good to have both of you in today. >> i'm struck sitting here between the disconnect in the private sector and washington can't get from a to b. i'm acknowledging that. >> he's coming to your viewpoint. >> thank you. everybody have a great weekend. make sure you join us on monday. "squawk on the street" begins right now. can't believe it, we've made it through this crazy week. good friday morning. welcome to "squawk on the street." i'm carl quintanilla, david faber and jim cramer at the new york stock exchange. a teflon bull market as "usa today" calls it. plenty of earnings on tap. the 10-year note the yield at 2.58 essentially.

then we'll keep our eye on europe as well, the mix of red and green, a little more green than red on this friday morning. the road map begins with the potential new record for the s&p, starting from fresh highs we reached yesterday, strong results from morgan stanley and ge will help power things along. >> google is also set to open at record highs after it reported strong quarter live results. >> china's economy rebounding to the tune of 7.8% growth for the world's second largest economy. >> and shares of chi polt up sharply on a jump in traffic. i could have told you that one from the lines i see. >> the s&p is poised to open at new all-time highs.

morgan stanley chairman and ceo james gorman will be a guest on "squawk on the street" in the 11:00al eastern hour. let's start with ge. a margin story that has been promised all year long, 120 basis points. >> i think that was terrific. on top of the 50 basis points in the second quarter. things are getting better, industrial margin guides i think is very doable. oil and gas, i thought that would have been stronger. wait till that kicks in. power and water very, very good. this was the quarter we've all been waiting for. >> really? >> yes. >> this was the one? >> yeah. >> okay. >> just making sure. >> don't be so skeptical. this is a good quarter. >> order growth 18 versus 4 in q2, u.s. growth 20 versus 18 in q2. >> no flies.

it's funny you mentioned something. the capital markets business, the finance business, thank you for making it smaller. if i can analyze the company correctly. >> it keeps shrinking. >> the other day i saw a company that had a big tax gain. i don't want to mention it but it does have the initials ibm. and it just was just the only reason why they made the quarter. this company has historically made the quarter with taxes in the last few years. it was not done with taxes. >> the quality of earnings was strained, as we like to say. we should point out it's the industrial margin expansion. >> isn't that great? >> it's that part of the business. >> remember that business? >> yup. >> not the bulgarian credit card, it's not the spanish houses. >> water and oil and gas. >> it's not the polish -- third largest bank in poland. it's not about those anymore. it's about the general electric corporation. next thing you know, they're going to be opening a lot of

plants in schenectady. >> they are foreseeing a growth again. there is no growth right now. >> aerospace is good. we can be cynical about it but it was good. what a slap that was. >> wow, man. i'm not being cynical at all. >> it's been a disappointment. >> for a long time. anybody who has owned the stock for a long period of time, unless you're lucky enough to own boat loads of it in '09 -- >> dividend increase. i think the stock is justified, the move we see this morning. >> morgan stanley, we'll have gorman on in the 11:00 hour. >> gorman doing a good job. we heard from citi they didn't want to be in the retail brokerage business, the assets

go out the door everybody morning. this was a winning strategy, a fantastic quarter. i want david's view. it's better than goldman sachs. can i just say that? >> i think that's easy to say givens performance, fixed income, commodities down 44% year over year, here as this company has, we pointed this out many times, it has changed its complexion dramatically over the last few years with the full acquisition of smith barney, pretax margin was 19.2%. that was above many of the analysts who follow the company. revenues 3.5 billion, perhaps a bit above. that's where you're going to see the strength. they did not take the hit in fixed income but they aren't as reliant on it any longer. it was a better quarter in the equities front. >> cleaner. clean. like ge. i don't know if people at home understand. when you read these quarters, there's always been these

different ways to value assets and is that how they made the quarter. they made the quarter through better sales and better earnings. >> you're right. there is a thematic purity. >> most of these companies are very big companies that have done very well. >> morgan stanley, there was a time when the market cap on that company was bite size. and now it's getting back towards 60 billion. >> traded 9/11. >> a large shareholder in the japanese, don't forget them, basically helped save the company. >> true. but gorman is delivering. i think it's a very impressive effort. >> yeah. >> meanwhile, google last night. >> that was pretty good. >> i was trying to be subtle.

>> i got so into the moment of morgan stanley, i forgot i was supposed to read a little bit about google here. >> the tech giant posting better than expected third quarter results, internet revenue up 23% from a year ago and getting an expansion from their mobile ad business. cost per click goes down, number of clicks goes way up. number goes way up. >> you can make it up in volume. this youtube quarter, monetization. >> they talk about an initiative you're following very closely, fiber initiative, that could be something major. >> it could be. the amount of capital they have to expend is enormous to make something not even nationwide but more than just austin and kansas city. >> joyous quarter.

>> the first quarter in two years they've beat on the top and bottom line. tabs rate helped, goes from 23 to 15. nice tail wind there. >> i do think what's happened, i was shocked, did anyone see how quickly youtube had gone nobmob. two years ago it was nothing. 6% two years ago, now it 40% of youtube's traffic. these are great companies that can manage that transition and still do well. can you imagine if overnight it goes away and you can still do a blowout number? >> the race is on to a thousand. kantor does take their target to 1175. >> i'm taking mine to 1176. i will not let kantor outdo me in a price target war. >> the $3 billion in profit is a billion more than the market cap of the "new york times." >> wow, that is telling. >> it is.

>> one quarter's profit. >> they generate about 2.8 billion in cash flow this thing generates cash a lot. >> when he buys the "new york times," it will be with part of the subsumed empire of -- ooh, that's that facetious -- >> it does have the ability to fund these efforts in all sorts of way, whether it's a self-driving car, whether it is fiber, efforts in motorola and nobility. >> it looked a little better this quarter. you know what's interesting? the contrast between these companies and what's going on in washington. >> larry page, raspy voice,

delivering. chipotle, delivering. mcadam, delivering at verizon. leaders in washington not delivering, letting us down. these guys are making us money. >> there are those who doubt the valuation at least at these levels. here's what jeff gundlach told us yesterday. >> google to me is something that should be harvested in terms of capital gains. >> that was the very last question, we were out of time, as we always are. i didn't understand what progress meant. i think he may have just been referring to the chart. he is a bond guy, mr. gundlach.

google is certainly making plenty of progress. >> do you remember how many strikeouts babe ruth had that year? >> yes. and doesn't care. >> doesn't care. i like gundlach. google's a good stock. they turned it around. >> we're going to mary thompson with breaking news. >> reporter: i just got off the phone with ruth pratt, the cfo of morgan stanley. i know you were talking about their strong results for the third quarter, she credited the innovative suite of product that morgan stanley has. as you guys mentioned earlier, the equity trading portion of the business very strong in the quarter. she said that was strong across all products and all geographies, fixed income continues to be a problem, revenues down 44% because of lower volumes and market

liquidity in that area. has the difficulty or impact in washington, how has it made your job more difficult in planning for 2014. sheep deflected how it impacts her but said it continues to impact the company's clients because going into the end of the third quarter, ceo confidence was very strong, the m&a pipeline was very strong but the uncertainty in washington continues to affect ceo confidence and delays a number of deals they believe could happen if washington got its act together and she hopes washington uses its time exclusively to come to a long-term resolution. >> sometimes when you get it right, you got to celebrate it. >> do you. you do. >> gorman's always been very straight forward. he's a good interview, too. he'll give you an answer. >> before we go to break, china's economy did grow in line with expectations, the fastest

pace this year. but the country's -- the country said signs of slowing in september. we have seen some export data from ibm that's been a little bit weak. how worried are you? >> not that worried. it's been more of a centralist party. the communist party, they run the supreme court there. people forget it is a communist country. but businesses generating not a lot of profit, trying to get it together. they have a hoshlg pollution problem but they have trillions in infrastructure projects that they can turn to. i'm not worried. >> that's a huge lef are for the global -- >> i'm not sure they have fomented enormous consumer

demand. the. >> if 25% of your business goes to europe and europe is turning as magnificently as it, is that's terrific, china. that's not i'm not award. >> chipotle is heating up. even though their earnings did miss last night. also ahead, goldman as chief economist. does he see a fed taper before the end of the year? and what about obs tuesday." take one more look at futures. the s&p is up six out of seven sessions. we'll see what happens when "squawk on the street" comes back. the american dream is of a better future,

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shares of chipotle up sharply. the restaurant chain did beat consensus. sales up 6.2, thanks to a rise in traffic and signaling they may raise prices to offset higher food costs. they think they can deliver low single digit in 2014 absent a rise in price, which they think they'll do that too. >> a lot of ingredients have gone up, salsa.

this is a joyous call. same-store sales moving up to the single digits. there's a lot of things they do to basically please the crowd because they're very much involved with the food chain. it's food with integrity, clearly working. acceleration of the business, take a look at the chop house, lines around the block from where they have them. not going to rush international. once again you're reminded this company has fabulous management even at the store level. i was talking with david about his chipotle versus my seven chipotles. i've got a brooklyn one i love and my philadelphia one, we're all proud of our chipotles. >> there's one open very close to my home now and i'm going to go soon. i hate waiting in line. i hate waiting in line. >> i swear, 50 people in line yesterday. >> you see it and you get

discouraged. >> they talk about through-put. they're not happy about the through-put at lunch. they're not content. this is a company and management team, i want companies periodically to read conference calls, steve els talking about what's necessary in terms of the videos they do and monte moran just saying terrific things about the new restaurants and how to get through-put better, addressing this and the four pillars of the company. this company should go to congress and say here's how it's done. here's how to build a consensus around popular themes that young people have. this new safrita dish, my kid's vegetarian, this is what we've been waiting for, the tastiest of the vegan dishes. they are forward looking, that's the secret to them, whole foods,

costco, starbucks. they understand what younger people want. >> what is the difference between them and a pot belly, which cooperman this week on squawk said was elevated, highly valued, multiples roughly in the same ballpark? >> i go to chipotle because i know that in the end they care passionately about the food chain. does pot belly care about the food chain? i don't know. noodles cares some. i'm not a big burger, sandwich guy. you are worry about your weight and your health. i go to chipotle for my health. i feel they're as worried about my health as i am. >> and high growth. >> accelerated margins, sales. the growth guys always come back to these names. look at intuitive medical.

you can hit a wall. chipotle hasn't even scratched the surface of europe. >> or breakfast, for that matter, as some analysts are waiting for them to do. >> go try it, go read this conference call. it's a beautiful thing. >> it's cramer's "mad dash" as we head to the opening. we'll talk about that when "squawk on the street" continues. in today's markets, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers

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we got about six minutes till the opening bell. time for a "mad dash" on the friday. slumb schlumberger. >> mexico, angola, tanzania, kurdistan, algeria, ivory coast, russia. where they aren't hitting the ball out of the park is incredible. this is an amazing company. my trust sold it. thought it was a fabulous thing to sell, take the gain. that was wrong. >> why? >> worried about oil going from

110 to 100. that's called small thinking, david. >> it's a real possibility, may even go below that. >> true. have i to tell you these are long-term projects, offshore projects. this is not levered to long-term projects. this is a company that a lot of people regard as the great international company, where they fit in everywhere. they don't talk about it enough. i remember when i was doing a piece for the "new york times." i went to m.i.t. in the 80s and everybody wasn't wanted to work for schlumberger. >> "squawk on the street" back right after this.

