of the black ribs and the red stitching and i think it goes well with the black face. >> what's the price tag? >> the this is around $3,000. >> thank you for being here. appreciate it. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good morning. welcome to "squawk on the street" i'm david faber with jim cramer. we are live from the new york stock exchange. carl quintanilla is on assignment in sochi. there's the music. it's a little late this morning at least in my earpiece. let's look at futures as you can see we're listening to the music. the s&p and the dow and the nasdaq, how is the ten-year yield looking. higher than yesterday. 268 and we'll check as we always do, europe. almost all in the green.

let's get to our roadmap this morning right back here in the good old us of a. twitter major concerns over user growth sending shares down sharply after the social network's first earnings report as a public company. while twitter is slumping green mountain coffee seeing plenty of green, rallying after coke agreed to take a 10% stake in the company and help launch an at-home cold beverage system. shares of gm down a bit this morning after earnings and revenue were well below wall street estimates, although restructuring maybe a part of that. gm january sales also fell 12%. that was thanks in large part to what they said was the bad weather. of course we had that news earlier this week. all right, let's start with twitter. shares are down sharply. let's see. right here i got 51.26, 51.34 bid despite posting better-than-expected fourth quarter results in its first financial report as a company. concerns about the user growth is weighing on the stock.

twitter said it averaged 241 million monthly users in the fourth quarter below street forecasts. on last night's earnings call the ceo acknowledged the need for twitter to improve the user experience but added he is optimistic that user growth will improve. >> we believe that the cumulative effect of the changes we make over the course of the year along exactly the kinds of dimensions i talked about will result in changing the slope of the growth curve. we have every confidence that that will happen. >> jim, it's funny. we talked to costolo right here, day one, of course, of it being a public company and i asked him that same question. we can get to that in a minute. user growth has been the concern amongst investors and frankly amongst i think management as well, that is, it's not moving up as fast as they would like and this is where people seem to be focussed this morning sending the stock down sharply. >> you can't -- you live by the sword, you die by the sword. if you come in and say over and

over again it's average user growth and you switch directions and you start talking about how advertisers like it, we're not going to do that. we're not going to suddenly say, do you know what, forget about user growth. you told us to do user growth. there's a moment on the conference call kind of a magnificent conference call from people who don't like the tock, ross sandler from deutsche bank, rigorous guy, i hate to beat the dead horse, you said the number one priority is driving mau acceleration. the dead horse doesn't usually come into the seventh question. this was the second question. we found out there was a dead horse right from the get-go. bad. >> this has been the question. of course, i'm looking at the research this morning. ubs i believe lowers the rating to sell. engagement worries move to the fore. ken sena at evercore, user deceleration overshadows the beat. pivotal research, you know, advertising, good. users, not. >> no. the ubs negative goes negative.

steifel goes to downgrade. the equity research from wells fargo incredibly negative. okay, let me just be -- >> but advertising was all right, right? >> okay. let's take it at that. if you want to value twitter on the same multiple on 2017 earnings that you would multiple what you used for facebook, you're talking about a $20 stock. now, that's inconceivable to me because i'm sure someone would come in and buy the company and bet they can do a better job. >> b talking about facebook versus twitter. facebook has somehow become a utility. everybody feels the need to -- >> 3.4% user growth if i recall at facebook which is less than what twitter had but off a far larger base when you are getting to 1.2 billion people. >> first decline of 3.4% year over year in the timeline views, remember, that matters for the advertisers. only 1 million sequential growth in the u.s. a lot of international where people feel it's not that great. you can't monetize that.

>> it was not as strong and it expects to be contracting almost. >> you need a long contract i was thinking about with twitter, they are decelerating too fast. is twitter a fad? no. twitter is heavily used by some people. >> it's not a religion in the stock market. i said yesterday it was just a cult. >> when i say cult, people don't understand, when i say cult, it means you can't value it. suddenly you can and that's the problem. >> enterprise value on '14 sales 30 times after the correction last night we'll see. so, that's a lot. i mean, facebook trades at about 13 times which is still enormous multiple sales. >> facebook has a clear path to earnings, david, that are really kind of explosive. >> 208 times and facebook is at 22 times ebita. it's a ten-fold multiple to facebook's enterprise value over ebita. >> what happens is we're stuck with the four walls of the canvas just like any other stock. and under that guise twitter's

very overvalued. under the guise of heat, momentum, calories per share until this morning, twitter -- until last night twitter was terrific. this was a jaw-dropping number. the stock was up six when the head lean came out but that was not what matters. it's the monthly average users and i was disappointed. >> i asked the ceo the very question when he sat here during day one of that exciting initial public offering, i said, what about these concerns about your slowing user growth? here was his answer -- >> there's an entire set of strategies like the onboarding experience into twitter from that moment you hear about it and you come to the service and sign up to really getting it, understanding it, and becoming active on the platform, one of the fascinating things about twitter is that the language of it, the scaffolding within it really is an evolution of how users have learned to navigate within that 140 character space. but that language and that scaffolding can be confusing and opaque to users who come to the service for the first time. it's about developing processes

and capabilities that allow the flexibility and power for users to navigate within that space. but making it very clear and simple to new users who come to the platform. >> told you. >> he said we need to make it easier to figure out, why do i want to do this? >> whenever we hear the new verbs, scaffolding, what he was saying it may be too hard for the next generation of people to use. they have to make it easier and then i think the advertisers would be more comfortable. they have to erect new scaffolding. >> bricks is falling on the -- >> we don't need to fix our buildings every five years and bankrupt everybody. i hate local law. >> we've spent too much time on twitter versus disney. >> i want to talk disney, but it says we need to talk green mountain coffees, let's do that quickly and we'll get to disney and sony after the break. can we talk green mountain coffee, all right? i know cult stock whatever you want to call it heavily shorted, but, by the way, that stock is up, i mean, the numbers are

incredible. premarket. why? well, coca-cola agreeing yesterday to take a 10% stake in the company. that value was $1.3 billion was the stake part of a ten-year agreement which coke is going to help green mountain launch an at-home system for cold beverages. coke looking for new avenues. they put a valuation tag on this thing even though they bought the stock at a bit of a discount that was not bad at all. you got a lot of guys short. this thing was a monster. >> are you talking about gm, cm? it's green mountain, coke, make? what people don't understand i've been short companies and i was -- i shorted a company that had the better mouse, literally better mouse, systemics, okay? and i knew the mouse didn't work and i said over and over again, short, short, short and later a major pharmaceutical company bought that company. no, that can't be. coke obviously did not care whether keurig had peaked. they're using it as a vehicle.

>> have they not read david einhorn's notes and letters? >> coke, you idiot, undo this, no, they like the distribution system and they'll blow it out internationally. the case against green mountain had to do with legacy grown mountain. this is new green mountain. >> former coke executive who runs it moving into a lot of different central distribution systems if you will, soda stream, of course, getting hit yesterday. >> darn. you just made the great point. new guy came in with a vision, obviously had this ace in the hole the whole time, the shorts continued to bleed that green mountain was what it always was going to be which is this keurig. and suddenly they've got keurig, too. and show the short case which, by the way, will be vociferous, when they get in, the stock doesn't go lower, it gets higher, i moan after. >> can we make it -- as it

watches its core product certainly stagnate the rise of so many other kind of fitness related drinks? >> do i want to buy it up 30? no. but do i think the case to be made negatively is the same this morning? well, only someone who has really got his head stuck in the sand would say that this is a bad company that coca-cola made a big mistake with. coca-cola is warren buffett. it's an international company. coca-cola decided that green mountain should be blown out internationally. by the way, coca-cola, how about my -- hat's off to them. they see their business slowing. >> that's what i'm saying, exactly. >> i would buy coca-cola on this. >> you would? >> i was worried that the growth has been terminal. i don't think that way. >> they are looking for different opportunities. >> all right, well, gmcr will be up and coca-cola may be and soda stream as well. and gm reported 67 cents a

share. and it seems to be softer-than-expected sales and growing dealer inventories and the new cfo was on "squawk box" this morning. >> from a wall street sell side perspective i think two things. one, book, book tax rates were higher in our actual results than what was comprehended on the sell side. that was one-third of the miss. the other two-thirds fundamentally related to the restructuring costs i spoke about in germany associated with the closure. >> higher tax rate, restructuring costs. what do you think about -- the stock's down a bit today. >> why don't we venture into the world of truth than bashing gm. the travel trust owns it. revenue's rose 3.1%, 40.5 blgd and people were looking for 40.9. i hardly regard it as a big miss. the german restruck is very important, the ebita adjustment,

the numbers were good. >> they were good. they were good. >> ebita is what the stock would trade on and it wouldn't shock me if it finished up today. >> interesting, i noticed the third slide. they want you to look at it. >> rigor. you have rigor. >> i have tried. >> the analysts were bashing it this morning rigor mortis. >> lack of rigor, perhaps. >> people come out, look -- >> overall auto sales not great. >> no. >> weather, horrible. phil lebeau tweeted that great chart, the west was fine and when you get to the midwest sales were down and the east sales were down. so certainly weather for january. >> obviously toward automotive, cash, marketable securities, $27.9 billion versus 26.1 and yield is 3 1/2 percent, it's ahead of ford in europe in terms of restructuring. it's just not bad. >> it's not bad. >> it was at 40 and goes down to

33 has a good yield, she'll tell a decent story. is it disney? no, nothing's disney, that was an amazing call. >> and, in fact, we'll talk about disney when we get back from a break. sony also, by the way, stretching up its own restructuring splitting off its pc and potentially tv operations as jim said disney's earnings, wow. wow is all we can say. have you seen "frozen" yet because apparently everybody else has. >> everybody else has. >> there's a look at that as well. my daughter still like "tangled" better. another look at futures when we go to the break we're poised for a higher open and we're "squawk on the street" and, yes, we are live from the new york stock exchange. when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance and saving at the pump

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[ male announcer ] don't wait. call today to request your free decision guide and find the aarp medicare supplement plan to go the distance with you. go long. ♪ sony announcing its cutting 5,000 jobs and going to be selling its personal computer business and tv operations still struggling. in fact, it lost $7 billion over the last decade. you know, they're trying to take their fixed costs down. the company also predicting losses for the fiscal year ending in march compared to analysts forecasts which had been for a profit. we know this name in part because there was -- in the spring if you recall, summer, dan loeb big position, pushing

them to do a subsidiary ip of sony entertainment. they came back in august with a detailed letter saying, thanks so much, dan, but all the directors of our company continue to believe that owning 100% of the entertainment business is fundamental to the sony success. the problem is not with entertainment which did shine a light on it and there's also real values there but making tvs is not great business. >> no, we knew that from zenith, didn't we? one of the things i struggle with with sony is, well, what is it that we really want? it doesn't have anything that i want in stock. no growth. no vision. no clear path to profitability. when we have companies that are doing things that are just amazing. let's compare this to -- >> but trying to take them back to the days of innovation, think about it, we all know the walkman. >> the walkman, didn't you just say everything? >> i know. >> i'm struggling. i'm struggling. the dna here is bad. it was great. i just don't see a lot here to

own. >> right. >> i wish i did, because the stock has come down a great deal from when a very smart investor got in. >> that's an incredible chart there. >> i remember when michael price told me there was a lot of worth. the problem is sometimes the business changed. remember when warren buffett said he didn't like technology because something else would come out. >> not a lot of recurring cash flow in technology typically. >> and warren buffett not looking good on the ibm or the exxon buy. >> no, he's not. no, he's not. >> companies, we need growth. the whole exercise in 2014 so far is who has hyper growth. yelp has hyper growth. disney has accelerating growth. >> let's talk about disney, shall we? ? sure. >> because it was a strong quarter for disney. bob iger joining us i think after the bell yesterday on cnbc. it was on "the closing bell." espn advertising, up sharply even with worries about, you know, ratings and subfees and

huge. >> stop worrying. >> you are talking about a company that owns lucas films, pixar and marvel and marveling at "frozen." enormous box office. >> good franchise. >> a froon chice anchise being . and abc not so good. network is not good. >> by the way, interactivity was good. there wouldn't be a time when that would have been the dominating story, but you have franchise, you have rollout. he spoke very clearly about how three kind of movies he's going to be making and he's got the animation which is obviously for "frozen." fantastic. he's got this amazing, incredible marvel rollout. just going to be good, good, good. and now all people are going to say, i got to held on to this because 2015 is "star wars" and he's saying "star wars" was going to be amazing. this was the best quarter disney has ever had. >> ever had. and parks also strong up 6% and

they invest in the parks but then they get a return pretty quickly even with the bands they spend 100 million bucks to come up with the new technology in terms of bands but it may increase the parks. >> bob iger said i hate to use synergy a much better word is our ability to leverage all the characters and movies, this is one of the more sinnergistic companies. you like "lion king." this was bigger. "frozen." then you bring it to broadway and you develop a theme park ride. the path to long-term profitable at disney is amazing. it remains the single best buy for your kids. >> people think, you could do as much as five bucks a share on the eps in the not too distant future and you are talking about 100 bucks. >> remember when we were worried -- we, like i work for disney. when there was a worry about espn and fox sports.

