and welcome to "the closing bell" on a thursday. i'm kelly evans at the new york stock exchange where stocks are rallying despite the fact that interest rates are moving up as well. >> i'm bill griffith. we are in rally mode. the dow looking to make up what it lost yesterday and then some at least right now. even though there are concerns that the fed was going to tighten sooner rather than la r later. some of the economic data today not all that impressive. >> i think investors are still using the weather excuse when it comes to some of the soft spots. also in one hour, tech bell

weather hewlett-packard will be out with quarterly results. we'll have the numbers behind the numbers. stay tuned for all of that. , picture this. you're watching shark tank and the guys that found ed whatsapp. mark offered $16 billion to buy. what does kevin o'leary say? kevin will join us. he never holds back. get his opinion of this mega deal that was announced last night. >> one of the biggest tech deals we have had. joining the spate of activity we've had this year generally. >> $16 billion for a company that has 50 employees. >> well, but they're going to have 100 by the summer. but it is maybe $19.5 billion once you add everything up involved. just a huge number. anyway, here's where we stand on the narcotics right now.

the dow is up 120 points, if you can believe it. 16,616 is the level. >> there's the s&p up 12-plus points. joining us in our "closing bell" exchange today, heather hughes, just coming in from -- >> blaming the weather. >> traffic there in washington. jim lowell from adviser investments. rich peterson from s&p capital iq. and our own rick santelli. kenny p., finish this sentence for me. the dow is up 121 points because -- >> it's a trader's mark. there was this overreaction yesterday about rates may be going higher sooner than expected. but last night as people kind of thought about it, you know, x, y, and z has to happen. if that doesn't happen, rates aren't going up. i think yesterday's reaction was

the knee-jerk down reaction. today people are saying, ain't happening, so you get this trader's market. >> even though the economic data are not that great? >> flash pmi was much stronger. philly fed was off the charts negative. but flash pmi, i think that's the bigger number. >> for the u.s. you're referring to, it was surprisingly strong, jim. what's your take on that? are people reading into the fact that maybe nationally u.s. manufacturing is holding up okay? >> yeah, i think weather is more than an excuse. it's like snow on a television screen. it's probably more of an annoyan annoyance, but it is there in the data. so soft patch slowdown hardly unexpected. and let's not forget if the fed does, in fact, raise rates, which i think is very unlikely inside of 2014, if they do, that means they will have become convinced that faster growth is upon us. that's good news. this may be a trader's market today, but we continue to like what we see in the data. >> heather, i know you're having

to put up with the weather like we are. we're having the volatility. it's back, clearly. these last two days are a classic example of that. does it feel like a market putting in a bottom to you or one putting in a top? >> i would look at the fact that today it seems like investors are playing defense even though we're up 114 points right now on the dow. in a literal sense, both the aerospace and the defense companies, the stocks are hitting all-time highs today. you're seeing that help the rest of the broader markets. broader recovery may be underway, even though growth is still anemic and slow. but hopefully we'll rely less on financial engineering this year. i know that was a dominant trend in even q-4. we had $138 billion of to be buybacks in the s&p. hopefully management is becoming more confident and looking to invest in some rnd and the next big thing. >> well, and looking at the

markets today and a change from what we've seen over the last several trading sessions. we have the dollar a little firmer. we have interest ratings moving up a bit. rick santelli, who's leading who here? >> first of all, you know, i don't know if investors are playing offense or defense, but what they're doing doesn't really make economic sense. if you look at interest rates, first of all, the important areas are 275 in the tens and 155 in the fives. 38% retracements. we're only up one basis point at that level. this happens with the notion that interest rates almost one for one at the beginning of the year followed stocks down. they almost don't want to play if stocks move higher. this is a very important dynamic. as far as that market, pmi today, listen, on february 3rd, we had both our normal pmi come out that we track, and we have the market pmi. they didn't move the same. market was lateral. pmi we followed went straight

down. purchasing managers. on march 3rd, we're going to get the final read for both. today was a preliminary read, even though i couldn't get the charts ready for air time, they don't seem to correlate. i think market pmi was pretty much an excuse. i think they would have taken the market up anyway. >> yeah, pmi is purchasing manager's index, not a medical condition f you were wondering. rich peterson, you're the guy that tracks the earnings. they've been good overall. you had the biggest retailer in the land kind of warning for the rest of the year. they missed their numbers. when walmart misses, what does that say about a very, very important sector of the economy? >> well, first, let me get back to what kenny mentioned at the top of the segment. he talked about the market being in a trading period. actually, it's a continuation of what happened up until yesterday afternoon back in ancient market history when turmoil in the ukraine and some imf reports about deflation in europe. but the fact s we're in a very robust period.