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[ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. you're watching cnbc "squawk on the street." the opening bell in about a minute and a half. we closed at 1733.15, a new record high, up 150% from the march '09 low.

jim, here's "usa today." i don't know where we can show it. >> did i love that story. >> calling it a teflon bull market, listing everything we survived this year, a fiscal cliff, the threat of a war, fierce about fears about a taper, a shutdown, threat of default. nothing stuck. >> that article is terrific. it reminds people don't get shaken out. >> and between now and the end of the year when we start worrying about another impasse, shutdown or debt ceiling related, what stops us? what stops us now? and, by the way, a lot of companies can blame any misses on the shutdown. >> look, a lot of people would say once the federal reserve stops easing money -- >> but they're not going to. isn't there an argument they'll just start grinding here --

>> i think it goes higher. i think it goes higher. >> let get a look at the opening bell here on a friday and see what's going to happen at the top of your screen. there's the s&p. at the big board, kadant, celebrating its tenth anniversary at the nyse. and abengoa celebrating its ipo yesterday. it is going to be a five-year high after beating by a penny at 36 cents. >> some people were saying there's no real revenue growth. no one really cares about revenues. this is a margin story. and the margins --

>> we are looking at new high at the open here for the s&p at 1737. that is a new all-time closing, a new all-time intra day. interestingly, the obamas' stock market performance is up 150% since he took office. he's within a couple of percentage points now of beating reagan. if the s&p can get to 1753, he beats reagan and starts giving eisenhower a run for his money. >> this administration, i think there a lot of people in it, it isn't just for rich people. 90 million people involved in one way or another. that's a remarkable performance. >> he got a pretty good print on the low. inauguration january of '09. >> some people talked about that it was the biggest wealth destroyer ever. there was a period where the averages could come down and lower expectations and then

better expectations and give a forecast that was highest before. but i do theel there's a lot of people who think that he does not care about the stock. >> google's worth a look. this is now 10%, even higher than some of the premarket end kateors suggested. >> i'm shocked. google was so afraid that last quarter they said a lot of things about not being able to monetize mobile the way we would like but bear with us. this was very facebook-like. remember the stock was at 27, they said don't worry, we'll do it. they did it! we talk about pay clicks, average price down 8. does it make you want to buy a twitter or shy away from it because googlelele.

>> how fast is twitter really growing? you feel better, facebook is a quarter ahead of google's monetization. google, i thought the price points would be lower for ads on google. but they're doing this advertising people like. and we're not talking enough about chrome. chrome is a loved product. at one point on the conference call, everybody said pc sales are bad. what are they talking about? this was a very straight forward call. it's really a fantastic number. this is such a well-run company. mayor they're in cleveland or like the browns, no one seems to care. have i flash gordon this weekend. but ingersoll rand, let's contrast that with stanley. ingersoll rand has a big

business in europe, stanley works continually being punished for that awful quarter. zirs of hca, largest hospital operator, up by 4% after its preannouncement. >> preannouncement. >> in contrast to some other of their competitors that have continually had -- it is obviously a public company and has been for a while. but there is still private equity money tied up in there, bd 6 billion. there is a thought buyback, and you get rid of the private equity guys entirely. we'll see. but keep -- i was asking around, jim. they have a lot more urban hospitals. there may be a desire for people

to go to urban centers. >> they've done a remarkable job. it did feel like stock goes up, that's when the equity offering occurs. don't be skad of equity offerings. look at dunkin donuts, dollar general. >> a lot of times you worry about the overhang. they got to hit the exits. they're already talking multi- s. >> finally with chipotle off, it's not pulling around the pin

era -- when i see the panera deceleration, it's growth is 2.3 and that could hurt them very badly. great companies know how to come back. >> normally at this time we toss it to pisani, see what's moving on the floor. today, though, something special. we're marking a big milestone here at cnbc. good morning, guys. >> good morning. it's a special day for me and all of us at cnbc, even the guys on the floor. it's maria's 20th anniversary of joining cnbc. she joined -- you were 14 at the time. >> i first went on the air october 14th, 1983.

i can't believe it's been 20 years. >> thank you so much, everybody on the floor. oh, my god. i have so many friends down here at this point. didn't start out that way but -- >> 1995 maria came on the floor and i will give you an idea of how hot maria became immediately. i wanted to come down here, too. there she is standing exactly where we are now. i was the real estate reporter from 1909 to '96 and i came down here march of '96 to sub for you. one of the guys standing right here, they said, "bob, don't take this the wrong way, the boys like you a lot but you're not going to replace maria, are you? >> i have to give a shout out to dick grasso. he made the opening an event. but initially he really went against the grain. i also have to give a huge shoutout to mark quayle, who is

still the executive director of "squawk box," who first put me down he -- i know david will come is raid on this one. opening up the morning call. it started with one source who worked for merrill lynch. he said to me i want to get my call on the air every morning. i said beautiful. i said call me every day at 6 in the morning. then he went to left and little by little i was able to track the -- the squawk boxes were a closed universe at that time. nobody got information out of the morning calls. we named "squawk box" out of the opening concept. opening that nut up really

helped put cnbc on the map. >> we launched box boss in '95. it was matt quayleies genius to begin on the floor as opposed to above the floor. i took over for roy bloomberg. matt said we're doing this new show, we want to launch "squawk box." he said we want you on the floor and we convinced dick grasso do that. and have i to give a huge shoutout to jackwell welch. he gave me such great opportunity. >> and bob zito was instrumental, working with dick grasso. >> there was a couple of guys who did not want me there.

i remember one guy, who would be "i don't want this on your little tv show." he was terrible. in the end we became friends. another guy always would push me and constantly whatever i was talking about. but it was fun. i remember i was a producer down here for cnn bhi first started my career. i remember my friends at cnn said they're hanging you out to dry. you look like a nut. i thought i love it. next thing i knew cnn sent a reporter down here. >> before we go, you had to transition to not just covering the market but to the big interview, the big ceo profile interview, that you helped do, one of the firsts -- not a first but big contributions that you made. >> thank you, bob. when i first went on the air, i had to do a report on the oil stocks. the oil companies were reporting earnings. it was my first instinct. here i am, 26, 25 years old. the first person i called was

lee raymond, the chairman and ceo of exxon mobil at the time. he said yes. that was my first. i always have to aim really, really high. that sort of was the beginning of i have to get the get all the time and whether it's the ceo. i have to give a huge shoutout to our viewersho so smart and so savvy. for the last 20 years i've been fortunate enough to have this front row seat on an investor revolution where people wanted to arm themselves with information. that's why i'm so proud. >> the most important thing is your career is still on the ascendancy. this is not a remember when i was famous story. you're still doing great. >> thank you, bob. don't forget september 11th, you and i were together on that fateful day. >> the whole day, in dick grasso's territory. >> but september 17th, we knew

we would rise again when the firefighters rang that bell. >> let's hope it's another 20 years together. >> thanks, bob. >> guys, it's wonderful to sit here talking to her. we could do it all day. >> what a great tribute. maria, congratulations. we'll see you this afternoon. on a day when we're hitting another record high. when we come back, the philadelphia eagles gearing up for a sunday showdown with the dallas cowboys, a battle for first place. but will more thursday night games be in their future, making the nfl an even bigger cash cow? we'll talk to the gm and president live with jim in just a few minutes. don't go away. bny mellon combines investment management & investment servicing,

giving us unique insights

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more big games on thursdays. let's bring in don smolenski, eagles president and howie roseman. google reported last night they got about 60 billion in cash. am i going to be watching a thursday night game on a google channel? >> good morning. you know, the nfl on thursday night is some of the highest watched programming on tv and i think, you know, there's interest in making thursday night another night, another destination night for football. so i think it's something the league is looking at and you may see more games on thursday night tv. >> i wish they had more national games. somehow they decided the eagles were not going to have a lot of national games this year. howie, you are a talent evaluator and you understand who needs to stay and who needs to go. do you think that corporate

america, ceos specifically, are evaluated as tough as you do with football players? in other words, i often think corporations, it's not the nfl because the nfl does it tougher. >> first of all, jim, you can know can you call me for any advice that you need. i heard you had a rough time with your fantasy football team. >> come on, come on, i'm even going to play your defense. anyway, honestly, howie, you are someone who is very tough and i think that a lot of people who watch our show think that corporate america gets a pass, which is tougher with talent. corporate america or the philadelphia eagles? the hardest part about our job is we have a certain number of resources, whether that's with the salary cap or draft picks so it's extremely competitive because everyone's dealing within that same pool. so when we make decision, we got

