our objective is to be the number one i.t. company. that's where we focused. we think over the long term that's going to play out for the success of us and our customers. >> impressive team here. i'd love to come back. >> thank you. >> call us chained heat. >> marissa, my apologies. make sure you join us tomorrow. "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, dave faber at the new york stock exchange. futures are cooling their heels after seven up days in the row for the s&p. that's the fourth time we've had that long of a streak this year, the dow up for three street days. the jobless claims came in at 292,000, that's the lowest since '06, although the labor

department says the data is not complete, two states with faulty data. that number is probably going to be revised. europe wrestling with euro production down. >> in the on-ed by putin in the times calling for caution in syria. >> facebook looking to hit a second consecutive all-time high today. ceo mark zuckerberg changes his tune about the ipo process. >> shares of lululemon. >> and an initial public offering. i'll have more details in a moment. >> we've had three triple-digit gains in the dow. last time we had four triple-digit gains in a row, never. doesn't look like we're going to do it today judging from futures. >> we did have an eight-day

streak in july, longer than the seven-day streak. >> the s&p, yes. >> i was looking at the s&p. after that it didn't go down immediately. august was tough so maybe -- i don't know. last night i'm watching the tape and unfortunately we saw some tough numbers from jay crew, which it just shows you if apparel -- how tough apparel if jay crew didn't do that well and they're the best there is. vera bradley. >> jay crew is private but you can learn about the financials. >> that's great you point it out because people should be buying that if it's public. >> gees, retail not so strong. but the market -- where are the big sellers, carl? wheres the guys who say israel maybe there's missiles fired at golan heights, the numbers from europe -- eurozone weren't that

good. where the sellers? >> like a yelp, a facebook, where these names have not come down, even with all the craziness around the world. >> netflix, there have been a couple downgrades. >> morgan stanley, which had liked it, that was a terrific call. >> we'll talk about the downgrade later on. >> carl, i call them the appointa anointed ones. these guys are just -- they're so loved that it's almost like they're going to be marked up between now and year end, celgene -- >> at the same time we're talking about a strong market, there's a frenzy going on in the fixed income market as well. >> did you like the verizon pricing? >> with the verizon deal and a lot more to follow, by the way,

in terms of high yield and investment grade. >> you got 5.2% on the ten year, you could do worse than that. >> you could. although traded immediately, yield traded down in the after market so people who got in on that deal, and a lot of people didn't get in. that was like a hot ipo. >> these are extraordinary times, carl. you used to have a gigantic network and trying to sell to retail anywhere. this bond deal is so big, would i start quoting the verizon paper as well as the treasury. how are the verizons, not the ten-years. >> they're going to be with us for a long time. that is incredible. points out you've had so much inflows still into over the years into fixed income. >> how much money is there out there? >> i know, how much is there? >> how rich is a segment of our country? or is it just the pension funds or -- >> we know what the 1% -- 19% of

all wealth built most in the 60s. i can't remember what the exact stat was. >> where's trotsky when you need him, huh? >> speaking of the russians -- >> in the "times" today, vladimir putin with an op-ed, unbelievable, which reads in part "no one wants the united nations to suffer the fate of the league of nations which collapsed because it lacked real leverage. a strike on syria would increase violence and unleash a new wave of terrorism." it basically says you guys should stop being the world's cop and you guys should stop thinking you are exceptional. that's how he ends the peace. >> panetta said a couple of great things this afternoon, oh, putin is lecturing us. >> who overseas run as country that is reliant on oil. it's a petro country, that's all it is. but my point is if you can

continue to create a good deal of uncertainty in the world, particularly in that region, you keep the price of oil up, that helps. it does help. >> do you really think they're going to work a real deal that you want, chemical weapons, jeff goldberg with a good piece today saying we can't even destroy our chemical stockpile. suddenly i trust the russians. yeah, they seem like good people. >> the russian stock market this month up 8%, as i think in the "times" today someone said putin is enjoying his best week as president in years. >> i'm raising numbers putin right here, right now. >> he's got some deficit there is to deal with and the higher price of oil will help. anything he can do to keep that price up. >> are you going conviction buy less putin? >> he's quite a promoter, that putin. >> if putin were running apple, you think that stock wouldn't be north of 550? can you imagine the pizzazz he'd have?

and the op-ed piece in the journal about how numbers are too low. >> facebook shares poised to reach all-time highs for a second consecutive session. that's one day after hitting a $45 mark for the first time since the day of the social network's ipo back in may 2012. of course it went like that. since then it's been a wild -- now it says it. it's been a wild ride for the stock. last night facebook ceo mark zuckerberg reflected on the ipo process. >> i'm kind of like the person you would want to ask last how to make a smooth ipo. but seriously, it's actually a valuable process. i was really worried that, you know, people would leave the company and people would get really demoralized when the stock price went down but people are focused on the mission and

the product we have. i actually think it's made our company a lot stronger. >> that's interesting. and james gorman from morgan stanley taking a bit of a victory lap with mary thompson. he took a lot of heat and came back and said give it time. here we are, time has passed. mobile is ascendant and facebook is as well. >> facebook, haven't sold any, biggest win i've ever had. >> the biggest win you've ever had in the charitable trust. >> i think so. >> apple, mid 20s. just kind of believed. why do you believe? same reason i told people to buy apple. my kid wanted a couple ipods. this is just an unassailable franchise. zuckerberg said he would not run intrusive ads. i know this is going to burn me but people seem to like the ads. i saw my daughter bought the red hot chili pepper t-shirt. >> people have short memories

but i remember the week of the ipo, you are not a buyer at the ipo. >> well, 38. that was controlled by the machines. the machines have a terminator feeling over at the nasdaq. but zuckerberg has delivered. if you switched to underarmor instead of that outfit, i think he stock would go higher. he is a terrible dresser. if that matters. >> i agree. are those off-the-rack from kmart sweatshirts? >> oh, men's warehouse. big disappointment. >> you know what else doesn't look too good is lululemon. shares down sharply. the apparel maker cutting below forecasts. company declaring it has recovered from problems caused by that recall of their popular yoga pants. inventory 30% versus sales plan i think 17. inventory has outpaced sales for

seven of the last eight quarters. >> it's apparel. it's apparel. it ain't selling. i was hoping this could be part of a cohort of high end specialty apparel, like underarmor. it did have a good quarter. got to hand it to them. this is one of those where we've been waiting for some decisions at the top, who's running it. the company has had a history of conservative guidance. >> why were they cautious on the guidance, given they had a better quarter than might have been anticipated because of all the weakness we've seen in other retailers? >> some margin issues? i thought it was quizical actually. >> they're looking at mid single digits in guidance. you would expect with inventory so bloated, there's going to be margin pain. >> i keep thinking what about what manny chirico.

i said you had a great quarter, what are you doing with the down guidance? he said last ten days not so good. they say the future is not as positive. there's something going on at apparel and it not happening at best buy, which continues to do well. i don't know. it's a hard good versus soft good. i heard it from your guy, berman. >> we talked about it for a long time since david came on with what ended up being a very pressing call. i'm not quite sure we can figure out except people have just had enough apparel. they don't need anymore? >> when you ask manny, are people just not buying clothes? i don't know. the way you play it, it's by tjx. they're the closeout guys. they come in with the cash, buy your stuff that didn't buy in the summer. you go to the tjx downstairs here. you been there? >> i have. >> i kind of like it. >> you actually shopped? >> i did. huh? i'm bringing a camera crew.

it's kind of like "caught on tape," david shopping. >> and there was no lines. i was in and out in like seven minutes. >> can i ask what you bought? >> it's actually of no great consequence. i also went to models and bought a new bathing suit. >> speedo? >> i do swim, it's long kind. men of my age should never wear anything other than long. >> i wear sweatpants. >> hilton jumping into the ipo waters. we'll bring you into the plan for them to go public. a lot more "squawk on the street" live from post 9 of the nyse when we return.

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hilton worldwide announcing plans to go public. this moves comes six year after blackstone took hilton private in one of the largest leverage buyouts of all time, the price tag then, $27 billion.

hilton's growth rate is a pretty good one. the overall value being ascribed to the company as a result of that ipo i am told by people familiar with the situation is $30 billion. so the ipo will value hilton at about $30 billion. obviously they're not selling a great deal of the company. it's unclear at this point how much is going to be sold as primary shares. not sure if it's to raise money or being sold into the market to help monetize investment. you have to exit investments to put up the returns. in this case they did not deliver any dividends over time the way so many other take privates have. in this case, though, they have delevered hilton and, therefore, the equity has grown. obviously it will probably be decent, if not a quite good deal for blackstone. an important component will be a huge refinancing that will also

take place. $14 billion worth of debt will be refinanced so they'll create a new capital structure, that includes commercial mortgage-backed security debt, bank debt and there will be a high yield issue as well. so will you have $14 billion in new debt and, you know, we'll have a public hilton most likely first quarter next year. you got to get the s.e.c. to sign off. we're almost already at the beginning of the fourth quarter. but then we'll have it out there along with the likes of marriott and starwood as another comp. looking at it, these are valued on a multiple. >> they took some debt down, they took a preferred. these were companies that went private at the very top of the bubble but manage to withstand

the financial crisis without going bankrupt. >> maybe been bernanke should get a little kudos there. >> and also no covenants in any of these things. >> the last ones before the crunch. >> you had very little ability to actually put them in they missed a payment. >> toys "r" us still coming out. so few bankruptcies. hilton of course well away from that. it's going to be a real success story for blackstone. >> these are success stories for capitalism. these companies would have gone under if -- >> only would have gone under because they took on enormous amounts of debt in order to go private.

harrod's, which is now cesars. >> the prior year showing growth. >> marriott was upgraded yesterday. stock had a big growth. we know starwood has been doing incredibly well. simon covers this group. but travel has been great. watch priceline. priceline's been incredible. >> we always have the question of an overhang. blackstone will be a seller of shares once it comes public. >> maybe buy blackstone. >> stocks of are dribbling out a bit. >> blackstone's been a great stone to own. fabulous stock to own in this last period. >> when we come back this morning, cramer will take you on a run for profits. we'll get his mad dash as we count toward the opening bell. one more look at futures.