>> yes. >> didn't come up on this particular quarter. the s.e.c. -- people love college. espn has so many things going for it and, of course, it cannot be dvr'd. >> and they've done an incredible job on digital. are we done now saying all these nice things? >> can we go home now? >> we can go to espn and maybe they have a show for us. >> business on the inside, this is about schefter. this is about schefter. my partner in -- >> you are a great fan. are always in bristol, connecticut. what did you do this week? i was hanging around the espn studios. >> i'm going for the three-peat. i want my fantasy twice, schefter, shout-out, thank you, mort, if you are going to fantasy partner with anybody they are good partners. >> disney shares will be up this morning. >> but we're not done because you better get to yelp right now. >> going to "mad dash." >> why do you hurt me? at espn i can blow off a

commercial. espn i can blow a commercial out. not here. >> no, not here, no way. we got the "mad dash" coming up, sounds like we'll take a look at yelp and a lot of other things. here's a look at futures before we go to break.

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quarter. company told us to measure it by revenue growth as opposed to average users. and repeat advertising and leverage being there they are getting more ads for more users and the cost of selling those ads is going down. it's called leverage. it's a thing of beauty, this company has arc and accelerated revenue growth and grew 72% year over year and last year was 65%, congratulations this stock is going to $100 in a straight line. >> bread and breakfast and a restaurant. >> we all fear yelp. my mexican restaurant in brooklyn has several good reviews on yelp. the inn if yelp writes a series of negative reviews, you are hurt. yelp's going to 100. >> going to $100. >> the other one i want to talk about aol, i used the term leverage, viewers must know what it is, it means you have trends. you have unbelievable video numbers coming here for 2015 and at the same time expense

reduction. expenses in 2009 were $307 million and they are down to $40 million. >> they got down to patch. >> no longer an issue. and i go to tell you tim armstrong delivering, delivering, delivering and, yes, david, even dial-up seems to have stopped going down. so there are a number of people -- >> incredible people are still paying -- >> a lot of comatose people paying. >> ad revenue grows 23% fueled by pricing growth and double digit third party network look at these numbers, you have we are talking 63% growth in third party network, abc, cbs, nbc, fox, time warner and aol. it is going to be a preferred way of tv. in 2015. with search attract -- attached to it goes much higher. >> really? if that really is true maybe the market value is -- >> microsoft will have to buy this company for $75 a share to get back into the game. microsoft, new fella, $75 you'll get back in the game. hey, green mountain just got a 10% investor in coke!

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all right. got the opening bell is coming up 15 seconds. by the way, broader market, you know, we haven't talked at all about that. >> well, i mean, look, there's a fabulous piece in "the usa today" and it's becoming the kind of paper of record. stock half up and down 10%. i mean, that has the feeling if you take a look at the employment number which we didn't talk about this morning and you get any relief tomorrow, then people are going to say, do you know what, geez, a lot of stocks are down 10%, maybe we should do some buying. google. google. >> i want to talk about google. >> do you? >> yeah. here at the big board you heard it nyse and employees volunteers and streetwise partners help low-income individuals realize their potential. and those are the circles in jim cramer travels, elite travel.

>> kohl's what a horrible number, minus two's amazing. amazing 30 good. costco how did they do six? the big negative here we felt that retail was finished. costco and kohl's are telling you, do you know what, you think we're dead in the water? you think we're finished? >> it was strong. >> it was not strong, it was monster. >> back to the big questions about retail, then, we get kors yesterday. we get today costco. kohl's, how do i make sense of this environment? should i be saying, well, the consumer is really not as weak as i think even though a lot of reef ta retail is? >> i think you have to do that. what you have to say is what we did is factor in the retail and falling off a cliff. doesn't mean that retail is doing great. but the fall off the cliff thesis just disappeared with a couple of these retailers this morning. >> including as you mentioned costco. let's get to some of the other

names we've been talking about all morning. let's get to google. mention it now. google not doing much, but did you ever hear this name, susan wajeski? >> isn't she the genius behind youtube? >> she's -- >> we talked beforehand. we actually talked. >> by the way, her sister is married to sergey brin. >> really? >> she was there at the beginning of this company but apparently big deal that she's running youtube which we know is contributing more and more to the growth and not to mention the future growth of google. >> and what is the greatest fear of anyone in media? that they decide they make money with users. because youtube is probably indispensable for younger people. it is their tv. i was on buck marshall last night, they keep rolling out buck marshall, the chipotle anti-food chaser, youtube, we all go to youtube every day and we don't pay. how great. one day we may actually find ourselves watching things we

don't want. called advertisers. >> one day you will have to use it to watch the nfl. now, cbs took the thursday night package. they'll air eight games, produce 16, of course, the nfl network will also have thursday night, but one day it's not too hard to imagine google steps in. >> what would happen if google decided to pay $5 billion for the european rights, in other words, watching, you know, google? we will see an nfl game every weekend in europe is my prediction in 2016. what happens if google bids $5 billion for all international nfl games? the rights could be available. who's going to -- who can bid against google? one of the reasons why you are seeing these very long-term contracts made with the nfl is they fear that google says, do you know what, we want to be cbs. we don't want to be time warner cable. >> right. >> of course, they can be whoever they want. >> they can be all those things. in fact, they are breaking massive amounts of fiber i mean in terms of capacity to you and if you are in kc or austin -- >> it remains a large position

for my charitable trust. facebook is -- facebook and google are trying to figure out which is going to dominate in the world of 2017. and they're kind of looking at everything else out there as being pee-ons. >> twitter is down 22.5%, $51 a share is twitter, of course, we talked about it this morning. >> still well above where it came public. >> yes, well below its highs it saw not too long ago toward the end of last year. user growth is the concern here. we'll see. listen, we mentioned -- but you mention green mountain. you mention the ability of companies to change the platform and reinvent themselves. and a lot of what people believe in twitter is we don't even know what it will be. we simply think there's a great deal of power in that platform. >> look, the stock comes down too much, again, microsoft has to buy them. someone has to say, microsoft has to do something. they have a lot of cash. >> you got microsoft buying a lot of stuff. >> okay, apple, let's have them

buying some things. why i think, you just mentioned the key point. twitter has the capital to reinvent. costolo could fix the scaffolding. a little it is a difficult for people to navigate. they could change the navigation, they do have a good brand. facebook four quarters ago facebook looked like it was on the ropes. >> it's true. >> and they figured it out. so twitter could do it, too. does that mean buy twitter? it will now be valued like a company and you can't. you want it to be valued like solar city and like tesla. but you can't. now you suddenly have to put an earnings multiple on it. and maybe you can't. >> that stock's coming down a lot more than that. even at 50 bucks we're talking about multiples far in excess of anything like what facebook has. the question is whether it's going to grow into that valuation. by the way, its revenue growth and its projection for revenue is quite strong. >> don't you think that an advertiser might say, do you know what, maybe i'm not getting the value that i'd like from

twitter or do we not really know yet? i say that because if you're looking in the future and seeing the slowdown, you might not want to be able to put more money in a long-term contract on twitter until they fix the scaffolding. scaffolding. >> listen, i know. scaffolding. >> scaffolding. >> we got plenty of that. scaffolding here in new york city, please. we walk through tunnels. >> it's everywhere. you can barely see -- >> it's on the upper west side and don't get me started. bill de blasio is probably in favor of it. >> green mountain coffee until today was one of the great shorts out there. >> shares up 33.7% you are looking at right there. >> every metric was going lower, but the guy kelly was a top-level guy at coke. he wasn't a pee-on, i'm using that, at a florida bottling company. >> it wasn't about we deliver coffee in little things, it's about we are a delivery system for all sorts of beverages. >> hot and cold. >> cold and hot. the same guys that were short amazon in 1998 because it was

about books. >> yes. >> it wasn't about books. >> wasn't there a 948-page short story deck on green mountain coffee? well, you want to throw that away because kindle has arrived green mountain coffee. >> all right. >> coke, i'm sorry. >> green mountain coke. shares of -- where we want to go? gm we can take a quick look at it. >> i told you it was fine. >> down 1.5%. >> what i do is do the darn work. is the work fun? is the work fun to do? no! it's a huge drag to do. but i go back to ebita which you taught me. adjusted losses were $300 million versus the 400 pl$400 m to the $450 million i was expecting. people say they are a bunch of idiots and they're not as stupid as they used to be. >> shares of vodafone, actually better-than-expected numbers out of the giant european carrier, of course, the deal to sell the 45% ownership stake in verizon

wireless. will close in the next couple of weenk weeks. shareholders overwhelmingly supporting it in a vote last week. shares up sharply, we'll be speaking to the ceo next to on "squawk on the street." >> interested, not interested? >> they got a six-month interregnun. >> did you just use that word? on the disney call they used taughtological. i don't want to have to get a dictionary out to be on your conference call, my friend. >> but you can follow anybody. hell, you're the one that usually uses those words. >> not only that it was the correct use of the word. >> was it? >> yes. >> shares of disney, up almost 6%. >> and how about merrill with a gutsy upgrade yesterday into the weakness at $68. congratlations for some value added research. how did we not mention that? come on.

how is it not we have not mentioned it? >> it looks like apple is not coming up with its own content delivery system and akami remains the backbone of how you are able to see netflix around the clock and level three. >> that's the concern, though, isn't it that people start to develop their own in-house? >> it's not happening that's why they have the hong-term contracts and that's been a big short squeeze. level 3 is finally back from the dead. you remember level 3 from the old days? >> yeah, sure do. >> geez. >> yeah. >> finally i did want, i don't know if we have soft bank. i just wanted to -- >> soft bank? >> sony soft bank. sony will be down, it's already been trading certainly, got those shares down. we've got them down 1.57%. take a look at softbank, that's up now, but, man, that has been moving down. massa sun, remember him, of

course, this is his company. >> is the tall ceo. >> the japanese chart on softbank, it doesn't trade here. >> can you get a deal done? >> i don't think so. i heard they got a beat-down from the s.e.c. massa's son. >> really? beat-down? >> beat-down. >> worse than the broncos/seahawks beat-down. are you telling me that he's peyton manning? i hadn't thought about that. where is twit? the >> a lot of people playing softbank for the alibaba ipo because they own an enormous amount of alibaba. >> do you mind if i bring us back to the us of a? >> what are you? don't be gi jingoistic.