the fact that we have softness in walmart's forecast going ahead, maybe weather is competing against amazon. the fact remains, we are seeing the best quarterly numbers since the fourth quarter of 2011. earnings are very strong. the economy is doing well. we have a quarter of a trillion dollars in announced deals year to date. we did some work at gmi, global markets intelligence, at s&p capital iq. rarely do you see that retreat. with all the cash on the balance sheet, with capital markets functioning, i think we look very favorable for equities going forward. >> jim, are investors overlooking a lot of this activity? >> well, there's nothing the market doesn't know that isn't priced in. i think mna activity clearly helping propel some of the gains. let's remember we're effectively flat. inside of those indices, if you look at the more defensive

equity sectors, health care, consumer staples in particular, they're having a gang buster year already out of the gate. that tells me that investors are smart enough to understand that this is still not a no-holds-barred growth recovery. there's still a lot that could derail it, a lot that could sidestep it, slip it up. so they're focusing on companies that are continuing to grow their dividends. they're focusing on areas that provide reasonable and defensive growth. so far this year, they're also getting some high octane returns inside of those more defensive sectors. >> all right. kenny, are we overthinking this market? i mean, you call it a trader's market. to rich's point, is this market simply telling us that it senses that things are getting better in the economy, especially when you look at the evidence, the weight of the evidence from the earnings reports out there? >> i absolutely think it does because it doesn't want to go down. when we had that pull back a couple weeks ago, we bounced right back. so certainly i think the market's turning around, the economy's turning around, the

market wants to go higher but it's being cautious. those individual sectors within, that's all well and great. but the market has to be convinced the whole economy is going to move higher. >> real quick, what about the point about this being an options expiration week and perhaps that being an influence here today, tomorrow? just almost on a technical basis. >> it'll be much more of an influence tomorrow than it is today. the volume doesn't really support that. that argument right now today is very light volume. tomorrow is when you'll get that rearrangement in the options. >> it seems like none of us are willing to bet the farm. all of us -- no one is saying i'm a bull or a bear. you're not seeing these huge debates right now. again, we have all this conflicting data. retail sales and jobless claims are weak, but the purchasing manufacturing index and all the mna merger and acquisition activity look strong. so it seems like a lot of people are sitting on their hands, yet the market is higher today so we'll take it. >> but the market is confused. because where are we really? we haven't busted out to the up

side. >> i'm waiting for you to call it, kenny. >> it's human nature. when things are bad, we think it's going to be like that forever. when things are good, we think, this can't last. right, rick santelli? >> i don't know. when you see somebody walking out of a casino who has millions of dollars because they picked the correct color, red or black, the last thing i think about is how intelligent they are. >> hey, but sometimes it pays to get lucky. >> isn't that the truth? >> better to be lucky than good sometimes. thank you, all. but the platitudes just keep coming, don't they? >> see you guys later. >> heading toward the close, we're just off the highs of the session. it has been another one of those days. the economic data not -- at least for today not supporting the rally we're having here on the dow jones industrial average. >> and looking to fed futures marks, we're starting to move up the date of the first fed hike. could they move to hike rates next year even as the economy isn't exactly going full

throttle? what does the fed see? and is it something others are missing? we'll have that discuss next. >> and it's the story of the day. facebook paying that whopping $16 billion plus for mobile messaging company whatsapp. is it a brilliant move by ceo mark zuckerberg or a sign of desperation to keep young people in the fold? we have shark tank's kevin o'lea o'leary weighing in coming up. >> and we want to know how you think it will look in the fullness of history or in two or three years from now. will critics be proven wrong, or will this be a majorly wise move by mark zuckerberg? your best tweets on the subject @cnbcclosingbell. we'll be right back.