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stanley piece, equity run, downgrade to equal wait, now priced for success. i think a lot of people feel that way. they say virgin is an interesting first step. but what's most amazing about this, david, is i basically understood the karma of the market, people like netflix, they like "house of cards, " "arrested development." i congratulate morgan stanley. >> this is a case where an analyst had it right to begin with. perhaps we should pay attention. very rare, though, they get it right on both sides. >> i know. >> scott devitt, congratulations. >> 227% rise in stock right. that's not bad. priced to perfection, jim. give us some sense there. >> what i thought was really interesting, the bear case that he's using is still the same as using a 3 -- i'm sorry, base case, 314 base case.

it means he still thinks it can go up a little bit. >> carl icahn saying he hasn't sold a share. one would think maybe you take a little off the table. >> buying more apple. he's very contrarian. and then there was an article, i just wanted to ask you, david, the wall street journal says that relational might be interested. they seem to do high quality work that boards listen to. >> relational has the quieter approach, not the hit you in the face kind of thing that carl icahn is known for. we'll see on timkin. they don't want to be caterpillar. >> if you have commercial construction coming back, they will do terrifically, goebbels company. david, relational managed

convinced the board at timkin that the management was wrong in not wanting to split the company up. the board was won over. what are these guys like? do they come in with just fabulous work? >> i think they come in with good work. >> nell san, too. >> everybody's got their on approach. it's interesting in terms of the more aggressive activists, those who will get very aggressive but will try to be construct of and then you've got the ackmans, the icahns. it not an all for one. and they will choose different menus. look to see if anything happens here. >> i thank you because some guys who do activism are really trying to help everybody. i think pelts has, i think relational's done high-quality work. >> all right. we have a lot more to cover this morning. the big question, is this week's rally going to continue? you know what, the best way to find out, stick around. the opening bell after this.

tomorrow, back from the brink. former treasury secretary henry former treas♪ y secretary henry

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opening bell set to ring in just about ament and a ha mea minute. the s&p up seven in a row. so far this year it's been up eight straight twice and up seven straight twice. >> yesterday we sat here with the mortgage applications. what goes up the most yesterday? home builders. this is this market taking information that normally would have been translated into negativity and saying that number must be the trough for home builders. the optimism is extraordinary. >> we're starting to hear from some technicians who say if you play short-term trends, maybe lighten up here. others say if you play long-term trend, wait for the august low to be taken out. does that make sense now? >> travel has continued to go up. i was too cautious.

i like to be able to say you know what, it's over bought, markets been up, i fear september, but that's been wrong. >> down here at the big board, guggenheim investments, what a year they've had. over at the nasdaq, ut energy, provider of oil drilling services, 9:30 on the east coast. david's got some news. >> let's talk a little dell, shall we? we know in texas the vote is going to take place on the decision by shareholders as to whether michael dell and his partner could take the company private. this is not a big surprise that, yes, that vote is going to be in favor of the numbers i'm hearing, 65-35. that's a preliminary vote count. that could chang a bit. again, no one had any thoughts that it would not be a victory for michael dell. but we can tell you 65-35.

that should be announced within the hour that in fact dell's shareholders have voted in favor. a lot of other things already in process. the company is in the high yield market -- or i should say the buyers are in the high yield market looking for their financing, $6.5 billion there and they're looking interestingly to start selling down their equity commitments. remember, michael dell is rolling in his stake in the company. he's also investing another $500 million, and then msd capital, which is the fund that holds a lot of his money and outside money, manage his money, he sold so much stock over the years, also committed to buy 250 million in the deal as well. msd capital is sending out some e-mails to its fund holders, offering them, i'm told, the exclusive opportunity to co-invest with michael dell. again, selling down their 250

million dollar equity commitment to the go-private transaction. so do you have this process beginning whereby they get the financing lined up in the high yield market and they start to sell down some of their commitments. not the michael dell commitment per se. he's rolling at 1250 a share. he's almost selling into the deal at 1250, he owns the stock at a 1388 deal, silver lake investing at not that level and so he took less for his equity, but you also have the sale by msd potentially at least trying to pair its exposure to dell. i don't know, would you buy -- if msd capital sent you an e-mail and said, hey, you have an opportunity to invest? >> i might just pass up on that attractive opportunity.

>> you would? you wouldn't want to be in there with michael dell as he transforms the company? >> i'd like to speak with him but take is there's a deal called verizon, tremendous cash flow, backed up by a company i pay a fortune to every month. i haven't bought a dell in ages. >> well, michael is having a very large barbecue. i didn't get an invite but i don't know. you'll meet all the bankers, lawyers, they'll all be there celebrating the newly -- or planned to be private, the deal is not going to close till october. a big celebration, the fourth vote that being held, the forth time would appear to be the charm. >> maybe they can talk about how tablets are going to outpace pc sales in the fourth quarter. new data out of idc. >> another negative.

it doesn't matter. this was a teflon deal and i hope they enjoy their smores. >> people pair it with the news of hp leaving the dow this week. >> hewlett packard, the category, the category. this category is so bad. the last thing i want to do is buy bonds of this declining, soon-to-disappear category. oh, no, jim, it's real big, you don't know. >> people will say everybody's who has written that story that the pc is dead has written it on a pc. thousands of stories. i mean, they're not going away. >> no. but there is such a thing as a secular decline in this world and it's defined by that. if you google secular decline, you are see a picture of a dell. not true and i do like that concept. wi wikipedia will steal it and say

facts this. >> the wikipedia fact thing. >> if michael dell succeeds, people will say, well, he managed to tank the numbers and buy the company too cheaply. or if he fails they'll say, well, it was all -- >> the barbecue was the bonfire of the height of the vanities. >> it's unclear if he wins either way. we'll see. very interesting turn around at dell. not private yet. the vote having been taken. >> maybe the pc is going to make a comeback. i mean, i don't know. i can't think of a reason why it would make a comeback. i'd like to throw this thing away but i have carpal tunnel. as soon as i get rid of the small keyboard. >> we mentioned facebook at the top of the show. it is continuing to blow through 45 here. >> look, i -- that quarter, that july quarter was an amazing conference call. it was the one where i just said this is a straight shot. it was one of the conference calls that really defined this period of saying not only have

we figured out mobile but we're the best in mobile, we're making a fortune in mobile. facebook is a very rigorous place to work. i don't know if you have any friend who is work there. >> a couple. >> they tend to be the best and brightest in the country. >> very smart. >> i hope to get a job there. >> qualcomm getting a lift, $5 million dollar buy back,. >> royal caribbean, very shareholder friendly. qualcomm brought a lot back during this last quarter. these companies think their stock is still cheap after some big runs. pretty amazing. optimism, david. maybe you ought to get a little dollop of it over on your end of the desk. >> thank you for that. i will prefer to stay in the fully reality-based world. >> what, the tan pants? >> you have a problem with the tan pants? >> i'm a suit guy. >> i have a yacht to visit. >> is what what you got at the

tjx? i bought my slacks at jcpenney trying to boost the numbers. >> how about the tie there. >> this is a very different tie than my usual. >> can we talk about yahoo! up near a new high. >> did she say anything in that conversation -- >> real growth, real growth. i man,ean, i continue to be ver impressed with what she's doing. company was undermanaged, shoes doing a lot of things right. cnbc has a relationship with yahoo!. one thing you have to recognize with this woman, she's revered. she's a very important role model yesterday. >> why are you chuckling? >> i wasn't doing anything. >> you're chuckling. >> i wasn't doing anything.

>> it was a great interview. >> lululemon say they expect delivery delays to continue in q3 in the balance of the year. >> gees, give us just a clean quarter already. i don't know what to say about lulu. you got underarmor in that area, you got nike. people are saying a september 18th meeting by dick's. we'll talk about positive things for nike. lulu is not my favor. underarmor, he might kill you for a sale. that's who i like. i like under armour. you know hough you have your list of questions? >> do you want to explain domminion? >> we all knew they were going to get this, there was very little doubt.

sierra club blessed this. we've been talking about this for months on "mad money." if you're paying up three points for a utility that will be able to build something in 2017, 2018, you're making a mistake. that's too high for dominion resources and that's one of my absolute favorite utilities. >> on the same subject, the wall street journal today reporting the epa is going to have extraordinarily high, stringent standards for new coal plants. >> i don't think anyone felt otherwise. >> which would require them to bury their carbon dioxide emissions. >> there will never be a new nuclear power or coal plant built in this country. >> new nuclear as well? >> ever. >> that's economics, though. >> fukushima. one day the federal government will probably get rid of its guarantee or the insurance guarantee. it wouldn't shock me. and coal, nope. i know this from mike sutherland. he said, listen, it's done in

this country. done. >> we're all in on natural gas, then. >> well, we're going to be all in on natural gas, absolutely. >> dow's off some 6 points. bob pisani, we're on pace for our second biggest weekly gain for the year. >> but the rally has run out of steam. it's been great in september. china managed a small gain, up five days in a row, anywayest run in a while. japan down. abe is increasing sales tax. i think it's a crazy idea but they're going to do it. europe, same as the u.s., they're kind of weak today, done fractionally. everybody is talking about the verizon bond deal. when stock traders start talking about a bond deal, it's a big deal. the three-year bond at verizon priced at par, now it's at 102 1/4.

the yelled went from 2.5 to 2.72. all across the spectrum, all the prices moved up rather dramatically. so here's what's going on. there are three points everybody keeps emphasizing about the deal. number one, it's so big, $49 billion, there's an enormous amount of index buying. that's a lot of natural buyers. number two, they priced it right, low price, high yield. brilliant on their part. finally a lot of people are saying this is reflecting some kind of comfort with the tapering process, the near-term risks for they feel a further backup in rates are limited or manageable, otherwise why would everybody be chasing this deal with the yields going down? observations from stock traders, a lot of disappointment in retail land. you guys were talking about lululemon but the same with

men's wearhouse. the ceo said we're being affected by macro issues affecting the entire retail space. they're saying the whole space is being affected. the s.e.c. has just begun a meeting ten minutes ago with all of the exchanges, all four of the major exchanges to discuss that nasdaq trading glitch that occurred a few weeks ago. the network that carries the trading activity for nasdaq went down for three hours. a number of things are probably going to come out of this meeting. one is they're probably going to suggest ways to create more robust backup systems, perhaps having the nyse and the nasdaq trading systems back each other up, but more importantly, i think there will be some kind of push to have more uniform regulations around testing and i think that's going to be very important. there's a plan called reg-sci that has been out there for a long time. it may create regulatory issues for them, they don't want more

regulation. that's understandable in this kind of environment. i think the s.e.c. is going to issue a statement in the middle of the day about this and i'll be on it. back to you. >> thanks so much, bob. i want to go to the bond report and speak to rick santelli. >> that verizon deal doesn't surprise me. i'm going to continue to talk about it in a couple of hours on the "santelli exchange." does it really mean a lot for rates? i'm not sure. one conclusion i can draw, the faulty data from the faulty towers gives us good insight into how markets price. at 8:30 eastern we see this really low initial jobless claims number. it's not accurate. we're told that by the people with the crayons. look at what an intra day of 10. boy, it spiked up. can you talk about this news being that news but in the treasury market, it's still good news when the perception of lower initial claims hit, rates spiked up. when it was dismissed, they went down. that made sense. but we have gone cold.

how many times have i said hot on treasury, big consolidation. let's pick some key tops in mid-august. if you like at 5s, 10s, 30s from about mid august, you can see the 30s are on their own with yield curve wiggles but the 5s and 10s are holding key areas, around 167 in the 5s, around 289 in the 10s. those are pivots, you want to watch those closely. overseas, remember everybody saying we bottomed a couple months ago? that caused some of their sovereigns, bunds at gilts. rear the wild foreign, change

days? they've consolidated greatly. carl back to you. >> rick santelli in chicago. >> we have spicy developments over at chipotle. and later on, a veteran watcher with eye opening comments on whether microsoft is following in apple's foot steps. "squawk on the street" will be right back.