to figure out what our priorities are and where we're willing to have a little bit less. that's what makes it really hard is that you know these people can't be here for the whole length of time. obviously football players have a different career length than corporate america and that's what makes it so hard. you have to be able to separate the personality from the playing performance. >> fan tech, which is going public, you get to own a piece of the fantasy player. i know the nfl spoke at the conference lately. this seems to be actually wrong. the nfl and the players own the nfl and the players. can you stop fan techs? >> don? can you stop these guys? >> i haven't seen that article yet this morning, but i know that fantasy football is a huge

business these days with the proliferation of leagues throughout the country. my own sons are in a couple of leagues. so, you know, it's great because it engages your fan, it drives fan interest and it keeps them interested in every game that happens on thursday, sunday, monday and throughout the week and throughout the year. i think it's certainly that the nfl is going to continue to embrace and how to continue to incorporate into the nfl. >> i keep thinking back to last year when we were thinking about adding a couple of games into the schedule, maybe into the preseason, maybe not. i think football fans are amazed at how games have become the center of the universe in this time shifting world. where is the balance between adding games, grabbing that additional revenue and making sure your players don't die on the field essentially? i mean, what can the human body withstand? >> the health of our players is

our number one priority. we continue to talk about that and look for innovative ways to figure out the kwquicker recove. when we brought in coach kelly and had a chance to sit down and interview with him, one of the things that appealed to us was his recovery status of players. we do a lot to make sure our players are in the best position on game day. >> i'm a season ticket holder. what do you do to make the even experience better what's new in the league and what are you doing for ticket holders? >> we've be embarked on a two-year ren open vawilliam rerl

about fan amenities. we put in fully integrated wifi networks that's free for fans so they can stream stats and video. next year we'll incorporate new hd video and ribbon boards. it's all about enhancing that stadium and making that environment that much more energetic. they can see what's happening around the world, around the league and every aspect of life. >> we have the best fans in the information football league. >> second most after pittsburgh steelers jerseys sold but the cowboys are not america's team, all right? they're not! good luck against the boys this weekend. great to see you guys. thank you. >> thank you very much. >> that's the most definitive statement you've ever made.

>> they're not america's team. i've had it with that. >> here's what's coming u on "squawk on the street." investing in this market can be as tough as an obstacle course. a dirty, muddy, ugly rake. "6 stocks in 60 seconds is next. now, go hit the showers. we'll be right back.

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amd, buy to neutral? >> pc sales are so bad, it didn't happy. >> you are shaking your head at baker hughes. >> they finally got a good enough. >> amazon hold to buy. >> i put this in because yesterday ebay said e-commerce

is bad. ubs said e-commerce is good. >> and a day after unh gave us those numbers. >> this time it's kantor going buy. >> what's on tonight? >> i want to find out about the device tax. we obviously have our game plan tonight. and, yes, i joke around with howie roseman. in full disclosure, when i go to the training camp, i stand next to howie and he's been a terrific guy and i'm proud of knowing the nfl and done some things with the nfl. i know i get caught up and my fantasy team is 4-2. >> the league does love you, jim. you're an advocate for the sport, no question about that. >> and our network has a great sunday night franchise. >> next week we're going to get all that data we didn't get

because of the shutdown. risk? land mines or not? >> yeah, i think so. there's a lot of opportunity to buy stocks lower i think because of macro gate daitia. macro data is probably not going to be as good as the microdata. if you like ge, maybe you wait till next week to buy it. it's been a great market. maybe you wait for the next opportunity. >> "mad money," 6 p.m. and 11 p.m. eastern time. >> google, look at that. less than $6 away. how high can it climb? and also ahead, an exclusive with james gorman. "squawk on the street" is coming right back.

welcome back to "squawk on the street." our road map begins with the s&p at 1740. a new record. >> google closing in on its own record, the $1,000 mark propelled by strong quarterly results. we'll have analysis.

>> general electric also beat by a penny. >> and now google shares which hit a new high and closing in on the 1d,000 mark, trading at 9.96 right now, up 1% after a third quarter earnings beat. the internet search giant seeing its best growth in over a year. aaron kessler, senior internet analyst over at raymond james with a price target just raised to 1,030. good morning. >> good morning. >> it seems like shares about to close the $1,000 mark. what does that mean going forward? >> the site revenue showed double the growth that i think the street was expecting at 6%. it allowed folks to move past the near term transition issues

that platform change can make, closing the loops around advertisers things that they're doing around chrome, maps and android. >> if $1,000 is tough for some investors to swallow, this teams sob sending a positive sign of investing in the internet space. i wonder if this is a rising tide lifting all boats here. >> it is. you've seen our -- >> ken, what about the investment? there are a number of great businesses poe ttentially they monetize but they're still in this heavy investment mode. that will give some investors some pause. >> i think when you look at the investments they're making, mmi was a margin drag.

overall margins, core margins, were find. but i think they're not going to get credit for a lot of the investments they're making in terms of multiple expansion until u see mmi start to taper off. >> which investments worry in an upbeat context? >> i think that google is in a lot of areas. the investments that i focus on the most that i think are very interesting, though, android, chrome, maps, even fiber to some extent. i actually think we'll open up new opportunities for them. i wouldn't say that there are things that they're doing obviously that maybe start to get a little bit out there but i think there are a lot of learnings that they draw from that that come back and make a stronger overall ecosystem. >> aaron, you can run out of

superlatives. i have a question about are they taking shares from ebay? is there a sense that is occur s occuring? >> google with their product listing is doing well. i wouldn't say google directly is taking share. >> that's why i wonder. if you want a tent, they'll give you a picture of nine tents and can you do one click. is that not something to think about? just given the numbers at ebay this quarter. >> the impact that ebay had on the u.s., ebay cited there were broader slowdowns out there but that didn't show up in google's numbers. i think the things google is making around shopping and product ads, it is going up. >> can they keep click going up?

>> some of the transition, we thought you'd see cpcs perform better, at the expense potentially of paid clicks but that didn't occur. at some point with enhanced campaigns, it it will. you'll see market -- once you get the higher conversion, you'll pay more for that click. when that happens, you'll probably see the volumes going back. >> whoa! we hit it. we hit a thousand bucks a share. the second company to hit a thousand bucks a share after priceline. sorry, i interrupted you. >> no, i'm hear to hear it. interrupt away. >> aaron, as we keep an eye, we just cracked the thousand dollars mark here, we should let viewers know this is a pretty rare thing to happen for a company in the s&p 500. the average share price has been moving gradually higher. it my be because of the buybacks

we're seeing or because there's not so much of an aversion to have this price, it's almost a bragging point. >> it is cool to see. >> one of the things that's been happening yesterday, we heard about it yesterday, is what's happening with the strength of youtube and advertising on the video site. and what does it mean for the rest of the players in this space as they start to follow suit? >> i think there is a comment that advertising on youtube up year over year. clearly driving much stronger growth in the core, which we think is growing about 15%. you add in everything else, adding about another 5% to the growth rate. google is continuing to see about to 20% revenue growth. it is helping google here. >> last night this thing was trading at about nine times 2015

ebidta. where should it be trading in terms of a multiple? >> if you're looking on ebidta, it doesn't look very revenues. if you see there being risk, it's not going to want you to bid up that multiple. some of the advantage they have is very secure, i think you look at it and say it very cheap on ebidta and see it trade up several turns from there. >> it's cheaper than discovery, to compare it to another media company that sells advertising. >> and yet at the same time, we saw david apple when it was trading up. that was the company we had wondered if they hit a thousand. their price to earnings multiples have not been high. >> no, never has been high. >> stock by the way is now firmly number three in terms of the biggest s&p company, behind

apple, behind it's hard to imagine it closed yet at 885. >> wow. hello. >> that's sort of where we are. guys, the quarter was good but we talked about how it is the first time they managed to meet on the top and bottom line. ken, are they being rewarded too much for one good quarter, the all across the board good quarter in a long time? >> i think there were a lot of concerns heading into the quarter, too. sentiment was pretty low. you saw facebook's numbers be very strong. there was some uncertainty on whether or not that could hit google. they were going around their condition. everyone knew them to know that you're getting past some of that investment campaign, leads folks to think about mobile, enterprise, all of these areas

where google is very strong right now and just scratching the surface with monetize persian gulf. >> does google become the biggest country in the world? or is it -- does it automatically overtake apple, for example? >> i think to the extend and through -- you can start efficiencies and i think other companies will challenge them but i think google is the leader right now. >> priceline did a 6-1 reverse split so on a nominal basis, it was never trading at 1,000. in some ways it makes what's happening with google now all the more interesting. guys we haven't really talked about the return capital here to shareholders. certainly one of the phenomenon in the broader market that's happening is the fact that buybacks are reefer duesing the share count, increasing the

dollar price again that's on some of these stocks and the s&p. i think the average price for shares listed in this index has gone from certainly like the 40s in the market lows to in the range of the 70s today. how much of that is a return even at these high levels. ken? >> google is clear that no one should sfekt a return of capital at this point. do you have to give the company some credit in terms of recognizing trends as they were occurring around mobile, and i think ultimately how you can even change, i think, or disrupt several players within software and hardware given that they monetize through services. so i do see google as continuing to be ambitious and potentially not necessarily returning that capital but going after these bigger opportunities.

>> a brief mention as well, guys, of what's happening with the volume here. ken and aaron, i want to thank you for your time. as we watched google crack the thousand dollar mark. both of them think it's got farther to go. >> when we come back, when it comes to the bank, should you bet on u.s. or europe? there might be some red flags across the pond. we'll find out when "squawk on the street" comes right back. especially when it comes to my investments. you want a broker you can trust. a lot of guys at the other firms seemed more focused on selling than their clients. that's why i stopped working at my old brokerage and became a financial consultant with charles schwab. avo: what kind of financial consultant are you looking for? talk to us today.

take a look at google. a lot of targets in the range of 1075. >> you're doing it on such a large market stock to begin with. >> very hard to move the needle. astounding market action on google, triple the average volume in the past month or so. in the meantime, s&p doing okay. dow being waved down by microsoft and other names. i think we're going to bob pisani as well this morning. hey, bob. >> we are. >> the euronex just said they're

going to have a testing time to allow trading firms to test their systems. the exchanges do testing on the systems. this is likely to make sure everything is working properly for the twitter ipo. first off, it is an open outcry system. you get the traders on the floor with orders going up to the designated stock maker for the stock but you also have the companies floweding the stock and they're on the phone putting in the orders. they want to test those systems, make sure the system works properly and the twitter opening goes as planned. guys back to you. >> quite a move there, bob. take a look at this management team. can you guess which company executives these executives work for? we'll tell you and talk to the company's ceo when we come back.