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througet a sealy queen set $500 on befor just $399.osturepedic. even get 3 years interest-free financing on tempur-pedic. but hurry, sleep train's presidents' day sale ends sunday. welcome back. as you can see, the market bouncing back today after yesterday's losses in part blamed on the hint feds would raise rates next year. is that a valid concern? >> let's talk about that. greg ip joining us. it was dennis lockheart of the

fed yesterday who said it could be as early as june of next year the fed would start raising interest rates. was that merely a hawk talking hopefully, or could that possibly be a possibility from the fed next year? >> well f you look at the last survey of projections they give themselves for when they think they'll start raising rates, most of them are in the second half of next year. what dennis said was not at all surprising or outside the range of what we would expect. i think what has the market off balance is the hint there are people who like to move even sooner than that, maybe this year. i personally don't put a lot of stock in that. those are probably the usual suspects. the hawks who have wanted forever to raise rates yesterday. for me the bigger issue is you have a committee, which judging from their words and minutes, seeps is incredibly sanguine about the economy. i don't know how we can have that tension continue. >> lindsey, a lot of people last night were walking this back

saying the market is getting ahead of itself to think that this kind of scenario as greg just mentioned is going to play out. but is it realistic the economy could be at a point rate hikes would be pertinent? >> i really think that's the minority. that's the small few of committee members that were keeping the threat of a near-term rise in rates on the radar, as they have done for the past several years. but there's really this growing cohort within the committee that is questioning the disinflationary environment that we're seeing. and really, the lack of impetus for wage pressure as we continue to see a pool of available labor topping over 16 million. so right now those committee members are saying, well, there's not enough evidence to say that we're going to taper the taper. but if we continue to take steps in the wrong direction, meaning even further weakness in february and march employment data on the backdrop of a disappointing january and december number, well, that may be enough then to cause for pause at the march meeting. and i think that's really the underlying story there. >> as we know, lindsey, the fed

broadly speaking gave themselves two bench marks. they wanted 6.5% unemployment. they wanted 2% inflation. we're close to the unemployment rate, but we're not close to inflation. is there something else missing that they need to see? i mean, are there other areas of the economy that they need to see strengthened before they seriously think about raising rates? >> you know, remember, they're talking about the 6.5% unemployment rate in the context of broader measures of the labor market. and they've been very clear. many committee members coming out saying this was a threshold, not a hard line drawn in the sand. they're looking at that improvement in the unemployment rate against the drop back of 12 million americans who have dropped out. very stagnant wage pressures, an unchanged workweek. all of those measures showing vsh much less improvement in the labor market than that civilian unemployment rate would suggest. again, looking at that against the backdrop of a continued decline in inflationary pressures really spells maybe a

more near-term cause for pause than for a near-term rise in rates. >> and greg, that's what makes it so interesting. at the same time, we have the cpi report this morning which showed that if you look at core services inflation, it's up about 2.3% on the year. core goods is falling 0.3% on the year. that prompted ward mccarthy at jeffreys to say this. once the commodity prices stabilize, headline inflation could rise quickly. what's your take? >> i think ward is exactly right. in fact, he might be interested to learn that's exactly the fed's view as well. you can see it in the minutes. you can see it in the monetary policy report. they believe a lot of downward pressure on inflation is exactly from that, from the decline in commodity prices. now that's over, you'll start to see it move back up again. all that said, one of the stieking things from yesterday's minutes is how often fed officials commented on how worried they were about how low inflation was. there's even a discussion about changing their overarching statement of principles but much

more emphasis on concern about downside on inflation. my guess is that middle of march at the next fed meeting that, 6.5% threshold on unemployment will be gone. then we'll have to watch what fed officials say about what they're watching. my sense is they are more likely to give us guidance that rates will stay low longer, not moving up sooner. that's my guess now. >> and it's going to depend on the data from there, guys. thank you so much for being here. >> thank you, folks. >> thank you. >> thank you. >> we're heading into the close, about 40 minutes to go. the dow still having one of its best session of late, up 114 points. we're about 12 points higher on the s&p 500 and 30 on the nasdaq. >> we highlighted it earlier. there's a big decline in profit, a weak outlook waking on walmart shares today. so is this a real red flag for the economy? we're going to look at that a little deeper coming up here. >> and don't blame winter weather for housing's recent stumbles. a new report says rising prices and interest rates have made buying a house unaffordable.

