the discussion. he needs to be in the middle of this talking to everybody. >> he is. but he's not going to bargain on the debt ceiling and he shouldn't. >> why do you say he's talking to everybody? >> i think they're talking all the time. >> you read in the papers that there are no talks going on sometimes. >> but they're talking to republicans all the time. >> happy birthday to your kids. >> happy birthday. >> see you guys on monday. >> make sure you join us. "squawk on the street"'s next! ♪ there it is, whoop, there it is ♪ all right, good friday morning. welcome to "squawk on the street." aim carl quintanilla with kelly evans and david faber. jim cramer is off today. the fiscal show down continues today. the s&p did finally break that

five-day losing streak yesterday. a lot more fed speak on the way today. europe got some strong confidence numbers in both the u.k. and in italy, although that italian 10-year ticking up yet again this morning. our road map begins with jcpenney. >> a potential payout to top execs coming in much bigger than expected. $80 million should a sale to a buyout group be completed. >> and nike share higher premarket after its quarterly results outpace expectations. >> and on this day in 1993, david faber first clicked on his mick cr microphone on cnbc and the rest is history. >> i wondered if that was coming. >> did you know it was coming?

>> i thought maybe because they sent me a little pin. >> did you know that was what happened at ten -- >> 20. >> oh, 20! >> that's a fifth of a century. >> thanks for reminding me. jcpenney is offering 84 million shares at $9.65 apiece. of course this offering itself someone unexpected given what been a believe that it did not need to raise equity or need to raise any liquidity. ceo mike ullman conveyed that message to shareholders. we learned goldman would hit the market with that big block sale of stock. 84 million shares. they did not exercise the

so-called green shoe. it does of course raise a lot of money for jcpenney toot tune of $84 million. that will be helpful, particularly in what is a seemingly weak retail environment, particularly for apparel. you can see this total debt will be $5 billion. this does go a long way towards calming perhaps some of the fears amongst suppliers and vendors, factors. i should point out on the positive side the bonds are up today. cds is trading better, as you might anticipate. but, guys, there's a lot of questions here, not the last of which is was it misleading? should the s.e.c. even take a look and consider market manipulation, false and misleading statements and question whether or not vornado and ackman, the largest shareholders on the board, step off and sold their stock knew this was a strong possibility.

these are questions being asked by investors. >> the new york post takes ullman's face and puts a pinocchio nose on him. that's sort of where the optics are on this. the post also has a couple of nuggets about perhaps the equity was a second effort after failing to raise money on second leens with t liens. >> listen, this does build confidence, extremely important for -- >> does it, though? >> i think because they have more cash now. >> aren't people just going to catch up to everything that's happened in the last week or so or almost over the weekend and say, wait a minute, what's going on with this company? >> i think that is true, certainly confidence amongst shareholders is very, very limited. but as a retailer and your ability to pay them, that does help on that front.

this has to be one of the key reasons why they decided so quickly to hit the market. as i've heard, none of the large shareholders have been selling, glenview, soros, perry, have continued to hold on to their stock. you've got a heavily shorted stock that we've seen at new lows this week with not a lot of shares out. now you have a lot more shares out. interesting they chose goldman to do it, by the way, because goldman is the one that helped send that stock down with the report from the credit side. >> chinese wall really works. >> then there's the issue of mark sweeny, their controller, who according to a filing left on september 20th. that just adds to the drama. if your controller is leaving -- >> where is the disclosure? why not tell us? >> plenty of time to make a material disclosure. >> without a doubt. communication has been, as others have put it, misleading. there are a lot of irate

shareholders out there. there are those who believe this turn around will take quite a long time, that the company now, if you want to put the positive side on it does have enough cash to get it through that turn around and that it will come, whether it be a year from now or even longer, it will come. those at least are the beliefs amongst those who are holding on to shares. >> when you're circling a negative 26% comp for the third and fourth quarter last year, you would hope you get a little bit of bounce. >> everything 24 hours ago we talked about their release, the wording of their release, positive comps coming out of the third quarter. people will begin to scrutinize every word now because the question will be can we believe what they're telling us? >> no doubt. credibility is going to be an issue for this management team. >> so watching cash levels at jc penney, also watching cash levels at blackberry, reporting a roughly $1 billion quarterly loss, that's in line with the guidance it offered last week. this morning's news comes days after the company accepted its

largest shareholder tentative bid, $4.6 billion to take it over. if the top execs lose their jobs as a result of the takeover, they could walk with with more than $80 million in severance. but the revenue is a massive decline -- >> the margins something like negative 26%. >> minus 24% gross margin. i don't know what you call that. >> it's gross. >> just leave out the "margin." >> they stopped giving submetrics a while ago. they did not do that today african selling the call. the last subquarter we have was the june quarter, which was down 4 million quarter on quarter. who knows how many subscribers

blackberry has right now. >> i can't remember the companies now in the news this week who are going to support blackberries. when you start to be concerned strategically about the company's future, you start to make those decisions that can hasten the termination of some of those agreement. >> no doubt. the question there now is where is the value for this company? is there enough intellectual property and in cash, which is being depleted but is still significant. i continue to have some questions about the ability of fairfax to finance this $9 a share offer, if you will. remember that was the news earlier this week, the letter of intent -- >> can people finance anything these days? >> you would say that but i think this becomes a more difficult deal to do, even with incredibly generous credit markets. you needed 3 billion in debt. the coverage ratios would seem to me to be pretty tight in that maybe you get up to four, five time ebidta. that's $700 million you need to

be generated. that's probably going this way. you need a good equity -- beyond the 10% fairfax owns, you need to put up a lot more equity. i have doubts they can pull it off. they're under no obligation to pull it off. >> sweet deal. sweet deal, as some have called it. >> meanwhile, one company that's actually bucking the trend, at least from blackberry and jcpenney, that's nike. they're up sharply. the sports, apparel and footwear maker posting a better than expected 38% jump in quarterly profit, stronger demand in the u.s. and western europe offset weaker sales in china. there was sentiment going into the quarter that perhaps their trends were slowing. they were able to pretty decisively put to rest some of the concerns in the overseas market. shares are up 7% premarket, the whisper figure as we mentioned on air yesterday was lower. so, again, it was kind of a game

of lower expectations and easier beat. >> futures up 8%. that's what everybody keys off of. china futures up 3. i think 2 after currency. so clearly the issue continues to be china and growth over there. growth margin did go up above guidance, which they had previously given which had roughly flat growth margins. most people are calling it a nice debut as a dow component on the first earnings run. >> they did reduce their top line guidance, i believe, a bit from what i see. high single digits that had been the high end, perhaps with a great headwind from foreign exchange. but in a retail environment that's pretty tough, not too bad. >> you want the winners. >> we actually saw some of the halo effect for similar names in the space last night. that will be a whole area to watch the sector. now let's get to markets generally pointing to a lower

open today as a looming government shutdown continues to way on consumer sentiment. and michael jones, chairman and chief investment officer at river front investment group. guy, good morning. >> good morning. >> sam, i think it was last week you wrote cautioning that people were being a little too complacent here. the markets continue to weaken. do you think there's further to go? >> i think's further to go to the down side. a lot of people got the call wrong in terms of the fed and in tapering, maybe they got the call wrong this time, expecting another 11th hour agreement between the republicans and the democrats, especially with us moving into a mid-term election year. if one party can make the other party look bad, get the blame for the shut down, i think they'll do it. >> michael, at the same time people keep saying they're going to come to some agreement, it's going to be fine. how are you guys making decisions about how to allocate capital amid all this?

>> we have to look at the underlying strength of the economy and say what do we know a lot about? we think we're pretty good about forecasting earnings, we think we're pretty good at understanding underlying economic dynamics. washington is a mystery to all of us. so i really don't think it's wise to set your portfolio strategy based upon the whims of washington. i also think that at the end of the day, the shutdown is not that material. we've gone through many of those. it's not the end of the world. it's the debt ceiling that matters and the shutdown is only relevant in so far as it makes people worry about the debt ceiling. we think that president obama, for all his rhetoric, does not want to go down as the president who defaulted on u.s. debt obligations. and so because of that, ultimately a deal will be struck. >> hey, sam, after jobless claims yesterday, more than a couple economists are saying there's up side risk to nonfarm payrolls a week from today. what happens if we do get a stopgap measure that kicks the can a bit in washington and next

friday's jobs number comes in, i don't know, 200, 220? things could feel a little bit different, couldn't they? >> oh, absolutely. and i think david's correct that when you look beyond congress and you look to the fundamentals, things do look good for the longer term. that's why we had elevated our 12-month target to 1845 a couple of weeks back. and so if you look back to 1995/'96, the last time the government shut down, the s&p -- then jumped more than 10% once a resolution was resolved. >> hertz yesterday, ual would make people wonder if the fed saw something that indicates the economy is slowing. what's your take? >> our take is the fed did exactly what they indicated they would do in may. if the economy elevated to the extent they thought it would, they would taper.

if it was slower than they expected, they wouldn't. it was slower than they expected and appropriately they did not taper. however, since the summer doldru doldrums, you've seen jobless claims drop fairly appreciably, you've seen pmi surveys all around the world bounce fairly substantially, especially the service pmis. all of that indicates to us that after three quarters of washington being a big problem for the private sector, big tax increases, big spending cuts, obama care, the fourth quarter, if we get through this budget crisis, the fourth quarter is the fourth quarter where the economy gets to stand on its own without washington holding it down and that's where we see our acceleration. >> well, that will be one -- i think a lot of people -- or, michael, a lot of people will still be skeptical until we get through all of the events of next week. sam, michael, thank you for your thoughts this morning as we wait to see what markets do amid all of that here. >> two decades ago, what was going on?

bill clinton was president, mariah carey's "dream lover" was the number one single on the bill board charts and david faber began what is now 20 years on cnbc. jim cramer wishes he was here with us at post 9 today but jim sent along this message for david. >> david, happy anniversary. i make a lot of fun about the idea that i need your approval. there's a reason why i am saying that. the answer is because you're the best business reporter ever. congratulations. >> wow. ever. >> very nice. >> boy, what are they going to say at 40 years? that was very nice. thanks, jim. >> more to come, trust me. when we come back, what has all of redmond, washington dancing this morning? and what does microsoft ceo steve ballmer have to do with that? we'll tell you. take one more look at futures as we kick off the beginning of this week. it's going to be a great week of television, football, "breaking bad," "snl." you name it. implied open down 27.

