in the amount of time between the different wire services and different websites of when that information is reported. and that could be a problem in terms of market volatility,

tyler. >> very quickly, is this to address a particular leak or breech? >> they say to address a potential for a breech. they say there haven't been any particular leaks, but they say two reporters in the past two years very disciplined for violations of the embargo rules under the old rules. these new rules much tougher, tyler. >> eamon, thanks. >> you bet. yesterday oracle's ceo took the stand. today it's larry page's turn. disputes over the android operating system. jon fortt has been monitoring the courtroom. he has the very latest on the high-stakes battle. hi, jon. >> yeah. bit of a tough day for larry page. trial over breeched copyrights and patents. he took a cab to the courthouse by himself. that's in contrast to larry ellison who showed up in a lexus yesterday with a small sbrourj. anyway, once he got out of the cab, the trouble started the phase of the day in this trial,

i don't recall, he said he didn't recall a lot of things whether an important document was used at an android meeting where they talked about java. whether andy reuben sent him certain e-mails. didn't recall whether he said things about copies apis and even the court in this case. even the judge said he doesn't recall a lot of things. page might not be done if oracle can prove the java document was used at an executive meeting, they can call page back to ask about it. he did contradict his deposition a couple times, ellison has a lot more courtroom practice. he took s.a.p. to court a few months ago. >> jon, thank you very much. internet companies taking a page from the tv networks for their version of the so-called up fronts. those are big ad sales presentations as they make a play for tv ad dollars. our julia boorstin is live with

us. >> that's right. internet video giants are pitching to madison avenue and they're speaking their language with digital content new fronts coming ahead of the traditional tv upfronts in order for the video giants to showcase new content and also their measurable targeted ad formats. hulu kicks off the first of the 16 new fronts with its presentation tomorrow to an audience of 500 advertisers presenting its original content and explaining its advantages. like the fact that it only charges when viewers watch entire commercials. >> we're able to eliminate waste for advertisers and increase the precision in the marketing messages that they're trying to get across. >> google's media giant helping to increase total advertising on digital video from just $2 billion last year to catch up with the $61 billion spent on tv in 2011. youtube, microsoft, yahoo! aol,

along with nbc universal and disney will be hosting presentations before may 2nd. this is about a week ahead of when the traditional upfronts start. spending on digital video advertising has really lagged the popularity of digital video, which has just been growing as there have been a slew of new options and people have been moving to these formats like youtube and hulu. now, the thing is that these video giants want to reverse that trend in order to really be able to catch up with the popularity. >> let's talk about another story that really caught my eye this morning, julia, about facebook. it's drawing attention now for reports that its board wasn't involved until the very last minute in its deal to buy instagram. so what happened? >> well, tyler, "the wall street journal" reported that mark zuckerberg negotiated the deal to acquire instagram without alerting the board or consulting with the board. instead of bringing in lawyers and bankers and board members to weigh-in on this potential deal,

zuckerberg met privately with instagram ceo only bringing the deal to his board for vote after already settling on terms and price. so the big question is why would zuckerberg go it alone? for one thing, he can afford to. he owns 20% of facebook stock but controls 57% of voting rights, which gives him the power to move independently. now, the deal came together very quickly, over the course of just about three days. which probably would not have been possible if he'd been working with a whole team of lawyers and bankers and had also been having the board in there. one key point on this deal here is that he was convinced he'll still be able to manage instagram independently and it would have been harder to convince him of that if the whole board was involved. the board approved it. so it's not like they didn't okay the deal after all. >> i bet there were some interesting conversations between mr. zuckerberg, the board and the general council. >> especially the general council i bet.

coming up next on "power lunch," big cap tech weighing on the markets today on the back of intel's earnings and guidance. so should you still bet on tech? >> and as we head out, let's look at some of the other major averages that we follow. three -- four of the five in the red. russell down six, dow transports do up 14. the rest down fractionally.