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♪ welcome back to "squawk on the street." the gold prices are falling fast. gold is down more than $35 right now, under 13130 an ounce as gold has broken below its 100 working day average. we're also watching as we are

seeing what will happen next week in terms of the fomc meeting. will we see tapering, when will that happen? a lot of traders are watching that as well. technical momentum on the down side is driving gold, 1325 an ounce is the key technical level. silver is also at a four-week low. we're seeing intense selling pressure in the silver market as well. meanwhile, oil prices remain supported because we're continuing to watch what will play out in the syria situation. >> thank you. chipotle is taking on so-called big food with this animated video and downloadable game. the scare crow fights a processed food giant controlled by a robotic crow and his efforts to bring wholesome, farm-fresh food back to the population. take a look.

♪ we'll begin with the spin traveling my creation ♪ what we'll see will defy explanation ♪ >> the only time the chipotle logo appears is once the video itself and the ads for the game have concluded. it's produced by an academy award winning studio, guys. they're going to give away a million buy one-get one to those who play successful. they used to be majority owned by mcdonald's. >> the cfos are big believers in the food chain being corrupted and that's why they do this food with integrity. they also have a sense of humor about it. can i just -- look, these guys are very close to their all-time

high. this stock has done great after a down 100 day. they do underpromise and overdeliver and i think it's something in the water there in denver, by the way. last night we had smash burger, last week we had noodles. these are all companies who try to do natural and organic. my hat off to chipotle, trying to teach people how to eat. >> watching that flooding in boulder today, very disturbing. a couple people reported dead there. we'll keep our eye on it. >> facebook ceo mark zuckerberg saying companies like twitter should not be afraid of going public. take a listen. >> in retrospect i think i was too afraid of going public. i've been very outspoken about staying private for as long as possible. i don't think it's that necessary to do that. >> that brings us to this morning's squawk on the tweet. if zuckerberg says twitter shouldn't be afraid of an ipo,

what should it be afraid of? tweet us and we'll see. >> i would love to sit down and pick your brain on what you think about these two. >> maybe another time. >> your ipo is coming, isn't it, carl? >> the thinking is more likely than not. they've been making some trips out to new york.

all right, "6 in 60" with jim on a thursday. >> you think it's bullish but be careful. >> controversial lynn energy. >> some journalists went on the offensive. this may be the beginning of the next round. >> a lot of discussion of kroger second quarter. >> wow. i mean, kroger, people don't understand this is a very powerful concept. again, 3% same-store sales. it's a great company.

>> cutting huewlett. >> and the new pandora ceo. >> wow, this stock is so heavily shorted. mcandrews comes in, kennedy is out. i don't think people even know mcandrews. hey, let's buy, mcandrews is in. this is a bullish moment that defies me. i'm too old to just have everything go right i guess. >> what's going on tonight? >> let's find out what's going on with apparel. express doesn't do a lot of t vflt. trying to find out more about the twitter world, introduce people to this notion of web sites that are very powerful, broke the teina brown yesterday. >> yes, very good. business verticals making noise, too. >> yes, they do. that's the stuff we're going to talk about. >> thank you, carl. >> do you realize facebook stock has almost doubled since the

summer lows? can the facebook rally continue? and clear channel ceo bob pittman will be here. he has a landmark deal to talk about and we'll talk to one hedge fund manager whose return is 500%. ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

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welcome back to "squawk on the street." our road map begins with a big move mover. lululemon suffering from downward guidance. can they recover. >> and mark zuckerberg says the ipo process really isn't so bad. >> and clear channel making a landmark deal. and weighing in on all the controversy on the internet media business. >> as i reported earlier, dell and silver lake will have enough votes to take the company private.

65-35 was the preliminary vote. they will release the count, i'm told, most likely in the next 20 to 30 minutes. when we get the official counts of yes votes to no votes, we'll bring it to you live and we've got coverage on the ground as well. >> on to one of the big movers of the day, lululemon, the yoga apparel maker. >> good morning, courtney. >> it's a rare list for the yoga apparel maker to be on. profits fell 1.3% from last year due to higher input costs. troubling to investors is the retail guidance. lowering full-year eps. the weaker forecast pulling down lululemon shares. lululemon ceo's began the

conference call by explaining where the company is in its search for a new ceo. day notified the board in june she'll step done once a successor is down. she is in discussion with several candidates. they'll narrow down the list of candidates. the yoga wear retailer's first london store with open. it's part of the company's growth initiatives but it's doing so very carefully. citigroup initiating coverage with a buy rating, citing the strength of the brand. christian bus upped his price target from 78 to 83. it's believed they can double revenues. roxanne myers noting recent

executive turnovers leave the door open for execution risk in that key fourth quarter. simon? >> courtney reagan on lululemon. meanwhile, facebook is hitting a new record high this morning, the stock is up a staggering 90% since the summer lows. just the past three months. at the tech crunch meeting last night, ceo mark zuckerberg talked about the company's growth importantly in mobile. >> last year second quarter we had basically no revenue on mobile. now in our last quarter, a year later, more than 40% of our revenue is mobile. people there's more competition on mobile, there's more great apps. people spend on desktop one in seven minutes with facebook of all their time on the web. on mobile it's more. it's one in five. >> the question is are the margins as big. aaron kessler joins us, senior

analyst at raymond james. and victor is also here. gentlemen, good morning. aaron, how far do you think the stock can go now? >> we still have a positive bias on shares here. i think the key is mobile. mobile is not 41% of revenues. we think that gets to 50% over the next couple quarters. facebook seeing direct response companies. facebook is becoming one of the best platforms for that. we think facebook has an upward buy here. >> you have a strong buy at 38. didn't we see it at 45? >> our numbers are based on 2014 estimates. that can provide up side to our target range. >> victor, you are already targeting $47, a buy recommendation. up side to that?

>> yeah, i think there's up side to, you know, i do have a $47 price target on the stock so i think the stock will get there. when i look at facebook, i see a fundamentally strong business that has a very extremely long runway. it's both long and wide for them going forward. when i speak to advertisers, they come back and tell me they continue to shift both brand and direct response advertisers and they continue to see facebook as the go-to platform. they're seeing extremely good results and they think that's going to continue. >> why is that? >> if you go back to what i've said many times, advertising has always followed eyeballs and facebook has eyeballs. they have the traffic and they have the audience. the audience are converting well for advertisers, high click-through rates and conversion rates. they're going to continue to allocate more advertising dollars to the platform. i'm actually seeing more brand,

more categories, real estate categories. i'm starting to see the alcoholic beverage category come on to the platform. i think the runway is really long and wide for facebook going forward. >> everybody is talking about the monetization of instagram. how much is that worth to the integrity of the experience? >> clearly facebook as i talked about last night trying to build the traffic first and advertising coming later. with over 100 million users on instagram, especially the younger demographic using instagram more than facebook, that's a powerful site that we think could be another driver of the up side. >> victor, we're seeing at the center of this $110 billion business, one individual, mark zuckerberg, whose own fortune

has gone from $16 billion to $27 billion. is he an asset or is there a liability of having such a young man we're watching grow up in front of our eyes? he's still only 29 at this stage and huge live wealthy. >> what i saw last night in the presentation, i saw a ceo who was extremely confident, a lot more confident than he was last year. extremely poised. a bit awkward but a lot more pep in his step. rightfully so. he's executed rather flawlessly over the past year, given against a back drop of investors for him -- calling for him to step down. >> he says himself being public has made the company far stronger. guys, thank you for your advice. victor anthony there and aaron kessler. >> we have breaking news. if you're a fan of harry potter. >> that's right, carl. it looks like warner brothers may have a big new franchise on

its hand. they're announcing an expanded partnership with j.k. rowling, the force behind the multi-billion dollar harry potter series. she's going to make her screen writing debut on fantastic beasts and where to find them. it will be an original story. it will start off as a book and also be a new film series. it will feature the magical creatures and characters, some of which will be familiar to harry potter fans. so of course warner brothers is always looking for a new franchise, especially after the success of the harry potter franchise, those films grossing about $2 .4 billion in the u.s. alone. >> that is very interesting. thank, julia. >> yahoo!'s ceo marissa meyer,

we have a look at what she had to say about mobile growth and the new logo. >> yahoo! above 30 bucks a share this morning. meyer took some heat about the new yahoo! logo but she didn't apologize doing it in-house saying it hadn't been updated in 18 years. >> we kept it in house. we didn't have someone at an external firm. we didn't spend millions do it. we did it in a way that came from a very authentic place. for us what the brand is really about is about the products and having the best products and best user experience. that's what we want to shine through. that's what we're focused on. we're happy with the logo. >> on the question of her greatest weakness, meyer said an experienced ceo told her there are actually few decisions a ceo has to make herself but the big one she does make must be absolutely right. that's a balance she's still figuring out. >> i probably should be making

fewer decisions and while i try and identify what those big decisions are and i don't think i've missed any yet, i do think it's hard to say, okay, what are the really big decisions that need to be made absolutely correctly? >> the implication there, she micromanages at time and she's self-aware. finally on microsoft's next ceo, mayer said microsoft's strength is in the enterprise and they can do enterprise and consumer but not both. >> i really admire microsoft in terms of what they've built. this is an interesting time in testimonies of microsoft. i don't know what their board is considering but when i look at their product line, i see a lot of strength in the enterprise area, windows, office and what the next extension of those products look luke. one -- like. i do think consumer and enterprise executives have different traits and different

instincts. >> that's an interesting thing to say given yahoo! and microsoft are partners in search, which is a consumer business and it's also spending just over $7 billion on nokia. maybe she's hoping microsoft will spin off msn to yahoo!. back to you. >> as an aside, is she effectively rooting herself out to be a microsoft ceo? >> sounds like it. >> thanks, john. up next, clear channel chairman and ceo bob pittman will join us to discuss a deal with a major music company. and we'll get his take on internet radio. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves...