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♪ ♪ ♪ this is how we chill ♪ >> a lot of news surrounding microsoft this morning. according to all things d, alan

mulally has vaulted to to the forefront of ceo. and imagine hballmer dancing to this song. ♪ sources say he was very emotional, telling his employees we will deliver the next big thing, we will change the world again. we know how worked up ballmer can get. >> they call this the monkey dance. dance, dance. yeah, look at him go! >> that's call selling. that's selling. >> that's previous meetings like the one yesterday. you can imagine why he was -- >> i can't imagine why they didn't have cameras. they get 10,000, 13,000 people there. he's still talking about the

future for microsoft that he believes is going to be extraordinarily fertile. but we don't know who the new leader is going to be. >> though the journal has a nice look at john thompson, who is leading their search today, says he is not a pawn for bill gates but they gave no update on the surge when he met with analysts a few days ago. they did have a nice slide, guys, that looked at microsoft across all kinds of metrics over the past ten years, profitability, sales and arguably maybe we give them too hard of a time. they have had problems in hardware but they make a lot of money. >> remember, going into their results in july for what would have been the second quarter, sentiment was running pretty high. this stock was up sharply. we were talking about how they were one of the best performers. they come out, they were down 11% on the earnings miss. and since that time they haven't been able to catch basically the sentiment has changed entirely.

then it became about ballmer leaving and what was going to happen next. >> you had restructuring there and the announcement he would be stepping down. >> you have the div hike. >> nokia. >> the nokia deal. it's just been uniformly -- i have yet to meet anyone saying that's a real positive step for the company. >> and not that they're calling mulally the front-runner but that he's actually warmed to the idea of taking this deal in the next weeks. >> he's in seattle. there's plenty of people saying this makes good sense for him hees, he's had a good run at ford, can he turn around microsoft? and in the meantime, a quick look at futures. we're looking at markets closing out the week potentially in the red. it has been a bit of a challenge

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♪ and we began to rock steady, steady rocking all night long ♪ ♪ and we began to rock steady welcome back with about five minutes left to go before the opening bell, how will we close out the week? let's ask art cashin. good morning. >> good morning. >> what do you see in the tea leaves this morning? >> i think it's going to be a bit of a tough session. it might replicate yesterday a little bit. it looks like we're going to have a showdown on monday, and

the showdown on monday is a problem for traders and portfolio managers. it's the end of the quarter. so there's a lot of things to be planned and done for the end of the quarter and you're going to watch the clock tick down to whether we have a shutdown or not. so it's going to be a very tough monday. >> i'm sorry, shutdowns we've seen before. debt ceiling, this is a new thing. we've seen it once but somehow now it's back. many argue that's much more important. that's a couple of weeks out. do you agree? >> i think so but the two may wind up melding together. the way it will happen is the republicans have themselves boxed into a very poor negotiating position because the president can point and say you're the guys who are shutting the government down. so they may try as a ploy to offer temperature emergency funding, a resolution that last

these weeks or a month. if the president turns that down, he shuts the government down. so they may have to accept that and that would meld into the debt ceiling. >> i don't expect people to put on big positions into the weekend then. >> we are in the bizarre position where credit default swaps on u.s. treasury securities are beginning to move up. the world's favorite safe haven is suddenly got credit default swaps moving. >> we'll keep an eye on that one. thank you, art cashin, this morning. >> we'll talk with two ceos whose companies are going public today. the opening bell in three and a half minutes.

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today with a friday session that kicks off in a few seconds at the opening bell here, at the big board. they have huge balloons out on wall street, ring central, are they loud, celebrating their ipo today. over at the nasdaq, dunkin donuts celebrating national coffee day. kelly actually did bring in munchkins this morning. i don't think that was related, though, right? >> no. it's that cosmic sense that i somehow have that it's all going to be about dunkin' this morning. >> and that we need an excuse to drink coffee. >> the syndicate tries to hold the line at 965. >> not going to do it, it looks like at this point. shares trading down 8.5% from the close yesterday. it was after the close we got the unexpected announcement that

jcpenney would be selling 84 million shares, could have been 97 million shares. 9.65 was the price where goldman sold the stock on behalf of the company. but now we're at 9.52. anyone who bought from that block last night nay be wondering what they were thinking. it's only been a minute. we'll see. >> with today's decline, that brings the year-to-date decline to more than half, down 52%. >> they were above 20 back in what, march? >> yeah. think about all the employees who already lost their jobs, 40,000. you think about bill ackman and ron johnson and the damage that was done to this company and the difficulty that i think has become clear to so many people of trying to really turn it around when it was so -- they lost $3.5 billion in sales. see ya. bye. how do you say good-bye to $3.5 billion in sales? >> and of course the trading,

the volume the last two days, more than 100 million shares each day. that is four times the ten-day average. so exchanging of hands, right? and as you pointed out regarding a small number of players. >> i don't believe, carl, any of the large shareholders and i don't want to say i know but i don't believe they've been sellers. so you're talking about the share base changing but not with actually the sale by the big holders. >> fascinating. do they average down here? do they figure -- >> i think some of them may have anticipated that, some of them hedged by buying on the bond side. can you benefit here. the bonds have tightened for jcpenney because they brought in over 800 million in cash for the company. that's a good thing on the credit side of the balance sheet. >> yeah. >> let's look at facebook today. we've been looking at price targets that keep coming in, buy ratings with targets in the mid 50s. today deutsche put 62 as their target for facebook. that's coming up from 43, a big

move in your target for fb, which of course is back above 50 today. >> guys, i do want to take a look also at ual, which i mentioned earlier. stock is down about 8%. this following yesterday's news from hertz, if you recall. the stock got hurt. airport rentals. ual coming out. ual continental, united continental with some trends that are not being well embraced by the market, as you might expect. >> that's new, down 8%. >> specs approximately 620 million, i believe, of gross capital expenditures. any number of different things here are not quite what people had been hoping for. >> yeah. if cramer were here, he'd want to talk about lumber liquidators, a name we talk about a lot. halted. the charlotte observer reporting

the feds executed a warrant at their headquarters in richmond, virginia. i think it's immigration, custom enforcement, their immigration division. very little detail about what they're looking at. can you imagine when it does open, it will be actively traded. >> this has been one of the better performers. the play on the housing recovery, a little improvement in what the consumer is doing. giving up 11% today. again, in context of the year they've had, though, that's still not a disaster. >> yeah, just to come back on ual because i want to -- it's passenger revenue per available seat mile to increase between 2.5% to 3%. that's what the market is keying off of, it's below guidance. that goes to the bigger question of what are we seeing in the economy? >> even though we're talking about relative expectations, perhaps the emerging market is

holding up okay lately, the china story hasn't collapsed, that still isn't to say that there is some big boost that's coming to global growth. i think that's the problem. with each passing month, it seems like we're settling in to this new normal and it's slower than the old normal. >> take a look at a pair of stocks, ford and microsoft, which may be trading around a potential move. it's reported alan mulally is warming to the idea of taking over at microsoft. guidance, we have not gotten much from the company itself. >> going back to the macro itself, we have to talk about the 10-year. so much focus was on the initial move. but we've continued to be at or below the levels, latest at about 2.63%.

guys, there's a lot of talk about whether that key benchmark rate that help set everything from mortgages, corporate loans, et cetera, is heading back toward 2.5%. that can provide a little support for the housing market, which we know saw activity slow after rates went up. >> of course credit default swaps, as art cashin pointed out, are starting to creep up in terms of the cost of insuring. we're still triple a rated by most, s&p, i guess. we still are. >> if you average it. >> the federal reserve may come out and say something, too. they're number one. then the chinese. what if they come out and say get it together. >> i think bernanke has already said that, by the way. >> he has. >> get to work, mr. schumer, as one report was titled the other day. let's get to mary thompson and see what else is moving on the floor. >> hey, carl. the dow off 73 points right now, up off its worst levels of the session. traders are keeping watch on

washington to see if there are any developments today as to whether or not they can come to some agreement on a stopgap spending measure. but that's keeping some pressure on the markets in today's session. the s&p after yesterday's gains, the first in six sessions, is still on track for a losing week, as is the dow jones industrial average. the nasdaq now holding on to a slight gain. behind me over my shoulder, can you see ring central, one of two ipos pricing today at the new york stock exchange. 7.5 million shares pricing at 13, hasn't opened yet. looks to be a happy open. right now about 580,000 shares. again, some traders telling me it's going to be a couple minutes. we do have the ceo on later in the day, but it looks to be a good open for this provider of cloud systems. also -- of course, you talked about jcpenney. just want to touch on this.

the company share offering basically will increase the number of shares outstanding by 38%. some analysts estimate it could dilute earnings for current shareholders by 28% on that. also, the companies that we're watching today all moving to the plus side, or at least they were in the early in premarket trading. that being nike, foot locker and finish line. nike and finish line coming out with stronger than expected results. nike seeing strong sales in the u.s., as well as in europe. this offsetting weak sales in china, which has helped to give a lift to foot locker as well in today's session. accenture, the company did forecast weaker ref newspaper for the coming quarter and that put pressure on its shares in the premarket. likely to keep pressure there. you can see it's lower in early trade as well. lumber liquidators was halted on the news that evidently federal investigators were at its headquarters in virginia.

and so that stock has been halted. lastly, we want to mention that marathon petroleum, its board approving an additional stock buyback the 2 million shares. that basically doubles the shares available. kelly, back to you. >> mary, great stuff. thank you very much. we want to shift our attention now to bonds and the dollar. rick san tetelli joins us from cme in chicago. >> i'll tell you what's an absolute amazing issue, kelly, is we all think in every country our issues are unique, but the markets auger differently. you'll see in a moment. let's look at a one and two-day chart of 10s. the dynamic is, yes, rates are moving down. they're holding right around that 2.62 level. we'll continue to monitor. let's take several charts back to the 12th of august because that's the last time a 10-year has been at these levels on a closing basis. can you see it on the chart.

but let's look at the bund. wow, it's not the same yield at 1.78 but the same comp, the 12 9/of august. let's look at a french 10-year. not the same yield. but gets where it's comped at yield of 2.33. you guessed it, august 12th, last time they closed at these levels. let's look to the north. look at canada. so many different issues going on, you say. why are the markets so efficient here? its yield is in the 2.50s but look where its comping the same day, the 12th of august. i think that's pretty fascinating. dollar index, it's been bouncing around these support levels for a long time in different currencies in that index have been moving it around. but the morning point today is it's comping a fresh low going back to february depending on the ultimate close. carl, back to you and congratulations on 2-0 to david faber! >> thank you very much, rick. >> when we come back, it's time

to saddle up, get ready to take a 20-year trip down memory lane with that man right there. david faber. >> there are some really funny things. >> when "squawk on the street" comes back. my customers can shop around. but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. that's health in numbers. unitedhealthcare.