all right. let's look at the treasury curve. mostly focusing on that 10-year note with the yield at 1.977%. and that's really been the range between just above the 2% level and about down to 1.96%. so let's talk more about that now with john brady with rj o'brien. he's at the cme. great to see you, john. >> hi, sue. >> what about this range-bound move in the 10-year? we can't seem to break to the downside and we can't seem to break to the upside. is it going to be like that for a while, do you think? >> it may be. in fact, it's been a very painful seven month trade with the range around the 2.40 yield level to the upside, about 1.70 to the downside. what's really taking place here, sue, is the fact that the market twice has tried to break out of this range over the last seven months and has failed. now from a technical perspective both on a 3-year chart and a 7-month basis looks as if yields want to retest the bottom of

that range 1.70. that's not to suggest that 10-year yields and treasuries offer value. they don't. but there's a comparative asset game going on here. what used to happen in the capital markets is that treasuries would really drive trade. equities would respond. today it's risk assets that have the focus of policymakers and that's how risk assets will react and they will only act in tandem or in response to what risk assets or stocks do. >> john, thanks a million. good to see you as always. >> thanks. >> lackluster earnings from intel and ibm weighing on stocks, but two market veterans say they're still bullish on the tech sector and on equities more broadly. jerry, president and chief investment officer at castle ark management. and mike holland, chairman of holland and company. welcome to you both. mike, let me begin, i heard last night a veteran investor who you know well from your days working with lewis say he was concerned

that the market overall is topping. after all, it is up more than 100% in three years. 30% some since the lows last october. and he pointed out these are rare events. we've already had one big correction. we've certainly had a pullback in recent days. and he feels the market is a little toppy right here. what do you think? >> as lewis would favor as opposed to saying, tyler, he may be right. we've had a huge move. look at apple. a stock that is parabolic. the problem with old time ways of looking at these technical things right now. is the earnings for a company like apple have outpaced the stock price. so you actually have a stock whose valuation on the old metrics, p/e multiple, is lower than it was a couple years ago. the valuation of the franchise is lower. it means to me the risk is not

greater but rather less when things get valued lower. so i think that's happened with a lot of major companies around the world. not just in the u.s., but particularly in the technology area and particularly in the global technology area. >> jerry, should i feel relatively more secure putting money -- fresh money, to work in equities right here? or have i really missed a good hunk of this? >> well, if you weren't around in march of '09 to buy at the bottom, i guess you could say so. the reality is this is a long-term game we're in. unless you're a trader, unless you're trying to play for the 3% correction here, you should be where mike's talking about. these are cheaper stocks today broadly than they've really been in a long, long time. and you're going to need a very definitive story about some geopolitical event or some problem in china or spain's imminent default so really scare you back to the place we were about a year ago when a bunch of things happened to knock stocks

down. otherwise, take mike's advice. these are cheap stocks across the board. and get involved. >> mike, put it into perspective for us though. if you have a portfolio and you have some exposure to the u.s., is the u.s. really the only place to be? how do you feel about asia with the worries about china? how much of your portfolio should be exposed to the emerging markets and the china play? >> sue, i think a significant chunk of your assets should be exposed to the asia play, the china play. you want to go where growth is. and where growth is trading at a reasonable valuation. and that's the case in china. once again, just as with apple, the chinese market is like a larger version of apple where the earnings have moved forward as people have continued to worry about the quote unquote hard landing. the hard landing never occurred. the most recent number out of growth in china is over 8% for the world's second largest

economy. and it looks as if toward the end of the year there's going to be an increase in growth according to people who know more about this than i do. so you're going to have an economy growing with a valuation that once again has been knocked down by fears. so you have 11, 12 times earnings as you do in the tech space. you have an interesting symmetry of fear in the market knocking down valuations. >> you know, mike, if i can stick with you for this last question, you used to work with warren buffett. we got the news last night that he's been diagnosed with prostate cancer. quite unfortunately, obviously. does it put more pressure on him to name the successor that apparently he has already picked? what do you think? you know him better than probably most. >> i was fortunate enough he came in as chairman when i was doing the money management there at sol monobrothers. he's someone very aware of public relations and public sentiment. i think there is more pressure today than there was two days ago to name the person whom he