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a big announcement in the music industry. warner music and clear channel announcing a partnership this morning. joining us is bob pittman, chairman and ceo of clear channel. i've read the release. explain to me how this is a benefit and where the money actually comes from, incremental money in terms of a revenue split. i've read the release and i don't understand what's behind this deal. >> it's about reinventing the

radio and music relationship in the digital age. the big money comes from building robust digital markets and from the warner side is breaking new artists, taking established artists, their legendary artists to the next level, which obviously is worth a lot of money to them. but i think most of all it's also to encourage the artists, record companies, radio, technical folks to all participate in building a very big robust marketplace. >> so they give you exclusive access to new content they're generating in some way? >> no, we're helping them take their artist into new digital marketplaces and helping use radio in a much more established way and business-like way, if you will, in terms of how you break the artist, how you take the artist, get the exposure and

push it up. i think from their standpoint they're helping us build the digital marketplace that really makes sense, understanding that sort of the music kol exside of it is quite different than the digital radio side of it and they both require a different approach. and warner i think has been very creative in putting that together. >> bob, you've been experimenting, so to speak, of course in digital and moving aggressively in it, as has warner music, huge challenges for music production and the radio business. what gives you the confidence, what have you seen in what you've already tried to do in various efforts this will actually work? >> i think for us it's an opportunity, not a threat. i think warner probably looks at it the same way but shame on us if we don't take advantage of it. we've really come out of nowhere to be the leading radio digital service, number two audio service on the web. we have the big radio festival

coming up next year in vegas, third year, sets records for everything. again, that's an indication. also, as i look at listenership, we managed to, if you look at the numbers, radio listeners have continued to increase for broadcast radio and digital has increased on top of it. we're finding incremental listening occasions and obviously that generates money for the music industry, money for the artist, money from us for advertising. so to me, it's a win, win, win all the way across the plate. >> investors could use your insight about these pre-1972 copyrights for sirius. what do you make of that? >> i'm the farthest thing from a lawyer. the music industry and everybody

who connects with the music industry is trying to redefine the relationship. there's a lot of back and forth but i think we find our way to a mutually beneficial outcome. >> the company took on an enormous debt load to go private. it continues to be in private hands. is there an opportunity to refinance yet again? are you comfortable with your leverage ratios at this point and where your cash flows are going? >> i think we're comfortable with the capital structure. we have all the resources to continue to grow this company. if you look at the enough businesses we entered, the digital marketplace for our outdoor, i think we've got some exciting stuff going and the new initiatives are indeed working. so for us we're excited about the potential and possibilities. >> anything stop you from doing a deal like this with the other major music companies in. >> we started this a year ago with big machine records, a

different kind of deal, but he was the first to help us bridge the gap between the music business and radio business to come up with something. we've done i think about 19 deals in the indy market. this is the first major. i think this is a big step. obviously we're talking to the other companies. they got some terrific thinkers there. i think everybody is trying to figure out how we make all this work for all of us and create a whole new robust marketplace. >> a lot to think about, it's been going on for a while. bob pittman, always appreciate you joining us. >> thank you, appreciate it. >> it is now official, we have news out of the dell meeting. jackie deangelis has that. >> hi, guys, that's right. this was the fourth meeting of the special shareholders and michael dell's proposal along with silver lake partners has gone through with the

shareholders. we'll get a final tally later in the day about the specific percentages. the deal we're talking about now is the sweetened deal, 13.75 a share and also we'll get the 13 cent and 8 cent dividend payable to shareholders on record. we're talking about a $25 billion deal here. let me give you some color from inside the room. michael dell himself did attend and we were not shocked by that. we did think he was going to come because the expectation was that this was going to be approved today. you had a little bit of a mix of some of your institutional investors and also retail investors, some of the same usual suspects we've seen here the last three times showed up today. their take on it was interesting. some of the little guys were voting for the deal and some weren't. one gentleman was saying he's owned this stock for a long time now, he's underwater by about $18 and he's really going to lose money on this transaction.

he concerned michael dell is unlocking shareholder here but not for the little shareholders. and another woman said i am voting for this proposal because a bird in the hand is better than two in the bush, i want to know what i'm getting. so there were mixed sentiments but most of all people were happy to a certain extent that it was oaf, there is some resolution and they know what to expect. this deal expected to close in october, as you guys have mentioned before. back over to you. >> jackie, thank you very much for that. we want to mention as well michael dell will be on this program tomorrow at 9:00 a.m. eastern time. david, it does give us a moment, though, to mark it as an historic marker, which it is, right? a very long journey into a very tough business. >> no doubt. these management-led buyouts inherently have a conflict. i felt throughout the special committee for dell's board did a lot of the things you should do

and yet it's hard to get around that conflict. carl icahn showing up on the scene. it's interesting, carl. i'm told that icahn seriously considered raising his bid in the last week. that would have been real drama. but decided not to. time will know whether shareholders got a good deal at 1388 or whether or not in fact michael dell and silver lake managed to pull one out here. >> the hard work is just beginning. >> it's hard to think of many electronic consumer businesses that have come back as strong as that. >> still to come, he's made billions in the market where many people have struggled. delighted to say that deepak narula will join us in a few minutes.

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big news in the lodging industry, hilton is filing for a billion dollar ipo. it was one of the largest leveraged buyouts to precede the financial crisis. it's been a long journey. but detailed is the way the ceo has been able to grow the business. some of the metrics there, they're talking about the number of rooms they have open, up 34% from when the company was taken private. 350 new hotels in europe and china. hilton has been a brand they have reinvigorated and particularly at the upper end of those brands, taking it international, where it arguably should have been when blackstone took it private.

and they're also talking about an accelerating operating margin, it has been growing 12% a year to 17% a year. you have this huge amount of work within hilton to make it a more valuable company and whereas they took it off the market at $26 billion, it's actually now worth $30 billion. you've only actually gained about 20% in value. the hotels had to dump inventory and a huge amount of value was destroyed. the second reason there's not a huge leap in value is because they paid, david, a 40% premium to equity investors to take it off the market. effectively nassetta has done all the work to get them back to square one. >> there were many who believed hilton would not survive as an

ipo. private equity, of course, the model -- the key here is they've taken down so their equity has accreted up. the fact is blackstone will see returns well in excess of that because of course most of it was debt. that's the way private equity works. >> nicely done. when we come back, the strange new way that home builders are figuring out what buyers really want in a house when we're back in a minute.

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. i'm sharon epperson with breaking news from the energy department on natural gas storage levels for the past week. we saw natural gas storage levels rise by 65 billion cubic feet. now, that is less than what some analysts were anticipating. analysts were looking for an increase in the range of 64 to 68 billion cubic feet but many traders watched increases showing possibly 70 or 74 cubic feet. we're seeing natural gas up right now. being tradelers will watch the forecasts for temperatures coming out to be normal. often this is the time you see selling of natural gas. we'll see whether or not this storage report which shows an increase in supply of 65 billion cubic feet is enough to continue

to lift the market. back to you, simon. >> the s.e.c. is meeting with the heads of this country, some 13 exchanges today, following the complete shutdown of all nasdaq traded stocks about three weeks ago for the best part of an afternoon. eamon, good morning. >> good morning, simon. the meeting has begun and it began about 9:30 eastern time here. they expect it could go as long as about three hours today. it won't get out until about 12:30 today. what are they talking about in this building today? they've been very quiet but our bob pisani has a couple of tiits on the agenda. they're talking about adequate backup capabilities for the nasdaq sip, and better protocols for testing backing up systems.

and clearly erroneous trades and how the rules are designed and how big financial firms can get a mulligan on trades that are clearly erroneous. i'm told the s.e.c.'s key leverage is they have something they call the atomic bomb inside this building, they have the ability to oust any of the exchange leadership they feel is not doing their job. that would be a very difficult process but it gives them a little bit of muscle in this meeting today. >> eamon javers in washington today. >> there's an old saying the trend is your friend. there's a slew of notable records being made. >> stocks are taking a bit of a breather today after three strong days. while there have been maybe some flashing lights, maybe no big signs. we're just a little over a percent away from record highs in the s&p 500. about an hour into the trade

we've got 38 new highs and 25 of those are record highs. so while many investors know full well that netflix and starbucks are up there, take a look at some of the other notable names making record highs, health care stocks, united health group, significant in a, hu -- cigna and humana. there's also a big one here, defense contractors, shaking off all those worries about the budget cuts and sequestration. shares of united technologies, lockheed martin, boeing, they're all at record highs as well. and we'll cap it off with nike. investors are still bullish with what's happening with that apparel and footwear making. business in emerging markets like china are pushing those higher. you keep an eye on those momentum stocks, a lot of

companies making these new record highs. >> dom, thank you very much for that. >> netflix coming off of its all-time high set earlier in the week. we were at 313 just yesterday. company making a bet on original programming. but do original shows really mean knew subscribers? we'll talk about that and the morgan stanley downgrade in just a minute. we route your order to up to 75 market centers to look for the best possible price -- maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. ♪ [ male announcer ] 1.21 gigawatts. today, that's easy. ge is revolutionizing power.

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shares of netflix hovering near some all-time highs, the streaming giant launching another series, the ricky gervais comedy "derek." but is it enough to add new subscribers. >> all seven episodes launch today but this show is not so

similar to "house of cards." it's about a volunteer in a british nursing home. it's drawn mixed reviews. it premiered in the uk on bbc last year, though it is exclusively on netflix in the u.s. today stocks moving down because of analyst down grades. morgan stanley downgrading the stock saying significant gab between price and value that existed 12 months ago has mostly closed and now we see a more balanced risk-reward. the stock is up about 430% in the past 12 months. in a week where the company launched in the netherlands and

announced a partner with u.k. cable company virgin media, it looks like the company is going to need another catalyst to move even higher than where shares are now. netflix does not release ratings so we won't know how well "derek" is doing until the end of the quarter. >> we'll just have to rely on the talent of ricky gervais, i guess. >> we'll see if audiences like this show as well as they like the original british "office." >> meanwhile are shares of apple following in the foot steps of microsoft? tom mcclellan will give us an interesting theory next on the show. ask me what it's like

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so an eighth day of gains on the market. let's look at where phase is trading, at 4549, a 90% surge from the lows we had in the summer. mark zuckerberg swaek being yesterday saying the company is much better run now than it was when it was taken public. carnival cruise lines, a subsidiary of the 24 ships,

they're calling a vacation guarantee. it allows complementary air flights home and a credit if they don't like the cruise. i don't know if it's an indication they're having people getting on the carnival ship because of your difficulties. >> you can end your trip early? >> yes. can you go i'm not enjoying this, get me off at the next stop. >> they don't charter you a a chopper? >> then you get your money back? >> 110%. >> would that persuade you? >> it might. not a lot of down side. >> we're keeping our eye on yahoo! too. the nasdaq, another 13-year high. nasdaq gains for the year, 23.5% on the year.