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♪ hair, long, beautiful hair, steaming, whacking, here, baby, there, mama ♪ everywhere, daddy, daddy, hair ♪ flowing, showing >> you've kept the hair all these years. it's just a little more ruly. >> and i don't dye it. ken came on one day and he's like you dye that, you dye that. i remember he was palming my head. i do not. it is starting to go gray a little. >> you haven't really aged in 20 years. >> i've aged. did you not watch that take? >> as mark hayes used to say somewhere in manhattan there's a

picture that's aging badly. >> you never wanted to go with the curly q? >> i've had some bad days. >> our david faber is a world class man and he's genuinely a great man to know behind the scenes. here's a look back at some of david's journalistic highlights over the last 20 years. >> deutsche telecom is working on a deal to acquire both qwest communications and u.s. west according to sources who are close to those negotiations. >> it was four years ago almost to the day they've broke the story, and if joe was here -- it's so nice not having here here because he'd be making fun of me for saying that. that i broke the story that mci was going to be purchased by british telecom. >> when this building, the company's enough headquarters, is completed, if you believe the sign above this entrance will

still include the letters aol. >> i'm buying a stock buyback. we're buying a lot of stock. >> but that's so short term. >> why? >> what do you mean why? is it 36, 37, what is it? >> wait! we're not buying the stock to drive it. we're buying it because it's so cheap. >> aig is in talks with the federal reserve to receive a loan for at least $20 billion to avoid a possible bankruptcy filing later this week. >> i think we're in a rocky road for a while. >> you think we're in a is he resession? >> i think we're in a recession but i would have said that to you nine months today. >> thanks, david. and that's just one of the stories he broke today. >> he's having a good day. that is a good day. >> wow, that's a long time ago. >> you were saying that your first show on -- your first appearance on cnbc was with bill. >> was with bill griffith, who

of course is more than 20 years, and neal cavuto. >> the business news became the heart of the nation's concerns, through the dot-com, the boone, you're the man, david. >> i don't know about that but i've been extraordinarily lucky. you look back at some of that tape and you can't imagine that that much time has passed. but being able to be a part of so many new things at cnbc, as we have grown, has been certainly something that i will always cherish, whether it was starting "squawk box" or starting -- you saw the aol, the documentaries, walking down that street with bernie ebbers is something i'll never forget. when you were on set with liz clayman when i broke the dow jones new corps. >> the tape, as long as that was, doesn't give us time to

walk through every scoop. i remember newscorp buying dow jones. now when you come to the desk, there is a bit of the buzz that goes through everybody on set saying what has he got? that is your currency, david. >> i appreciate that. those are not easy to do but when i look back, it's all the colleagues that i've had. people say that bullpt it's rea true, being a part of something and watching it grow. and to be a part of something that has grown so dramatically from those early days when i first was here 20 years ago has been extraordinary. >> what was the horse all about? >> that was just a few years back at kyle's ranch. we're going down there in a couple weeks. we're going to have some great guests. i will not go back on the horse. thankfully was able to stay on the horse when they asked me to do that. >> it's a great look back, david. congratulations to you as always. >> it's a privilege sitting up here with you.

>> thank you. i've gotten so many e-mails to so many people. thank you all if i don't get a chance to actually respond and to all those tweets as well. really it warms my heart. it really does. and i am not a day older than i was when i first walked in, you're right. thank you. >> indeed. >> on our way out, we'll look at violin memory here. 18 million shares priced at 8 to 10. the applause was loud in the early going. that has died down. we'll talk more about that in a moment. when we come back, breaking news on consumer sentiment, plus market reaction. first a look at the dow and how the s&p have performed over david's tenure over the past 20 years. [ female announcer ] it's time for the annual shareholders meeting.

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celebrating its ipo this morning, flash storage violin memory. joining us is the ceo.

don, thanks for joining us. >> thank you. >> it's very rare for venture-backed companies to become public companies. it's a huge milestone for us at violin. >> toshiba, big backer, they have about 11% now of the total. >> i think around that. maybe a little bit more. they're our biggest backer, our biggest shareholder sfwlp what is the future for flash? the future is memory. the memory future will take over the enterprise data center and over the next few years, just like its consumers, we run our life in memory, on our phones. we don't use film anymore, floppy discs temperature wi. it will be a memory-based data center. >> you guys have been eager to go public for a while now. the jobs act has made it easier. do you if i thi maybe we could have held off another six months, a year's time, give it a little more time, a little interest out there? >> no, i think the public is

just a milestone. we're out building a company. for us, having that public scrutiny and that public transparency is really what our customers want. we're very fortunate to be able to list on the nyse and grow the company now, have access to far more capital and new investors that weren't available to us as a private company. it's a great step to us. >> you mentioned access to the capital market. what are you going to do with the money raised? >> it's expansion of sales force, it's actually driving -- we have a such a huge opportunity. we are in 33 countries, but we still have a relatively small sales force compared to our number one competitor emc. we need to scale that sales force and service those largent prize customers globally. >> so you'll be hiring. >> we are hiring. over the last two years, we quadrupled the company already. >> are you confident you can manage a bigger company? >> we're still relatively small

to a company, come pairpared to largent prize like -- larglarge large enterprise. we think we've assembled a team to drive the stock forward. >> violin memory, vmem going public today. >> breaking news. rick santelli. >> 77.5 is the final read for september from university of michigan, sentiment survey of course being the index we're reflecting. how does that comp? well, 77.5 is the lowest level since april when it was 76.4, subsequent reads have all had an 80 handle. so 77.5 takes away the mid read at 76.8 and now is memorialized as the ultimate final september. back to you on the "squawk on

the street" day. >> thank you very much, rick. 77.5, i think we were expecting 78. some of the confidence numbers have been softer here than they have been in europe. u.k. today best since '07 consumer confidence. in italy where parliament is a disaster, business confidence at a two-year high. just sort of shows you how people feel about europe's trajectory versus our own. >> a lot of people look at the confidence data. we're going to have to wait a month to get the real figures. from that point of view it's interesting because it suggests a little soft i don't knening f month. >> in italy, there is concern about the berlusconi withdrawing because of that tax increase. >> and who would follow him and who would withdraw from parliament? >> a lot of people looking at italy's credit rating and the european union, what's going to happen as they continue to deal with these countries struggling

politically and economically and yet you see that increase. >> today's drop here likely due to what's going to happen over the weekend in washington as the senate sends their bill back to the house. >> not going to help consumer confidence. >> no. when we come back, controversy surrounding blackberry and a potential $80 million buyout if the deal goes through. we're back in a minute. i'm a careful investor. when you do what i do, you think about risk. i don't like the ups and downs of the market, but i can't just sit on my cash. i want to be prepared for the long haul. ishares minimum volatility etfs. investments designed for a smoother ride. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock.

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welcome back to "squawk on the street." our road map begins in washington. come monday we could be looking at a government shutdown. how should you be playing the markets ahead of the weekend? we'll help you navigate it all. >> plus shares of jcpenney under serious pressure today after announcing a nearly $1 billion share offering. but the company's executives say they remain optimistic. should you? >> then in its first days as a

dow component, nike hits it out of the park. we'll talk about whether it's time to buy the stock. >> we begin in washington, just three short days away from a possible government shutdown. is there any hope for a compromise? i don't think they're cheering, john, behind me for what's happening in washington. our cnbc chief washington correspondent john harwood joins us live from d.c. with the latest this morning. hi, john. >> reporter: kelly, i'm pretty sure nobody's cheering for washington right now. we have got a standoff really within one political party. important to note about this standoff over the shutdown and the debt crisis, this is not about democrats and republicans fighting each other. it's about republicans fighting among themselves about the right way to approach these kinds of issues. this is why the house caucus has stalemated their own leadership on an approach. they wanted to put aside the set of demands that the hardline conservatives within the caucus of pushing in order to go ahead and keep the government funded,

also to raise the debt ceiling. that hasn't worked. the leadership hasn't been able to control those people. the same thing is playing out on the senate side where you've got ted cruz and mike lee and a couple of others pushing this filibuster to try to defund obama care and other republicans, bob corker, for example, came on the show really ripped into those guys yesterday afternoon, said that they were holding up a resolution of the shutdown. but where we are right now is that the house has passed their bill to extend government funding while defunding obama care. the senate is going to strip that out and pass it midday today, probably by about 2:00 in the afternoon. then the question is going to be how does the house leadership handle the government shutdown bill? do they go ahead and extend funding for a couple of months, avoid a shutdown and have some negotiations with the white house and democrats, or do they precipitate a shutdown? meanwhile, the house is trying to move a bill on raising the

debt ceiling. they are discussing with their caucus attaching a very long list of demands to that bill, but they haven't figured out how to get it passed. that's why it's not on the floor today. but the house is going to be in session over the weekend and try to move that bill, which is an overlapping crisis that won't ripen until october the 17th when the treasury says we'll hit that debt ceiling. >> will you remind us of the numbers of the house. if you have the two dozen conservatives that are holding boehner's feet to the fire to get some gop sweetness into whatever passing the bill has. is it inevitable there has to be gop sweetness here? how do the figures stack up? >> reporter: it's not inevitable but it requires something very difficult that the speaker has been trying to avoid, in essence cutting loose those members. it's a group that ranges in size

from 25 on some issues to 60 on other issues. the speaker has a potential threat to his continuation as speaker if he tries to buck those people, but at some point he may try to do that, govern in essence without them, try to get the bulk of the rest of the members and maybe a few democrats. >> okay, john, thank you very much. going to be a busy weekend for all. john harwood live from d.c. let's just mention that ring central, the cloud communications company, has just quoted or it's just traded 7.5 million shares were sold at $13. you can see quite a decent bounce tlp -- there. the ceo will join us later on cnbc. meanwhile, let's have a look at where we are on the markets overall. the dow and s&p are on pace for their first weekly decline in four weeks, partly because of the uncertainty as to exactly what is happening with the debt ceiling debate and indeed the

debate to extend the government's budget. how will sentiment being affected from here? joining us, the chief investment strategist a strategist. they can have their drama and it doesn't necessarily affect us as we have sometimes seen. mark, from the way that john harwood just described it to you, do you think the markets will sell off on what is likely to happen? >> simon, they. i think the pressure we've seen on the equities market this week so far is wholly attributed to the standoff we have in congress at the moment.