is already said has been chosen by the board. so i don't know if he'll do it. actually, a long-term shareholder, i kind of hope he does. >> thank you, gentlemen. >> gentlemen, thank you very much. we are keeping an eye on berkshire hathaway on the news mr. buffett is fighting cancer. next on the announcement, succession and where the invest goes from here. and later, the stock has been battered, reputation soiled. so is best buy now a takeover target? we'll show you how to play those rumors when we come back. [ male announcer ] if you believe the mayan calendar, on december 21st polar shifts will reverse the earth's gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life.

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the lexus rx. why settle for a copy when you can own the original? see your lexus dealer. time for three in 30. i want to get to the first two quickly because the third is fascinating. start with wynn. another report that macau casino could be moving forward. halliburton reported solid numbers and the stock is up 4% now 4.5%. the only weakness in their numbers was latin america right now. here's first solar. nice pop yesterday on the news of the huge restructuring. well, today giving a lot of it back. the analyst community is absolutely tied in knots over this company. two firms downgraded to sell. one was from an outperform all the way to sell. while another bank of america, merrill lynch went from understood perform all the way to a buy. proceed, sue, at your own risk. words to live by, thank you, brian. investors and the markets paying close attention to news that warren buffett has been

diagnosed with stage one prostate cancer. in a letter to shareholders late yesterday, mr. buffett wrote "the good news is that i've been told by my doctors that my condition is not remotely life threatening or debilitating in any meaningful way." my doctors and i have decided on a two-month treatment of radiation to begin in july. our next guest has a large stake in berkshire hathaway stock. greg, nice to see you. welcome. >> thank you, sue. good to be here. >> the stock took a hit yesterday. and after hours trading it's continued its decline today. is mr. buffett under more pressure now to reveal who his successor is? he says he's picked them and they don't know who they are. but do shareholders need to know who they are, do you think, at this point or not? >> you know, sue, first of all i want to thank you for having me on today. but also i want to say our prayers and thoughts are going out to mr. buffett during this difficult time. >> absolutely. >> i think as a shareholder it's

important to know what is the succession planned. and i think this event over the coming days, perhaps months, will put pressure on the board and mr. buffett to reveal or unveil that succession plan. i mean, evidently they already have it in place. just now they need to make it public. give everyone the investors confidence going forward. >> ty and i were talking about this over the break though. you know, a similar situation occurred in terms of the succession plan at ge when jack welsh was under a lot of pressure to reveal who was going to follow him and follow in his footsteps. and he named three people. in essence as we put it during the break, there was a bake-off if you will, between these three gentlemen. when one of them didn't get it, they left the company. does he run the risk of losing people if they do not get the nod from him? >> if you read the letter, sue, to the shareholders, it basically says the board has already picked someone.

they're enthusiastic about their management style and their human abilities as far as interaction with multiple board members and companies. so they're excited. and they also have two back-ups. so evidently these two back-ups are pretty excited too or they probably wouldn't be still there. >> so shouldn't that be enough? you hold a large stake in berkshire hathaway, shouldn't that be enough for you that the board has made this move? that the board has a succession plan put in place? >> it does give us confidence that they do have a succession plan. at least they're saying this so we have to believe them at this point that this is a good thing long-term. yeah, but as an investor, you do want to know eventually. i don't think you want to prolong this thing out. they have a lot of capable money managers in position to take over. and i think the business model will continue on. you don't want to compare this to apple by any means. but look at what's happened with, you know, the death of steve jobs and the continuation of apple. that legacy will continue to live on.