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shares of intuitive surgical getting hit hard, feeling the double whammy of the impact of surgical volumes declining for it's da vinci system, people skeptical about the device for use in giynecological procedure. revenues well below expectations and revenue not looking so great. however, it has come off the lows today. at one point it was knocked down about 8%. back to you. >> thank you very much, bertha. the u.s. government is back up and running and a short-term deal has been reached. there's also concern the fed could delay -- peter southerent

joins us. alberto, this has gone on for a long time now. this is almost a two-year rally on the european banks, on the debt and equity. alberto, can it continue? >> i think it can. i think europe is melting up into year end. we have not only this unleashing of demand from the u.s. debt ceiling resolution, but we at the same time have improved transparency. the ecb next wednesday will announce new details on its banking union project and this will boost transperson say

acro -- transparen transparency. this time we have stress tests -- >> isn't that terribly dangerous? we had two sets of stress tests and they were much maligned. people didn't believe them. you have 130 banks they're going to cover. you're doing research that says they're massively, massively undercapitalized and there's no way we can get the money into them effectively, there's no system to recapitalize them. isn't that really dangerous for investors now? >> look, there is some banks that are under capitalized. i would say it is around 10% of the banks in the stress test, particularly the small ones in the periphery. so small lenders in italy and spain don't have enough capital potentially. 90% of banks in the stress test are generally okay. they're really -- some of them have struggled but they're really getting there. and we have a few quarters more to get there. so i think it's not a systemic

problem anymore. if you separate the good from the bad banks, investors will be more confident about recapitalizing investing in the good banks and then the good banks can either acquire the bad ones or you can gradually resolve the bad banks. you know, as it has happened in spain and ireland. if you look at what happened in spa spain and ireland, it's close to u.s. banks because they've done transparency exercises. >> let me bring in our u.s. guest. what is your view of the big banks in general on both sides of the atlantic? >> our view is there's a macro delevering in the economies so the tides are going out. the winners are the strong operators, those who can drive loan growth and pricing. as a group we're underweight. we like the european banks, however. in that regard it's valuation

and its exposure to the emerging markets. the spanish banks have great exposure in latin america and we think that makes them unique cases where you've got great valuation and a catalyst for growth. so it very selective. as a rule we don't like the group but there are some exception. guys have a great weekend. thank you. >> it estimated u.s. consumers will spend $55 billion on their pets, an amount that has increased every year for more than a decade. despite that growth, petsmart cutting fourth quarter growth outlook citing lower customer activity. >> we were watching you ring the bell yesterday. just as this was crossing the taken and we thought how awkward is that? what did you see in the quarter

that led you to that guidance? >> we actually reaffirmed our eps guidance for the third quarter and all of our guidance for the entire year. we're feeling good about the year. we saw softness in customer traffic as a result of the uncertain financial environment. >> did you bring down your comp guidance? >> we did from 2.2 from 2.5%. we see lower traffic. >> do you have innovation in your area? you have a new must-have for a dog or cat? >> absolutely, simon. that's been one of our focuses.

we announced our project with national geographic. >> what's the product for the goldfish? z >> it going to be a tank that's very easy to use. fish owners have a hard time taking care of their fish. >> there's a story overnight about how the japanese are developing a wine for cats. interesting to look at that and be reminded to some, pe extent your area is discretionary. so that's the area they'll first pull back on, is it not? >> our services grooming, we found in we give you a quality room with the right

relationship, it very much becomes a need and not a want. it an affordable luxury we find customers wanting to come to us to have that fun moment with their pet. >> there are too many nail bars across manhattan but not many pet grooming season terse. could you expand into that? >> we've got 1,300 groom shops. we have two here in manhattan. it's an area we continue to grow in. >> can i come back to the question about the challenged consumer environment? can you give me a little more sense as to what that actually means? >> again, we see the customer being challenged by all the uncertainty out there, whether it be the shutdown, payroll tax, sequester and we think that has led to softer traffic impact for us. >> are they citing those things while they're checking out? how do you know that's what their concerns or? >> we've seen a broad-based

across-the-board traffic and that's leading to that conclusion. >> you don't think it a seminal change in people's willingness to buy things for their pets? >> absolutely not. what we found is people want to do the best things for their pets. we're continuing to bring pet products from the human world. whether it be vitamins. we have customers giving gnc glucosamine to their pets every day. we're doing temporary tattoos in our salons these days, as an example. >> for pets? >> for pets. >> would you do them for humans as well? >> can you match with your dog or cat? >> i have given my dog glucosamine by i've never given him a tattoo.

>> you can now. >> coming up more on a major milestone just hit for google, the internet giant joining the 1,000 club, $1,000, in fact, $1,002. it is boosting the s&p 500. "squawk on the street" will be right back. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪

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an astounding event for a single stock. google has cracked the $1,000 mark. what is staggering is the scale of what is happening in the wake of their strong third quarter report. we've added this morning 35, maybe $40 billion of value on that move that you see on your screen now. jon fortt is in san jose with more. jon? >> reporter: remember ibm's bad quarter? google is doing a good job at helping everybody forget about that, cracking $1,007 a share on higher than average value. google being on the top and bottom line last night, solid revenue from motorola and signals that it's enhanced campaigns, which tie together mobile and desktop ads. google web site's revenue came

in above expectations at 9.4 billion, motorola at 1.2 billion, right at paid consensus. a sign of google's mobile muscle, larry page saying nearly 40% of youtube's traffic coming from mobile now, up from just 6% a couple of years ago. we can't look at this google surge without considering a few contracts. a few years ago google had a tough quarter that sent the stock stumbling and a year ago facebook had a tough time and both up. so what's next for google? ceo larry page said last night on the call he's going to be a less frequent participant, turning attention to less public matters than the earnings call. international revenue growth seems to be an important area. and of course there's the

holiday quarter. analysts expect revenues to rise sequential sequentially. it doesn't mean things are easy. >> isn't that the dangerous point, jon, that they get carried away from here. he said he wants to take a back seat and do more r & d. there must be a contrarian view that we need to mark here. >> absolutely. remember apple 700? there's always room for contrarian views. larry page is steaming straight ahead saying you guys should be asking me to make more wild out there bets like calico. for a company of our scale, it hard to push the needle but, hey, today that looks like a bold and exciting statement. we'll see where the stock goes from here. >> not if you're fiscally conservative. jon, thank you. >> now that a debt deal has been

reached, washington's focused is about the spectacle of a possible grand bargain to avoid a sequester. it opposes any idea involving social security, medicare or medicaid cuts. mr. silvers, good morning. >> good morning, how are you? >> good, thanks. i just want to ask you why going into these negotiations where we know there has to be give on both sides, your group is saying from the beginning a deal that includes any entitlement cuts is a nonstarter, labor groups will withhold support in 2014 from any democratic lawmakers who support spuuch a deal. are you not standing in the way of any gridlock in washington? >> we're making clear what the path to progress is. the vast majority of people oppose benefit cuts to social security, medicare and medicaid. right now 55% of americans fear they're going to be economically

insecure in their retirement. the last thing we should do for our country is cut medicare, medicaid and social security benefits. >> nobody's saying that there's not a good rationale for having these programs in place. of course they're popular, of course people want to make sure that our citizens are taken care of. but that's almost not the point because what you've said is that you simply won't negotiate and you're holding the threat of withholding your support for any democrats who would even go forward and compromise around these measures for decades in the nut. >> we're being really clear. we're not going to give cover to democrats who think it's a good idea to take away economic strurt from our most vulnerable citizens. we're extremely clear about that and not embased about it whatsoever. we want a really clear message out there. if you cut social security benefits or medicare benefits to our seniors, to our most

vulnerable people in the country, you are going to get no support on it. it only treating them fairly there will be any progress going forward. >> are you as clear on the reality that if you have don't cut entitlement benefits this country may well go bankrupt? >> that's frankly not true. that's a lie put forward by billionaires who don't want to pay higher taxes. social security is the best funded aspect of our retirement system today and medicare's long-term issues are integrated with the long-term issues of our health care system. neither program is overgenerous. both programs are undergenerous. the on people who believe what you said are people not counting on those programs and who are worried their very large incomes will be taxed. >> you can go back to any

bipartisan budget group which indicates the progress we've made on closing the deficit, on stabilizing our debt level will change in 2016 going forward and the main reason is entitlement programs. we already knew the retirement age is going to be moved up a little bit. why not allow for give, means test, social security. if we need to do other things to bend that to make it more palatable to republicans, come to the table for a deal that won't hurt growth and undermine all of these objectives in the years to come? >> we are totally in favor of doing things to make medicare more efficient and we need to start with negotiating prescription drug prices. there's no question that in the long run if we keep basically giving away money to the prescription drug companies and health care provide that's we're going to have a problem with

medicare. social security's financial problems are relatively minor and have -- the two have been conplated, frankly, by people -- most people know that tax les have to rise on some part of the population and they also know that there has to be some entitlement cuts. >> actually, that's not true. most people strongly oppose cuts to benefits. most people strongly oppose cuts to benefits in social security and medicare. it's simply that most rich people don't. it very simple. >> i'm talking about the people that understand the figures. >> you're talking about -- you're talking about people who themselves are more afraid of paying higher taxes than they are of being poor in retirement. you're talking about essentially rich people. if you want to have a democracy of rich people, i suppose your statement is true.

>> okay, let's leave it there. >> it's been a rough road for obama care. now that the web sites have been up and running for a couple of weeks, are things getting any better? we'll take a closer look at that in just a moment.