and let's go to courtney reagan. >> good morning. we've got a quietly positive open, the dow up about 86 points, the s&p up about ten points. pulled back just a little bit here right now. relatively quiet as far as the big, big concerns that we've had of recent. emerging markets relatively quiet. moody's upgrading mexico and providing a little bit of comfort, we got the better-than-expected jobless claims this morning but we've had a lot of economic data that hasn't been so good either. saw some strength this morning, draghi biving hints the ecb is not doing any imminent easing. we know the rates were left unchanged you can see the euro took a nice little pop up this morning. and we've got to talk about retailers and the same-store sales. we know it was a shell of what it once was. we don't get as many retailers that report the numbers, but the ones that do remain interesting. take a look at costco, outperforming here. very interesting numbers out of costco. really sort of shrugging off the effects of the foreign exchange

rates in the lower fuel costs, something that's very important to them. their international segment much more profitable than the domestic segment here. but expectations beating them, blowing them out of the park. limited brands, too. up 9% for january same-store sales. the analysts only expected an increase of 0.5%, and they say it will be slightly above the $1.60 previously forecast. things weren't great at kohl's, holiday sales slightly negative and january much, much worse than expected, of course, blaming weather just like many others. but also saying that profit is going to take a hit due to expenses from their e-commerce business, not what people want to hear from kohl's, it doesn't look like it's around the corner anytime soon. and ann, inc., putting out prelease today. tepid sales, slower consumer dragging them down even though they expect the results to be

higher than they were last year, how far, they are going to enter q-1 with clean inventories and that's been a concern when we look at the retailers that struggled to make their way through the fourth quarter and we'll check back in later but for now, back to you. >> thanks, courtney. >> the stocks are up because we all felt january was a disaste . and l-brands correcting and lots of different senses of went on in january. maybe we got too gloomy. this market is the about being too gloomy. >> let's move from equities to bonds and head over to the bond pits where rick santelli joins us from the cme group in chicago. good morning, rick. >> good morning, david. a two-day chart we're not going to start with our market. we'll start with the bund market. a couple of things should jump out at you, rates are moving up a bit. remember they had an ecb meeting no change. they had a bank of england meeting no change.

they had mario draghi press conference really no change. we're about ten basis points from a complete of yesterday's low on those yields on the bund to where the high yield is today. open the chart up and you can see year to date, you know, it has turned. has it broken the pattern of lower rates i don't think so yet but that's a matter of opinion. if we lack at tens now two-day we look at our low yields yesterday, high yields today and we are up several basis points. there's an eight basis point spread and. ours up longer to november it puts a face on why the areas that held and also remember there has been a loss of purchasing momentum, rates down. i wonder why. probably because we have a big report tomorrow. very big report. big implications. you could talk about weather, talk about last month being weak and talk about averaging the two. talk about temperatures, snowfall. but in the end tomorrow's knee jerk reaction is still going to be large for the fixed income markets. left switch gears to currencies and it's about the euro. if you do look at the euro

versus the dollar, obviously 8:30 eastern we see the euro strengthened and strengthened well from 135 to 136 and it's somewhat sticking. if you open the chart up year to date you can clearly see on this chart that the euro hasn't had a major trend and the dollar index mirror image hasn't had a major trend. here's where the major trends are, look at the euro versus the yen whether it's the dollar or the pound this is a trade that we continue to see as one of the favorite charts on the trading floor. speaking of favorite, david faber back to you. >> thank you very much. >> santelli. you are into retail today, huh? >> because i see this is a pattern. that was a leader on the way down and could lead on the way back. and banks need rates a little bit higher. i need rates higher. you want to see the ten-year 2.75 and only time in my career i wanted rates to go higher in order to show us it's not the end of the world. >> and we got more growth than we think. talking about retail, retail

sales report cards are out after the bad weather from january and we'll get reaction from charles koppelman, the former ceo of martha stewart omnimedia. "squawk on the street" is coming right back. for retirement.

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welcome back to "squawk on the street," we are watching crude futures trading higher. west texas intermediate popping after the jobless numbers today and also along with u.s. equities. we are looking for that unemployment number tomorrow. traders watching that closely. in the meantime the brent prices being impacted by some supply issues in libya. west texas intermediate above $98 a barrel. in the meantime, got to talk about nat gas seeing a little bit more of a pop today ahead of the department of energy storage report. we'll have that number out at 10:30. last but not least we're watching gold futures as well trading slightly higher. traders are looking for a catalyst but there's nothing in the marketplace to move gold higher but we are staying above the key support level of 1255. david, back over to you. shares of twitter are tumbling after its debut earnings beat wall street expectations but as we've been talking about all morning user growth did not. that brings us this morning to

the squawk on the tweet, we're asking you to put on your creative hat and tell us why is driving it today. town 21%. a reset in a way for twitter. >> you have to think they'll fix the interface so more people come. obviously they're losing a lot of -- >> kind of hard to -- i mean, is the addressable market just not simply as it would be for a facebook or any other period? >> a lot of people felt it was son of facebook. facebook itself. a lot of the advertisers getting great results here the advertisers will start questioning it. they have to -- i think twitter's a great platform. i know a lot of people are on it. i'm on a lot. >> obviously you're on a great deal. i use it a lot. >> it's a great communication, one, to the world but it looks like that they have to come up with something that makes it so another group of people want to come on because these are decelerating numbers. there's no denying it. >> decelerating user growth has been the story, by the way, was the story into the ipo, something we talked to the ceo

about and it continues to be the concern. >> it does work well on mobile. they have a lot of very smart people there. could they reinvent the company. i'm not saying buy it right here. we know the history they've all been down 50% at one point. i don't think twitter will go down that low because it's not that bad. but i do feel that the problem here is that they told us to focus on the metric so we did. if they'd told to us focus on advertising, we might have said, listen, we don't care about the monthly average. they have a lot of international. i don't know if the advertisers really want that. >> right. >> you know, versus yelp which is an incredibly targeted way where jerome stoppleman has really come up with a virtual circle because the content's free because you put it in and you have salespeople and all they do is call everybody that has a review and say, listen, maybe you ought to link yourself in a mobile basis to the review. >> right. twitter a double from its ipo price. >> that's important. we'll have 6 in 60 coming up right after this break. welcome back. how is everything?

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time for 6 in 60. let's get right to it. start with rocket fuel. >> goes hold to buy. this is programmatic advertising, the genius that runs the actual rocket cysigh

scientist. >> five below. >> i hope we can get momentum but the stock is in the penalty box. >> pandora is down today? >> had fantastic numbers but they threw cold water on the future. i think they did underperform. >> what do you use? what's your -- >> sonza. >> really all right. selloff? >> they all say it's overdone. i didn't like the conference call. >> the "new york times" digitally. >> when i start my -- every morning i start off with this 760,000 people are subscribing to this and the redesign is working. forget advertising, this is a story about circulation. >> also a story about trying to make it in the new media world. >> and they are succeeding. the best gated product. >> 760,000 subscribers. we've got one more. >> perigo. >> these are the guys that do the knockoffs, but one of the reasons why the stock was up very big before you need to see

cold and flu season. good cold and flu season which means a bad cold and flu season for everyone other than shareholders. >> what do we got coming up on "mad"? >> one of my favorite stocks a huge home run has been brunswick ever since sandy which destroyed a huge number of boats, when you buy a boat, you have to come out with an insurance policy which says that you get a new boat. >> i didn't know that. >> and 60,000 people who let boats destroyed. i have a boston whaler and you'll love it. >> i did not know that. so many things yet to learn about you. simon, what do you got coming up in the next hour? >> the twitter selloff is it a buying opportunity? we'll talk about retail through this very difficult weather season the former head of martha stewart living will join us and the changes to coke, what does the deal with green mountain mean? hour two of "squawk on the street." ♪

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and good morning. welcome back to "squawk on the street." our roadmap inevitably starts with twitter, shares of the stock falling sharply after the social network's earnings report as the public company disappoints investors on subscriber growth. find out how you should play it now. all right. while twitter is in the red, green mountain coffee seeing a lot of green shooting higher following coke's agreement to take a 10% stake in the company. we'll tell you what that all means for the beverage industry and retail as well. ceo after ceo blaming the weather for disappointing sales numbers, but is it really a valid excuse? the former ceo of martha stewart living will weigh in on "squawk on the street." but let's kick off with twitter shares down sharply after its debut earnings as a public company, essentially beat expectations but raised real concerns over user growth on the conference call last night, the ceo dick costolo asked if it would take 5, 6, or possibly 12

years to reach 200 million users. this is his response. >> we believe the cumulative effect of the changes we make over the course of the year along the exactly the kind of dimensions i talked about will result in changing the slope of the growth curve. we have every confidence that that will happen. >> okay. joining us now we have scott kessler from i.t. group, director of i.t. group and a senior analyst at s&p iq and then we've got a senior analyst from r.w. baird. scott, let me start with you, you have a sell rating and a target of $43. you think twitter has 15% more downside from here. why so pessimistic? >> right. well, simon, i mean, truth be told, we've been, let's say, in the sell camp for a few months at this point. and one of our primary concerns has been related to user engagement growth.

we pointed out, for example, that in q-3 twitter actually saw timeline views per user as flat from the prior quarter and they dropped 10% in the fourth quarter. we think that's a worry if they make big changes we're not so sure how that's going to affect other elements of their platform. >> but, scott, isn't the reason that the timeline views this dynamic that they use is down is because they are better connecting the conversations so people don't have to refresh and the photos and the videos are directly available within those timelines? i mean, if you look at the average revenue per user, it's up 66%. >> yeah. there's no question that monetization has improved, but wouldn't you expect that to be the case given that they've really only focused on this area for the last year or two? to us when you're talking about opportunities relative to communicating with advertisers, i think you want to lead with a large and growing and increasingly engaged user base and twitter doesn't seem to have the data to support that

proposition. >> you know, colin, at the same time you've got management doubling down here. they're going to spend $1 billion on new data centers and noncash stock compensation. you are a little bit more optimistic about the company, aren't you? >> well, we have a neutral rating. and i think largely we agree with scott. the stock was priced for perfection. and the underlying metrics really do matter in that scenario. you know, we would be buyers of the stock more towards the low to mid-40s. and i think, you know, the focus is clearly turning back to the user metrics, engagement and growth. these are the same questions that investors were asking on the road show, yet the company was very focused on monetization and certainly showed a lot of success there in the fourth quarter. so, the spotlight shifts back to user growth and the stock will be in the penalty box until we get a better read on whether their initiatives are having any impact. >> scott, i wonder if it's completely fair to put all of

the emphasis on user growth here. yes, that is what freaked everybody out about this report. but if you look at some of the monetization metrics here, it's making more moan fney for the u than it has, ad revenue per timeline view up 76%, so it's not all bad. >> no, sara, and i think it would be a mischaracterization of our view to say that, you know, we don't have anything constructive to say on twitter. look, i mean, we see the potential of the platform. we see the utility of the platform. and there are a lot of good things to say, but the reality is, as colin rerges ferenced if look at the valuation along with the metrics and results provided yesterday, it's hard really to be constructive on the stock right now and that's really where we're focused. >> hey, colin, you know, between now and the next quarter, anything you can expect that would conceivably turn this around. any piece of news we might start to get from the company before it reports again that might change sentiment? >> quite frankly i think a lot

of the news that you'll get from the company are related to product and advertising related services. so, in terms of specific user growth and engagement metrics, you probably have to wait until the next quarterly report. there will certainly be a lot of conjecture on that, but trend line will have to move in a different direction for the stock to regain its multiple. >> yeah. before we let you go, scott, i mean, we should note, of course, they are going to change the way that they organize the data. it's going to be subject based and, therefore, there will be churn moving forward. i was just as a final thought trying to calculate the value of the stock overhang. the lockup that expires over the next couple of months, am i right in thinking that it's on the order of $24 billion worth of stock or have i got this calculation wrong by an order of magnitude? >> the way we think about it, we are literally upon the first lockup expiration. i think it's within the next week or so. and i think the next one, the big one is in may.