and i think berkshire -- buffett's legacy will continue to live on through his berkshire company. >> do you feel as passionate about the stock today as you did in the past? >> yeah. i would think so. a little hesitation there because there's some uncertainty. i think only time will tell, you know, as far as how the board and new management and leadership would takeover in a situation. but this is going to push mr. buffett to really consider going public. i mean, an 81-year-old body going through radiation treatment, who knows what's going to happen over the next few months. hopefully anything will not, hopefully he'll be there many years. >> that's what everyone wishes. we wish him the best as well. we have a special all-star day of investing advice and market insight today. when ty and i come back, an exclusive interview with the president of personal investing at fidelity.

is there too much volatility for the retail investor? >> and with so much talk about apple, don't forget the other tech titan microsoft. it reports earnings tomorrow. we'll tell you where your money should be today. that's a little later on "power lunch." this at&t 4g network is fast. 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. ♪

welcome back to "power lunch." let's reset the marketplace for you. not a lot of movement in the dollar index, but we have the 10-year note below 2%. crude down 1.5%. we'll get to gold in just a minute. down about 70 in the dow. a little weaker than we started the show. i wouldn't call it a spike in the vix, but it is above 18.5. up about 2%. i want to update quickly on a couple stock stories that are pretty big today. first chesapeake reports of major loans taken by the ceo absolutely rocking the stock. it's down 6.25%. if you look at this chart, it's well off of its lows right now. also look at shares of ypf, i don't want to butcher this, the reports are that the ar general teen government plans to natural the company. it was halted at the current price yields over 20%.

who knows what happens when you nationalize. gold getting ready to close right now. courtney reagan at the nymex. court, what's going on? >> kind of a lackluster trade going on here today, brian. metals closing lower. gold closing lower for the fourth straight day. the market seeps to really have a lack of conviction. not a lot of fresh fundamental news to convince buyers to get in on the gold trade. in fact rbc capital market making comments that fund managers are making money work in equity as opposed to precious metal. look at copper closing lower. we had record volume last week. today much, much lower volume. and bank of america analyst making a comment at the world copper conference being held in chile today saying for many years it was almost the consensus that copper prices would always go higher. of course we know now that's a much riskier trade. back to you. >> courtney, thank you very much. our all-star series continues now with the focus on one of

fidelity's highest ranking where she oversees one-third of fidelity's $3.7 trillion in assets. and more than half of their retail customers. brokerage, retirement planning and guidance businesses. in a cnbc exclusive, kathleen joins us from boston this afternoon. welcome back to "power lunch," kathleen. good to see you. >> nice to see you, tyler. >> one of the findings in your survey that was out today on retirement savings indicates that americans are dramatically underallocated to equities. can you blame them? >> you know, one of the repercussions of the financial crisis in 2008 and 2009 was people became more conservative. no, you can't blame them. even the general-y generation with a long time to retirement shifted to a more conservative asset allocation. what we wanted to do in this study is to show and quantify

the action steps to help people reach their retirement, close their retirement income gap. part of that is taking another look at your asset allocation. >> i wonder if i could follow up on that for just a quick second. >> sure. >> one of the areas of great interest to me have been target funds where you have an asset mix that basically promises -- let's put it bluntly, to deliver a certain amount of money for you on your targeted retirement date. how are they working? and are you worried that they may dramatically underperform and disappoint investors giving the industry yet another black eye? >> you know, i think over the long-term i'm not concerned about the performance of target date funds. those target date funds are primarily for investors that want some help with asset allocation that don't feel confident doing it themselves and frankly don't want to pay the expenses of a managed account that costs 100 basis points or so.