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get a complete vehicle checkup. only at your ford dealer. welcome back. the situation in ukraine is reportedly getting worse at this hour. the death toll tragically climbing. nbc's jim maceda joins us now with the latest. jim? >> reporter: hi, kelly. well, today was supposed to be a day of mourning for the previously killed but it got much worse than that. around 10:00 a.m., protesters

reportedly fearing rumors that large numbers of army troops were heading to kiev's independence square really took it out on riot police. they stormed them, throwing stones and fire bombs. dozens of police were killed or wounded or taken prisoner. then the police responded with live fire, cutting down protesters, killing at least 75 just today and wounding hundreds more. now, bodies were left lying in pools of blood for hours, really, in the chaos. opposition protesters blamed the carnage on police snipers while the police, who have lost 13 at least of their own today, were blaming armed extremists. tonight kiev is relatively quiet. we're monitoring the live stream from the square. there's just an occasional crack of a warning shot. police have now pulled back off the square again amid rumors that ewe yukrainian leader vikt yanukovych has agreed to hold

early elections. bill, back to you. >> all right. nbc's jim maceda in ukraine with the latest. thanks, jim. back here, stocks rallying from yesterday's losses. dominic chu, what's behind this comeback? >> blackberry shares moving higher on facebook's $16 billion acquisition of whatsapp. also, coca-cola gaining ground after increasing its quarterly dividend nearly 9%. coke shares getting a pop. electronics and retailer conn's saw its stock plummet after it cut profits for the year citing higher debts expenses but avis rose after posting better than expected fourth quarter earnings, boosted by strong sales growth and higher price. we're going to end things with walmart, losing ground after reporting fourth quarter sales that came in shy of estimates. its 2014 earnings estimates also came in below analyst consensus

views. kelly, bill, back over to you. >> all right, dom. thanks very much. with walmart the worst down performer today, is this a buyer opportunity, or today's earnings a canary in the coal mine? >> joining that conversation, mike santolli from yahoo! finance. michael, this should be walmart's time given the nature of the economy right now, given their size, their scope, their reach. why the stumble? what's going on? >> well, this has been four quarters in a row where walmart's fallen short of its own target. so obviously i think the story for me f you want to look for a reason to be contrarian and actually think it's a buying opportunity, is that most of the bad news is out there. the consensus is this is dead money. and i do think you saw some signs with walmart management today really lowering the bar for 2014 and ramping up their small store format expansion is an acknowledgment that status quo is not going to cut it. the stock has kind of bounced

off support around 70 for the past year or so. it has not breached that level. seems to me the downside is limited. it's cheaper than target right now based on the current year estimates. so it seems to me much of the bad news is in there. but look, you can't really paint a happy picture here. their sales over the past year have trailed cpi. so they're not even keeping up with inflation. >> james, you don't really like the shares here either. i want to ask if we know in the consumer space, there are struggles and that acquirers and con sol day to bes are being rewarded. why shouldn't walmart like family dollar? >> i don't think that's what the issue is here. we look at all of the economic data that's been released over the past month and a half or so. we see that really the darkest spots in all of that data is the data points that relate to the consumer and retail here in the u.s. and that's a really big drag on walmart. we saw them cut guidance. we saw them miss for the fourth quarter in a row today. four out of the past nine quarters they've missed on earnings. i don't see any reason to get --

>> so why is that a macro story and not a walmart specific story? there are plenty of examples of companies in the consumer space f who are doing really well, disrupting the walmarts of the world. what do they need to do? >> right. so it might not be a macro issue. it definitely is somewhat of a walmart specific issue. like you said, there are a lot of retailers out there doing well. walmart has an incredibly large reach around the world and does have exposure to a lot of markets we're concerned about right now. the stock i don't think has any chance of heading too much higher from this level here. it sells off on earnings historically. i think it's going to head lower. i don't see any reason that buyers are going to come into this stock here. it is trading at a discount. there is a chance it may fill the gap lower from today. but i think from this level, with the yield at around 2.6%, it's not really attractive from any angle here, especially if you're going to be in an

environment of rising interest rates. >> mike, as much as it pained denver fans, the seahawks figured out the mighty peyton manning. is it possible other retailers have figured out walmart and put them in their place? >> i think it's possible walmart has multiple drags that are not even from competitors. essentially, they ingest a lot of government benefits to households that have been declining. so that's a head wind. and yes, i do think that they're obviously very, very slow and far behind in online commerce. the amazons of the world can completely strip away at a lot of the product categories that walmart has relied on. that being said, you know, you can kind of turn that upside down and say they have a very unexploited online opportunity. i do feel as if it's not really changed the overall kind of value proposition of the walmart brand out there. they're being valued almost like a basic grocery chain, like kroger, and they're obviously a bit more than that. i feel as if it's not a real