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one of wall street's most iconic buildings is being sold to the chinese, number 1 chase manhattan plaza towered what was then a staggering 60 stories high when it was completed for david rockefeller in 1961, representing a new breed of sleek, glass and steel sky strapers for the world. what became jpmorgan's

headquarters is now being sold for $725 million. it's been seven years since jpmorgan went uptown to park avenue. >> they picked up a building for bear stearns as well. >> coming up next, ceo of the medical company stryker and what he thinks of obama care and the implications industry wide. also ceo of morgan stanley, james gorman, is coming up as well. you won't want to miss it. "squawk on the street" will be back after this.

welcome back to "squawk on the street." the company agreed to dhalt a trial. the company had hoped that it would be able to be beneficial with this drug for folks with

myelo leukemia. disappointing news there. >> many have been prevented from registering for health care online. dan can walk us through some of the latest. hey, dan. >> carl, how you doing? >> good. what do you make of where we've been and where we will go? >> i think there's been a lot of news that health insurance been awful and it's getting worse day to day. there's a big story in the wall street jorurnal is worse than people knew about. the enrollers are seeing serious problems about the quality of the data they're getting. only about 1 in 100 applications are usable.

people are being registered with spouses, three, four wives, spouses are being shown as their children, all sorts of corrupted data is being transmitted and they're having to process the applications by hand. it's going to be worse when you get many more trying to enroll by the deadline. "usa today" talked to technology experts who say they used basically 10-year-old technology. "i've never seen a program in the last five years require you to delete the cash in an effort to resolve errors." even if they had done all their homework, they're dealing with technology that makes it difficult to operate. >> they're clearly in triage mode. they say for the next six months they'll be doing dribs and drabs and fixes but afterwards looking at a complete overall of this and this system has cost tens of

millions of dollars and it's going to cost a lot more if that pro di prediction holds true. >> we'll talk about it in december and maybe in march. nice having you. >> shares of the medical device company stryker are higher this afternoon after reporting earnings above expectations. joining us now is the ceo of stryker, kevin lobo.you. >> good morning. >> we got a number of firsts on the show. you took over a year ago, but two and a half years in the company. >> correct. thank you for having me. >> what's the underlying state of the business? >> stryker is in great shape. you saw the earnings results. very strong organic growth. confirmed eps guidance, and talking about the pending acquisition of mayco. >> yeah, for your section of the

medical space is whether or not people will elect to have surgery. we know that was quit badly by the financial crisis. the question is, what are the utilization rates going to be, particularly in this country. johnson & onson, your former employers were saying it would be small. >> we saw a need -- the market seeing improvement. we're feeling more bullish. >> what about the new medical devices tax, which still stays on the statute books. johnson & johnson is going to absorb that, they say, into their margins. imagining that's much more difficult for you to do, and potentially a great cost disadvantage? >> 2%, 3% of sales, so for us, it's not $100 million. we have not passed this tax on to the customersest we're ab sorking it. >> it's in existence now? >> it s the eps increase was only 1%.

but if you add back the med device excise tax, cost us 3 cents a share in this quart. if you take that plus foreign exchange, we have delivered 9% eps growth. >> certainly, investors won't punish you for paying a tax you don't have a choice about. >> correct. the investors are looking at the future outlook. we're absorbing it now. >> to that point, it's interesting what you say what's happening with capacity, you mentioned an increase in demand for hip and knee, and others have said it's flat. are you winning share? if so, how? >> we've grown faster than the market. we believe the biomet is improving. there are still other getters to report. we feel it's improving. >> we should mention the recall. i think you took more money out this time around. i think the expenditure is now $700 million on a hip replacement that was faulty, and you had to recall -- where are we now? what lessons have you learned? what is the future litigation cost here? >> the first thing i'd like to

say is the vast majority of our products provide outcomes for the patients. it's wonderful technology for all of us. we did have an issue with our product. our primary concern is the safety of patients. we set aside this amount of money to make sure the patients are well taken care of. >> we had a big discussion regarding the uncertainty of the health care law. a lot of the procedures that involve you are more elective. are you getting a sense will say, i don't know what my health care will look like in a year, i'll defer the knee replacement? >> that's what they've been doing. they've been concerned about unemployment. >> oh, yes, we had a conversation with stryker three years ago, four years ago. >> the market is starting to get better. people are feeling better about their state of employment, and so, that's a big driver for us. most of our procedures are not elective. right? so if you look at a trauma procedure, even a hip procedure, it's very difficult. to avoid. and most patients are older. they already have medicare

coverage. the influx of patients is not a big benefit from the aca for stryker. >> is that why you mentioned the acquisition, $750 million in china. is that why you're buying into trauma? these are specifically for trauma victims, because it's not elective. it's less elastic. >> that's true for the premium segment. the acquisition in china was to access a part of the market we don't play in at all. a lower-priced segment. many hospitals in china we never sold a single stryker product to. >> it's about selling there rather than bringing technology here. >> much more for emerging markets. >> we've run out of time. come see us next quarter. >> thank you very much. >> all right, kevin, thank you, the c.o. of stryker. when we come back, find out why falling foreclosure rates are putting more homes on the market. the dow down 18. the s&p still up 4.

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get the flexcare platinum. new from philips sonicare. >> falling foreclosure rates are pushing home flippers in a new expensive arena. hi, donna. >> reporter: hi, carl. the foreclosure play was about buy-and-hold, because as home prices were falling, you

couldn't make any profit, right? now, as home prices are rising, a new breed of flippers are honing in on high-end neighborhoods like this one. >> we're looking at properties all the way from $1 million in acquisition price up to -- we just purchased one for $9.5 million. >> reporter: nicholas sinatra's company, american coastal properties, specializes in buying, remodelling, and flipping multimillion-dollar homes. rather than go through the zoning and tax issues involved in a total teardown, sinatra and his team of architects and designers seek out homes in sought-after locations that might need some work. >> and the hotter market, like southern coastal california, you have a high bear for entry, and there's no supply, no inventory. >> reporter: flipping, which is designed as buying and selling a home within six months, is actually down 13% nationwide from a year ago, according to

realtytrac, but high-end flipping is up 34%. it's thanks to a $50 million infusion from private equity firm colony capital, and colony has put a lot of money into low-end foreclosures of the past few years, so this is a new, albeit riskier, opportunity. >> it's a bigger up front risk, and on the back end, you usually have fewer buyers. but the payoff can be much bigger. >> reporter: now, the profit on average for a low-end flip is about $55,000, according to realtytrac, but going high end, it can be up to $240,000. interestingly, washington, d.c., this area, wins the prize as being the most profitable for flips, over $250,000 on average for the high-end home flip. lots more onion line, realtytrac.cnbc.com. >> all right, that's interesting, diana.

and we were talking google, for good reason, it's rare you see a stock that large move by that much. it is now, guys, the second priciest s&p stock at $1,000 on the nose. the lowest price today, jcpenney, which is -- >> ouch. >> -- 26 away from a 6 handle. >> the $35 billion addition in market cap is, what, 17 times that of jcpenney's market cap overall perhaps. listen, i can remember when google went public with the dutch auction, 80 bucks a share at the time. we can remember the s-1, don't be evil. i haven't read the dave eggers book, "the circle" about the power of companies like google to know everything about you. but that seems to only be increasing, particularly in a mobile world. >> people aren't even still wearing google glass en masse yet. wait for that to happen. >> the interesting thick is there's a lot of privacy concerns that continue to grow. google and facebook are changing their rules. and it doesn't get any traction at all. it's no concern about the backlash potentially whatsoever.

>> what do you mean, concern from who? >> that it could materially impact, and at some point, regulators on either side of the atlantic, will say, you can't do this with your data. that's not on the books at all. nobody's worried about that. >> yeah, till it's too late. >> david, good weekend to you. >> you, too, carl. >> what a week it's been. simon, we'll see in a few moments. if you're just joining us, here's what you missed early on. ♪ >> announcer: welcome to "squawk on the street." here's what's happened so far. >> the other night when they wheeled in the pizza at 11:00 at night, and all of a sudden, magically, another hour later, a deal came out. >> start with the pizza. yeah, seriously. they don't know each other, they never talked to one another. >> we saw speaker boehner can achieve with his caucus, and he's walked away from deals he probably wanted because his caucus wouldn't go along. that's why we're at the impasse

we're in. that's why we've been going flu the constant budget worries over the past couple of years. >> the race is on to $1,000. cantor does take the target to $1,175. >> i will take it to $1,176. i will not let cantor outdo me in a price-target war. chipotle has scratched the surface of europe. >> or breakfast, as some analysts are waiting for them to do. >> look, go try it. go read this conference call. it is a beautiful thing. [ bell sounds ] >> and when that happens -- whoa! >> we hit it. we hit a thousand bucks a share. it's the second company to hit a thousand bucks a share after priceline. sorry, i interrupted you. it was clear on the reality that if you don't cut entitlement benefits, this country may well go bankrupt. >> well, that's frankly not true. that's a lie put forward by billionaires who don't want to pay higher taxes.