not only on an inter party base but an intra party basis. i think that's going to stem into monday dependent upon what takes place over the weekend. >> scott, what's your analysis here? >> simon, i think this is the kind of news i would love to see a market sell off on because i think it's an opportunity to buy stocks. i think there is the closest chance to zero that you can possibly get that the debt ceiling will not be raised or that the u.s. will default on our debt. any selloff based on this, more power to it. i want to see it and we'll be in there buying stocks and recommending our clients buy it. >> that begs the question, mark, why we've traded lower during the course of the week. >> certainly it hasn't been on bad economic data because some of the data points that have come out this week, including today's personal incomes which show disposable incomes up the most in five months are not indicative of why equity prices would be weakening. it has to be an anticipation of

the prospects that if under the guise of a government shutdown, the economic implications would be some impairment to our somewhat feeble stayed of economic activity at the moment. so that's what the market is trying to see through. i, like scott, though, believe that if this is in fact a catalyst for why we're seeing pressure on equity prices, which i think ultimately the lack of a resolution and certainly very remote possibility of a debt ceiling debacle like we saw in 2011 means equity prices go lower, we would become increasingly aggressive in buying equities here because we think the economic fundamentals support corporate profits and therefore higher share prices. >> you know, there are many pieces of information that we could pick out from the data. weekly jobless is obviously one, scott. and of course there's the whole debate with what the fed is going to do with tapering. and kelly brought our atengs to it yesterday, i want to again

underline the fact that yesterday, scott, the annualized gdp priced deflateor dipped to 0.6% on the fed's preferred measure of inflation. in other words, we have very, very, in fact perhaps dangerously low inflation in this country at the moment and there is an argument that if anything, the fed should be doubling down on its monetary stimulus because it is potentially so dangerous. what would you say to that argument? >> well, simon, i tell you, james bullard, who you guys talk to frequently, he's the president of the st. louis fed, he has been talking about disinflation and maybe even a little deflation. the fed's measure of inflation is way below where they want it and certainly you can make a very rational argument that most members of the fomc are worried about disinflation at the very least, possibly deflation and that's a great argument as to why you wouldn't want to do any

tapering until some time in the future. very rational argument. >> which i guess is on the margin good for stocks as well, scott, to the point that you were making earlier. >> right, right. and so i think that, you know, we're not in, you know, one month later we're probably not going to see any tapering. we need to see some sustained improvement here. the fed is not going to base their decisions on what they believe gdp will be this year or next year because they're way too optimistic. >> guys we're out of time. i'd love to carry on the conversation all morning but that's not the way it work. mark luscini and scott wrenn, well. >> let's return to one of today's top stories, jcpenney, the stock under serious pressure after looking to raise money on a stock offering. courtney reagan is following this one for us. joining us live in new york with

the story. hi, courtney. >> reporter: hi. good morning to you, kelly. that's right. there's a lot for investors to digest today as we look at the jcpenney story, including both the equity raise that you have mentioned just there as well as the launch of a couple new shops that were previously announced, starting off on a media tour this morning in the location behind me. let's run through what we know about the equity raise first. jcpenney is offering 84 million shares for $9.65 each. that is for a total offering of $110.6 million. goldman sachs is the underwriter. it does have a 30-day option to offer 12.6 million additional shares. that means this dilution with the 84 million shares will dilute current shareholders. . the company now expect it is will end the year in excess with liquidity in excess of $1.3 billion that is 200 million less than what it had expected and it told the media, as well as

investors. she basically told us she's been working with the same jcpenney team throughout. she's not worried about consistency and she's so far encouraged by what she's seen in the last couple weeks online with her product. back to you guys. >> courtney, thank you very much to that. the latest on jcpenney. the question is is there any

hope for the struggling retailer. michael just lowered his price target by $7. it's good to have you today. >> i want to talk about this paradox about cash. are you more concerned that they had to do this in the way they did it or are you less concerned because they arguably will have more of a buffer going into year end? >> they definitely have the buffer. i would say up until recently the commentary from the company is that we don't think we're going to need this liquidity. i think what they're seeing in the retail trends right now and a lot of their competitors are out saying that things are slower. they might have said we better get capital when we can, not when we need it. >> how long is this going to last, michael? >> they're still struggling to get their customer back. the potential to go back and have ebidta positive and generation cash again is still

very low, at least in 2014, potentially into 2015. i think this gets them at least through the holiday this year, which is the most important part to them obviously and into next year before they have to look at it and reassess where the strategy is at. >> this is a company that now the current management team has some credibility issues, would i argue at least, based on again what you just stated well, leading people to believe they didn't need to raise liquidity. they're in the midst of looking for a new ceo. how do you explain it to investors, particularly in terms of the timeline they need to look at to think the stock is going to break out? >> since they gone on the strategy of last year, they've lost a lot of their customers. putting back in the traffic drivers and business drivers of the past, every incremental update from them is that it's taking a little longer than they

think at this point. it's telling us they're not not clear when they will reembrace the strategy of jcpenney. i think this is going to be very, very tricky to get the consumer back in and very expensive at a minimum money. >> you know, michael, there are other events this week that will fascinate people. one is the people that goldmans decided it would issue a note suggesting that investors take out insurance on penney's debt, when they themselves were about to lead the placing of the shares and place the loan. so that seems a bit odd. maybe they've got great chinese walls within goldman. let's hope so. the other thing is the announcement that jc's controller is resigning. is that material in your view? >> it's more of a bigger theme. this retailer has a lot of challenges ahead it haof it, no doubt.

there's a lot of management positions that are open at this point. any single one of them i would say is not a deal killer here but there's a lot of places they need to put some talent in offer the next few months. >> do you think they went with an equity raise after some reports they were unable to do a deal in real estate? >> they took a lot of debt out in may, they took a $2 billion loan out. they have 400 million in recurring interest payments. very, very, very risky to put another interest payment on top it have. we weren't surprised to see them go the equity route. >> michael, thank you very much. michael binetti talking about the situation over at penney. >> i wanted to take a look at lumber liquidator holdings, excuse me. if jim were here, he'd tell you

it was one of the keys to the market. the stock has reopened for trading and they have put out some news regarding what we were told earlier in the day was a search by federal authorities. they are responding by the action by federal authorities saying the action by the authorities relate to the importation by certain of the company's wood products. it's cooperating with authorities to provide them with requested information and it says those actions were by the department of homeland securit security's immigration, customs enforcement, fish and wildlife service. it's related to the importation of wood flooring products. that stock had been off as much as 11% before being halted for the news which we've now received and shared with you. >> all right. when we come back, as blackberry struggles, questions being raised by its ceo's

multi-million dollar pay package. to investors have a right to be outraged? >> and coming up a little later. >> i'm phil lebeau. which collision avoidance system does the best to prevent you from a rear end accident? the answer may surprise you. that's coming up on "squawk on the street." with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open ccount.

welcome back.

a payout to executive, $80 million bid. let's bring in jim morman, equity analyst and mark, an analyst. jim, i want to start with you. your price target is at $9, which is right where they had the offer from fairfax potentially. is that because that's how much the company is worth or because that's the best option on the table for them at this point? >> a little both. that's where i valued the sum of the parts. i think the company is still going to have to burn cash and i see a discount for intangible assets, if somebody were to pick apart the pieces. i think it is the best pieces. that's the problem. going private and going with that deal is by far their best

option now money. >> mark, are you surprised at the size of the readout if they go public? >> relative to what i've seen before, it's in line. >> in fairness, if the guy walks out with $55 million with all the efforts that he's made in an incredibly difficult situation, there will be some who will say, well, good luck to him, particularly when you see what they got over at nokia for just selling it back to his old boss. >> i have to tell you, when i think about heins, he was put in when they pushed out jim basile. i think they decided on heins, he was a bet, they werecy thiing of opening up their services platform to apple and android

and i think heins was a sign on the board they wanted to make a bet on b-10. >> jim, i have more of a broad, sort of business kind of lesson. we talk a lot about how much good will they had when it came to the consumer and enterprise fire or six years ago. the risk was innovating where you would eat in to your already very popular product. what was the right answer back then? >> funny, there's a right answer but some of their success was almost providing the wrong answer. because they were so far behind, that's one of the reasons why they became so popular in emerging markets, because at a time when a lot of other vendors weren't offering low-end handsets, their handset became very affordable in emerging markets. so withone of their mistakes, iu

want to call it that, allowed them to be very successful in emerging markets. even the latest mistake with the bb 10 roll out, the fact they came out ahead of the zeb 10 than the q 10, the people that have it really want the physical keyboards. it's just kind of mistake after mistake after mistake. >> that's kind of going back to the salaries and the payouts here. that's what's raising eyebrows. it has time to play out. we hope to hear back from you both. as we wash shares of blackberry rebound a little bit. >> we go to diana olick. >> congress is informing members it will draw 1.7 billion from the u.s. treasury. this is the first time the fha has ever needed money from taxpayers in its 79 years-history. it doesn't need congressional approval. it insures loans with a minimum

down payment of 3.5% stepped in to save the housing market during the crash but is now paying the price. most of fha's losses, $70 billion were originated 2007 to 2009. by june it had 33 billion but the accounting shows that's not enough. in the letter fha officials say this required mandatory appropriation is an accounting transfer and does not reflect an up-to-date view of the mmif, that's the mortgage insurance fund's performance. its long-term fiscal health or it's current cash position. this is based on estimates that fund would need. it's not taking into account the parts of the current fha that have improved, higher home prices, higher premiums in the fha and far fewer delinquencies.

on the flip side the fha is making a lot fewer loans and that means it's making less money. its accounting thing but $1.7 billion from the treasury, this is the fha's first time it's asked for a bailout like that. >> up next on the program, the results are in. find out if that crash avoidance feature in your new car can actually prevent rear end collisions like these. we have all the details. and later amc networks gaining more than 30% so far this year but now that its show "breaking bad" is coming to an end, can is sustain that. and here's a look at some of the most watched finales of all time. i'm hoping who shot j.r. is there but no. we'll be right back. she's always had a playful side.

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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? ♪ welcome back, the dow jones industrial average down about 200 points. a lot of questions about whether this has to do with worries emanating from washington as we

head into the weekend and brace on monday for the end of the quarter and major vote that would keep the u.s. government from shutting down. all of this the back drop to another round of fighting on the did the ceiling. >> it's what we call event risk. >> plenty of people were waiting, saying they want to get into the market but not at all time highs. do they wade in now? >> he now sees a better support at 1660. >> one of the most popular features for new vehicles, collision avoidance systems but do they work? phil lebeau is live at a track in virginia testing that. >> reporter: we're here where they've been doing crash tests for 20 years, but this is the

first time they've had a chance to measure collision avoidance systems. how quickly do they warn drivers they're about to hit another car and how fast do the brakes take control? seven got superior reaction. the subaru models are particularly interesting. they got the highest test scores in these crash tests. they are the only system -- the subaru system is the only one that avoided a crash at 25 miles per hour, but the head of research says the important thing to keep in mind is that all of these systems will be effective at preventing injuries. >> these new front crash prevention systems will definitely help drivers avoid crashes and avoid being injured in those crashes. we're still new in technology.

this will enable to prevent fatalities in the future. >> we're going to get up to 25 miles per hour. when we do, we'll see if the automatic brake kicks in and if i'm warned, first of all, before it happens. here we go. we're going to get up to 20, 25 miles an hour. listen closely. it warned me and it stopped me before i hit what's a mock-up of the car in front of me. it's a little taste of what they're doing with the collision avoidance crash test system. fortunately i feared better than the crash test dummies of the past. >> as someone who was involved in a hit and run, as a victim last week, i assume it's the speed you're traveling at. in other words, if you're traveling down broadway, having been partying all night and you ran into simon hobbs' taxi in

front of you, if you're going at 30, 40 miles an hour, it's unavoidable and it going to happen? >> it depends. the tests are designed at 10 to 25 miles per hour. but the faster you go, there's not as much time for the brakes to kick in. if you're going 75 miles an hour in a 35 mile-an-hour zone, there's not going to be a lot of time for the system to kick in here. >> phil, you are a brave man for testing that out on live television. phil lebeau in charlottesville, virginia. >> still ahead, if you want a salad with that big mac, you can have one. mcdonald's is making another change to its menu about will it pay off? we'll have that when we come back. stay with us.