>> despite apple. >> yes. >> let's get to rick santelli with "the santelli exchange." >> hi, carl. good verizon deal yesterday. can i buy more now? plea please, can i buy more now? that's what i hear. there's so much being written about this super dupe record, usurping the previous record considering it was 17 billion. there are so many ways to go. i'd like to first contrast it with the ipo of facebook, even though they're kind different sides of the world. on one the underwriters probably didn't do facebook any good and i think yesterday the underwriters didn't really do verizon any good. i know people say they were brilliant by putting this together so quick because of pop taper, fed meeting, we'll get to that in a meinute. in the end it was super cheap and i think verizon could have

done better. that's my opinion. but when you look at all the stories, bill gross's tweet, before the ten-year option his tweet was 520 verizon, 295 ten-year. with the notion, you could take it in a multitude of ways but the one way i took it and many here took it was that the ten-year wasn't going to go well but it did. i think the real issue is that traders don't make commitments on long-term projections on interest rates when they see a whopper of a deal they perceive is cheap, they know how to hedge, wedge and put relative trades on to capture and protect some of that cheapness, discount that was perceived. we know it's more than perceived. bob pisani has a great piece on cnbc.com about how many points this rally has pushed rates done. what should we take away and be careful about conclusions and

drawing conclusions. first is that verizon underwriters have some mythical crystal ball and they know in the old days when they came to the market with a long-term or 50-year bond that they knew something else nobody knew. if the fed is unsure of what they're going to do, i don't think anybody's crystal balls can be plugged in. b, it means investors are idiots because who in their right mind would buy anything right now when the conventional wisdom is that rates are going up. the first thing to dispute is anybody who plays in the corporate arena sees several things. if you're in the corporate arena, you almost have to be involved in a deal this big because of the bogeys, benchmarks and ul howe significant they'll be on indexes that measure performance. b, federal programs, there's no other place to be. well, there are a lot of people

think trillions of dollars on the sidelines who aren't buying into that argument. if i was one of those people, i'd think a cheap verizon deal is a quasi hedge against any nervousness about the sector make sense. the one conclusion i can draw, when something's on sale, whether they should have bought so much, heck, it's on sale. >> rick, thanks a lot. russian president vladimir putin likes to portray himself as one of the people but he could be billions of dollars ahead of them. we'll go inside his mysterious wealth in just a moment. has it's ups and downs. seasonal... doesn't begin to describe it. my cashflow can literally change with the weather. anything that gives me some breathing room

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russian president vladimir putin writing an op ed in the "the new york times" in which he calls for caution around possible military action in syria. then, in the final paragraph, mr. putin also warned about the promotion of the idea of american exceptionalism. but when it comes to putin and the russian people, it's him that's shrouded in mystery. robert is here to explain more. >> reporter: vladimir putin likes to portray himself as a simple russian everyman. he calls himself, quote, your humble servant, and i quote,

galley save in public. he dresses down, sometimes not even wearing a shirt, in the official portrait, and his income was, $187,000. his official list of assets includes a small apartment, three cheap cars, and a garage. but many russian experts say he is worth more. how much more? well, putin's net worth remains one of the biggest mysteries in global wealth and political circles. russia has an estimated 100 billionaires, many of them with ties to putin. wikileaks says putin was trying to secure immunity against possible probes into his, quote, alleged elicit proceeds. one opposition leader told the guardian last year that putin's worth is at least $40 billion. he said putin has shareholders in several energy companies. they were largely through offshore trusts in lichtenstein and other tax havens. they say a report from the former deputy prime minister, he

said putin's official perks include 58 planes and helicopters and 20 homes. for a galley slave, he also has some pretty nice yachts. four, actually. including one with a waterfall and a wine cellar. it documents the money on his wrist with luxury wrist watches worth more than $700,000. putin has long denied the claims saying it's a fabrication of western reporters with no hard evidence. back to you guys. >> robert, i also have met a couple of journalists who followed this. i believe he's building one of the largest houses in the world, as well, in some part of russia. i don't know if you encountered that in your own research. some people say his wealth could be well north of $40 billion. >> there are a lot of rumors that say it's much more, and in russia, determining the wealth of anyone, let alone the president, is just very murky, because it's filled with shadow companies, shell companies, offshore trusts, and there's a lot of real estate and a lot of yachts, a lot of assets around the world that people say might

be tied to putin, but there's never any hard proof. >> and sorry to be so naive, but how do you live in 20 homes? [ laughter ] >> quite nicely, actually. you know, again, these are homes that are officially attributed to the presidential office. unclear how many other homes he may have that are private. but again, he's denying it, saying there's no hard evidence that owns these things. >> yeah, we're still -- we're looking for hard evidence in all sorts of different things these days, robert. >> that's right. >> you pesky western reporters. thanks a lot, robert frank. >> thanks, carl. squawk on the tweet, mark zuckerberg speaking the a tech crunch saying companies like twitter shouldn't be afraid of going public. take a listen. >> in retrospect, i think i was too afraid of going public, and i think, you know, i've been very outspoken about staying private for as long as possible. i don't think it's that necessary to do that. >> so we ask if zuckerberg shouldn't be afraid, twitter,

what should it be afraid of? mike writes, afraid of ipo advice from zook. schuman write, should be afraid of hoodie winked and bought by zuckerberg before the ipo. he says be afraid of icahn. be very afraid, as a lot of ceos are. there's no love lost between twitter and facebook. arch rivals in the valerie. we'll see how far that -- >> no fear from icahn. don't forget mr. zuckerberg has all of the controlling share. huge majority. the voting share, like google did, as well. and in these cases, activist investors not going to be able to do much. >> yeah. although we'll see. some of the -- they expire the end of september. we'll see if zuckerberg sells a lot. and a lot of discussion today about the new ceo, right, the less imperial ceo, that zuckerberg personifies, wearing the hoodie, talking like a regular guy, being as young, as you mentioned earlier on. >> yes, 29. with $27 billion. extraordinary. >> yes. >> you saw that when you did the

twitter documentary, as well, did you? >> 50. a lot of guys out there are -- and women, too, are younger. we'll see how -- whether or not the icon of the ceo changes over the next few years. we'll go to break and start 11:00 earlier. dow up eight points, s&p roughly flat. here's what you missed earlier on. welcome to "squawk on the street." here's what's happened so far. >> i do believe that we're at a point now where companies today, banks today, the way risk-weighted assets are calculated and so on, there's very little chance you'll sink the financial system, but can you cause a pretty bad bellyache for the financial companies. from my perspectives, if i look at it from a global standpoint, i think we truly have a recovery, but it's a slow and steady recovery, rather than a recovery that's starting to show some signs of steam globally. i call them the anointed ones. the anointed ones. it's, like, what does yelp have

to do to go down? zillow. it's literally, like, a good nsa, they know what you had for dinner and whether you liked it. these guys are -- they're just so loved. this is just an unassailable franchise. and zuckerberg said on the comps he would not run intrusive ads. people -- i know people are going to burn me for this, but people seem to like the ads. they're useful. [ bell ] most of all, it's also to encourage the artists, the record companies, radio, the tech folks to all participate in building a very big robust digital marketplace, which we all benefit from. it is now official. this was the fourth meeting of the special shareholders, and michael dell's proposal along with silverlake partners has been approved by the shareholders and it has gone through. good thursday morning. welcome back to "squawk on the

street." we're live at post nine. a little more flattish action today. obviously, we've had three triple-digit gains for the dow. one of several times we've done that all year. seven upstraight for the s&p. we'll see if we make it eight today as it's trying to hang onto a slight decline this morning. pandora's new boss popular on wall street. shares of the internet radio company rallying after news that pandora appointed former microsoft executive brian mcandrews as its new ceo. he will replace joe kennedy, who announced in march he was leaving the company. meantime, investors do not like the way men's warehouse looks. the stock falling this morning after the company cut its full-year earnings guidance with clothing sales coming in below forecasts. lululemon, another big mover today. the stock falling after the company cut its full-year forecast. we'll tell the where the company goes from here. plus, a very good year for yahoo!. stock's up 50% this year. hitting levels it hasn't hit since 2008. we're going to hear directly from marissa mayer on the company strategy going forward. congress gearing up for a

new fight. if members cannot reach an agreement, we might see a government shutdown. republican senator james inhofe will join us in the hour, as well. but we'll start with lululemon. shares trading lower after the open after the guidance came in below estimates. oliver chen is a retail analyst at citi, jamie katz at morningstar. good morning to both of you. >> good morning. >> what is the issue here. comps, olivers, weren't that terrible for the quarter. >> yeah, the main issue is guidance. guidance was worse than expected. they guided to midsingle digit comps, that's four to six. we expected seven to eight, and even whispers were higher than that. it's all about the forward-looking issue. >> obviously, they've been through the mill. >> yeah. >> jamie, over the past few quarters. and everybody is talking about inventory, which, i don't know, would you call it bloated? how would you characterize their inventory versus sales both now and going into the end of the year? >> well, it seemed like there was certainly more inventory on the balance sheet than we would have expected for the number of stores that were hope.

and it also seems like maybe the right merchandise isn't getting to the right stores exactly on time. so i think going forward we would like to see that inventory growth number trim down pretty considerably and, you know, maybe if the weather matches a little bit better to the seas s seasons, they might be able to move inventory faster through the channel. >> yeah, they've taken it from all sides, obviously, as a lot of apparel retailers have. so we're expecting some margin pain, i guess, in the coming quarter. you think there's a chance they can meet the new guidance, or is that a risk? >> i feel like the new guidance is appropriately adjusted. the problem is inventories are up 30%. revenues growing closer to 28%. there's some overhang. also, there's still a product shortage with respect to the deliveries, so there's execution risks as they get the deliveries on time. deliveries are running about four weeks to a month late. that's causing some lack of visibility, and their ability to guide, as well. >> yeah, jamie, they said that would be a problem both in the

quarter, and at year end. the delays. when will we get our first clean quarter? >> that's a good question. probably, you know, maybe in the first quarter of next year. and, you know, in all honesty, when we put this in the perspective of a number of the other retailers that have reported, this report wasn't so bad. there are a lot of other retailers that are saying the third and fourth quarter will be completely dire, and these guys are basically, you know, saying we're going to have mid-single digit or high-single digit comps for the rest of the year. we don't think it's all bad. >> right. how much of it, oliver, do you lay at the feet of christine bay? >> well, you know, these have been issues for a while, and i think there is opportunity for supply chain. but christine day really formed the template for success and culture and what makes lululemon special. also, lululemon has 25% margins. our sector's at 10%. we're seeing teen retailers go negative 10 comps, so this was a nice performance. it was better than expected with the comp at plus 8. >> you'd rather own this than an

abercrombie? >> i like this for the long term. it's a different product. they can still sell $100 pants that are great and versatile and different. >> jamie, are you that long-term optimistic? >> i think there's a lot of potential for growth over the long term. but i do think that the teen retailers are pretty well oversold at this point, so there could be some opportunity there, as well. >> what do you make of that argument? >> well, my take is that lululemon has a much better differentiation, and we're seeing great looking denim at 9, 10 discounted at abercrombie, and seeing high levels of teen unemployment, high 20s to 30s, which is an all-time high. so that worries me a lot for the teen. and people could be spending on houses and homes and other items like autos instead of giving their kids money for these products. >> yeah. taking it back to your note from a couple of weeks ago, talking about cheap and the acronym of what people really are spending on. we were mentioning j. crew's comps, guys, when they have