over the long-term that type of asset allocation strategy should work. again, one of the issues we saw in our survey was that where you're underallocated to the equity markets early in your lifetime, it gets really hard to catch up. and the repercussion is you'll have to work longer or have less discretionary income in retirement. >> kathleen, there's a lot of debate right now about whether or not the individual investor is actually back in the market. can you shed some perspective on that? and also, do the majority of the people you talk to and interview, do they think that they are optimistic about their retirement? do they feel as though they're adequately prepared for their retirement or not? >> two answers to your questions. first, in terms of confidence level and whether the individual investor is back in the market. we did see a slow down certainly last summer with the debt ceiling crisis. and there was a hangover through the fall. we saw the investor get back in the market starting early this

year. more in fixed in the last year more shift into equities over the last six to eight weeks. that's number one. secondly, we've seen as a large provider in the marketplace the volumes have gone up dramatically. so our net flows are 20% higher than last year. >> really? >> 200,000 new accounts in the last two quarters. so i think people are getting more active. that's number one. the other thing in terms of retirement are people concerned. i think a silver lining of the financial crisis back in 2008 is that the american investor did become more aware of the issues that could impact their investing and their retirement. they want to be more educated. there's actually been a shift to thrift and a shift to self-help. so we see the investor trying to get more educated. we're providing tools, surveys, quantifiable action steps. >> the other thing the financial crisis did is it put people in close touch with their own risk

tolerance. they learned in a very concrete way how much risk they could stomach. i want to ask you, though, one of the things you say is we can do more to educate and empower investors so they never again feel helpless and lost in the face of market volatility. i think a lot of investors think those are nice words, kathleen, but a lot of investors probably say there they go again selling me this hope. and i know that the next dog on time i'm still going to get creamed in the market. or i'm still going to just tread water here. >> you know, i gave a speech to the financial services industry just this morning on this topic. and really it was a challenge to all of us to say we have to do a better job. we need to do more. there's no question that people weren't as prepared as they should be. and so what we want to do at fidelity what we've been doing since 2008 is listening to those clients and saying how can we do a better job? couple of examples, 70% increase in seminar attendance between 2008 and 2011. we put out viewpoints now.

10 million viewpoints to our clients every single month making sure we have more guidance interactions and retirement income discussions with them. so i think american investors deserve education. education leads to empowerment leads to action and results. and i think it's an obligation on the industry to do more and to continue to challenge ourselves to meet their needs. >> kathleen, thanks very much for being with us. >> thank you. >> we appreciate it. and all day on cnbc we are speaking to the all-star investors for their advice and insight. and we are focusing on 5-star funds. here's a list of fidelity's top five stars based on three-year annualized return. the growth company up 24 -- almost 24.5%. capital & income up 23%, small cap discovery up almost 30%. and income replacement 2038 up 14.9%. income replacement fund 2040 is up 15.24%. so there are some ideas for you if you're looking for them. >> the target funds.

and our day long coverage of all-star investors continues on "street signs" banking on big caps and bonds. two five-star managers will join the "street signs" team with where they are putting their money now. there you see them. they'll be up at 2:00. up next on "power lunch," microsoft among the big names reporting earnings tomorrow. the xbox on fire. and new versions of windows 8 on the way. and a stock up 20% this year. so is it time to bet big on this sleeping giant? or have you missed the boat? back in a minute.

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we have two five-star stock pickers with stocks that can energize your profits. you don't want it in your stocking, but is coal on the verge of a comeback that could make it feel like christmas day for your portfolio? we'll find out. and why today could be the most important day in the history of "street signs" because we are launching bacon news. that's right. a daily edition of bacon news. we'll show you a hot dog from a jersey diner that might make you never eat again. i promise. that's coming up. now back to sue and tyler on "power lunch." >> comes as a great surprise to some people, but i have never met a piece of bacon i didn't like. we are focusing today on microsoft. the company reporting earnings tomorrow after the bell. shares up more than 20% year-to-date. nearly double the gains in the s&p. so is it time to put some money to work in microsoft ahead of those numbers tomorrow? stephanie link from the street.com is here with me. and we have brent the thrill fill from ubs. you've probably never heard that one. >> i've been called much worse. >> you've been called worse.