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are the stories we're squawking about at 7:30 on the west coast and 10:35 here on wall street. the university of michigan consumer index coming in at the lowest from five months. it is up from august mid-levels however. cisco, intel and ibm are among the biggest dow losers. and it's an upbeat wall street debut for ring central, however,

ticker signal rng. we will have a live interview with the ceo in the next hour. >> some would argue that earnings season kicked off this morning. nike is now in the dow and hitting new highs following the company's first quarter results. dominic chu has all the details back at hq. >> good morning. nike did it and the stock is up big. the world's biggest maker of sporting goods made its earnings debut as a member of the dow and it hit it out of the park. earnings coming in 8 cents better than average wall street estimates. sales in line with expectations at $6.97 billion. as we dig a little bit deeper, it goes more positive. many traders and analysts look at the number of orders placed for nike products for delivery at a future point. that's referred to as futures orders by nike. if you strip out the effect of

currency fluctuations, those orders rose by 10%, also beating analyst estimates. that means future business looks good for nike. a key focus will be on china where sales fell last quarter but futures orders in the region rose by 2%. there was also improvement for profit margins thanks to lower commodity costs as well as fewer markdowns for their price products. this is a stock that's been on a tear up close to 40% for the year, up 122% overs last five years. this latest move in the stock puts it at record highs like you said, now at current levels. the stock trades at 28 times earnings compared to the s&p, which trades at around 15 times earnings. so the question for investors is what will it take for nike to continue this massive stock run, kelly. back over to you. >> thank you very much for the detail on that this morning. >> i want to mention a quick programming note. be sure to tune on monday. four-time mvp lebron james will

be with us live. i'm excited about that. >> has he stopped picking? >> maybe he can tell us what's up with nike. >> does he work for nike? doesn't look like he does. >> when you want to talk about shoe trends, this is the guy to talk to. >> my 11-year-old, you want a lesson in sneakers? i'll bring him in and he can explain to you. >> sadly i'm not here on monday. >> we'll see if lebron can reschedule. >> that would be nice. thank you, carl. that's very thoughtful. >> meantime, you want fruit with that instead of fries, mcdonald's will offer salad, fruit or vegetables as choices in its meals. guys, they've committed to this as part of the clinton global initiative. their top 20 global markets, fully implemented by 2020, starting in 2014. big operation for a company with

that many stores and restaurants around the world. >> and i'm looking at panera here. we know how well that stock has done. do people go to mcdonald's for an apple and side salad? >> i think it's really unfair of mcdonald's. i understand its size and everybody wants mcdonald's to do something about nutrition wherever they are. but actually, they have the apples available as a substitute for fries and nobody particularly wanted that. >> it's a minuscule percentage. >> then they put it with the happy meals. fundamentally you don't take your kids into mcdonald's for healthy food. >> shouldn't you be able to have the option for a much lower cost, healthy option for your kids? >> you take your kids in and, david, and you take your kids in for convenience because it's fast, right? and if there's something other than fries, maybe you will look at it. i think the more interesting this evening is people are pu

thing is people are pushing them to do a bigger burger, a five guys burger, go the other way and others are saying, no, you have -- >> it's strategic. >> but does it muddle -- does it keep their loyal, average customer from walking in the door? >> there is a question unanswered here. david, do you actually take your children into mcdonald's, on this your 20th anniversary? >> i used to go when i was a chimed bu child, but, no, my kids don't eat a lot of fast food. >> coming up -- >> we have all day. >> it's me, isn't it? coming up, why you can soon be buying the newest iphone at the versace mansion. and get your dvrs ready. there's a tv battle brewing. terry mathisen in a sunday night showdown. who will come out on top and which network has the most at

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there is a tv battle brewing this weekend, nfl sunday night football, the season premiere of "homeland" and highly anticipated series finale of "breaking bad." dvrs around the country are already overloaded but who has the most at stake? julia, the journal calls it possibly the best night of television ever. >> reporter: that's right. because of dvrs, eventually you will be able to watch everything. nobody will be bored on sunday night. nbc has sunday night football, showtime is launching the season premiere of homeland and amc has the series finale of hit show "breaking bad."

amc has the most at stake. it the flagship network of its parent company and "breaking bad" is expected to have a massive sunday. last sunday's show drew record high ratings of 6.6 million viewers, despite the fact that it was up against football and the emmys. but then after the show was over on sunday, the pressure will be on for amc to launch the next cult hit, as "breaking bad" is one of its three most popular series, all of which are nearing their end. so what's amc's solution? last week amc announced it's developing a spinoff, a pre-quel of "breaking bad" called "better call saul. there's no air date yet. "walking dead" is the number one show on tv among adults 18 to 49. amc announced it's producing a companion series, kind of like a spinoff, to launch in 2015. now, amc has no plans for a spinoff for much beloved "mad men" but it is expanding that

season by just one episode and splitting it up. so "mad men" won't actually end until the spring of 2015. now, amc has a slew of new shows in development and has "hell on wheels," which hasn't broken out yet. now, huge ratings for "breaking bad"'s finale would help amc, translating in higher ad revenue and demand in dvd sales. i, for one, will be watching. >> me, too. >> amc's market value is now equal to cablevision. this was a spinoff of cablevision. it's been incredible under the leadership of josh sapin, what's they've been able to do there. >> and sustainable?

>> that's the question. >> the versace mansion have new owners and they have some interesting ideas. >> the versace mansion sold this month for $41 million. the new owners said they would turn it into a hotel. now they're considering another idea. an apple store. we have the glass cube apple store in new york and the grand central apple store, but now the versace mansion apple store? the group that bought the mansion said the hotel could be an interim plan until they find a retail tenant. they say ver sasace's former mansion could be a flagship location. it is dripping with versace's glamorous gold fittings. he has a suite he built for

madonna, he has a hookup room and a pool with 24 karat tile. >> what about the fact he was killed on his steps? you still remember the aerial scenes and the blood. that's ghoulish. if you have it as a public place, unpleasant things are going to happen on those steps, won't it? >> it's a controversial plan. a lot of people see this as an historic site, meaningful to the minds of many people. and to turn it into a retail store strikes many in miami as crass. it's a tough building because it's basically in the middle of the times square. >> i wonder what apple thinks of all of it. >> shares of ring central

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tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bestselling tempur-breeze beds. visit tempurpedic.com to learn more, and find a retailer near you. welcome back. want to get out to the cme group this morning, rib, santelli with the santelli exchange.

hi, rick. >> hi, kelly. you know, obviously, everybody that place the markets, for the most part is keeping a very close eye on many different issues. washington, debt, employment. but one thing down here i'd love to talk to the technicians, and over the last several days, when i asked them, you know, what chart, what chart's the big chart to keep in mind today, it's almost now a unanimous shrill, the dollar index. as i'm speaking, put up an intraday of the dollar index, you can see it's under a little pressure today, if you put up a july 1st chart, you really see the issues. now the issues are that if we only wanted to, for example, use the news of the day as the reason for the deterioration of the dollar index, many would subscribe that that has some possibilities to it, that the dollar would get hurt by what's going on in washington. but it really doesn't hold water, because if you really look closely at the chart, the

deterioration that happened in early july and the deterioration that happened in early september are ongoing key tops and those were driven by employment reports. now, let's take a look at some of the popular technicals. i don't necessarily think that any given technical is what you should put all your eggs when when you make a trade, viewers, listeners on satellite radio. what i find is various forms of technical analysis from the simple to the complicated, all showing the same signal that is really something to pay attention to. one thing that caught many people's attention the last 36 hours is the death cross, and that's just talking about the 50 dipping below the 200 day. currently, where is that for the dollar index? on the 50-day moving average, right around 8145. on the 200-day moving average, right around 8176. so you can see that the 50 is now below the 200. now, certainly you that's simple. many people can program that in.

but the point of this is that over the next several days, you want to really very carefully watch what now is at the lowest level since february. think interest rate differential, all tied up, no coincidence that so many ten-year sovereigns of developed countries are comping back to the same exact day, august 12th of this year. back to you, simon. >> interesting. good point, rick. rick santelli in chicago. ahead on the program, the insider trading domestic diva herself, martha stewart, causing controversy on twitter this morning. find out what she had to say that made apple angry. yes, apple and martha in the next part of the show.

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apple rep to come pick up my ipad. no action yet. then she follows up by saying maybe i have had a good entrepreneurial idea, apple now, lining same-day delivery from amazon? i think i am on to something. same day fix it. so, maybe a bright idea for martha. but then, i cannot believe that the apple public relations group is mad at me for tweeting about my ipad and how to get it fixed. steve johns gave it to me. maybe it was a special ipad. but then, a martha hater, matthew, tweeted this, this is interesting, i think apple pr is mad at you because you spelling it wrong. you keep spelling it ipad with a capital i. now you martha comes back and says, i wish i could explain everything here on twitter about the broken ipad, the stolen i spoke to the silly joke about repairs and my frustration, but it's impossible so i will deal with it all silently and hope that alogical fix everything so

i can function again with proper tools. now, here's the thing. she didn't suffer in silence too long because she came on the "today" show this morning to clarify her position. take a listen to what she said. >> when i dropped my ipad, i was so mad at myself for breaking something that i can't live without. i love my ipad. don't you all love your ipad? >> yes, we do. >> i mean, i'm addicted. >> get a free ipad. >> no actually you it was a gift from steve jobs and i have the little note that came it with it because he knew i was an early adopter all of kinds of technology. and so i was just -- i was just making a joke. >> so, maybe a sentimental ipad. carl, kelly, david, simon, i'm not sure, but i would probably just take it to the apple store. >> i tell you what i saw these tweets coming in pretty late last night, dom, people are like, has she lost her mind? on a week that began with iphone

sales figures, that's pretty good pr. >> difficult if you are a diva over 70 and nobody is listening to you. any news on how her match.com profile is doing? five or six months? >> she went the "today" show a couple times, on her efforts to meet someone nice? >> able to fix an ipad? >> earn $150,000 a year was the other requirement. >> dominic, thank you. guys, we will see you later. david, enjoy the weekend. you deserve it. if you missed us earlier this morning, here's what you missed. >> welcome to "squawk on the street." here's what's happened so far. >> the political leaders could not believe the too big to feel has been eradicateded. i think in many ways, they do not believe the too big to fail can be eradicated. >> people will start their day thinking about what do i want to do today? where do i want to eat? what do i want to buy and hopefully, they will look at their phone and click and buy on

groupon. >> the gross margins, something like negative 25, 26%. i had to read that twice. >> minus 24% gross margin? >> yeah. just extraordinary. >> call that a margin? >> i don't know what you call that. >> another word for that? >> gross. gross all right. >> just leave out the margin. [ bell ringing ] >> to be a part of something that has grown so dramatically from those early days when i first was here 20 years ago has been extraordinary. >> there's still the disparity of potential outcomes for these guys right now is pretty wide. you know, they are still struggling to get their customer back so the potential for them to go back and have ebidta positive and generate cash is very low, 2014, potentially into 2015. >> the fact they came out with the zeb 10 ahead of the q 10 where their loyal base is, people have it really want the physical keyboards some, just kind of mistake after mistake after mistake. and that's what's kind of troubling about the whole thing.