i think the way we look at it, that's just another overhang in terms of potential additional supply. remember, the company sold all the stock back in november. no one else sold. >> it's valued at $24 billion which is way over half the present market cap. is that the value of the stock that he's released in may? >> i haven't done the calculation on what the exact value is, but it doesn't sound incorrect to me. >> okay. it's good to talk to you both. thanks for joining us. an interesting day for twitter. >> thanks a lot. we're watching shares of green mountain coffee absolutely surging this morning after coca-cola announced its buying a 10% minority stake in the company. they're joining together for a brand-new venture. let's get analyst insight, and jonathan feeney is a senior analyst at janney montgomery. john forchet let's start on coke. i was reading a lot about this. i was on the call with muktar

kent with brian kelly of green mountain. transformative is how people are describing this deal. would you agree? >> i think it's too early to say that it's transformative right now, you know, if you look at what single-serve at-home coffee has done for the coffee business, it's a slightly different proposition within carbonated soft drinks. there is an at-home single-serve option it's a 12-ounce can. i think as we lk at this, it's another new channel to get back to the consumers. it's a way to maybe evolve but transformative seems strong from my perspective. >> on the new channel clearly over the past ten years north american soft drink sales have been declining. does this reinvigorate it? does it reignite it and what kind of opportunity is it for coke here in this new revenue channel? >> i don't think the carbonated soft drinks industry gets reignited from that stand point. the real issue there are so many options out there that didn't exist 10, 15 years ago, you have teas and coffees and juice

drinks, et cetera. this actually will add to this. when you go home you won't have the 12-pack of coke you'll have "k" cups or whatever they are called of dozen of different beverages. i think it may help the overall beverage industry but i don't think it will lead to growth in csds for the first time in over a decade. >> jonathan feeney want to ask your take on green mountain. clearly investors are pleased, a huge vote of confidence coming from coca-cola. keurig cold an interesting new product segment. what kind of lessons does green mountain take from keurig hot and starbucks and others that it can bring to the table here? >> well, i would echo john's comments about it necessarily being transformative. everybody already owns a coffeemaker, right? and very few, relatively own an in-home soda maker right now. but as far as lessons they've taken, i think they understand the portion of brands, the importance of having a multiple number of leading brands and starting with the leader. so, i think this is a very positive start for green

mountain as the market's telling you today. >> for the other jonathan, what does it mean for the bottlers, coke bottlers? nearly 300 of them, has taken increasing ownership of it? is it negative for them? >> i don't think we know that exactly. the bottlers will need to be involved in some way. let's remember that coke also at this point owns 70% of their north american bottling system. i think the real question, and there's a question of whether or not these k-cups could go through the bottlers and get delivered to grocery stores that way. there's a lot up in the air. what i would say is it's going to further change that relationship. because it's going to put extra pressure on coke to come up with a real good solution. i would say on the margin it's slightly negative but right now it's still up in the air. >> mr. feeney, what is your view of the green mountain stock after you've had this very big jump? are people getting a -- because coke is only taking a 10% stake at this stage, are people getting a free ride on coke's ability, its management ability,

its ability to drive it forward and promote this new channel or do you think it's fairly valued now? >> well, three things happened last night at the margin. a really knowledgeable player endorsed green mountain's business model. you saw good results that increased the success potential of keurig 2.0 and then you had this hope of this keurig cold system which really wasn't as much on the table last night so if you look at what the stock has done today, the market has done it right. it's a very transformative thing. it raises the downside case potential and provides downside protection the 70s level where coke invested. i think to move further from here we're going to need to see more positive data points about the adoption and potential success of keurig 2.0 the new in-home brewer. >> and how does it change the competitive landscape for the beverage industry, soda stream and pepsico and others? >> i think this point i think it will put extra pressure on soda stream to probably raise their household penetration in front

of the keurig cold launch so we could see lower prices of the soda stream machines from here. as far as pepsi, my guess is they'll do a little bit of wait and see. it's relatively unknown, not a lot of people have seen the technology and they can if they want join in. brian kelly made that very apparent on the green mountain conference call last night. now, that would have some financial benefit to coke as a 10% owner. but pepsi's not excluded here. my guess is they're more in a wait-and-see mode at this point. >> it will be interesting to see, there are plenty of unanswered questions as this rolls out. john and jonathan thanks so much for joining us on coke and green mountain. >> thank you. >> thank you. shares of general motors taking a hit after its disappointing fourth quarter. will the new ceo mary barra be able to get this giant back on track this year? hear what she had to shea on the company's conference call when "squawk on the street" comes back. orbiting the moon in 1971.

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check out the rally, up 124 points the earnings are good. disney is up almost 7%. kohl's, the gap, all making gains. a market that is tracking higher after so many sessions of recent losses. meanwhile general motors is reporting lower than expected fourth quarter earnings and that pushed gm's stock lower. phil lebeau is live in chicago with more on that particular play, hi, phil. >> hi, simon, the gm earnings call has just begun, mary barra just jumped on and she's going over the numbers and we haven't

had any questions from analysts and that's what we're focusing in terms of what she has to say about the earnings miss for the fourth quarter. the gm shares have come back from where they indicated premarket but still down more than 1% on the day. here's the earnings miss gm bringing in 67 cents per share in fourth quarter well below what the street was expecting, it was expecting 88 cents. on the revenue side also lighter than expected $40.5 billion, below the $41.1 billion forecasted on wall street. story here, strong in north america. weak overseas. north america the profit surged to $1.9 billion. a big part of this is stronger pricing. in fact, their profit margins in north america up to 7.8% in the fourth quarter, a big improvement compared to a year ago. but europe continues to be a problem for general motors. it's cut its q-4 losses in europe down to $345 million a loss of $800 million for the year, but earlier on "squawk box" cfo chuck stevens says they are making the steps needed in

order to turn europe around. >> we're executing to the plan that we laid out in 2012. we really got significant traction in 2013 on the cost side of the business. we narrowed our losses by $1.1 billion. on the market side, we're starting to see some positive traction there as well. we grew share for the first time in 14 years. we had improved revenue in the second half of the year. >> as you take a look at shares of general motors over the last year we should point out the two reasons general motors gives for the earnings miss, one a higher tax rate than what was expected and restructuring costs in europe that continue to weigh on the bottom line. again, we're going to jump on this conference call, simon, we'll let you know what mary barra has to say about a q-4 earnings report that came in well below expectations. simee simon? >> phil lebeau live from chicago. pleasure to see this market gaining up 124. let's get a market flash with

dom chu. >> an even bigger gainer is advanced auto parts surging after the auto parts retailer began posting a better-than-expected fourth quarter profit report driven in part by the addition of 151 new stores over the past year. the company is also guiding estimates for profits in the full year above wall street estimates that stock is up some 67%, sara, over the past year. back over to you. >> all right, dominick chu, thanks very much. up next from droughts to blizzards, this winter's weather has been absolutely brutal. we hear the retail blame the weather for bad sales numbers all the time. but is it really a valid complaint? we'll talk to retail veteran and former martha stewart living ceo charles koppelman about the headwinds they are facing after the break. tdd#: 1-888-648-6021 there are trading opportunities

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it continues to be a rough winter particularly for many investors in retail, but how long will ceos be able to play the blame game as their sales dwindle? charles koppelman is currently the ceo of kmk development with corporate and celebrity client amongst hils other accolades the former chairman and ceo of martha stewart living omnimedia. good morning. >> good morning. >> this isn't your first rodeo. you've seen winters like this before. >> i don't even think it's about the winter. i think that retailers had big promotions in november and december. online takes a significant amount of foot traffic out of retail. it's more about appointment buying and then january the

weather is horrible. and you stay home. you're on your couch and you're buying stuff online. >> it's not a temporary blip or, i mean, what should investors do. what should they look for? what works going through the rest of the year? >> i think like everything else you have to look at what is the aspect that sets one apart from another. and national brands to that, celebrity brands do that. i mean, jennifer lopez has become a national brand. obviously ralph lauren, michael kors, steve madden. if those brands are at retail that's convenient for you to go to, you're going to keep going there. online if you're not a player that is building your online business, you should be out of business because that clearly is a giant future of retail. >> on the promotions idea we've seen so much of it throughout the season. are retailers training customers to expect this? in other words, can they get back to a world where it's not 50%, 40% off?

>> i don't think they'll ever get back to that but i think this year was a little bit unusual. they tried to do all these big promotions in november and december so it was, like, an early christmas for everybody when january came. everybody was shopped out. and the weather contributed in january. >> the other question i have is online. i mean, you hear howard schultz, for instance, of starbucks talking on his conference call about the fundamental shift in the way consumers go out and shop and he said what you saw in december is going to be indicative of what you're going to continue to see and this is going to be a very, very rough year for the retailers as a result. >> i believe you're going to see that but i think there will be a lot more sales online and the retailers get bigger margins when it's online and that's a safe, terrific way to go. >> i don't know if you anything as banal as studying economics at school but they have the concept of perfect competition and it see else to me we're reaching that this with the price discovery of the internet because it doesn't matter where you are in the country, everybody can see the prices.

they can see the prices online, it's sorted within seconds. that's a game changer, isn't it? it changes retail for everybody. >> it is a game changer but i think the bigger game changer is just sitting at home and buying stuff online. i'm going to spend some time in miami and, you know, i went online over the weekend and bought stuff that i would normally be going to retail to buy. now, the retailer is still getting it, the brand is still getting it. if you're a brand this is good business for you. if you're a retailer, you've got to have those brands that the public wants. >> all right, but if i'm a mall-based retailer in this environment and i don't have a great online strategy, i'm not thinking my future's too bright, am i? >> i couldn't agree more. your future isn't that bright. >> why is macy's a standout for you? >> well, you know, macy's has marketed over the last ten years that they are the store of the stars. they have the significant brands. their commercials are terrific. they are in the entertainment

retail business. and they drive people to this their environment. it's really about traffic in your stores. >> come on. that's good for your clients. you're trying to sell them celebrity branding. that doesn't necessarily mean it's good for investors, is it? >> when you say is it good for investors. if foot traffic increases at macy's or if kohl's has a new brand that they're going to roll out and the public shows up, that's good for them and the investors. that's good for their business. >> just before you go, saturday is the 50th anniversary of the beatles. >> yeah, yeah, yeah. >> you know the beatles, you did one of their deals? >> i did. i did. i renegotiated a deal when they were having trouble with emi. i was running emi and i renegotiated a long-term beatles arrangement which brought us the anthologies and all the music since then. >> how would you describe the effect they had on culture in this country alone? >> in this country they changed the entire landscape of not just

music but fashion and beauty. they were, you know, an incredible influence and still an influence today. >> it's good to see you, sir. >> good to see you. >> charles koppelman there. straight ahead, #ouch. twitter tanking. disappointing investors, how does ceo dick costolo plan to move forward? i had to do something. i saw my doctor. a blood test showed it was low testosterone, not age. we talked about axiron the only underarm low t treatment that can restore t levels to normal in about two weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant, and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer,