you have a buy rating on this stock. you think it can go to 36 if i'm remembering correctly. >> tomorrow is the calm before the storm. it's a transitional quarter for microsoft. i don't think investors are really as focused on this current quarter. they're more focused on the next couple quarters coming up. >> why is that? >> you've got a massive product launch. their biggest products that are their highest operating margin businesses are about to refresh with the launch of windows 8, the server offering, we think you'll see office 15 by the beginning of 2013. so you effectively have the three biggest businesses at microsoft, the highest profile businesses all refreshing. the pc market's been asleep. everybody's getting tablets. my family's collected five tablets in the last year. i think we're looking at pcs at some point because there's a refresh cycle. >> wouldn't it all be in the stock already? it's hardly a secret that

windows 8 is coming and has a lot of buzz. >> right. brian makes great points, obviously. it is all about windows 8. i think the quarter is going to be kind of ho-hum. but we got good data. pc units data is better. intel told us component shortages weren't an issue because of the floods. and enterprise might be better than consumers. i think the quarter will be all right. windows we know, i think up 21% year-to-date, maybe wait for a pullback. >> you think maybe there's a better time to buy than right here where the stock is trading around 30 or thereabouts. >> yeah. nine times x cash is not expensive alt all. and 2.5% yield. maybe under 30 i would be buying it if it gets there. >> what about stephanie's point that maybe there's a better place to buy than right here? i guess you can't be too picky. >> she as a great point. the stock up big. it's outperformed indexes. certainly done well relative to oracle or some of the other names year-to-date. i think the point is when you

look at 2007, look at 2009 and look at the stock chart. and we've put this in our marketing material when we see investors. the stock runs up until the launch. and it goes straight up. and then it starts to sell off. so i still think at 11 times -- and stephanie said nine times x cash. it's one of the cheapest names in our group. we think they're going to re-accelerate their operating margin, which the street doesn't really believe is going to happen given the investments in some of the other businesses. i think the setup is still -- it's not amazing on the stock given the return, but it's still not expensive especially relative to the market where the market's software right now is extremely expensive. you've got some expensive homes in the software market. microsoft is not one of them. so the comp group is way, way ahead of where microsoft is at. and given microsoft's size, i understand the challenges. but, you know, there is still an

opportunity. >> brent, vigorous good argument. thank you very much. appreciate it. >> you're welcome. >> looks a little like billy bush. >> just a teeny. >> i'm just saying. you're going to stick with us. >> i will. >> sue, over to you. >> terrific. next on "power lunch," credit card set to report earnings in just a few hours. the stock is sitting at a 52-week high. should you buy ahead of the numbers or not? stick around and find out. [ male announcer ] we imagined a vehicle that could adapt to changing road conditions. one that continually monitors and corrects for wheel slip. we imagined a vehicle that can increase emergency braking power when you need it most. and we imagined it looking like nothing else on the road today. then...we built it. the 2012 glk.

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welcome back to "power lunch." i'm mary thompson. we are watching shares of american express. credit card giant reporting earnings after the bell. investors keeping a close eye on the firm's expenses in the first quarter in what is expected to be another good three-month period for the company. am ex rose 4%. revenue rose 8%. amex continued. it's working to transform its business spending on new platforms like serve, a digital payment service link today a prepaid card. ceo saying investors keeping a close eye on how the company is managing expenses for this transformation as well as for traditional marketing.

trends in build especially in europe also stabilizes a key area as serve. we'll have the numbers as they break on the "closing bell." sue, back to you. >> look forward to that, mary. let's bring back stephanie to run through three key stocks on our radar right now. best buy, polaris and you can see on the beautiful wall over there american express. let's start with american express. what do you think? >> i think it should be pretty go good. this is a play on consumer high end as well as corporate travel spending improving. if you look at retail, online sales, they were pretty good, right? they've been pretty good. so i think that the spending numbers are going to be about 10% growth for the quarter. should be flat. which is i think good enough, but the key is really going to be operating leverage. this is the one thing that this company always gets criticized