>> good friday morning, we're live at post 9. 1,737 on the s&p. we were up to 1,740. it's been a series of good days for the s&p, up six out of the last seven sessions. we now have to start with google. shares crossing $1,000, after third quarter profit revenue beat estimates. stay tuned, we'll have more on google later. and chipotle, a nice gain. the third quarter revenue did top estimates, a jump in customer traffic year-over-year. they will raise menu prices by 3% to 5% by 2014. >> and that's extraordinary. the current crisis in washington is over, but does that mean the possibility of the taper is back on this year? we'll ask that question to the chief economist of goldman sachs in just a moment. the $1,000 club has a brand-new member.

yes, it's google. google rallying after strong earnings, now trading above $1,000 a share. the question now is what happens from here. we have the answer for you in just a second. and a good day for morgan stanley. the stock strongly in the green after a strong third quarters earnings report. we have an interview with the ceo later this hour. and google shares, crossing the $1,000 mark earlier, a shade below it right now after the strong third quarter earnings number. sheila is live at the nasdaq with more. hey, sheila. >> hey there, carl. what a day for google, right, going all the way up to $1,000.07, and still hanging around the $1,000 mark, and making it a part of an elite group of stocks. i want to put the move in perspective, because we're talking about big numbering. today's stock rise, about 12.5%, means google has already added $35 billion in market cap. that's about the entire size of yahoo!'s entire worth. two times the size of netflix.

and more than three times the size of tiffany's, so we're talking a blockbuster move. and it boils down to the solid earnings report. google assuaging any fears it may have been slowing down, or it would become this mature tech company. the one number people keep talking about, 26%. that is the increase in paid clicks the company saw in the third quarter, basically meaning, that where you go, more and more people are connecting through google, whether it's the pcs, or mobile devices. one of the interesting things that people are also seeing, despite the big stock price number of $1,000 a share, when you look at the valuation, pretty attractive. google's forward p/e estimate is 23 times, compared to facebook, which trades at 75 times forward p/e. a lot of people saying with earnings reports like that, google looking like an attractive buy. and we're seeing a lot of buy today.

carl carl? >> sheila, thank you. let's get more from tim stevens, former editor in chief at "gadget." and he's joining us, good morning. >> good morning. >> what's your initial reaction that google is trading above $1,000, it seems as if it's firing on all cylinders. is there anything here that should give people pause with regard to how important this was? >> certainly, google is making all of the right moves. it's a challenging market when it comes to monetizing the mobile ad views, and the mobile scene is much more important to google than ever before. part of the earnings found that it's now 42%, compared to 6%. so sort of a huge move. it needs to capitalize on the mobile scene. they're doing it in a great way. and if they continue, they'll be a strong buy. >> how big can youtube get? okay, forgive me, tim. aye i guess we'll stick with you. i'm not sure liz is with us. is youtube a $22 billion

business in the long term? >> it still has room to grow. youtube made space in the growth industry. and i think they are better positioned than anybody else, especially as we see offline youtube viewing, should be available in the none too distant future. >> and i wonder, you know, how much is the pie growing generally, tim, because a lot of people are talking about the fact that, you know, it's not necessarily a google versus a facebook kind of world. it's more that these internet and social media kind of names seem to be hitting all-time highs, the more that the old kind of enterprise software names are plumbing new lows. >> absolutely. they're very complementary services at this point. there's definitely overlap with google plus versus facebook. ultimately, google is trying to get in the predictive search market, where they want to be a part of your life, making recommendations for continue, how you should buy your flight. those are areas facebook hasn't

stepped into in a big way yet. that's really where the biggest opportunities lie ahead for google. >> i want to bring in liz gans, joining us from "all things digital." good morning to you. >> hi. >> what piece of the business is most -- is it google's diversification here that's important? is it the fact that mobile is finally working? is it the paid clicks? is it advertising? what here really sticks out to you? >> i think it's no surprises. google is doing well in all of the businesses it's supposed to do well in, and all of the stuff peel are interested in, the crazy new businesses, the balloons, google glass, even the more near-term crazy businesses like chrome books and whatever comes next on android, are what people are -- there's no surprises. there was nothing that came across as, well, we should really worry about that. and mobile and youtube are huge. they're the ones that need to be doing well, because they were yesterday's big bets. >> liz, do you think they need to jettison motorola? how long can that be a drag? does it even matter if the other

growth areas will show the kind of growth they are? >> i think they're just hoping it doesn't matter. i mean, motorola is just beginning to get to the point where they're making the own devices. they had the moto-x going on sale. there are big significant improvements, but it can't be that much. they just took over the company, the google team, running it about a year ago, and we should be looking at motorola closely. i think they will continue to branch out. they won't do just phones, they'll try to be experimental, but can they compete with the top of the market in terms of innovati innovation, the most interesting thing. >> tim, i think that's a really important point for whether -- it's not a bullish or bearish argument, necessarily, but going vertical was a sea change in their long-term corporate strategy, right? and motorola still gives those doubters a little -- a little fodder. >> yeah, it definitely does. google has quite a few plays that can be made on the hardwood side of things. we're still waiting to see what

they can do with motorola, like liz mentioned, the x that just launched and the first big phone developed underneath google. we're waiting to see what comes next. and we have the consumer release of google glass in the not too distant future. it should be an interesting thing. >> given google glass, the way it's getting, wearable seems to be the next generation for devices, you almost wonder if google at $1,000 still is at a moment like before apple launched the iphone or the tablet or something like that. >> well, right. because expectations are lower on those things. i mean, sure, there's a lot of hype around it, but it's not their core business. nothing in those results yesterday had said anything about device revenue wearables, anything like that. you know, google is going to try to make glass a success. i think people are still skeptical, and rightfully so. but that whole era of wearable kpu computing is starting and google is well positioned to play a part in that. it will be interesting to see what they are doing.

what i heard recently, working-around, there are expectations that google might be involved in a watch. i think the most likely scenario, they're building a version of android for people who want watch interfaces, and it will be interesting to see who their nexus-type partner will be, flagship partner. i think it might be motorola, which would see these two companies, kind of under the same roof, working together, but keeping them at arm's length. >> well put. we'll see if the watch is next. appreciate it. tim stevens from cnet, thank you both. >> thank you. >> thanks. the current crisis in washington has reached a conclusion for now. as we approach the end of the year, though, could the fed taper now come back into play? we'll ask goldman sachs jan hartzius in a moment. plus, morgan stanley having a strong day.

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will we see a taper by year end? now that the drama in washington, d.c. is over, we shift our attention back to the fed. they say the taper is not on the table, but not off the table. this is jan hatzius, who i was

just joking with off camera. have you gotten long without data? do you have the shakes? trying to make it to tuesday? >> i think we've had some. it hasn't been a lot. obviously, we're anxiously awaiting the employment report. we've had the surveys, you know, surveys have been actually decent. philly fed was pretty good. unfortunately, the jobless claims numbers, which was the one government data release, thats have hand bereese lead, have been good this quarter. >> how's tuesday going to come in? >> so we're relatively optimistic. we think 200 for the september report, stable unemployment report, 7.3%. it's unclear how much of an impact it should have. i mean, it's obviously pretty dated -- no, it's pretty dated information at this point, because you're getting, you know, early/mid-september information, and that was a long time ago. nevertheless, knowing markets

and how obsessed markets are with the payroll numbers, we may still get a big move. >> reaction. >> even if we were to get a 200 number, do you think that would be the best we see? where do you think the trend is with regard to payroll growth? >> i'd say the trend is probably a little below that, more in the 175 kind of region. but when we look at the data and the inputs that go into our model, we were 200,000 when we thought the number was going to be released, and there's been no reason to make a change to that. >> let's talk about the fed. we started out by saying what they're saying today, the f.t. has said, will it be june before we start talking about tapering again? >> i mean, our expectation would be that it will probably be before that. we still have december, just about as the baseline. but it's -- you know, it's gotten much cloudier. the question is, basically, what do the new fiscal deadlines mean for the tapering?

and at some level, of course, they have to reduce the probability of december. but if you really want to put a lot of weight on the fiscal deadlines, it's not so clear that january or march is a better call, because we may still be in front of the next dealt ceiling extension, and that would then take you to june. now, june is a very long time away. it seems to me that most fed officials would like to shift a little bit from qe towards forward guidance, and maybe sooner than that. >> it's been clear they're eager to wind this down. we third that earlier this year from bernanke. so at what point do they look at this picture and say, okay, we aren't seeing the allocation into labor income growing, stocks are doing high, corporate profits all-time high, are we at the point, if it is june before they feel comfortable enough to taper? >> if that's what the -- what they conclude, then, of course, it would be an argument for doing more. i don't think they would

conclude -- if they had looked at the labor market and they w saw, you know, still not much improvement, i don't think they would conclude monetary stimulus isn't working. i think they'd conclude, "we still need more of it." >> i guess, what i mean, if you look at the labor capital share in the country generally, if they feel as corporate profits record high, stocks doing well, but that it's just -- it's just at the expense almost of more of that being allocated towards consumers, precisely because they're not tapering, because there's not this sense of revenues are increasing and we've made it through that part of the cycle? >> i think their expectation would still be that if you see, say, corporate profits do better, financial conditions being easier, that they would expect that ultimately, also, to trickle down in a sense, to labor income. >> fisher this week on the tape, said the bond market's been showing the u.s. the back of its hand, right? we still have people who swore that the 10-year was going to 3.25%, being a little bit cowed by the action we're seeing, especially today.

what do you think? is that story deferred for a long time? >> i mean, i think 3.25 is a pretty good call for the end of 2014. but not for the end of 2013. i think at the moment, we're in a range -- you know, i think that monetary policy, you know, still -- they still have a lot of incentives to be easy, even if they were to taper, they'd be extremely careful to avoid another big tightening of financial conditions. longer term, though, when you look at the term structure, you know, of course, we're still' very, very low levels and the bond term premium is depressed. so if you look at late 2014 or into '15 and '16, i would still expect a fairly sizable increase. >> we believe yellen was behind the strategy this summer. is the market better prepared for that any more than bernanke's was? >> i think it's always difficult. you know, of course, they've

worked on this together, and it hasn't been good. clearly, the signals have been very, very mixed, very, very confusing, but it is -- when there is a change in course, it's always going to be difficult, and i don't think that will change. >> in a word, how much damage did the impasse -- the shutdown, the debt ceiling, do to the economy, both now and into 2014? >> i think now our estimate would be .25 to .50, in the very short term. i think for 2014, i don't really see a major -- a major impact there. you could, in fact, say that it's a temporary hit to the baseline, and you get the positive bounce-back. i don't see that as a major impact on 2014. >> don't you wish you could co-anchor with us every day? >> should i just leave? >> we would both leave. jan, good to have you again. >> thank you. great to be here.

it's no secret, i should say, that congress isn't very popular these daying. just take a look at this poll. 44% of people approve of cockroaches. 42% of people approve of congress. so what can congress do to win voters and business owners back? we'll talk to a business leader to find out coming up next. vo: two years of grad school. 20 years with the company. thousands of presentations. and one hard earned partnership. it took a lot of work to get this far. so now i'm supposed to take a back seat when it comes to my investments?