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market looking very strong this morning a gain of 133

points on the dow. obviously tomorrow is the big one with the employment report but for the moment the earnings are driving us higher. let's get over to jackie at the nymex with the natural gas eia numbers. jackie, good morning. >> good morgue, simon. we're waiting for the number to come out now. let me give you context, we saw a drawdown last week and traders expecting negative 275. now, the number coming in at negative 262 so that is not as much as a drawdown in supplies as expected. we're watching the natural gas prices they're actually declining as we speak right now, 501 is the current price. traders telling me a couple of things to think about when you are looking at the natural gas trade. there are cold temperatures outside so that is going to be supportive of prices but these prices are above $5 and they are relatively high and a lot of traders are saying the cold weather is baked into this trade. it's been a very volatile trade. we've seen the margin requirements up just over the last couple of days so we've

been whipsawing around with these prices but we're watching them right now, 507, 506 that is where nat gas is. back to you. >> thank you so much for bringing the breaking numbers. twitter, despite better-than-expected results on top and bottom line, shares tanked on concerns of user growth falling over the course of the company's first conference call, cnbc's julia boorstin joins us to break down what happened, shares continued to plunge as analysts hammered executives on this question of user growth. >> shoes absolutely right, sara. it was twitter's disappointing user growth that they focused on as did the analysts' questions and one raising concerns it will take a dozen years for twitter to hit 200 million u.s. users. and another pressing for just how many people try it and leave. costolo didn't answer the question but said he's confident twitter can grow its user base. >> we have a very, very clear

roadmap across a number of dimensions that we will use to drive interaction and engagement and make it easier for a broader audience to get twitter, to understand twitter more quickly. >> costolo outlined a plan making the service easier to use especially for new mobile users. enriching twitter's media which means adding more video and photos, making it a better tool for conversations between people and organizing content on twitter around topics like news or sports. both costolo warned of bumps in the road as it makes tweaks to grow. >> it will be a combination of changes introduced over the course of the year that we believe will start to change the slope of the growth curve. furthermore, i want to point out that some product changes we could make could result in short-term fluctuations in some of our operational metrics particularly timeline views. >> the other question is just how twitter plans to grow advertising with timeline views

which is a measure of user engagement down 7% from the prior quarter. the company projecting receive new will decline from the fourth quarter to the first quarter of this year. but costolo laid out a plan to fix that. >> advertisers will launch new ad products that provide even more powerful targeting capabilities both for brand and direct response advertisers and will launch new formats that we believe will increase demand for marketers and engagement from users. we have only scratched the surface of what we believe twitter can become. >> now, twitter did grow its revenue faster than expected 116% in the fourth quarter, but wall street is fundamentally concerned that without that user growth revenue growth is unsustainable. simon? >> that was a great summary, julia. thank you very much. julia boorstin there and we'll have more on twitter in about half an hour's time. up next, disney's animated blockbuster "frozen" is heating

up the stock today. look at that gain up almost 6%. certainly the film or the movie boosted the company's fourth quarter profit, but is there another hit that you can bank on in the pipeline? find out how you should play disney now. right after this break. about retirement. ou a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard.

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sony announcing its cutting 5,000 jobs and selling its personal computer business and splitting off its television operations cutting nearly a billion dollars per year from its fixed costs. the company is also predicting losses from the fiscal year ending in march compared to analysts' forecasts of a profit. let's bring in jon fortt who has been following sony for a long time and has seen his share of sony restructurings. what's different about this one? >> this one is a restructure where they are planning to make it looks like deep cuts. he talked about cuts not just in 2014, also in 2015. the idea is to take the tv business out, make it its own

unit, to allow it to move more nimbly. wants to create some customized products for emerging markets, allow them to serve those better and to emphasize 4k and take on samsung which, of course, has all the cost advantages of all these components. then at the same time spinning off pcs which isn't that different from what we're seeing blackberry doing with the foxconn deal trying to spin off the phone risk to foxconn, he's trying to isolate some of the troubled businesses here either by spinning them off or giving them a little bit more focus within a separate unit and then invest in areas where he thinks sony can grow. he's got the currency issues with the yen which aren't benefiting them as much anymore so it's tough. >> importantly he says that his job is to turn round the consumer electronics business. >> yes. >> that's the video games which arguably have done quite well recently. it's the mobile phone operation. he still from dan loeb's point of view lumping it with entertain at the core of the

business and that's surely the controversy. is he being aggressive enough? >> it's interesting what he's choosing to spin off here which is some of the more commodity declining businesses instead of spinning off the entertainment businesses. we all see how popular content is right now. part of the conversation on the sony call was how can we position the services businesses, the content businesses so that they help lift the hardware businesses, too, something sony has never been able to figure out. >> well, apple has. >> that was the conversation during -- really? i wasn't aware that apple had a content business. >> look at itunes. >> its licensing. they have the films by demand. what else have they got? american hustle. captain phillips, they could have that somewhere else and license the prod did yucts back through into the hardware business. that's a fund dam at 2001 dot-com bubble argument. you got to bundle them together. >> i can argue from the consumer's perspective there's not that much difference between creating the content yourself and serving it up.

i think to the consumer, the itunes experience is content when you are listening to that either 30 or minute-long preview of a song when you are interacting with itunes radio, what apple has been able to do is create that experience and make it enhappens the hardware offering so they could get margin. sony two like to. >> right. what may be happening is a reversal of what loeb wanted, keep everything else and get rid of entertainment. >> because it can support the share price. >> yes. >> that's the fig leaf under which you can do what you've got to do. >> the dream that sony has long had, what if we could take the movies that we have, the songs and make our hardware products more attractive just through having those. but the problem is the consumer isn't thinking, oh, well, this is a sony movie and i feel good about sony movies. they just want the blockbuster, right? they want the blockbuster. if sony can't deliver that, it's not that much of a great value proposition. >> and reduce "spider-man iii"

to its own products when the entertainment business -- >> they do a lot of tv production. very important. >> is it very profitable. >> yes. >> what they can do is offer that content in 4k. they can offer that content in 4k packaged with the television. they are hoping that lifts that hopefully higher growth at least emerging business. >> all right. speaking of television and thanks for that, jon fortt. watching sony. shares of disney are up nearly 6% helped by the success of its animated film "frozen." bob iger discussing the performance of its broadcasting and cable business last night on "closing bell." have a listen. >> we had some softness in ratings and thus the impact on advertising. so -- and that was true on the local level, too? where you had actually difficult comparisons from a year ago because of political spending. so, there's some apples to oranges there, but it wasn't a great quarter for broadcasting. it was a huge quarter for cable and thus a tremendous quarter

for our media networks. >> let's bring in stern a.g. senior analyst to talk more about disney's results and what we can expect going forward. "frozen" was the story of the quarter as bob iger alluded to. is it a billion dollar brand? how do they build on this, a sequel perhaps? what else does disney do with "frozen"? >> "frozen" is undoubtedly a success but the story is bigger than that. not only "frozen," "frozen" is good for them because it's a successful film which is an animated film, not a pixar film, it's disney animation film and they've been working on fixing that division for a while and it's working now, but other segments where they exploit characters, consumers, parks and everything worked well in one quarter and that just reinforces the bullish view of the fact that the company can create and exploit characters be it on video games or the screen or

parks. >> i'm glad you brought up video games, because disney infinity had a pretty strong run, video game there. how big is the interactive unit? because there were some reports of layoffs actually within this unit. what does it look like right now? >> yes. well, first of all, infinity is big because that unit has been losing money for disney for years and we are on track for the first profitable year since they reported separately. i think the layoffs will probably be concentrated in other -- in other areas other than infinity because the interactive segment is not just infinity. they also tried to make console games and so on and so on, so i think that will be going away. but infinity definitely gives the company a reason to point at this segment now and say, look, we can also do it on video games finally and that just reinforces that view that i mentioned earlier. >> yeah. as you know the heart and soul of disney is really the media networks business. a 20% gain there on earnings.

it seems phenomenal the likes of espn, the ad revenue, the affiliate fees. where do you see that going? >> well, that's going to go well. i do want to point out, although it was a great quarter for them, around 40 million of improvement is because they deconsolidated some networks that were losing money for them. that's espn, star, and espn uk. but it's a good, good segment. probably top line will not be growing as fast as people thought maybe a month ago because of the pressure from the deconsolidation of espn uk but, you know, it's a very strong business. >> obviously iger takes a victory lap from this quarter. how do they keep the momentum going and how much of the good news is already priced into the stock right now? >> well, that's the question with disney, how much good news or bad news priced in. you know, surprisingly disney is a megacap company in the group, but it's more volatile around

earnings than other companies because they don't provide guidance. there's a lot of missing pieces. the quality of earnings shift from quarter to quarter. so, i would say if they keep putting up quarters like this where everything works, except for broadcasting which is never usually a part of the bold thesis, the stock will do well. but also, remember, sometimes it doesn't work. like last year everything worked but cable and cable had a pretty bad quarter last quarter. so, i think that's the major unknown here. >> yeah. i mean, the economy, too, with ad revenues and theme parks as well, thanks so much for your perspective on disney. it certainly is one of the gainers in today's session. >> thanks for having me. still ahead on the show, we'll talk to one tech investor who has been avoiding twitter since the ipo back in november. hear what he has to say about the stock. now, is this a buying opportunity? ♪ ♪

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welcome back to "squawk on the street." check out l-brands the operator of intimate women's apparel including victoria's secret and also bath and body works, same-store sales for the month of january rose 9%. analysts were looking for a gain of half a percent. as a result it now expects fourth quarter profits to come in higher than it thought in the

past. one caveat here, though, l-brands merchandise margin rate was down big due to promotions but the stock is down 12% year to date but a nice pop, 4%, for that stock today. back to you. >> and speaking of pops we should note the dow is up 164 points. hi, rick. good morning. >> good morning, simon. you know, as i watched parts of the press conference with regard to mario draghi, watched the way the markets moved, i continue to be puzzled not so much by the relationship with the euro currency against other currencies, but i continued to be really most perplexed by some of the cross-trades with the yen, so whether you are looking at the euro/yen, dollar/yen, pound/yen, it's been an amazing move to weaken the yen and i wondered how that could fit into other global aspects and how we can give our viewers and listeners some heads-up on some trades to follow. and to me, all roads this

morning led to something that's confused me the most in europe and that's the big fall in the southern european countries' yields. okay? let's take example. just a precipitous drop in their yields. and it doesn't really make sense. when i look at what's going on with treasuries, boons, it really, there needs to be a much lower yield in some of those on the relationship spread to a ten-year instrument like spain. it makes no sense. it isn't that we're seeing regular rational investors move in even though some of the big funds have. but what i discovered is really fascinating. i'm going to put up the chart, and then we're going to talk about it. this is a chart not of your re/yen but of the yen/euro against ten-year spanish yields starting in early 2013. and what you're going to see there is actually, in my opinion, kind of amazing. so i went back and did some research. what i found was almost exactly

a year ago plus, finance minister of japan was talking before and after g7 meetings about, as they embark on abenomics, they actually want to try to stoke inflation, they want to try to stoke their economy or paddle their economy with some shock to, you know, get it out of this kind of flat line that it's really been in, you can argue since the nikkei top 25 years ago. what i also discovered is interviews right on cnbc with kate kelly about a year ago with city officials also discussing this. so the japanese were very open about it. why is this chart important to anybody? because of the exports between sc japan and europe.

shouldn't the cross trades go the other way? what we need to do is watch what happens with these interest rates in southern europe because it figures prominently and only process going on right now to demonstrating unified front on banking in front of stress tests. so this is a spread, a correlation trade you want to watch that i don't see anybody else talking about. sim simon and the gang, back to you. >> thank you, rick. >> i can tell you i've never seen the euro/yen flip like that. >> you know your euro/yen. >> that was a first. that was good. we are watching the markets. it's been a tremendous rally. and also shares of twitter as well going the opposite way, tumbling after the debut earnings beat. wstz expectations but user growth not so much. that brings us to this morning's squat on the tweet. asking you, put on your creative caps and tell us what hashtag best describes twitter sell-off? tweet us and we will air your responses throughout the morning. [ male announcer ] the new new york is open. open to innovation.