for. they spend too much, you don't see the operating leverage. they've made a real conscious effort of improving that. >> i think they have to spend it to get it. >> they should. but they're doing it almost too much. so i think investors want to see that leverage in order to see the multiple expand. >> i've been doing everything i can to help american express and best buy. spent a lot of money there last year on things. this is a company obviously going through a ceo transition. lots of challenges to their business. and now talk of potentially a private equity takeout of this company. are they a good candidate for that? >> they could be. but you have the chairman owns 20%. so you got to get that buy-in. it's hard to buy a stock based on that alone. i mean, when they make the announcement of the new ceo, the stock is going to pop. there's no doubt. i think you fade that rally. like you said, a lot of challenges, pricing 10% higher than internet. they have to close the store base substantially. and then you don't even have an electronics product cycle story. i think there are issues you want to fade that rally. >> oh, yeah.

>> and even with no snow on most of the east coast, polaris did well. >> it speaks to the product, pricing, market share gains and very lean cost controls and inventories. >> stephanie, thank you very much. >> thank you. >> and speaking of polaris, jim cramer will speak with the ceo scott wine, about the outlook for his company tonight on "mad money". now to breaking news, more signs of an auto recovery. this time involving audi. phil lebeau has details. >> tyler, we have just confirmed that volkswagen has announced it will be building a plant to build audi in mexico. the significance of this is that audi would be the first luxury automaker to have a plant in mexico. there hasn't been one. remember, all of their north american production has been up here in the united states or in canada. the audi mexico plant will build an suv. they haven't picked the exact location in mexico where the plant will be located. but we know production starts in 2016. for audi this is the

continuation of the ramp-up and emphasis on north america. this year's sales up 16.1%. last year they were up 15% outpacing the growth in sales that we saw for the industry overall. and worldwide audi is the third best luxury brand. of course a lot of that strength is over in china. look at adrs of volkswagen. a stock and company that have done quite well over the last six months. audi right now, well, it's fallen off with the rest of the automakers over the last six months, sue. they clearly have their sights set on growing sales here in north america. they're nipping at the heels of cadillac here in the united states. they haven't passed cadillac, but they're close. >> phil, there was other important news announced at that same meeting. audi agreeing to buy the italian motorcycle maker. that's an interesting move. >> it is. look at the brands audi now has underneath its umbrella.

you also have lam bor gee knee. why is an auto companyi inbuyin motorcycle maker. i'm sure to a certain extent work in the same circles. >> that's the play on luxury, is it not? >> it is the play on luxury. a lot of people sit there and say volkswagen should not be diversifying the way they are. this is a company not shying away from adding more brands. they already have a number of brands that we don't see here in the united states. we do see ducati. this is one of those plays where a lot of people will say makes sense for audi to have that under the umbrella. >> bmw has motorcycles too don't they, phil? >> yes, they do. >> coming up, just over two hours left in the trading day. and we will have our charts of the day when "power lunch" returns in two minutes. fiona here was just telling me that ford dealers sell a new tire like...every five seconds, how's that possible? well, we purchase 3 million a year. you just sold one right now didn't you? that's correct.

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♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ] morgan stanley shares down 1.75% today. but they've had a pretty good run so far this year up about 16%. the financial giant reports its earnings tomorrow morning. and the ceo, james gorman, speaks about the results and looks ahead first on cnbc with

david faber. that's tomorrow at 11:15 a.m. eastern time on "squawk on the streets". take a quick look at the markets here. dow jones industrial average right near the lows of the session and almost 20 points worse than when we started here. we're slipping just a little bit late here in "power lunch." >> let's go to the chart of the day. since we were talking about microsoft a few moments ago and their earnings are out tomorrow. one of the guests made a very strong case in favor of microsoft, i thought it would be interesting to go back and look at a 10-year of microsoft. you can see there that over ten years you would have made about 1% a year in microsoft. trading right now at $31 a share. it is up dramatically double digits so far this year. a lot of people do buy the idea there's a product cycle play here for microsoft. >> i'm taking a look at berkshire hathaway down another 1.3%. we wish mr. buffett all the best. and that comes after his open letter to shareholders yesterday afternoon. >> quick look at