challenges, you know that apparel's in a difficult spot. we'll see how the end of the year shapes up. oliver, jamie, thank you so much for your time. >> thank you. >> thank you. meantime, somewhere, mark zuckerberg is smiling. take a look at 45.35 on fb, hitting a new high in trading. facebook's ceo making a rare public appearance yesterday, speaking at the tech crunch disrupt conference in san francisco. julia boorstin is here with more on that. hey, julia. >> well, carl, i was there yesterday, and mark zuckerberg was pretty confident and comfortable, talking about how far the company has come in the past year, growing mobile revenue from basically zero to 40% of the company's ad revenue. now, one initiative that has not taken off like facebook's mobile revenue is its home-mobile app. launched with much fanfare in may, put facebook on your home's home screen, but zuckerberg has not grained much traction. but he says don't count it out just yet. >> toughest things is determining when something isn't

going to work versus just hasn't worked yet. i definitely think home is slower in rolling out than i would have hoped. >> still, zuckerberg was very upbeat, even saying that despite everything that went wrong with facebook's ipo, it was actually a very valuable process, and the company is run a lot better now. still, he pushes employees to experiment and move fast. >> is that -- i want to empower people at the company to try things out, and i don't demand that every iteration of what we release is perfect. what i want to optimize for is learning the most and having the best products, three, five, seven years from now. >> facebook's zuckerberg says his company's outlook is different than apple's, which would never launch a product that didn't meet its, quote, perfection bar, as he put it. the tech company he praised wasn't apple, but, rather, microsoft. i'm sorry, we're missing the sound bite here. zuckerberg said there are probably a lot of people who can

run microsoft, talking about who will release steve ballmer and do a reasonable job, but what he was really impressed by was that when he was grow be up, bill gates was mark zuckerberg's hero. in the interview, michael harrington said, isn't he like darth vader? and zuckerberg said, no, no, no, he is the good guy, and he was always been impressed by the fact that microsoft was really a mission-driven company trying to put a computer on everyone's desk, though he did say that microsoft has lost some of its focus now. back over to you. >> yeah, that was a really compelling part of the interview, talking about his experience growing up and idolizing gates. julia, thanks a lot. of course, during the interview with zuckerberg, he said companies like twitter should not be afraid of going public. it brings us to this morning's "squawk on the tweet." if zuckerberg says twitter shouldn't be afraid of an ipo, what should they be afraid of? tweet us @squawkstreet. meantime, congress is barrelling towards a new fight over a government shutdown and raising the debt ceiling.

what's it going to take to get a deal done this time around? we'll talk to republican senator james inhofe in a moment. first, though, rick santelli looking to play today's crop report. rick? >> absolutely. i think, you know, i want to be the eyes and ears of most investors out there. we have ashley gulkey. she's in the business. she has fields of product. we have a report coming out at noon eastern. we're going to talk about what traders are looking for, but more importantly, how does the product look in the field? you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker. [ man ] i wanna be a pilot. [ woman ] i'd be an architect. what if i told you someone could pay you and what if that person were you? ♪ when you think about it, isn't that what retirement should be, paying ourselves to do what we love?

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at the touch of a button with our new tempur-choice. so both of you can get your best night's sleep together. let's look at materials today. the worst performing sector this morning. dominic chu has more on that. >> they are underperforming given the flattish nature of stocks. leading the sector lower overall are shares of cliff's, down about 4%. and golden copper miner newmont down 3%, and round out the top four, or bottom four, with fertilizer maker cf industries and international paper, both of the stocks are down by at least 2%. so again, materials definitely underperforming by a wider margin than expected given the idea that we're still holding right around flat lines, carl, in the market overall. >> yes, nothing like the past few days. thanks a lot. dominic chu back at hq.

meta capital has been betting on fannie and freddie, making it the best performing hedge fund. it launched just a couple of months before the crisis, and it has returned over 500%. since its inception. the man behind that fund is depac, who joins us at post nine. good to have you. welcome. >> thank you. >> i can't think of anyone i'd rather talk to about some of the issues we're facing now, because you played fed policy probably better than just about anyone out there, and then we took this hard turn in june where we started talking about tapering. how would you characterize the market's response to that since then? >> quite honestly, what the fed said and has done has really not surprised us at all. but the market's reaction has surprised us a lot. and it tells you how much risk there was in the marketplace that was betting on the fed's presence in terms of the amount they were buying in fixed income treasuries, securities, and the long-duration trades and carry

trades probably in the marketplace that were unwound in the second quarter. a lot of those. and the reaction was quite violent. mortgage rates and treasury rates went up a lot. mortgage spreads widened. and things have stabilized since then. but certainly, i think q2 was an eye-opener and it probably was the right thing for the fed to do to alert the markets and really take out some of the, you know, fairly speculative trades that existed in the marketplace and a much better appreciation for risk in the marketplace today than there was five, six months ago. >> you have to let some steam out of the kettle at some point. and that's arguably what they did in q2. what happens now? we're days away from the meeting. do you think a september taper is a layup and then are we -- are we ready for that? >> the markets are certainly budgeting for the fact that there will be a taper in september. if you look at qe, chairman bernanke's brainchild. his chairman is coming to an end. it's reasonable to kind of guess that he would probably want to start the unwind of qe before he leaves office.

also, if you look at, you know, various economic statistics, relative to when qe was launched, things are a lot better. housing is doing great. equities have done very well. employment is the one thing that probably hasn't, you know, really kind of delivered, but it's still better than where things were a year ago. and so, pretty much, you know, things are in place for, i think, the fed to go ahead with the taper, and that certainly is what the markets are pricing in. >> yeah, after the jobs number, especially, people trying to gauge right. will it be a dovish taper? how asymmetric will the taper be? do you have thoughts on what it will look like in terms of its components? >> i'm not an economist, but, yeah, certainly in terms of our point of view, i can share that with you. we've been through the view all this year that when the fed steps back, they will step back more in the treasury buying than the mortgage buying end. so if we were to guess what happens, probably that it's a mild taper that they announce, especially given the employment report recently.

it's probably more skewed toward treasuries and maybe a mortgage component. maybe 10 billion treasuries and no mortgages, or 10 billion treasuries and 5 billion mortgages, something along those lines. >> and the resulting effect on the 10-year? can we normalize here in the 3 range? do you think the broader markets are used to that at this point? >> i think that's pretty much what's priced in. those are the numbers that are priced in. and so, there is maybe a minority that believes that the taper might get delayed the end of september, into october, into december. you know, certainly to the extent they do delay the taper, it probably will be a pop in prices, both treasuries and especially mortgages, because -- so that's a big part of what they buy. but that still is -- it's one month versus the other. >> it leads us to the discussion of housing and fannie and freddie, and refis. i mean, you've been pretty good at calculating how the homeowner would react to rising rates, but then you see mortgage apps come in every wednesday, you see refis down 20% in a week.

what's that about, you think? >> it's very simple. it's about higher rates. i mean, if you look back and look at where the refi index was in early may, the mortgage bankers association publishes a weekly index of activity. it was about 5,200, the first week of may. it came out recently, and it's somewhere between 1,500 and 1,700 depending on how you treat the seasonal adjustment. that's down 70%. very simple. mortgage rates were 3.25, 3.50. they're approaching 5% now. if you see, refinancing has been a big driver of basically, you know, homeowners refinancing over the last few years. the average interest rates that homeowners is paying today is a lot lower than maybe it was three years ago. when you take the mortgage rate up 5%, it's not a surprise that refinancing falls off the cliff. >> we mentioned the performance last year. you started metacapital in '02. your own money, your own

savings. some money from friends. what do you say to young managers now? do you tell them the easy money has been paid as we exit this period? >> i think the mortgage market is a very large market with many moving parts in terms of risk, and so, certainly where we could offer any advice, if that would be in our sector, and then there's going to be plenty to do in that market. having said that, yes, i think the credit crisis created some very significant investment opportunities. it's going to be hard for those to come back, unless we have another crisis, we we all hope we don't. >> you got that right. deepak, thank you for coming in. really good to see you. >> thank you. >> with metacapital. when we come back, could apple be following in microsoft's footsteps? coming up later, our guest says yes and tom has charts to back up his case.

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lets get a quick market flash. seema is looking at the big movers on the nasdaq. >> carl, it's interesting to see how the nasdaq was the key laggard in the first part of the year, now the nasdaq is up 23.5% this year, outperforming the s&p 500 and the dow jones on a year-to-date basis. it's now trading at its highest level since september 2000. the biggest winners are specifically in the high-growth sector, including social media, internet, biotech. facebook, groupon, pandora, up double digits over the past three months thanks to encouraging commentary around mobile growth. in the internet space, yahoo! shares, which hit a five-year high, amazon now trading back above $300 a share. in the biotech space, thanks to upbeat earning, cellgene, gilead had better than 20% over the past three months and it's

helped the nasdaq biotech index outperform over the past three months as well. back to you. >> seema, thank you so much. as the october 1st budge oat deadline approaches, the next big debate in washington will be the debt ceiling and where to cut government spending. the next guest is proposing an amendment that exempts the defense department from sequestration if the u.s. strikes in syria. u.s. senator james inhofe of oklahoma joins us this morning from washington. senator, it's great to see you. good morning. >> thanks, carl. good morning to you. >> talk about the collision between foreign and domestic policy. why is this important? >> well, first of all, i'm opposed to the president's program of military intervention in syria. but the reason is a different reason than most of the rest of them. that gets right down to the question you asked. our military's in -- this president has decimated our military in the last 4 1/2 years. and you remember that first budget that he had, he did away with our only fifth generation fighter, the f-22, did away with the c-17, did away with the future combat systems,

ground-based intercepters, all of that. that was the first budget. and since that time, and you're fully aware of this, his extended budget takes another $487 billion out of the military. now, the question you need to ask is, with the sequestration taking that much more out, why should 18% of the budget, that's our military, be responsible for 50% of the cuts? i don't think they should. i think what we need to do, if we're going to go along with any of the programs -- and i actually have an amendment -- i don't think we're going to pass anything in the house or the senate that will allow the president to use force in syria. but if he does, he should have to exempt the military from sequestration. >> all right. >> and that's what the amendment's all about. >> i understand you're not for a strike. you don't believe congress will give him the right to a strike. but clearly you wouldn't be putting this forward if you didn't think there was a possibility he might go ahead on his own. is it a hedge? >> no -- well, of course, he

could go ahead on his own. that we can't control. of course, that wouldn't be effective, because obviously, this is not going to pass. if he goes ahead with consent of congress, then my amendment would make it -- put it in a position that would lessen the financial impact on our military. keep in mind, carl, and we all know, that we can send in a few cruise missiles. it's not going to cost anything. but anyone who's naive enough to think that that is being an act of war is not going to cause us to have to use our assets that we really don't have at this time. let me just read one thing to you. >> yeah. >> this is the commander or the chief of the -- the joint chiefs of staff. >> that said, we're putting the military where it's so downgraded, unready, it would be immoral to use force. that's the condition of the military now. that's why i have that amendment on there. >> i have to ask you, just because you're on the hill and the people -- the circles you fly in, senator, what is the reaction to putin's op ed today?

is it getting laughed at, dismissed out of hand? does it move this debate forward in any way, shape, or form? >> no, it just verifies in my mind what putin's motivation is. for us to be dependent upon putin to pull the president's problems out of the fire is just -- and i don't look at it in a humorous way at all. i look at it very seriously. i think how could we put ourselves here in the united states of america in a position where we're being lectured to by a former kbg, by putin, and i've never trusted him. in fact, i have to say this, carl. obama's never trusted him until last tuesday. so i take it very seriously, and, also, i take seriously the fact that he says if we use force in there, they're going to be repercussions. just like iran. iran is the biggest problem. it's not syria. it's iran. they have the capability of the nuclear weapon and delivery system in another year and a half.