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it's been a good few weeks for you. >> hi there, sarah. yeah, the russian olympic leadership today faced off against the international press in a big news conference. of course, as we know, a lot of the coverage, at least in united states, has been resoundingly negative despite all that, the russians call this a huge victory. they said, look, six years ago there was nothing here and now we have housing for all the venues and house for 200,000 people. barely. yes, they are still polishing, painting, plastering, et cetera. they are mostly done but some things are still under construction. despite all that there is a lot that has gotten done. there's a sbrand spanking new road that gets you up to the mountain. yes, it was extremely expensive considering the length of it. but it's done. there's also a train that gets the workers and the attendees up to the mountainside venues. here's the basic understanding. if something occurs on ice, there's an event on ice, it happens at sea level. that's where we are right now. if it's an event that occurs on snow, then you've got to go up

the mountainside. of course, there's a lot of focus on security. the russians made clear to international reporters that they think this is an extremely secure olympics, that they have no worries. this is as secure as washington, d.c., new york city, or even boston. they cited a lot of american cities. you may haves inned there's cameras visible in many, many places. security, when we went up to the mountain today, there were two different check points. certainly those are the two issues that we were talking about today, are they done? mostly. is it safe? so far it appears to be. simon, back to you. >> and let the games begin. meantime, michelle, it's nice to see you. it's going to be a fascinating couple of weeks. michelle caruso-cabrera. a lot of the cnbc team live from sochi for the winter olympics. time to squawk on the tweet. twitter shares taking a beating after the debut earnings. beat wall street expectations on a lot of the metrics last night but there was obviously serious

concern about subscriber growth. that brings us to this morning's squawk on the tweet. we're asking you to tell us what hashtag best describes today's twitter sell-off? chuck tweets, #twitterjitters. #emp #emptynestsyndromes. #qwitter. >> i like our producer's, #ouch. that was the investor reaction. >> i don't have a hashtag suggestion for you. but i can give you long sentences. >> yes. >> and/or the bull case which i've had the opportunity to speak to a couple of investor who believe eventually they point out they think costello continues to be confident there will be using growth. what is that based on? i think there's a sense that you will have a lot of different enhancements to the so-called scaffolding he's referring to when he sat right where you are, sarah. but you know, that you will make

it a more immersive experience for the user and cure rate more and perhaps get them to not go away and not come back. unfortunately seems to be the case. >> he gaye a some what convincing argument about how to bring back user growth. the way that twitter is figuring out how to beef up the ad revenue. >> can you make it -- if he can do that, then it's a very, very good investment. surely the jury is still out oz to whether they can breakthrough facebook. >> the ipo this was their weakness and they have yet to correct it. >> and in the meantime they're going to change the scaffolding and organize ita by topics. the situation deteriorates from here. >> because users might react negatively to the changes. people are passionate about their twitter. the question is how many people are signing on and leaving. one of the analysts asked that as well. more on twitter ahead on the show.

if you just joined us. good morning. here's what you might have missed if you're just joinings us now. >> welcome to "squawk on the street." here's what's happened so far. >> this is a miss and a miss bay wild margin. general motors in the fourth quarter earning 67 cents per share. that is well below what the street was expecting. the street was expecting gm to earn 88 cents per share. >> we saw heavy cuts, structural cuts out of the retail sector. a number of companies, sam's club, jcpenney, sears, best buy, target, all announced cuts. >> until last night twitter was terrific. this was a jaw-dropping number. stock was up six. headline came out. this is not what matters. it's on the average user. it is. i was disappointed. >> this is bigger than that. you bring it to broadway. . then you develop a -- you develop a theme park. half the profit, disney is

extraordinary. it remains the stock you must buy for your kids. >> i think you want to lead with a large and growing and increasingly engaged user base and twitter doesn't seem to have the data to support that proposition. >> if those brands are at retail that's convenient for you to to go to you're going to keep going there. online, if you're not a player that is building your online business you should be out of business. that clearly is a giant future of retail. >> good morning. we live here at post 9 at the new york stock exchange. let's get a check on markets because markets are roaring back from some of the declines we have seen earlier in the week with a dow up triple digits, 147 points at this hour. s&p 500 up a full percent almost. and nasdaq composite in the lead, up more than 1%. you got earnings. you got t initial jobless claims

which were declining last week. disney is a big component of the dow jones drill average. >> i just want to show you if we can, if you can go to our video wall at hq and show you the breadth of the rally we have today. it is very impressive. this is the s&p 500 as you can see. you see how many stocks are higher. the reason that you would have bought this market all of the way through is on the basis that you believe that the earnings will remain solid. today, the earnings are actually quite good. from disney that's true. you've also had some international players come through like daimler, mercedes maker. industrials have come through in europe today. they have also pleased the market. today the rally is good. it's strong. we're up 147 points on the dow. >> chevron another good one for the dow. everybody is watching tomorrow's business jobs report. the government releases the monthly data. always a tradable report. >> okay. road map starts here with twitter. still major concerns over user

growth. the stock is severely to the downside this morning. social network in trouble after its first report as a public company or is it a buying opportunity? thus, while twitter slump, shares of green mountain coffee are rocketing after coke agreed to take a 10% stake in that business to help launch a new at-home cold beverage system. we'll tell you what this means for coke and green mountain. speaking of green, this is the end potentially of the pullback, say the bulls. stocks are rallying this morning as the dow post its biggest gain of the year and best performance since december 18. meanwhile, twitter shares are getting hit hard after reporting the first earnings report since going public in november. the company reporting its slowest pace of user growth during the fourth quarter. the company's conference call, ceo costelloe talked about twitter's value. >> hundreds of millions of users continue to flock to twitter every monday to experience

moments in their lives and moments in the world. when events happen, the event itself and the conversation surrounding the event unfold on twitter. >> is it enough? eric jackson is a big tech investor but has avoided twitter as an investment. john black it is ledge is the analyst and has an underperform rating. jon fortt joining us as well. he's been following social media and twitter. what dick costelo says about the power of twitter is valid but can he continue to gain users at a faster pace that will satisfy wall street? >> some people are mising the positive in the report. part of what he said was that up until this point, they've been optimizing different things. some of what they did in the fourth quarter was trying to get people to be more engaged with twitter ads, spend more time through things like threaded

conversations. and that worked. we saw the amount of engagement, the revenue occur, user actually went up. and now they're going to shift more toward trying to get more users in. if you think that twitter actually knows how to pull that lever either through user interface enhancements or through new add-on products that maybe you're still excited about this stock. if you think twitter is perhaps more of a niche product, maybe not as good at product development as facebook has been at its best, then maybe you feel differently. >> jon, to you, does this quarter change anything to you? you had an underperform on this stock. clearly there are some things to be positive about here when it comes to making money off of the users. does it change the story? >> yeah, and not really. they definitely did -- they definitely have a ways to go in terms of modernization, that's good. ultimately the user total user and engagement growth missed our

estimate and validated our concerns about decelerating user growth and engagement growth which we highlighted in our initiation a couple weeks ago. ultimately that can limit that inventory growth over time. we lowered our user forecast in engagement expectations over next five years 12k3w4r you, for longer term investors, there is a possibility there this is a great buying opportunity. if, i appreciate it's conditional. if they can identify a core case for the general public, most people around the world to use twitter, this becomes a very valuable platform, true? jon? >> yes, yes. so that's fair. i would say that, you know, the services have been around since 2006. they are -- the user growth is decelerat decelerated. we think twitter has less

powerful effects than linkedin. instagram between addd more than two times as many users per day than twitter. the other thing i would say is they got a lot of promotion around their successful ipo in the fourth quarter. a lot of people thought that might help user growth and engagement. clearly it didn't. they came in below expectations on both metrics. so, you know, i kind of wonder if, since it's been around since 2006, why weren't they, you know, working on accelerating user growth two years ago. >> well, eric jackson, i want to put it to you. talking about twitter as an investment, i know you're not a fan. you must be happy that you're not in it today. but why are you so turned off by a company like twitter and more excited by an old school company like aol? >> well, i think twitter was just -- got ahead of itself in terms of valuation. i would have loved to buy into the twitter in the '20s or '30s.

it's simply -- you can't jump into it at these levels without the risk of these kinds of shocks. i think there's a bigger part of the story which is the rise of messages apps like we chat in china line in japan and overseas, what's app over here. kick as well. where are the users going? i think they're going to the messaging apps. i think that was primarily responsible for the turn ag way from twitter in q4. that's something to watch for as a potential threat for facebook in the quarters ahead as well. >> it's jon fortt. are we missing twitter's core value proposition? a lot of people think of twitter as either the website or the app. does twitter have a value in global conversation in topics, in realtime information that they have yet to harness that if they figure out little pieces of that could change how you fundamentally view the stock? >> absolutely.

microblogging is here to stay. it is really surprising how the new user growth is coming from these private network, private conversations. you know, we've seen a wabo which is china's version of twitter for the last couple of quarters suffering the same kinds of growth challenges we saw in twitter's q4 and it's because of wechat coming on so strong over there. it's here to stay for sure but if part of the proposition is that we're going to sell the ads and have user growth we just lost that user growth in this quarter. i think that's fine. it's still a viable business but it's a lot cheaper business. >> all right. thank you all for joining us here today. you know, jon fortt, there are so many different metrics on twitter to pay attention to. most important one for investors? >> i don't think it's not any metric right now. it's whether you believe in their ability to develop product. that is really what matters. look at facebook paper, if they can figure something like that

that grows, it could be huge. >> thanks very much. heating up, green mountain coffee is ramping up cold beverage gain as it announces a ten-year partnership with coca-cola. what could this mean for the at-home soda competitors like sodastream? michael bellas is joining us now on the cnbc news line. good morning, michael. what is your take on this deal? is it transformative, or not? it. >> has to be watched very closely. there is a good potential for this global basis for coca-cola and green mountain. for coke to invest, acknowledging must be vetted very carefully. partnership that will be able to put some of these machines globally around the world and so we have to watch and see how this plays out. it's probably more important for green mountain than for coke. it's important for both in any

case. >> sodastream, interesting, sodastream stock rose in the after math of this deal being announced. what does it mean for the other players in the industry, do you think? >> it's certainly -- where are the trends in our beverage choices, customization of our beverage choices. this is going to put this right at the front burner at every home that they can get the machines in. so there's always a trial. there will also be a number two. so initially i think it's going to bring more people into the mark market. see how it plays out long term and how sodastream can compete against green mountain and coca-cola. >> what do you think is the next step in this partnership between coca-cola and green mountain, do you expect coke to raise equity stake? how are the financial terms going to be worked out and what are we going to learn next?

>> coke generally takes a slow investment but not nothing of this scale. they did it in tea. they had thresholds in which they would buy more. i'm speculating. i don't know exactly how this is going to go long term but i wouldn't be surprised if there was a little more to it than just what we heard today on this. it still has to prove itself. i mean, this is -- we've heard about this at christmastime, they were developing this cold fill machine. quite revolutionary. the way it's supposed to operate. so it still has to be proven and i would imagine coke would want to be close to its suppliers or close to its friends in this and possibly could go forward with greater investors but i'm only speculating. >> mr. bellas. the ceo of the beverage marketing corporation. it has been a rough winter for a lot of the country and thanks to all the bad weather

many cities are running low on salt. a key resource in keeping major roads clean. we've got the answer. but first, rick santelli, what are you watching at this hour? >> well, we're going to talk a little about salt, too, but not salt that you use to melt snow. maybe rubbing a little salt in the wound of what's going on with regard to puerto rico, its bondholders. we're going to talk about if more agencies weigh in, what that means. also, post-mortem on the ecb and european central bank meeting today. what it means, all with mark grant from southwest securities. bottom of the hour. announcer: where can an investor be a name and not a number? scottrade. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody.