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♪ welcome back to "squawk on the street," i'm bertha coombs. investors are saying hello to a 3-d printing firm. the company priced at $13 at the low end of the range. look at that. the price nearly doubling.

the company now worth -- valued at about $420 million, or so. 3-d printer stocks have been hot of late, as a lot of people are captivated by the idea of printing their own things. voxeljet, used to make james bond cars in "the sky falls." wild, huh? >> yeah, it is. many investors are frustrated by the prolonged budget stalemate. it may change how business approaches politics in the future. yesterday on the street, carlos gutierrez, talked about what needs to happen to turn things around. >> until this administration just realizes that it's the job of the private sector to create jobs, and it's the job of government to help the private sector, we're going to continue the way we are. >> zane tankle is the chairman and ceo of apple metro, the new york metropolitan area

franchisee for applebee's restaurants, employing over 3,000 workers. he joins us at post nine. >> good morning. >> you have 3,000 workers throughout the metro area. what say you the impact washington has had on your business lately? >> well, i'd say we're running a mayoral election, a tale two of cities. this a tale of two countries. washington to new york, in a whole other world, and people have become desensitized to what goes on there, and we keep doing like we're doing in new york. you just plow right along, but are people affected, sure. if you're involved in a government job or some sort, no -- everybody is trying to get by right now. and this is another contaminating situation with regard to an environment that has been very difficult since probably '07, '08, '09. and it's one more thing. you know, our space is about too much snow, too much rain, so

people don't come out. it's too hot. it's too cold. i hold meetings with our executive team all the time. i don't want weather reports. i want to know why is this happening here? so here's another blip on the screen. but, you know, we're in a fortunate space. we all get in this habit of birth, co-eating, and you can't kick it. >> earlier this week, after the madness in washington ended, "usa today" interviewed an restauranteur would say, why would you put any more capital at risk? is that where you are? >> not at all. >> what would get you to make flyer on additional hires? >> it would take what we started this week, construction on two additional restaurants, a cap ex in excess of 3.5 million each, one in the bronx and one out in brooklyn. and i'll need about 150 people to run each one of these. so it'll take nothing other than we just keep on putting our heads down and keep doing like

you're doing. >> how does health care factor into the decisions you're making right now in terms of expansion? >> that's a really good question, and it's posed to us all the time with thousands of employees. firstly, all of the managers and managerial people, we've had health care all the time. we never didn't. and it's really about the hourlies, and i can tell you that -- i don't think anybody really understands it. it's hard enough for people at the managerial level -- >> you have workers -- do you have a franchise model? are the workers your employees or are they -- >> oh, no, no, all we do with applebee's is a franchiser, come under the marketing budget. >> so it's up to you as to whether or not to provide health care? >> 100%. >> and do you provide them health care, the hourly employees? >> we've always had a program with affordable health care, negates now. we had it for crises, what have you, and we have to throw it out. i don't think anybody gets it or understands it at that level. i'll give you a example.

>> they don't have health care now -- >> they do, until the first of the year, and we have to -- it's just a crises kind of situation, when it comes into play. no one get it is at that level, the hourly level. it's not an insult to them, it's been so difficult, so complex, communicating, getting it online. i asked my people, and i have a great relationship with all of them, and if they're watching on air, they'll confirm it, i think, what do you -- do know about obama care. they say, sure. i said, tell me. well, obama cares. yeah. and then, i say, there's a cost factor attached to it -- well, i never paid before. but now you will. and there's long pauses. >> so you think it will hit people when it hits them directly, and they won't ab fan of obama care? >> absolutely. absolutely. i speak to thousands of people -- >> even if they come away having

coverage they wouldn't have previously had. >> if you are 25 -- i'm sorry, you probably are 23. if you got to 25, and you were perfectly healthy, and you never had health care, and you were making 25,000 or $30,000, a year, getting by, just getting by, nobody is living big and large in new york on $30,000 a year, or in the country for that matter. and now, i say, three grand round figures, i know it's 9.5%. i say $3,000 of your w-2 pretax is going to go to health care. why would you? >> yeah, that's going to be the education that a lot of people are -- >> why would you? and the education will be, they'll pay $90, which is the alternative. >> yeah. i wish we had time to talk fast casual, but we hope you'll come back. >> invite me, and i'll be here. >> all right. talking all things aca. a strong day for morgan stanley. the shares rallying after earnings did beat estimates. [ female announcer ] it's time for the annual shareholders meeting.

♪ there'll be the usual presentations on research. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

welcome back. let's bring in bob pisani. it's almost incredible how little attention is being paid to the fact that the s&p 500 is hitting all-time highs. >> and the russell 2000 at all-new highs, and something more important, volume is on the heavy side. again, three days in a row. wait a minute, markets at new highs, volume pickup? we haven't seen that classic confirmation in a long time. it's got a lot of bulls

happening. and a lot of people short-term bearished, chagrinned, unhappy. what happened to sell on the news? let's look at the market now. it's not working. i have a lot of friends, a lot of people, we're going to get a little dip here, because earnings season will be aggressi aggressive, and they'll take the numbers down. then the market will come back. people were aggressively short. huh-uh. they're being forced back in, because the market is not going down. a friend of mine said, i'm getting killed on my shorting. why isn't it going down? well, their problem, the obvious answer, the bernanke/yellen put, as it's called, is in full force. everyone believes they'll be backstopping forever. let's look at what's going on here. the rationality put, has worked out. art cashin uses the phrase, it's worked out. shutdown, resolved, modest damage. and maybe we sail through the earnings season. maybe it's not as disastrous as they were thinking.

the industrials, which i love. easy to explain. general electric did pretty well. parker hannifin raised their guidance. a historic high. ingersoll raised their guidance, honeywell, disappointed, lowered the guidance. interest rates are dropping, that's helping things and also the dollar down. dollar at an eight-month low right now. euro just keeps rising. the bottom line is, it's not working for the sale on the news scenario. so far. we'll keep a close eye on it. >> very good point, bob. >> thank you, bob. morgan stanley beating q3 estimates. the stock trading almost 2% higher on the day. in fact, a little better than that. mary thompson is live with an exclusive with morgan stanley ceo and chairman gorman. hey there, mary. >> hi there. we're sitting here with james gorman, ceo of morgan stanley. a very good quarter. tell us what your personal highlights were. >> firstly, thanks for doing

this, mary. it's great to be back on cnbc. you know, for me, the long-term strategies is what really matters. it was a great quarter. we can talk about the bits of it. the long-term strategy, the resilience, the durability, the consistency, all of the things we've been putting in place for the last five years, since the crises, they've started to come through. >> let's talk about the bids. one of them, you got off the conference calls, and fixed income. revenue year-over-year down 40%. and you have a target r.o.e. on this. you can cut compensation. you can reduce risk assets, or decrease risk. what will we see? >> i'd add one fourth thing, which you can increase flow business with clients, which isn't necessarily increasing risk. we're doing a little of all of those. it's a less balance sheet, capital-intensive business. we're increasing flow with the clients.

and we said we won't get there in one quarter or two quarters. what i'd like to see is progress. we have a great management team, clearly articulated strategy. we're reducing the risk in the balance sheet by bringing down the risk-asueded assets. >> multiyear turnaround, what inning are we in now? >> we're still in the reasonably early innings, given honestly where the revenues were. it's got to be put in the context of everything else going on at the firl. firm. a look at the equities business, sales in trading equities, had just a terrific quarter. 1.7 billion in revenue. i think it will be number one, maybe number two, but i think number one in the world. that stability gives us the time we need to make that turnaround in fixed income. >> you say you're still on track to have earning expenses, but we did see litigation expenses, which continue to go up.

what's behind all of that? >> like all of the firms, we have a raft of potential litigation, and we have to take appropriate reserves -- >> mortgages, commodities? >> i think we were 14th in the country, so smaller on the foreclosure activity. ours is more around the kind of products sold during the crisis and so on. but we're working through that. i think we prudently reserved, as ruth said on the call, it's an elevated level now, 200, to $300 million above what we think of natural run rate. that's fine. we'll work through this. >> how long will we see the elevated levels? >> tough to predict. i'd say it will continue for a little while. the whole street is going through this litigation mish-mash of activity. you know, but we're comfortable with where it s obviously, we can absorb it given our current revenue run rate, which is the important thing.

and we will get to the end of this. >> one other thing that helped you this quarter is you had a much lower tax rate. it was 25%, i think compared to 35% next -- last year. will we see a similar tax rate in the fourth quarter, or is it going to go up? >> i hope 35% is not the run rate for our taxes. i think of more around 30%, particularly as we have a u.s.-centric business wealth management, which is predominantly u.s. there were some adjustments, i think 3 cents of repatriation of foreign taxes. you know, that move's plus or minus a couple of cents every quarter. i would target generally about a 30% tax rate, for the business mix as it is today. >> on the call, your cfo, ruth parrette, talked about the impasse we saw in d.c., over the last couple of weeks. >> mm-hmm. >> was a tax on business. now, we have this kind of temporary window, where we see -- we hope congress will come to some kind of an agreement, and the white house. what would you like to see out

of d.c. over the next three months? if you had a wish list in that long-term solution, give me two things you'd like to see? >> both sides start talking today rather than february 6th, or whatever the date is before the final next date. so we start the discussions, we start behaving as though we're trying to do what's right for the country. not what's right for individual political parties. we need to come together. we've been trying to come together for a couple of years to deal with the fundamental problem, which is we spend more than we take in. and as a result of that problem, obviously, we're incurring debt, which is why the debt ceiling has to go up. they're separate issues. we need to start talking immediately. >> beyond talking, is there anything else you feel is critical? is it tax reform, entitlement rucks, what is it you like to -- >> it's got to be a balanced solution. it's both sides. you aren't going to solve this problem by increasing taxes. you won't solve the problem by just reducing entitlements. it's a comprehensive relook at the balance sheet of the country, the amount of money we're spending overall, an what

it's doing to our income versus our expenses. you do that -- if you're running a business, that's how you do it. >> congress at this point has a low approval rating, something the banks may find as a relief, takes the spotlight off of them. my question is, how much money morgan stanley has spent, backing some of the people in congress. do you feel you have your money's worth, or are you thinking of respending it watching the shenanigans -- >> i think because of the approval rating, consumer, all citizens, disappointed. congress isn't doing what it's supposed to have done. we're looking forward to people getting serious. >> it goes back to the question, do you feel you got your money's worth, or will you rethink how you spend it? >> so far, we haven't got our money's worth. we haven't got back to a situation that we're focused on growing the economy. which is what the situation in the capitol ought to be about. >> what are your clients saying? are they angry, frustrated? >> i think it's anybody.