>> and i'm sure -- i don't need to tell you -- there are some -- some -- who argue that this new moderate leader of iran is actually worth working with, that somehow they would be willing to accelerate talks, get the ieae out of their hair for good. i assume you don't believe that, either? >> well, i don't. it's almost like if you replace assad, you'll get someone worse. it's hard to believe there is someone, but they may be out there. >> senator, appreciate your time. we're obviously watching everything going overseas and on the hill. thank you very much. >> thank you, carl. >> senator inhofe from oklahoma. housing recovery has been showing signs of a recovery, as you know. things are getting better. homebuilders are looking for new and interesting ways to get you into the home of your dreams. we're going to explain that in a minute. plus, the bells will sound across europe in a few moments. we'll get simon to talk about what's going on there. more berlusconi news. into

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. the housing market was hit hard during the financial crisis, but it's been on the reboundarir reboundaries e recently. diana has more on that this morning. hey, diana. >> we're in a warehouse stretching two chicago city blocks where pulte homes has built the full frames of 11 homes, both upstairs and downstairs. what they're doing is running focus groups through these homes to find out exactly what today's home buyers want. it's critical given everything that's happened in the housing

market, and it's an incredibly unique form of market research. from your cardboard cabinets to your plywood countertops, it's the brainchild, actually, of pulte's new cmo, who spent the last 20 years trying to sell cars. >> i remember watching one of our chief engineers at toyota, who spent a whole year watching how people interact and use their product, their vehicle. and we decided that would be the best thing to do here, have people run through homes, see what they need, how they would interact, where they would go. and then, as a team, we started working on how can we actually do this in the home building. >> now, pulte is spending a week in the chicago area running dozens of participants in small groups, and then exhaustive q&a sessions to find out what they liked, and more importantly, what they did not like. wahl says they get at least five new design innovations from every event. participants said it was much better than having to look through floor plans. >> as you walk through the room, you could figure out where your

kids would be, where the furniture would be. it really seemed to help out a lot. >> now, wahl says it's also cheaper to actually build the frames of 11 homes than it would be to build model homes, and then have people run through them, because they might not like them. we'll tell you on "power lunch" what they liked and didn't like. back to you. >> like a test kitchen for the housing market. i love it, diana. thank you so much. we'll take you to washington. the cabinet is meeting with the president. >> -- over the last several weeks, the situation in syria and how we can make sure that chemical weapons are not used against innocent people. i am hopeful that the discussions that secretary kerry has with foreign minister lavrov as well as some of the other players in this can yield a concrete result. and i know that he is going to be working very hard over the next several days to see what possibilities are there. but even as we have been

spending a lot of time on the syria issue and making sure that international attention is focused on the horrible tragedy that occurred there, it is still important to recognize that we've got a lot of more stuff to do in this government. the american people are still interested in making sure that our kids are getting the kind of education they deserve, that we're putting people back to work, that we are dealing properly with a federal budget, that bills are getting paid on time, that the full faith and credit of the united states is preserved, and that the federal government itself in every single agency running the way it should and making sure that our constituents and the american people are getting a good deal. so we're going to spend some time here today talking about, you know, all of the efforts that have been made by many of the cabinet secretaries to streamline operations, to cut

out waste, to improve performance, to improve customer satisfaction. we're going to focus on some specific issues, including managing some of the budget debates that will be taking place over the next several weeks. we're going to be talking about the rollout of the affordable care act, where you've seen some tremendous progress over the last several months, and confident that starting the beginning of next month, people will be able to start signing up for healthcare, in many cases for the first time. and we're going to spend some time talking about issues like comprehensive immigration ref m reform, that's still of enormous importance to make sure america grows. so i appreciate all of the great work the people have done. some of the cabinet members here are still relatively new, but thanks to their confirmations and the great teams they put around them, i know they're hitting the ground running. all right? thank you very much, everybody.

>> that is the president at a cabinet meeting. some of the pool reports coming out of washington saying the president ignored a series of questions about the op ed by vladimir putin in "the new york times" today. john harwood joins us in washington with more. john, that takes place just as assad is speaking to russian state television saying that any chemical deal is contingent on the u.s. stopping aid to what he calls terrorists. >> reporter: yes, well, that's not going to happen. we don't know if the deal that sergei lavrov and john kerry are discussing today is going to happen either, but the president in the cabinet meeting was saying he would give some time for that diplomatic initiative to be pursued. kerry, of course, is not at the cabinet meeting. he pivoted back to the issues domestically, which he thinks americans are wanting some action from their government on. he talked about immigration. he talked about education. talked about preserving the full faith and credit of the united states, which is a reference to the upcoming fights over keeping

the government funded and also raising the debt limit, which the treasury says has to happen by mid-october. and just as the president was speaking, we got word that eric cantor, the house republican leader, is cancelling a house recess that was going to shorten the period of time in which congress could resolve some of the funding and debt limit issues, so now they may have a little more time back here in washington to try to make some sort of deal, carl. >> all right, john, thank you for a little clarity there, coming out of the cabinet meeting. john harwood in washington. meanwhile, dow continues to hover in a very narrow range. bob pisani is here. >> the important thing is we've had a great run in september, and traditionally not a good month. we're starting to run out of some steam now, and the talk is turning towards the fed meeting next week. all-important here. you can see what's been going on over in asia, for example. a great run for the last several days. all of the asian markets have been up. today, just kind of flatlining. the good indication is the india earnings etf. it's a great etf.

it does what wisdom tree does so well. fundamentally based. a one-month chart. straight up almost every day. like most of the etfs over in asia that trade, they're basically flat to slightly down today. elsewhere, looking at the other thing, commodity etfs. when you get china flat to slightly down -- and it was up a little bit today -- you get most of the commodity funds flat to slightly down here. that's what's going on now. copper, metal stocks, coal stocks. all slightly down. that's very typical of what happens when you get a slight rollover in china, or china starts losing momentum. one gift that skeeps on giving, though, lower interest rates. that's been the third big driver here. remember, syria. of course, what's been going on elsewhere in the world, in china. but lower interest rates have helped. the homebuilders again, another rally. remember terrible performance throughout the first half of the year, but they've been doing well in the last several days. another group that's rolling over is gold. gold stocks. gold dropped immediately as we got the weekly jobless claims. of course, disputed about how good news that was. we learned that immediately. but you saw gold drop immediately, and all of the gold stocks are to the downside.

finally, a little bit of upside in consumer names. food and retail stocks, kroger reported inline earnings and talked about raising the lower end of the 2013 same-store sales. all of the stocks moving to the upside. so a little bit of momentum lost here. but overall, up 3.5% for the s&p in the month. you know, that's not a bad little gain here for a month that's traditionally down. >> yeah, best september in a couple of years. >> yeah. >> thank you, bob. meantime, the usda releases a widely anticipated crop production at noon eastern. rick santelli's in chicago with what we can expect. hey, rick. >> yes, thank you, carl. my guest, ashley gelkey, used to farm within 70 miles of chicago, but moved north, way north, north dakota. 11,000 acres. >> yeah. we're farming up in north dakota. i married a farmer. you can't move a farm. so that's where i am. >> all right. normally, when i think corn, i don't think north dakota. were you telling me that the corn belt has moved north, and it isn't for crazy things like climate change. it's because of? >> seeds. i mean, what can i say? i love monsanto.

i went to a monsanto meeting a couple of months ago and they were saying that's their research and development. they're working on seeds. they will grow and produce well in north dakota and ukraine and canada. >> so shorter season, shorter cycle seeds. >> yeah, exactly. >> how is the corn crop looking? >> great. >> you have the corn crop, obviously, not coming out of the ground for a while. >> oh, no, probably coming off in october. >> especially because you're north. and the kind of corn we have here, you're not going to find on the side of the road, because feed corn, which is the bulk of the corn that's grown in this country -- >> yeah. >> -- for feeding animals. let's backtrack. you already pulled most of your wheat crop out. how did that look? >> it looked good. it depended on which field we were harvesting. it was winter wheat. we planted it last fall. it really did look pretty good. >> the charts look horrible on every commodity grown in a field. beans, wheat, corn. you think that maybe that may change. but give me one reason why you think corn prices are under such pressure. >> well, world demand -- well, world supply is huge.

i mean, we incentivize the rest of the world to plant a lot of corn. and this year, we planted a lot of corn. last year, i told you, we'll have a lot of corn, but weather changed that. >> because prices were so high. >> yeah, weather changed that. we didn't have a lot of corn. prices went up this year. we planted a lot of corn and the yields are looking good. >> i'm going to change gears completely. when you think of north dakota, listeners, viewers, what do you think about? i know what ashley thinks about. lots of money. lots of jobs. lots of energy. quickly, tell us what it's like, why you moved to north dakota, and the comment you made off-camera about if you're looking for a job. >> i just say, if i hear anybody looking for a job, and the economy's bad in the united states, move to north dakota. everywhere you go, now hiring, now hiring. you can make 30 bucks an hour working at mcdonald's. people are renting places to put their campers for 800 bucks a month. 800 bucks a month for a camper. it's nuts. eating at the rest stop or at the truck stop is expensive. everything is expensive, but that's because a lot of people are paying lots of money for workers. >> and you heard it here. this isn't unique to north dakota. unique to a lot of states with

energy. energy's the magic elixir for the economy. ashley, thank you. >> yeah, thanks. >> back to you, carl. >> thanks, rick. call it the marissa bounce. shares of yahoo! up 50% this year, actually 51%. the stock is at its highest level since february '08. is this all because of marissa myer's management? that's coming up next. basically for every job we have, we get a resume each week. which is up, you know, dramatically, by a factor of five or six. >> okay. >> from before -- before -- before i was there and before july 2012. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login...