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as nasty winter weather continues across the country, many cities are running short of one precious commodity used to fight all of the snow and ice, salt. morgan brennan is live in new jersey with more. morgan, how bad is the salt shortage right now? >> well, that depends where you're located. yesterday we brought you propane shortages. today it's road salt shortages in the midwest, northeast. towns of cities plowing through the salt supplies that's causing prices to skyrocket. deliveries are getting delayed. new york state governor andrew cuomo called the situation dire. on the city level, suburbs outside of chicago have already run through their supplies. now, this isn't a mining issue as much as it's a transportation issue. the bad weather making it really

hard to get deliveries out that pace demand and as the prices get rising, municipalities scrambling to get the funding to bring supplies back. now, all that being said, someplaces are getting really inventive in iowa where we were yesterday and in parts of pennsylvania they're using sugar beet molasses. in milwaukee, this is great, they're using cheese brine which apparently helps salt stick to the roads a little better. in wisconsin, 62,000 tons of road salt they've gone through since through the end of january. that's 5,000 tons more than last year. and here in northeast in new jersey, 277,000 tons of road salt. that is through the end of january. that's not including the winter storms we saw this week. that's 19,000 tons more than last year combined. still, not everybody is feeling the pinch. it's very local here in tenafly, new jersey the behind me, 600 tons of road salt. that's what this looks like.

waiting for another 400 tons to come in. they're managing it efficiently. we asked them if they would share with their neighbors. >> that would be an administrative tiger. right now, i would tend not to unless somebody was really in dire need and had an emergency that there was a condition that needed to be rectified immediately, of course, we would help them out. >> so there you have it. people are either trying to get more salt or really trying to hang on to their supplies. back to you. >> that's the spirit. >> just need better weather. that's all. we just need the sun to come out. cheese brine, i wonder how effective that is. all right. morgan brennan, thanks very much. let's talk about the markets. up 145 points on the dow as you can see. triple digits. we keep bouncing up to 1770 but we're having difficulty getting through that. it is none the less an impressive rally in terms of the breadth of the move today.

art cashin is director for floor operationses at ubs. we were down, i think, seven of the last ten sessions. this this feels important. this feels like we're really trying to make ago of it now. >> this is. it's the most credible rebound we've seen. tried for two days with a very heavily over sold market to produce a rebound. you got a lackluster flip up on tuesday. wednesday you got no follow-through. the nasdaq closed down. then you came in today and several things happened. first of all, remember that oversalt condition because that's a natural pressure for a rebound. europe appeared to be calmer and, in fact, a bit firmer. most importantly, i believe, the yield went back above 2.7 on the ten year. and that gave a bit more credibility. i think what you're seeing here is a combination of some of the buy the dippers coming in saying it's not going to be a depth spiral. it looks okay. and some of the shorts covering.

it's not a stampede, however. the volume is a little bit less than yesterday. >> it's tough, technically, from here. what happens on the s&p in particular? talk us through what we have to get through. >> as i wrote in my morning comments there's tremendous amount of resistance at 1765 up to 1771 in the s&p. now, that's because there were several moving averages. there were former lows, a variety of things. when we broke below that is when we did spiral down. we are now facing that resistance. we got up to about 1770. >> if they punch through 1771, i would expect you might see some algorithmic buying. some shorts might have that as a trigger. if they can manage to close above 1771 then you could give this legs and it could last for a few days. we're in a very critical area right here. >> fundamentally what are you watching to see further direction? obviously the jobs report tomorrow will be important and we're still in earning season. >> yeah, well, we're still in

earning season but that is pale. i think they're going to watch the yield on the ten year because that reacts to so many other things. they will go back to watching the japanese yen and then we'll see. a lot of people, the other thing is, coming into the payroll numbers, there's a segment of traders who think that it's a natural bullish set-up. if you get a good number, that's good. if you get a bad number, that's weather. they've got a get out of jail free card. >> what about tapering? we're quite clear, a lot of -- they're all on message that tapering seems to continue. the bar is higher, i think one of them said recently, for them to change that course, taking 10 billion less each month on that money printing. is that factored into the market? does the market understand that now? or is it good news, bad news and all that? >> market understands it. i don't know that the market accepts it. okay? >> right. >> where the market is now accepting because they use almost the identical language in

the high hurdle routine, so people are thinking, okay, it is going to be data dependent. we're going to have to see more data. it's like a petulant child, mom any doesn't pay attention to our market. we're worried about it. we know the market is not going to change them unless it spirals out of control. we're going to have to look at the data. i think there's a belief that the tapering may be eased back but not quickly. it's going to take more. >> i'm not sure the central bank would want to do that. they would point to the bubble argument at the end of last year and say look at the gains you had. >> they certainly don't want to do it. it would injure their credibility, their forward guidance concept. we had to change because of circumstances. >> the softness and the economy. >> we don't fully know. we'll see a little -- interestingly enough, the payroll number tomorrow, the survey was taken during good weather. so it might be a pretty good number. >> we shall see. art, thank you very much.

art cashin there from ubs. twitter's earnings conference call, a little heated last night. we'll explain, next. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.

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if morning's economic data is causing some to rethink where we are on growth as we head towards tomorrow's big employment report. steve liesman is back at hq with more on that. good morning, steve. >> simon, good morning. the trade data coming in, the government estimates it for december when it prints the fourth quarter gdp number. now we have a real number. it was less than expected. caused a big decline in the estimate for fourth quarter growth. down 0.4% on average. hearing from economists because of the weak drtrade data. imports up a scant 0.3%. exports actually declining 1.8%. it was a good year for u.s. exports but not a good end of the year. jobless claims right in line, 331. and coming in at a way that's

consistent with decent growth, could be reported. tomorrow the fourth quarter productivity up 3.2%. that was pretty good. challenger layoff spiking, although from a low level. so, guys, the data i think for december at this point is mixed. nothing really in my opinion that would cause the fed to change is course on tapering, especially since that emerging market currency thing is not on the front burner now. >> right now is the key the steve liesman, thank you for the briefing on the latest economic data tnchtsz bells are about to sound across europe. just a few minutes left in europe's trading day. we have the close, the details, and the impact here on u.s. stocks right after the break. welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title.

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the european markets are closing now. >> and it is a strong rally in europe on the session as you can see. we've got a convincing rebound on both sides of the atlantic. we started off positive in europe. we then declined when the ecb failed to act a little bit. but the rally that we've got here in the states is lifting the markets. look at italy, for example, which is up some 2%. mario draghi today at the ecb failed to move on interest rates, which is what the bulk of the market thought that he wouldn't do. they didn't think he would move and sure enough, he didn't. he is leaving the door open so suggestions that there will be further measures next time they meet. importantly at that point they will have more -- fresh inflation forecast.

if they say inflation in europe, lit be low for longer that you get extraordinary measures. for the moment, no move. one of the reasons we've got the strong rally is the yearnings have come through quite well. mercedes with the c class. alcat alcatel, lucent for two years. and volvo doing well and doubling down on its reredundancies as well. one stock that isn't doing well today is credit suisse. that's partly because it's missed expectations as a result of the office here in new york. they are now provisioning an additional $570 million for potential sec investigations into whether they illegally tried to get americans to evade tax here and, of course, all those questions over the mortgage assets, as well. here's what the ceo told our colleagues in europe. >> we did take some litigation

provisions in the fourth quarter though, some for mortgages and some for the s.e.c. aspect of the cross border/u.s. issue which we're working towards a resolution on. clearly those did bring the bottom line performance but represent continuing progress towards working through a number of these historical issues. >> in the meantime, the bank of england met today. no changes there. >> always, market moving. interesting to hear what mark carney has to say. with more on the u.s. market, strong over sea, strong in the u.s. courtney reagan is here on the floor of the new york stock exchange. hey, courtney. >> that's right. you are seeing stocks steadily gaining. if you look at the s&p 500 though, that 1770 is sort of this key resistance level. we hit it and pulled back down a little bit right now. we're sitting at 1768 there. cashin saying, look, we tried for a couple days to have a credible rebound. this is the first one that we're really seeing here.

some short covering and some buy on the dip. whatever it is, the s&p 500 is just one of the major indices moving higher today. if you break it down by sector, some beat-up sectors that we've had of late actually catching a break today. retail sales surprising a number of these companies actually putting out much stronger than expected january results. so you've got the retail, some sector leading the way. emerging markets quiet. moody's upgrading mexico overnight. that helps, too, getting some movement out of the ecb just unchanged. leaving the rates at unchanged. but i think quieting a lot of the sect ors that had been causing some concern. deeper dive in retail, limited brands higher posting 9%. same-store sales. the street had been expecting half a percent gain there led by victoria's secret. kohl's up 5% despite seeing disappointn disappointn't. weather was an issue. e-commerce business taking a hit for the expenses. some analysts say that's because they sold more than expect and

that's a good thing. part of the reason why they're trading higher. banks higher yield curve. ten-year up above 2.7%. the highest level we've seen in about a week. housing related stocks also on a tear after some strong results from building material companies. vulcan materials and usg corp. look at some of those. usg up more than 8%. i want to end on auto parts. interesting here, especially after what we heard out of gm which was a bit weaker than the market expected. auto parts posting strong movement. advance auto parts up more than 13%. full year guidance way above consensus, seeing 720 to 740 per share versus the street's consensus. other strong earnings and overall just a lift to the entire group. back to you guys at post 9. >> courtney, thank you. let's focus on general motors in particular struggling obviously in a tape that is filled with a lot of green after its earnings disappointed last night. fat on the session overall now. phil lebeau is live in chicago

with more on that. it's the conference call finished now? it. >> has finished. ra wrapped up five minutes ago. it will be interesting to see the reaction from comments from mary barra. here's the numbers from general motors. a big miss. the company earning 67 cents a share. well below what the street was expecting. it was expecting 88 cents. where's is disconnect? general motors says a good chunk of that miss, a third of it can be blamed on a higher tax rate for the fourth quarter. the other part of it, the european restructuring. that continues to be a drag on general motors as they continue to fix operations over there. it's important to point out they have not changed their guidance for 2014. just a few minutes ago ceo mary barra on the conference call said general motors needs to maintain its cost structure. >> we've got a lot of good activity going on in a very coordinated way to make sure we're not just, you know, i'll say looking at cost here or cost there. but systematically looking at

our overall cost structure, whether it's in the cost of the business or logistics. i think that's another huge opportunity and we'll keep our focus on each of those. >> now, one area where general motors made the big profits in the fourth kaur, north america. the profit margin climbed up to 7.8%. well above 7.2% a year ago, largely because they've been able to drive through pricing increases with the new models selling in the u.s. as well as canada and mexico. look at shares of general motors over last three months, if will is one theme that mary barra hit time and again on this conference call, gm needs to be profitable everywhere it does business around the world. she said that about six times. very disciplined in her comments with the analysts. >> i have one question on the pay package, phil. what's the deal? is she really going to make less than half of her male predecessor, mr. aker son? >> no. >> is this real? >> no, that's out there.