you talk to anybody on the street. i've been watching interviews on the street. everybody is frustrated. america is the leading country in the world. it's the leading economy in the world. it's been the leader on so many issues. it's time we started acting as leaders. >> how does it affect your business? ruth said it wouldn't affect fourth quarter m&a, but what about 2014? >> it's too errol to predict. if we get a comprehensive solution, if congress can work towards that, then i i this the economy is free to do what it's supposed to be doing. the u.s. economy is in good, fundamental shape. >> one last question. >> sure. >> tell us how your retail investors are responding, because you have this wonderful window on the retailing investor. you said they hung in there in the third quarter. >> well, the retail investors haven't pulled money out of the markets. they've been less active, because there hasn't been as much confidence, but they haven't pulled it out. it's poised for growth. we were thrilled with the performance of the retail business. it's coming along as we hoped it would. the plan to create stability for the organization is working, and

a credit to the financial advisors out there for the job they're doing for their clients. >> james, thank you for joining us. >> thank you. great to be here. >> we've been speaking with james gorman, ceo of morgan stanley. >> great stuff there, mary. thank you. google topping $1,000 a share in trade for the first time this morning. where does the stock go from here? we go behind the numbers and we'll try to find out in a moment. stay with us. ♪ at farmers we make you smarter about insurance, because what you dont know can hurt you. what if you didn't know that it's smart to replace washing-machine hoses every five years? what if you didn't know that you might need extra coverage for more expensive items? and what if you didn't know that teen drivers are four times more likely to get into an accident? 'sup the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum -bum ♪

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♪ coming up on "the half," with stocks at record highs, earnings the talk of the day, is there any reason to be out of stocks? we'll debate that. plus mayho and manley, they're here. and rick reeder, in the "halftime report" playbook. carl, we'll see you at the noeft a bit. as we continue to watch google, as the stock hits $1,000 for the first time ever in early trading, currently at 997, how much higher can it go from here? mark newton is at gray wolf execution partner, great to have you with us especially today. >> thank you, carl. >> we've had this discussion

about tesla at 190, chipotle, we could talk about 500. what does 1,000 mean for google? >> it's psychologically important. the stock has gotten overbought short term, so it will be tough to progress until you see consolidation. >> the year-to-date gains, it's not anything spectacular. it's akin to a stock exchange, it's a molex. is there something special about this month, this week? what time period do you think is overextended? >> it's interesting you say that, because google has had a tradition of making pretty dramatic price spikes in the month of october, if you look back over the last couple of years, really in 2007, 2009, 2010, even 2012 last year, the stock actually just moved into all-time high territory last year, around this time when it broke above the 750 level. a couple of different charts, putting this in perspective,

looking at the daily chart over the last five months, the stock has been range-bound since may, similar to indices like the dow jones. and just today, obviously, we've taken out the highs, up 13% on very big volume. volumes about 5 to 6 times what the average trade something for google. it's a bullish move to see someone take out highs on big volume. my only fear is that investors looking at the stock, thinking they've missed it, and now is the right time to come in. it's difficult to get in the stock here before the stock consolidates, a bit, which i think is very likely in the next couple of weeks. >> mark, once we get through the consolidation, though, a lot of people are trying to say, conceptu conceptually, how much further can we go? the analysts were talking about how the company is firing on all cylinders, and haven't introduced glass to the public yet. once we get through some choppiness, are we talking 1500? 2000? what do you see as feasible? >> a couple of different things to look at. if you look at how the stock has

traded over the last seven, eight years, i think the stock from 2007 until 2012 was really in a pretty large bullish base. and so, we've just broke out of that last year. so it's still really ascending and moving higher. the charts continue to look very bullish on an intermediate basis, so my thought is, if you pull back down to 975, 940, 950, i think, would be an excellent area. my target is 1,250 on an intermediate term for google, and that's where investors might take partial profits. >> i have to throw one s&p question at you. >> sure. >> just a couple of weeks ago we were talking about holding 1,685, right? we were talking about the august lows, the 1,630 level. >> right. >> does having avoided that, obviously the shutdown makes it cloudier, but are we in the all-clear having not breached those or violated those lows? >> i don't think so. complacency has gotten very, very high in the last few week,

not just technical reasons, vix, and it seems like it dropped to the lowest level, and nontechnical reasons, like the debt ceiling default, now being kicked into next year, people look at the fed taper as being postponed, so everybody thinks right now it's all clear. the indices have gotten very overbought in a short period of time without consolidating at all. if you look at historically when the government has shut down, typically a 4%, 5% pullback s, d the dow has seen none of that. it just continues to charge higher. and so, we are nearing levels in my opinion on the s&p up near 1,745 that should cause at least some consolidation over the next several weeks. >> yeah. >> and we're getting towards a bullish time of the year seasonally, november and december, it's tough to fight the indices. all of the technical problems we discussed a month ago, regarding negative weekly divergence, those are still important. that he haven't been resolved, but they're postponed until next

year. >> all right. we have to leave it from, mark. >> okay. >> i'm sure we'll be having this discussion as indexes prove that their teflon, carl, as "usa today" was saying, mark newton from greywolf. thank you, sir. >> thank you. google isn't the only company moving on trader. next up, "earnings squad" is here with the news you need to know. [ passenger ] airport, please. what airline? united. [ indian accent ] which airline, sir? [ passenger ] united. whoa taxi! [ british accent ] what airline, then? [ passenger ] united. all right. [ spanish ] what airline? [ passenger ] united. ♪ [ mandarin ] which airline? [ passenger ] united. [ arabic ] which airline? [ passenger ] united. [ italian ] where are we going? [ passenger ] united. [ male announcer ] more destinations than any other airline. [ thai ] which airline do you fly? [ passenger ] united. [ male announcer ] that's great, big world friendly. ♪ they always have. they always will. that's why you take charge of your future. your retirement.

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welcome to the "earnings squad," and i'm melissa lee, and kayla, and jackie. the scorecard. 25% of s&p companies have reported. 62% beat the eps targets. 13% have met estimates, 24% of. >> reporter:s have come in below forecasts. we'll kick it off, morgan stanley, one of the last big banks to report. kayla, a lot of smaller banks out there that may give us a good read as to what's going on here. >> and a good read on the consumer. two of the bigger regionals, capital one, suntrust reporting, and if you looked at the actual reports, you would think that capital one beat estimates on the top line as well as the bottom line. suntrust hit with a big litigation expense. even without it, the company's 66 cents a share missed, but look at the stocks. you see capital one is actually down slightly, and suntrust is up. the fngts health of the customer is the reason why. of all of the loans in suntrust, mortgages, consumer loans,

credit cards, only .5% are so delinquent the company has to take a charge to get it out of the portfolio. at capital one, the business is mostly credit cards, but the total charge-off, down from the last quarter, but up from a year ago. in an improving economy, that's not something buyers of bank stocks want to see. 1.29% of the portfolio is delinquent, so it has to be charged off. 1.75% a year ago, fairly high, not moving in the right direction. >> does it speak to the card holder specifically at capital one, as opposed to bank of america and jpmorgan? >> right, the quality of the customer they offered credit casheds to, it was a lower-quality consumer. the big banks have been moving toward, you know, those above 700 fico scores. capital one is operating just below there. there may be an issue with the credit cards and the type of customer. face not looking good. >> and the oil sector.

schlumberger trading higher. >> two of the big oilfield services, and we're watching for halliburton on monday, as well. schlumberger beating. 20% profit growth, part of that coming from strength in the middle east and asia. that's important in the middle east specifically, because they're talking about iraq. expect this company and also others like it to benefit from production in that area. also, gulf of mexico has helped this company in the past and helping it going forward. we're seeing recount increase there, companies like chevron, an darkco, shell, building new drilling platforms and watching that into 2015. looking at baker hughes, the situation is different. strong presence in north america. that's where the sales were the strongest. but also with baker hughes they had a little bit of a challenge in the natural gas area, but analysts are saying it's something to watch, not to be worried about. >> all right. that does it for us at the "earnings squad." if you want to join us, tweet

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call it the "spy who subbed me," a tesla spokesperson confirming to media outlets that it was elon musk who spent $989,000 to buy this car from "the spy who loved me." currently more of a prop, musk says he plans to upgrade the car with a tesla power train in an attempt to make it transform drive-and-dive for real. only elon could carry that off and have people believe it would happen. >> i'm surprised he would want that original model, as if it would reveal something. incredible. >> yeah, you were mentioning the divergence between the dow and s&p. if only google were in the dow, we might see different reaction. right now, google is adding about half of the s&p's gains. >> the dow all-time highs hit back on september 19th, so a significant period that it climbed. >> you think it's more

interesting, chipotle near 500 than google near 1,000. >> google, it's a world-changing, disruptive stock. chipotle, a good business, building a burrito, and raising the price. >> there are skeptics out there. we'll see what the coming quarters. in the meantime, good weekend to you. >> you, too. let's get over to post nine and scott wapner and "the halftime." >> here's what we're following. great google! is now the time to take profits or stay long? inside the playbook, designing the winning move and fixed income with one of the street's best, blackrock's rick reeder. we look at jpmorgan, and stronger economic growth in china. and we debate, is there any reason to be out of this market? it is "halftime," and let's play the