to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine.

nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge.

that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. coming up next on "the half," the investment strategists is here. facebook hits an all-time high. is now the right time to sell some? plus, apple may be a carl icahn favorite, but it's not getting any love from one of our trad s traders. the big bear case is next in a "halftime" debate. carl, we're with you in about 15. >> looking sharp today, scott.

we'll see you soon. yahoo! ceo marissa mayer spoke yesterday at the techcrunch conference, talking about how the company's new logo is reflective of its new ideals. >> we have one of the most sophisticated personalization algorithms i've seen to date. and i think that -- i'm really proud of what the team has done there, and i think we're just getting started. i think as core yahoo! is a driven company, but we're a personalization company, and we're right about the right content, right advertising for each of the users. >> of course, after a slew of recent acquisitions, the real test will be this. will what shines through resonate with customers? edward freeman is a professor at the university of virginia, darden school of business. john sullivan is a professor at san francisco state university. gentlemen, good morning to you both. >> good morning. >> good morning. >> john, people have a hard time sort of characterizing her tenure so far because the shares have done well, but also the ali baba component that's been a

tailwind for her. has she been a success, or not? >> well, definitely, especially in the people area. if you've ever been to yahoo! i describe it as kind of a mortuary, people are walking around like they were dead. it was quiet. and now, she's saying people matter. so she's an engineer, but she knows people. she approves every hire. she's got great recruiting going with the resume stream, retention is single digit, and she's got boomerangs coming back. so she's emphasized, something is happening here, and that causes people in the valley to say, hey, i need to take a look at this. >> interesting. they do point to a lot of metrics, and most of them regarding retention, the number of resumes that are coming in. but in the end, investors, they want to see ad revenue growth. they want to see the kind of mobile growth that they're beginning to show, that she talked about yesterday. how do you characterize her level of success? >> well, i think she's been very successful. she understands that

interconnection of employees, customers, and shareholders. if you make a place a great place to work, the employees will figure out how to give a great customer service and invent new products. if you do those two things, you'll make money. so i think she started with this idea of change the culture, make this a great place to work, and that's what she had to do. so i'm actually very happy with what she's done so far. >> interesting. john, there is -- there are those, obviously, we live in an age where people are knit pickers to a large degree on social media and other platforms, and argue a "vogue" cover, not the cover, but the photo, a few weeks ago is a distraction, that it takes away from people's ability to judge how she's doing her job. how fair is that? >> well, remember, her audience are people she wants to recruit, as well as customers. so you get -- you get noticed in "vogue," you get notice by

changing the logo, you get noticed by hiring a high schoolkid out of england who's 17. you do things that are a little bit outside the stream. remember, she was at a disrupt conference. she's got to disrupt the image of yahoo! and you have to start with the people. it takes a little while for the product and the revenue and the traffic to follow. but you notice she put people first, and it's really impressive. i mean, she's a hard worker, came back to work right after the child and all those things. but she's trying to instill t t that, and that just wasn't there. it was a shell of a company, people were walking around in a daze. there were layoffs every couple of months. it has stabilized and is going in the right direction. so she's excited, and the employees are excited. >> yeah, that's something to -- if we keep having this conversation a year now, we might feel differently. you could argue for sure there has been some stability both in the board room and in the suite. thank you for your insight. appreciate it. >> great, thank you. >> thank you. i think we're going to go to john harwood here in washington?

no, i guess we'll take a promo of michael dell, speaking of the challenges in management within tech. michael dell will be on this program tomorrow, 9:00 a.m. eastern time, after securing the shareholder votes necessary to take his namesake company private. now, we'll go to john harwood in washington, recapping what house speaker john boehner said a few moments ago. john? >> reporter: boehner is still giving his press conference, carl. what he has said so far is that he is working with his members on some way of avoiding a government shutdown. he had no details, because they don't know what that way is. the house republicans thought they had an approach yesterday in which they were going to continue the government spending at current levels and include a provision to defund obamacare, which they knew the senate was going to kill. conservatives said that's a sham, you're not really going to defund obamacare. they pulled that bill. they're not voting on it. he's having discussions with his members and trying to figure out another path forward. they don't know what that is yet. and nobody in washington does, carl, and on the one other issue

we've been watching so closely. he says he wants to give the diplomatic process a try and some time in syria. the russian-syrian proposal. but he reiterated his skepticism that russia and syria are sincere in that plan. >> all right, john, thank you for that, as we watch speaker boehner wrapping up his press conference. john harwood in washington. straight ahead, why you could have seen last week's pullback in apple shares coming if only you'd looked at a chart of microsoft back in 1999. we'll explain in just a moment.

apple is up a bit this morning after falling over 5% on those concerns yesterday over the new iphone. our next guest says the drop in apple came right on schedule, according to the leading indication from microsoft's chart pattern from a few years ago. to explain, let's bring in tom mcclelland, the editor of the "newsletter." good to see you. >> hi, carl. >> you've taken turns comparing apple to historical charts on rca earlier in the year, and now microsoft. what are you seeing? >> well, the whole point of doing a comparison like this is not to compare the companies but rather to compare the price patterns of the charts, and the price patterns tell you about the behavior of the investors in these companies. microsoft was a tech darling from the internet bubble, and then people fell out of love with microsoft in 2000 and 2001. apple has been the recent tech darling all the way up to 700, and then people have been falling out of love with apple's stock -- they still like the

company and the products -- but falling out of love with the stock in a pattern that's very similar to the way that people fell out of love with microsoft. you can make inferences from the patterns. >> and when you say very similar, you're really not kidding. this chart, i'm not sure it puts it into exact perspective, but this is basically microsoft on the blue line from '99 to '01, and microsoft for the current people. and you can trace eight or nine lows or highs. how can it be so exact? why does that make sense? >> it's about the physics of the investors' minds and the emotional roller-coaster that we go through as we fall into and out of love with a tech stock, and that's where there's a repeatable pattern. exactly why it works, i don't have a perfect answer. i'm not enough of a sociologist to explain that. i just see it is working and has been working. the big drop that we had in apple this week was right on schedule to echo a big drop in

microsoft from november of 2000. but what's interesting is that microsoft's price pattern back in november 2000 looked a lot weaker. so while the dense steps are happening in the right spot on the floor, apple is looking stronger and that gives us at least the hint of maybe a better outcome for apple in the next year or so. >> i was going to say, yeah, you would be looking at a rally, assuming apple goes into its own schedule, as you put it. you'd be looking at a rally going into october. >> at least a rally into october, and a nice tradeable rally i'm not ready to buy it yet. i covered my short this week. i want to see a confirmed notion of an upturn. you look for a price oscillator to turn up, or some other indication it is going up. but to get into that rally into october. but i'm thinking that the situation is improving for apple much more so than for rca in 1930 or for microsoft in 2001. i think that we have the chance that the pattern will break, but it's still working for the moment. >> yeah, that rca -- i remember

the rca chart. that was a more worrisome story from a few months ago. answer me this, though, tom. you have no position as of now, having covered your short, as a technician, as a chartist, do you ever feel tempted to weigh in on the fundamentals, to make that part of your model somehow? >> it matters. and what i like to say is, you know, when people buy a stock, they think that they're forming a relationship with the company. so they want to know everything there is to know about the company and what its earnings are, what its prospects are, who the ceo is, et cetera. there's a more important relationship that you're forming, and that's a relationship with all of the other people who own that stock, and those people can screw you if they get a mind to. [ laughter ] so looking at the chart tells us what is the psychology of those people, what are they thinking and when is that likely to change, irrespective of what the company's doing. that's why it's important to pay attention to both. >> that is a -- that is a pithy way to put it, tom, absolutely. you're dealing with a lot of

other shareholders. great insight. look forward to seeing you again soon. >> thanks, carl. >> tom mcclellan joining us from seattle today. meantime, a bankruptcy judge has given his approval to bankruptcy exit of american airlines parent amr. however, that approval contingent on completion of amr's planned merger with u.s. airways, and, of course, that's still up in the air. the justice department is suing to block that combination. the issue is scheduled to go on trial in november. our phil lebeau has more on that this morning. hey, phil. >> reporter: hey, carl. this is not a surprising ruling, if you will, coming from the bankruptcy court here in new york city. it's been long expected that the bankruptcy court would say, yeah, everything's in place for this merger, for this post-bankruptcy merger to go through. but remember, all of this is contingent upon a federal judge in washington, in a separate case, ruling on the department of justice filing an antitrust suit against amr and u.s. air, trying to block that merger. so essentially what you have is amr coming out of bankruptcy with u.s. air. if that merger is approved or is

not blocked in that suit in washington, d.c. so that's the news that just came out. the reason we're here in new york city today, general motors unveiling the 2015 versions of the chevy suburban, the chevy tahoe, and we're going to be talking about gm's cfo, dan hammond, coming up first on cnbc on the "fast money halftime report." don't miss what he has to say about a number of topics, including the possibility of a return of the dividend to general motors shareholders. >> mm, hello, nurse. thank you, phil. phil lebeau covering two beats. during an interview yesterday, mark zuckerberg reversed his course on going public and said companies like twitter should not be afraid of that process. it brings us to this morning's "squawk on the street." if he says twitter shouldn't be afraid of an ipo, what should it be afraid of? tweet us @squawkstreet. we'll get more later this hour. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development.

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the ceo of facebook, mark zuckerberg, speaking at the

techcrunch disrupt conference yesterday, saying that companies like twitter should not be afraid of going public. >> in retrospect, i think i was too afraid of going public, and i think -- you know, i've been very outspoken about staying private for as long as possible. i don't think it's that necessary to do that. >> that brings us to this morning's "squawk on the street." if he is saying twitter shouldn't be afraid of an ipo, what should they be afraid of? maria writes, allowing the next twitter to take the next spotlight. simon says, how they're going to generate revenue without annoying users with ads. and carrie says, twitter shouldn't fear an ipo, just stay nasdaq ipo. ouch, that does hurt. looking at facebook stock. we're looking at good action. it's powered through 45. remember, cramer said it would be a straight shot to 48. it matches the high of the ipo in may of last year. also, not a waste of time to look at the nasdaq. we're off a couple of points

here, down 3 points at 3,721. but earlier in the day, a 13-year high. the return on the nasdaq year-to-date, 23.5%, compares to just 18% for the s&p and 17% for the dow. let's get back to headquarters. scott wapner and "the halftime." carl, thanks. welcome to the "halftime" show. four hours until the close. let's take you to the wall. we have some work to do on the street today if we're going to keep this streak alive. there's the dow down 17. the s&p, nasdaq, also negative today. here's what we're following on "the half." face-lift. facebook gets a new all-time high, but what now for a stock up 90% in three months? debate it, with icahn loading up, in the big unveil, where do apple shares go from here? is 400 or 600 next? two trader guess toe-to-toe. first, the top