that's one of the things floating around on internet. the only thing determined so far is her cash compensation for 2014. that's going to be about $1.6 million. $100,000 less than dan, the previous ceo. whats has not been determined yet is her long-term incentive package. that will be determined in april. once we see that, then it will be fair to say, okay, here's what she's making versus what here's what he made. i can tell you this from talking to people who have been around mary ba a over the last months that story has come up, she rolled her eyes and said, i'm here to do a job. i'm not here to worry about am i getting the same amount as the man who was in the job before me. >> but the rest of the world wants to know. concerned about the gender pay gap. thanks for clearing that up. >> the thing here is they're not comparing apples to oranges. the stories out there are not clear in that regard. >> good thing we have you. phil lebeau, thanks very much for giving us the details on the quarter and on mary barra's pay

package. let's get to rick santelli now in chicago with a look at what's moving over there. i know you're looking at europe. >> yes. be we're going to look at the ecb and puerto rico. island talk. i'd like to welcome mark from southwest securities who come from a warm climate. we'll let you slide on that this morning, mark. >> the great santelli. good to see you. >> so we now learned, you know, i tried to listen to as much as i could on the mario draghi and many trader on the floor think, you know, he puts mr. greenspan to shame if you're trying to follow what he's saying. did you draw any new conclusions? >> no, he's basically saying we're staying the course. we're not going to do anything new. we'll look at it again in march. i think that provided some calm to the marketplace today. >> you know, earlier, mark, i showed a chart of yen/euro overlay we'd spanish ten year for the last year and a quarter.

so it's basically tracking one for one. do you have any thoughts on the japanese presence in terms of holdings and some of the peripheral securities markets? >> well, as you know, rick, the japan has virtually no yield in their own bonds, so europe has done everything they could to encourage the money managers and insurance companies there to buy bonds in the periphery nations and, of course, the ecb and europe almost is coerced, prodded, moved, to get the money managers, central banks and banks in europe, to buy the same bonds in the southern nations. and that's what's pushed the yields down, rick, not that the economy is any better because it's not. >> exactly. you know, in the old days you could draw some fundamental conclusions when you saw rates move with regard to credit risk and such. those days are gone. puerto rico. i tell you what, i'll give the government and the current administration credit. not bailing out cities in michigan have gone bankrupt.

cities in california have gone bankrupt. cities in pennsylvania have gone bankrupt. now we have a common wealth in the form of an island, puerto rico. what are your thoughts there regarding how this may turn out considering, as your blog pointed out today, there's really no precedent for common wealth bankruptcy. >> the bankruptcy cold of the united states, rick, there's no language and all about a common wealth going bankrupt though i suspect that federal court could mandate to follow the same guidelines as the state. the economy in puerto rico is in horrible trouble. unemployment rate is 14%. the pension funds, the public pension funds are only funded about a 4% rate. and i think there's a very good chance, rick, that not only are people concerned about the s&p downgrade and mod ody's and fit to follow, i think the common wealth could very easily default

if not enter some kind of bankruptcy depending upon the court system. >> excellent, mark. thanks as always for your insights. let's go back to the "squawk on the street" team. >> okay, thank you very much, rick santelli. let's get back to twitter. shares are still something this morning. major concerns over to user growth. and that has led to a slightly more heated quarterly conference call than perhaps t. dick costelo anticipated. >> how many people come and try twitter and then leave because they couldn't create a good enough feed or for any other reason because that seems to be the problem that your client addressed. >> we have massive global awareness of twitter. and we need to bridge that gap between awareness of twitter and deep engagement on the platform. so it is absolutely the case that it is very much about making it easier for people who first come to the platform to

get it more quickly. >> and if they can do that, there's no question, twitter will be a great investment. the question is, can they achieve that? john steinberg will weigh in after the break. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some financial folks who will talk to them about preparing early for retirement

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coming up, the dow is having its best day of the year but don't break out the champagne just yet. we're trading all the day's roller coaster moves. lots of stocks in play here and some are fizzing up while others may be fizzling out. we're going to taste test all

the plays. and twitter is down big time after its first ever earnings report failed to impress the street. should you re-evaluate your social sickcircle now? >> see you then. scott wapner. let's send it over to dominic chu. >> sarah, look at aqua financial. it's taking a sharp, sharp drop train day after a dow jones report that new york regulators plan to halt a mortgage servicing deal with wells fargo. ocwen was to pai $2 billion for the service rights. first part you're going to see this, down sharply. wells fargo in focus because of that particular deal. again, dow jones reports, simon, a share to keep an eye on. >> thank you, dominic chu. twitter's first earnings report to the headline level be expectations but raised serious concerns about user growth. take a listen to ceo dick costelo in one of the tough exchanges, this one with bernstein's senior analyst.

>> in a quarter to 3 million, is to take your 12 years to get it to 100 million users. do you think twitter will get to 100 million u.s. domestic users in, say, five or six years? >> xwagain, i'll go back to we have a very, very clear road map across a number of dimensions that we will use to drive interaction and engagement and make it easier for a broader audience to get twitter to understand twitter more quickly. >> here to weigh in, john steinberg, buzzfeed's president and ceo and cnbc contributor and jon fortt is our technology editor. what did you think of the earnings? >> well, i left here and it was down 15, 16% and now it's down 22% or so. that's because of the earnings call. there's no real detailed explanation of how other going

to hit the user numbers. and fundamentally it's a fantastic transformative company. it is too expensive. it was always too expensive and now it's being adjusted where it should be. it's still, you know, a $28 billion company. i'm sure the management team and the company is very happy where where it's at. it was over priced. >> what you are good at. how many users do you have at the moment? >> 130 million. >> so you guys know how to grab an audience. >> yes. >> what does he have to do to break this technology into the mainstream? starting of course, he says, by rearranging everything by topic. >> yes. >> does that move the need until. >> i think there needs to be a fundamental change in the product. there are no tweets. this is not something small. i think they need to do something like facebook did with paper or make an acquisition. fly flip board. >> what did facebook dood do? >> they made the news feed almost like a magazine you can scroll through to read stories. content is the new battle ground for the social media sites. twitter needs to make it more normal for twitter. >> i think twitter is built for

content creators. they need a product for content consumers. the question is whether they can tweak the core twitter product and make it both or come out with something else. what twitter has fundamentally is every media company of note and the crowd all posting breaking news from it, posting location. they've got an incredibly rich database. the question is can they leverage that. they're in a better position than probably their competitors to do it. >> yeah. and when you look at everythili they're adding 20 million new users per quarter. i mean, theoretically twitter could have been flat or negative. we don't know how much churn was in the number. not only are they not really adding u.s. domestic users, they may be losing a ton as well. on the conference call there was no strategy for growth. >> that is the issue, right? they've got a lot of people posting content and then going away. they want to keep people engaged. twitter has got that realtime

stream. >> it's about people just posting stuff for other people to read exactly the same as facebook. you know, facebook doesn't make feeds for people to watch. it's just the content works better. >> right. and ultimately it's not a consumption experience. a lot of people get on there, baffled by this the sin tax. they don't know how to use it. the conference call would have been better, rather than saying we're going to look at the acceleration of the curve or growth was something that happened to us to date, is what costelo said. there was no explanation for what they're going to do. i think that upset investors more because there's no path to how we're going to get to this higher ground for them. >> is facebook perhaps the wrong comparison here? clearly that is the -- they can get a billion. >> i think it's the right comparison. i think it's the right comparison. a lot of bulls on twitter is saying it's not the facebook comparison. if it us then't get to a billion users, if it doesn't get massively broad, it's not a big media platform. >> what matters is ad revenue. >> it doesn't have to get that big but it can't orford to get

eaten by facebook and facebook is moving in twitter's direction. >> are they eating their lunch? >> positioning at the counter. >> we'll see if they -- they want to be the place for news and media as well. >> jon, thank you for coming in. all right. still to come here, you have a look at shares of advance auto parts. we're going to dig into this rally this morning. the earnings squad here to tell you a little bit more about why.

squad. joining me today, cnbc's dominic chu and jon najarian. let's start off with a big earnings move ver. advance outer parts surging after reporting the fourth quarter earnings. dom? >> it was an earnings beat and decent size beat. sales didn't come in quite as hot as people thought but they gave a forecast for the coming year that was good. above a lot of analyst estimates. what they said during their comments is they saw some softness during the bulk of the year but a strong momentum trade for their parts and their sales in the fourth quarter that think they could carry over. it makes you wonder whether or not the winter weather has people fixing their cars or buying new ones. >> the potholes and windshield wipers. >> all of that. this trade overall has been on fire. take a look at what happened with aap, ended a streak of declining store sales. 29th straight quarter of

double-digit growth. take a look at all of them and today they are on fire. let's look at apple trading higher after posting stronger than expected fourth quarter earnings. we saw the big pop carrying over today. up 20%. >> the initial pop was 5% or 10% at max and then it really accelerated once that conference call began because that's when they started talking about, well, because of very large customer that has increased the usage of our product and they're not just talking about nbc, which is of course running this for the olympics, and using it to basically put video out there, but apple and everybody is guessing that apple is really ramping up for whatever their tv delivery will be on demand and so forth. credit suisse moves up target. guidance was 10% higher. >> the fact they raised guidance jpmorgan puts to rest any concerns about renegotiating with that large customer. exactly, which had been rumored to be apple. let's talk about spirit aerosystems. this is a huge decline in the

stock. one fell swoop this stock is violating the 50-day and 200-day moving average. up 64% for the past 12 months. the biggest structural parts supplier to boeing. boeing's gain has been spirit aerosystems gain. it vice versa. look at the fourth quarter beat but a stunning pre-tax charge related to 787 charges. that was the problem. new ceo here from lockheed martin in the job for less than a year. the challenge for this guy is to convince investors that this charge is going to be the last big charge for spr. so you take a look at boeing, take a look at spr, you like boeing, you should like this. this company is also -- >> we should sell puts on boeing on the big dip that it had. i don't know if spirit aerosystems has corrected quite fuf in 26 feels better of an entry point. so i would be a little more comfortable here if we could get it at below 25. i would love it more. >> that does it for us this

morning. back on "street signs." coming up next on "squawk on the street," shares of twitter are tumbling after the earnings debut yesterday. so what hashtag best describes today's twitter sell-off? tweet us. we'll get to some of your answers. that's next. [ male announcer ] here at optionsxpress, our clients really seem to appreciate our powerful, easy-to-use platform. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price. and let it do its thing. wow, more fan mail. hey ray, my uncle wanted to say thanks for idea hub. o well tell him i said you're welcome. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. yea, and these ideas are across the board -- bullish, bearish and neutral. i think you need a bigger desk, pal. another one? traders love our trading patterns, now with options patterns. what's not to love? they see what others are trading -- like the day's top 10 options trades by volume --

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squawk on the tweet. twitter shares taking a beating after the debut earnings beat on the headline figure. real concerns over user growth which brings us to this morning's squawk on the tweet. we're asking you to tell us what hashtag best describes today's twitter sell-off. lori tweets, #byebyebirdie. #twitortweet. #twitterweneedtotalk. >> captures the sentiment now. >> it's actually three months to the day since we priceding on twitter. remember, we priced $26. exactly double that now. 52. look at that. yes you have a big sell-off

today but you still have a stock that has doubled from the ipo pricing. this is a big cap stock. >> a lot of people are interested in it. it did get analysts today. underperforms on this stock as well. >> in the meantime, that's it for "squawk on the street." as we hit noontime on the east coast, let's send it over to the "fast money, halftime" report. >> we're all over twitter and everything else. here with the hottest trades of today. soda wars, green mountain soars on the deal with coke and sodastream sinks. the future of both names in a highly carbonated. #trouble. after they fail to impress, rough erodes ahead for this battle ground social stock? the blame game, how much wreckage can be pinned on the weather? courtney ray again separates facts from fiction.