>> good friday morning, we are live here at post 9 of the new york stock exchange, watching the market, after breaking that five-day losing streak on the s & p, losing a little more ground here, 1691 the current level, down about 7. we have talked a lot about neckline support around 1693, 1695. so, having broken that mildly, we're looking to see how the markets trade this afternoon. our cash early this morning, kelly, talking about better support 1660, but nowhere near that yet. the ten-year is sinking lower as well. it is another rough day for jc penney. the stock opening at 13-year lows after looking to raise up to $1 billion via another public stock offering. is that enough to save the troubled retailer? we have got that coming up. plus, pack up your things. but first, how about $55 million? how much blackberry ceo thorsten heins could get if he loses his job in a takeover. take a closer look at blackberry

and its golden parachute plan. the strong earnings report pushing shares of nike to all-time highs today. find out what's in store for the company now that it is a full-time member of the dow, not helping helping to staunch the decline. >> a lot of uncertainty out of washington, the senate prepares to send that bill back to the house over the weekend. art cashin again saying monday, potentially a rough session, the showdown really does get down to its final hour. then you have bigger, broader concerns, a cash burn watch at jc penney, right? a cash burn watch at blackberry. fha news, they will need more money from treasury to hold off potential losses over the next few years, probably not helping matters either. >> also a reminder even if we tie up the government shutdown discussion on monday, it's only gonna punt that to november 15th. the meantime, we have got the debt ceiling to worry about.

we will start with jc penney. shares fall another 1%, the worst week ever for the company, more than 124 million shares have already traded hands, marking a new record in terms of volume, all this on the heels of the company looking to raise more capital. courtney reagan is in new york and she's got more on jcp and the status of its suppliers this morning. courtney? >> good morning tour kell lakers lot going on here for jc penney. run it through for all of our viewers. what we know as of yesterday after the close, jc penney announced it will be offering 84 million shares at $9.65 each. that's for a total of 810 million dollars in actual liquidity. goldman sachs the underwriter for that deal and has the 30-day option to offer an additional 12.6 million shares. the company is under about $5 billion worth of debt. and as of this morning, in an updated filing, jc penney now expects to end the year with liquidity in excess of $1.3 billion that is $200 million less than what the company had

expected in the second quarter earnings release. now, jc penney has to soldier on to the basic tenet of retail, selling merchandise. today, jc penny is launching 565 giggle and disney shops, announced originally in the fall of 2012. also a number of other collaboration lines that are going on in launching in a number of jc penney stores. we spoke to giggle's ceo and founder and asked her if she was concerned what is going on with jc penney as she hitches her company's wagon and joins them as a partner. she says she has been in constant communication with jc penney over the last year and she feel there is has been continuity, at least with her team and the design team that she has been working. she is encouraged by the early online sales, two weeks of them, that she has already seen with jc penney there are still many, many questions here. of course, the stock has fallen a lot in the past week. a number of analyst notes, i would just like to point out,

that wells fargo is saying they believe jc penney has been burned by the affects of a failed turnaround strategy, created a hole that is just too deep, while others believe this equity offering was exactly what jc penney needed in the short term to get back to the business of selling merchandise. back to you guys. courtney reagan outside jc penney this morning, a lot of attention on both the company's store spores and the shares. thank you very much. shares of cloud storage company, ring central, meanwhile, surging on its debut here at the big board. shares priced at $13 last night. currently trading up 42%, along with vial and memory. ring central will put the new york stock exchange in the lead for tech ipos this year to 19 versus 17 over at the nasdaq. joining us on set is the ceo of ring central, virginia lad shmudis. good morning. a big opening for your share also, why did you choose the new york stock exchange and not the nasdaq? >> we had the relationship with the new york stock exchange for several years.

it was a fantastic relationship, even prior to us opening. couldn't be better to be here. >> you also fit the trend this year of companies first of all listing with the help of the jobs act. secondly, anything associated with cloud, going to the cloud, it would seem doing really well here. but what is it that you think has really drawn the interest of people when it comes to wanting to participate as an investor in your company? >> ring central is solving a very real problem for a great number of people. we are serving over 300,000 businesses with our cloud-based communications solution. and i think people can relate to what we do. >> obviously, for those who don't know, you help small businesses manage their mobile communication strategies, their faxing, their e-mail. as you said, 300,000 customers. every indication we get is that small business in this country is still hesitant, right? they are hesitant about confidence, the rollout of obama care, employee levels, some moving employees to exchanges, moving this emto part time. are they confident to make

investments like this? >> we believe so. we have lot of small business customers and we have lot of customers going not so small. ring central itself started out as a very small business and came a long way. we believe small business is resilie resilient. >> how can small businesses save with your product? >> oh, my god, they can save a lot because what we do is we take a piece of hardware equipment, which is really outdated, and we replace it with a cloud-based solution, which saves them thousands, tens of thousands up front. >> how much will vin note hang on to? we love watching what he does? >> i can't speak for vin note,

but no one has sold into this ideal, none of the management, none of the investors. we are here for the long run. >> very nice. >> you can see again, 43%, investors lininging you the story here with ring central. we want to thank you, virginia lad, for joining us as well. >> thank you very much. >> on the first day of trading. we are just three days away from a possible government shutdown. the question is can lawmakers come to a compromise over the weekend or on monday. democratic senator tom carp letter join us with an inside look at the negotiations. first, rick santelli talking about a potential shutdown today. rick? >> maybe from a different perspective. i know that it's so hard not to look at the markets and the news stories and correlate them, there is definitely a correlation, but the key is it a good signal, monitor the markets see what the right thing to do is or just traders knowing they can make a few bucks? nothing wrong with that. we will talk about that, do the both tomorrow of the hour. (announcer) scottrade knows our clients trade

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ask me what it's like to get your best night's sleep every night. [announcer] why not talk to someone who's sleeping on the most highly recommended bed in america? ask me about my tempur-pedic. ask me how fast i fall asleep. ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand. tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bestselling tempur-breeze beds. visit tempurpedic.com to learn more, and find a retailer near you. welcome back. there are heavy losses for indexes today, here is one doing a little bit better, the basic materials sector. take a look there. i'm sorry, one of the biggest loserses this morning on the s & p that would make sense, wouldn't it? dominic chu back at headquarters with more on this one. hey, dom. >> hey, kelly. like you said, material stockser

the reason why material stocks are considered cyclical, stocks more sensitive to the overall ups and downs of the economy, so when there are worries in the system, they ripple through the market he is. the stocks that get the hardest hit. when things go wrong, the cyclical-type stocks get hit the hardest and materials the biggest losers today. >> cliffs is on that list, seems like when vering a rough day, at the top. the senate planning government shutdown votes today. bring in democratic senator tom carper of delaware. good to have you with us this morning. good morning. you know, one thing we are always keen to ask on days like this is we're going to see a lot

of politicians come to the microphones, which actually tells the mark vet little. what's more important is the discussions going on among staffers. >> winston churchill said we can count on americans in the end to do the right thing after trying to everything else. my hope is we will find a way to work with republicans and democrats before year's to end get to grand compromise on the deficit, the underlying problem, show the government needs to be financially responsible and we need to provide some certainty with respect to the tax code. that's not going to happen in this back and forth this week or probably this month. but by the end of the year, my hope is we can make some progress toward addressing the underlying cause. >> what do you think does happen in the next week? is monday di-- do you see a

shutdown, a 48-hour shutdown the next week? >> i sure hope not. the people want us to govern. provide certainty. act like we do in delaware, democrats and republicans work together, reach across the aisle, find the middle, able to communicate and compromise. the two most important ingredient he is for a democracy are the ability to communicate and compromise. we just have some folks, particularly in the republican party, the house, who just aren't interested in compromising, we need to get back to that. >> senator, given that, isn't is there a risk here that you could win the battle over the government shutdown in the near term only to lose the war when it comes to the debt ceiling, which people around here argue is the more important issue, the one that shouldn't be messed with anyway? >> again, this is -- we have always paid our bills. at the end of the day, we will do the right thing.

paraphrase winston churchill, we will do the right thing. i'm confident. the political perils, not just the economic peril for our country, republicans push it to that point, there will be hell to pay for them in the elections to come. my advice to them, as their colleague, don't do that. the democrats say go ahead and do that our country doesn't need that frankly, neither do they politically. >> seine to the president has said he won't negotiate when it comes to raising the debt ceiling, would you support the kind of measure that raised the debt ceiling for a short period of time if it gave a little more breathing space to work out a longer term deal? >> i think a number of us would agree with that. but ultimately, we have to summon the courage to do the right thing. and the right thing in the end is, as i said earlier, come up with a comprehensive debt reduction plan, where by the republicans agree to tax reform that raises revenues, democrat agree to entitlement reform, saves these programs for the long haul, saves money, doesn't savage old people or poor people. the third thing to do a longer

term issue you look at everything we do in the federal government, everything we do from a to. >> and say how do we get a better result for less money. ironically in, they cover everybody in japan. we desperately need to find ways, and we are, to be able to get good health care, better health care coverage for people for less money. with he can do that. and the exchanges, so-called marketplaces, ironically, republican idea a good idea, and they're fight it. >> senator, obviously the rollout of how to do that is what's troublesome. more reports today about difficulties in managing the data of an exchange, as we get closer to october 1st. we have had senator manchin yesterday talk about potentially supporting a delay. do you think that is something democrats could live with as part of a compromise? >> people have until next 31st got six months to sign up, to find out the details this is a big deal, setting up exchanges i or marketplaces in 50 state, each a little bit different.

don't be surprised there is a bump in the road. we will work through it, people have plenty of time, not by the end of december, sign up for their exchanges in their start up until next march 31st. the hair on fire, hair is not on fire. we have got time to make this work, let's just keep cool and make it work. >> you make it sound so simple, senator. i'd say have a good weekend but i think a house going to have a lot of the hard sledding this weekend. >> you bet. take care. thanks. >> seine is tore tom carper joining us from delaware. talk about a golden parachute, according to reports, blackberry ceo thorsten hines could walk away with millions if blackberry is sold. look at that and the state of the company in a moment. mine was earned in djibouti, africa. 2004.

vietnam in 1972. [ all ] fort benning, georgia in 1999.

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it always pays to be the ceo, according to the reports. blackberry ceo torston hines could pick up millions if the he is terminated. >> blackberry was slumping, the ceo was signing a new contract that trimmed his compensation toon estimated $55.6 million. reports indicate that this golden parachute was secured by three board members, including then-board member, watt sa, fairfax financial chairman stepped down from the board stating a potential conflict of interest which turned out to be, as we expected, a bid to take blackberry private. since hines joined in 2012, blackberry struggled to maintain market share in the smartphone

market. clearly they had faith in hines and wanted to ensure he stuck with blackberry through the tough road ahead, including the latin of the bb 10 smartphones. hines' compensation package call nothing question whether ceos deserve such high payout and second, getting these large sums of cash when the companies they are leaving are underperforming. carly fee orrona paid $21 million even though shares of hewlett-packard fell during her rein. bob nardelli of home depot paid $2 million while leaving the firm. william maguire, united health group got a whopping $1.2 billion. maybe he deserved it uhd shares gained 5,000% while ceo and lastly, henry mckindle of pfizer received $196 while shares dropped 36%. back to you. >> thank you so much. seema mody in hk. continue the conversation on blackberry. bring in jeffrey sonnenfeld, associate dean of executive programs at the school of management.

good to have you back, jeffrey. >> thanks, carl. good to be with you. >> let's move past the compensation issue for just a moment. i'm just trying to think back six or so months, told us they weren't planning on a sale and then they were. they said they would continue to provide metrics and then they stopped. how much -- how much wrong do you think this company's done? >> i think they have done everything wrong in an honest way. i don't think an effort to deceive. i haven't heard any message to go out of their way to consciously throw us off base. as investors, employees, customers, wasn't misguided intentionally, i don't believe. however, thorsten hype heins w wrong guy for the job. it was missing date buys six, seven, eight, ten months, late on product, the capabilities weren't there the market performance wasn't there. and nobody on this board at the

time he became ceo, not a single person who had ever served as a public corporation ceo. nobody to guide him. he has pushed out of the job, the chief technology officer, went ceo at the time took one of hines' devices threw it in the glass of water around out of the business entirely, klaus kleinfeld, running siemens. they had nobody to succeed the co-ceos. he didn't know that taking charge process. you set expectations and you beat them. you don't try to do too much. >> would you have been in favor in keeping laz pretties and ball around in an operating fashion even after their intention was more focused on buying sports teams than the company? >> no they were too distracted. grandiosity had gotten to them. they were obviously brilliant visionary founders of sorts and a surprisingly good partnership

between the two of them, co-ceos, not the right ones to lead it next stage. great people to bring in. the guy who is running t mobile, lots of great people out there who would have is been perfect to have brought in, possibly saved this business, but very much like happened to the old, original motorola and perhaps saying with nokia, sometimes the board is a more pernicious threat to the health of the company than the competition is in some foreign distant seaport. motoro motorola's board did more damage than nokia or apple ever could have. >> a great point, jeff. i just want to turn to another story that we are following at the same time, talking about leadership. microsoft ceo do they go for alan mulally for ford? bring him in? is he the right fit here? basically up to alan to decide whether he wants to gamble with what right now looks like a pretty good legacy for him? >> well, this would be a dream job. alan mulally is somebody who is

supremely talented. there is no more universally respected ceo in this country or almost any country right now than alan mulally. he had the vision and foresight, of course, to get ford's balance sheet in a very healthy state. so going into the 2008/2009 downturn, they didn't have to go for the bailout. he support the rest of the industry, but he unified the brands, got out of things they shouldn't have been into, both on the financial front and the diversity front, a very solid management team. but i have to say, microsoft is not a company in distress, as ibm was when they brought in lou guester in, you bring in somebody on the outside, folks have thrown their hands against the wall. ibm, people forget how close to disaster, catastrophe, ibm was under john acres, veering off the cliff. that is not the case at microsoft. this is a cash-rich company, a company where two-thirds of its revenues are coming from new businesses now. sure, there's some opportunities in mobile and things without doubt that they have missed out on, devices haven't, but they

have repositioned themselves into, of course, very exciting devices and business. >> jeff, maybe it sounds like alan should go to blackberry then. >> well, alan -- blackberry should take him if alan got the offer, should take it, a wonderful job no where near as bad off as guester in h >> great perspective this morning. appreciate it. bells about to sound across europe now a couple minutes threat of go in the trading session there, a lot half.ing on the political front, as we mentioned earlier. simon hobs will rejoin us in two minutes to let you know what's happening.

a fascinating piece of research out of barclay's today, the evolution of financial markets over the coming months is more dependent on europe than anything else. they have looked back at the multiplier effect and found that a 1% gain in european economies has three times the effect around the world than 1% gain on the u.s. economy, because of the trade linkages and the banks. we have problems in europe, saw negative territory. concern, the prime minister of italy, he was here two days ago on the floor, now back to rome into crisis talks to try to save the coalition. remember, the vote in the senate to kick out berlusconi because he is a convicted fraudster is one week from today, on the

friday. all right coalition survive that? there is the inevitable talk about a further downgrade on italian debt. you can see the yields continue to rise disproportionately there. the minors are down in london heavily. bank of america, merrill lynch, overnight considering that iron, gold or copper could continue to fall. and one more before i hand it back to the guys for the weekend, as you debate what to do with the united states postal service, in the uk, the government has decided it is going to privatize the royal mail after 360 years. shares will start trading two weeks from today, so they have greater access to capital to modernize it the dutch and the germans already have their postal services in the private sector. i would say one thing to you, guys, the reason the usps doesn't work very well here is because the price of a stamp is too low. the price of sending a letter in the united kingdom is 97 cents, first class. that's twice what you pay here to send a letter in a much

bigger country. congress needs to raise the price of the stamps and that will help. >> unfortunately, laws against that everybody knows the price of a stamp is too cheap. i think we all agreed. >> twice the cost in the uk and therefore, it will survive in the private sector. raise the price of stamps here and put it in the private sector. >> thanks, simon. >> okay. have a good weekend. have a good time with lebron on monday. >> i know. you send us questions. >> i will. apparently you about watches. >> high-end watch. thank you. get to mary thompson, see what's moving on the floor. hey, mary. >> moving lower as we have been throughout the day carl, the markets pretty much remaining at the levels they have been throughout the session, dow up 82 points as investors continue to wait to see whether or not can get its act together and provide some kind of stopgap spending measure so that there isn't a partial shutdown and eventually raise the debt limit so we don't default on our debt. take a look what we have been watching, the yield on the 10-year verb treasury, an odd

correlation this week, the yields decline, so, too has the stock market. keep in mind, the s & p down 5 out of the last 6 sessions, typically they move in opposite directions, suggesting the stocks are move informing ann testimony with the yields, investors more concern about the strength of the economy than whether or not they will see continued stimulus from the federal reserve. among the sectors leading the markets lower today a broad-base deed klein, seeing a little bit of strength in banks right now, other than that continued weakness in consumer staples, industrials, technology and energy stocks today. take a look at the home builders, because while lower throughout the session, they did take a little hit when, of course we did have diana olick come out and say the fha is going to have to borrow $1.7 billion from the treasury, they have recovered since then. transports weaker as well in large part because of the weakness we are seeing in the airlines today. this comes after united couldn't nental said a measure of its revenue per passenger is going to be weaker than expected for the third quarter. and so, that's putting pressure not only on united continental

but the rest of the airlines as well in today's session. we want to touch on a couple of stocks that went public today. of course, very, very well received ipo in ring central. this is a cloud-based phone system. it went public at 13. there you can see it is trading more than 40% higher than where it went public at 13 today. and then lower today, violin. an enterprise storage, flash storage, violin memory, enterprise flash storage company, it went public at nine and the reaccepts a little bit less enthusiastic as you can see. it is weaker. lastly you want to end on lumber liquidators, it was haltinged in early trading because the fed also gone into its headquarters in virginia. the company says it is cooperating with the investigation. evidently, it has to do with of the lum hear about it imports. you can see its stock reacting down about 9%.

now we want to flip to rick santelli with how the budget in washington is impacting market there is. hey, rick. >> absolutely. i used to do a bit of trading. whether it was graham rudman, whether it was the first gulf 4, whether it was some comments made in -- by previous presidents, axis of evil or, i don't know, long-term capital, t.a.r.p., markets always weigh in on important issues, whether it's in washington, whether it's geopolitical. and that's normal. but what may be a bit abnormal to think that what the markets are saying is giving you a good indication about what's good or bad for the economy, what's good or bad if you're choosing to have a conflict with another country, because as a trader, when you look at the markets, all these issues, what's going through your mind? >> i'm looking a what the type of movement we are going to get out of it what type of volatility. ultimately, the market say say, feel that what's gonna happen is the result of a particular action. but in the long term, it doesn't

affect it. so i want movement. i will trade it both ways on that >> what is going on in d.c.? give me your take. first of all, you were telling me you were looking at some polls. >> there was a poll out where 61% warp the to see cuts in the -- in the budget in order to keep this thing going. >> with regards to the debt ceiling. >> with regards to the debt ceiling. what that is going to do is provide republicans ammunition to say, hey, president obama, this is what we are looking at. from a trader's viewpoint, i think we might have a bigger -- >> two-way trade. >> right. to the downside right now is where i place my bets, the markets showing it today, going into the weekend. unless we see some -- >> let's be fair. i have seen all those polls as well. i think, you know, pretty much, there's so many polls and so many channels and so many interpretation, i will keep it simple. this is my opinion. it seems, though, a plurality of citizens in this country are worried about debt. it's how you address it, what you team it up with, how you team it up with the debt ceiling, how you long at obama care and health care, that's where it starts to get dicy.

>> right. >> let concentrate just on the notion that as i continue to see the market go down, just look at traders what do you see and think they are doing now? >> again having all these catchphrases, debt ceiling, taxes, obama care, shutdown. that's triggering cells. i don't understand,works or what it does, i don't use it but it's happening, so you have to play along with that and keep in mind that that can happen. >> when i look at so many stories out, when you consider what's going on, for example, with detroit, now there's talk that maybe 300 million federal money goes in. i think they need to help. don't just make it a bailout. 15, 20 years ago, people in detroit, michigan, tried to address some of these issues, maybe it could have made a difference. some of these politicians that are getting vilified in the press, i think they just see a large -- big hole coming, that we can fall into and maybe these little bumps. is there any doubt in your mind if we have a shutdown, we will lose a little gdp?

that is logical. >> what will happen the long term, done for the right reason, it will be good. got to solve this debt problem. >> whether it is economists or polls, not sure the market is giving the idea what is best for the country, as a trade, he thinks he can make more money selling stocks with the current headlines. back to you. >> keep in mind. thanks a lot, rick. send it over to dominic chu for a quick market flash here, dom. >> apparently, more americans are rving, thor industry shares getting a pop after themaker of recreational vehicles reported earnings that beat analyst estimates. the major of air stream four winds, other branded trailers and motor homes, said that towable rv sales grew 13% around the motorized rv sales grew 56%. maybe more folks are looking toward the extended road trip as a vacation option. so, may gasoline prices be ever in your favor, kelly, back over to you. >> dom, thanks very much for that. what a day it has been for nike, shares hitting new highs this morning after earnings beat analyst estimates. now that nike is a full-time dow

component, the question whether you want to buy in here, more on that when we come back. stay with us. ♪ ♪ [ 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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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. we mentioned nike, shares of trading at all-time highs after the dow component posted strong earnings and beat the street ex-tech passions. talk to sam pores, upgraded the shares of nike from a buy to neutral this morning. sam, good morning to you. >> good morning, thanks for having me on. >> thanks for being here. i guess the question is why upgrade them to a buy now?

do you really think that there's more of a move left than what we've already seen for these shares? >> well, um, yes, i do. the reason i moved it now is because the business in europe and -- it was much better than what we expected. the business in the united states, north america, was better, as well as the back -- future orders. we also believe that china is going to turn the corner into next year as some of the investments that they are making now will pay off. on top of that, they are having an analyst day in a couple of weeks and we think there's going to be a fairly aggressive long-term plan put out there that we don't think is in the numbers yet. >> sam, you go to 85 on your target. the day -- the analyst day on october 9th what new catalyst do you think they are going to provide on that day? >> i think they are going to provide a three-year plan. so, that would be a revenue ebit plan through 2017 as well as show us some of the new technologies and so on that they are working on, give us some color into what they're gonna do

around the olympics and the world cup and, you know, the general outlook for what's happening. i think consistently, including myself, up until -- till this upgrade, underestimated the kind of catalyst that these -- that nike has. and it just -- it really impressed me, from what we saw in the numbers. >> sure. >> i just didn't want to sit on minute tral anymore and watch the stock continue to go up. >> sure that is one of the hardest things as an analyst, also wondering, people this morning saying, while it's a good story, while there are catalysts out there, do you really want to pay this kind of multiple for fundamentally decent earnings growth? and there's a reliance on sharma saying, look, we have gotten to the point where people are willing to buy growth at any price. are those criticisms fair? >> i mean, i get it, but i think that, you know, if you're looking at it today, i can completely understand where that's coming from. i think if we look out, if we look out three years and then look back to today, i would be

arguing it's probably something to buy f you're expecting a return on this money in the next six months, i can't tell that you's gonna happen. but i feeling very confident it is going to happen the next 18 months to three years and there are longer term investors out there, not everybody is waiting for what's happening tomorrow. >> sam is china the biggest risk to your thesis on this? >> um, i don't think so. i mean, i think that the risk is that they miss innovation with new product in the midst of what they're doing. i think -- i think china, you know, will improve. i think it's a timing issue there. i mean, they talked about how the stores that they had converted to what they call third category offense had really to show double digit growth and a very small amount, over 6,000 retail locations, between their own and partner

locations, have -- very few of them have been touched yet. it's like the tale "taye tale o cities," apparel which has done well and footwear, which hasn't. and stores showing a big, big response. if we look at what's going -- how europe is turning, how the strength of north america and eastern europe is sustaining itself, i think that that opportunity sort of just is more of an organizational issue in china and it sounds like they are finally moving in the right direction. >> okay. $85 is the new price target, sam poser joining us to explain it. thanks very much, sam. >> thank you. >> and speaking of nike, one of its biggest stars will be live right here on "squawk on the street" on monday, the king himself, king james, nba star lebron james will join us live on monday morning, 10 a.m. eastern time, talk about new high-end watch that he is working on as well as all of his business sense. he is an amazing, not just athlete, kelly, but leader.

we will talk to him about all sorts of different issues. >> he can move merchandise like almost nobody else. really want to pay attention to that in terms of what's coming up. a good day as well today for yahoo! company shares rallying to levels not seen since 2007. call it the ali baba effect. josh lipton has this out of san jose. hey, josh. >> kelly, yahoo! up 8% in just the past five days. one possible reason here, excitement over the potential ali baba ipo, the 28 partners at the chinese e commerce giant, they want to have control over the majority of the board, maintaining dual class voting structure. hong kong regulators don't support that skinned of corporate governance structure. but alibaba shareholders, including yahoo! coming to defense of the company. yahoo!'s chief development officer staying in a statement that yahoo! does back alibaba's

partnership structure. why is this a big deal for yahoo!? they have a 24% stake in alibaba. analysts at sanford bernstein value al play ba ba at $95 billion. could be worth $15 a share for yahoo! shareholders or as much as $22 billion if ya ho goes public. back to you. >> thank you very much, josh lipton, without a tie out west, talking some alibaba. the last six years, bad has been oh so good, the series finale of breaking bad airs this weekend, sure to be a big hit in the ratings for amc what is the number gonna do after "bad" comes to a close? that in just a moment. ♪

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the series finale of "breaking bad" air this is sunday but how will amc networks cope without the show? we have two analysts and "breaking bad" fans. rich is the one on the left, director of research and alexis media analyst at jp morgan and i don't think she thought she was would be paired with an list dressed like this. what are you driving an rv, too? what's this about? >> i drive a volkswagen. >> how much has the series added to the bottom line over at amc over the years? is there a good figure on that? >> i think in general, this is a company that generates about

$500 million and therefore, in aggregate, they've all pitched in to the team. so over the years, "breaking bad" hadn't been much of a factor because the audience range between one and $2 million. until recently it flustered up and it's a really on the quality of the show improving, i mean, it was always very good but really getting outrageously good recently. >> and i have a feeling we'll see some big headlines in terms of the viewership despite the viewership this weekend, and all the success amc has had here, why is there a neutral rating on the shares? >> because i think there's heightened risk going forward. next year you'll have higher program exspanls and fewer scripted hours so i think that there's a lot of uncertainty how the numbers will fall out but i think the odds are with amc in the sense that i think they're more likely than not to come out with other hits to follow on the great success it had so far.

>> how important is it for them? in other words, out of, say, ten new programs that may be coming out, do they need just one "breaking bad" here and how quickly do they need that next big hit? >> i think they looil like to have more than just one and i think it's important to have more than just one but clearly, another big hit, even a hit the size of "breaking bad" there's different levels of hits. "walking dead" has a bigger audience but they are both big hits. they have two new shows for next year coming out and these two other shows they announced. the prequell to "breaking bad" and "the walking dead." if two of those out of those four are hits, i think that's a home run. >> a lot of discussion, rich, about vince gilligan's new series which is going to cbs. they bought the whole season. a report that you could take a phonebook to a pitch meeting with vince's name on it and sell it. should amc have gotten it? is there a point where they're

no longer willing to pay for a star like gilligan? >> it's really tough. this is something that we've talked about. the market for original content is very frothy. the tax credits affiliated with -- associated with building up big shows and it's just creating a lot of inflation and at some point, when you look at just the sheer number of originals that get ratings above 15, they with getting -- medi critic the market is getting crowded out and you have to be selected because amc is in a position, you know, as alexia said, if they win two shows they'll be fine but to move the business forward they want to get sun dance channel and we tv they are stronger platforms so they need four or five shows to work out over the next 18 months

or two years in order to get to the business. >> that's asking a lot. what's your price starter for the shares? >> we'd like to stock up until 80. we don't have a bye on the stock. we have a market perform so we think that $62 is a place we want to think about it. >> alexia, can the finale crack ten len the million people? >> i think it's possible. i'll be tuning in, that's for sure. >> we have to wait until monday. >> at least i know why you came to the set with shades on. thank you for your time, guys, and we'll see what happens over the weekend. >> we want to correct an earlier related report that stated all three of amc hit shows are winding down. in fact, only two of the company's three biggest shows are coming to the end. the biggest is "walking dead" ladies and gentlemening its fourth season in october and the show has already announced the spinoff. no current plans to bring the season to an end. >> cramer will be happy about that. when we come back, microsoft

ceo steve baller going out companywide at his last meeting. we'll explain in just a moment. i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." seasonal... doesn't begin to describe it. running a bike shop has it's ups and downs. my cashflow can literally change with the weather. anything that gives me some breathing room makes a big difference. the plum card from american express gives your business flexibility. get 1.5% discount for paying early, or up to 60 days to pay without interest, or both each month. i'm nelson gutierrez and i'm a member of the smarter money. this is what membership is.

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chief executive of microsoft, according to all things d. but any replacement probably won't come in with as much style as ballmer is going all. listen to this, at his last companywide meeting in seattle, ballmer stormed the stage as he has in the past and danced to this song. ♪ "can't hold us" and sources say ballmer was very emotional telling employees we'll deliver the next big thing and we'll change the world again. and you know, he's got a lot of -- >> he has tenure. >> that's the question. you have employees with an uncertain future at the company and somebody has to keep them motivated to keep building and designing product. >> and you can understand the excitement that would come with someone like alan malalley. >> and the notion that he might wlooimpb ford might be one reason ford is lower today.

the tape is rough but ford is down and microsoft is hanging on to a gain of almost 3%. hard to do on a man that big. >> and on a day like this. we should mention the dow is off 70 points. ten-year treasury rate is sinking back to 2.6%. >> have a good weekend and see you monday. enjoy your weekend, guys. we'll go back to headquarters with wapner and the halftime. here's what we're following on "the half" today. pennies billion as the companies raises cash we raise new questions about what happened and when and why some on wall street are fuming about the announcement. marissa's magic, yahoo! shares are up and on track for their less week in two years. why is one of our traders ready to bail? a debate is just ahead. first or top story. it is this selloff. stocks are down as investors continue to fret over the fed and the protects of a government shutdown and what all of it means to the markets. from washington to wall street, your money is on