upbeat story, but it's one of those deals where kind of a sleeping giant you shouldn't underestimate. >> mike, just real quick, i mean, we know safeway is potentially exploring a bid. we know there has probably got to be more consolidation in the bricks and mortar space. is that the reason to own or have exposure to a walmart here? >> i don't think it's really a reason, but it's a reason that the downside is extremely limited because you don't have that much breadth in the kind of bricks and mortar grocery space that's -- there's no expansion here. once you've got the footprint, it's yours. >> all right. >> thapnks, guys. appreciate your thoughts on walmart today. not helping the dow, but the dow doesn't really need it right now. the average is up 106 points with about 30 minutes left. >> so what does facebook's $16 billion deal for the mobile company whatsapp say act how mark zuckerberg has matured as a ceo? >> and what does this deal say about the future of the labor

market? afterall, facebook paid a king's ransom for a company with only 50 workers so far. is that a major red flag for the future of global work force? stick around. do not miss that discussion coming up. iwe don't back down. we only know one direction: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at start-upny.com

welcome back. as we head into the last half hour of trade, want to do a quick check here of markets and where we stand again. the dow up 107 points. the nasdaq adding 31. the s&p up 12, bill. so on a day in which we're seeing relatively light volume, certainly going to keep an eye on what trend, if anything, this signifies. >> absolutely. facebook acquires mobile messaging company whatsapp for more than $16. they're making some folks you've never heard of very, very wealthy. >> who are these people? josh lipton taking a look at silicon valley's newest billionaires. >> they have oned the pantheon of silicon valley's uber rich. meet the founders of whatsapp. meet jan kourn. it was his experience growing up in communist ukraine that shaped his approach and appreciate

communication that wasn't bugged. as a teenager, after arriving here in the u.s., he lived on food stamps, but he wanted to stay in touch with family back in ukraine and russia. that was the motivation to build this messaging service. overnight he is now in the neighborhood of some $8 billion. his partner, brian acton, was employee number 44 at yahoo! where he worked on advertising, shopping, and travel. acton tweeted in 2009 that facebook turned him down for a job. so he went on to co-found whatsapp. another big winner in this deal, jim getts of sequoia capital. could be worth an estimated $3 billion. and for a group of guys that built a messaging app, we can tell you it's hard to track them down. guys, back to you. >> all right, josh. thank you very much.

so imagine this. you're watching "shark tank." it's "shark tank" tuesday on cnbc. the whatsapp deal happens on "shark tank." the guys come in, make their presentation. instead of mark cuban, it's mark zuckerberg sitting next to kevin o'leary and zuckerberg offers $16 billion to the whatsapp founder. what do you think kevin would say? >> well, we don't have to wonder. he's joining us now. investor on "shark tank." kevin, great to see you again. what would you say about this deal? >> well, i think it brings up four big issues. i'm trying to be pragmatic about it as an institutional investor. first of all, i do not own any facebook stock, and i never would because i never own dual-class voting shares. here's exactly why i don't. the last time i looked at this deal -- and first of all, i want to congratulate all the sellers. the shareholders of this app

have done a very good deal for themselves. that's what capitalism is all about. but if i were a shareholder of facebook, it raises four huge questions for me. number one, and because obviously i don't have a typical due diligence process in terms of valuing this deal, in this case, the ceo decides what he wants tooed. it doesn't go back to his board. i think they made a mistake. it's the first time ever i called my desk today to look at the borrow on facebook. i'm thinking of shorting it. >> wow. you bring up an issue, kevin, that actually goes back to when facebook listed. dan bigman at "forbes" is writing about how facebook ownership structure should scare investors more than the botched ipo. his price was effectively the fact that this dual-class structure gives zuckerberg a yes/no vote on pretty much everything. he says, you aren't betting on the business when you buy facebook. you're effectively betting on

zuckerberg. that's a good bet, but it does raise this issue. if you're shorting the company, you're shorting mark zuckerberg. >> i haven't shorted it yet. i'm going to look at it for the fist time. it's now telling me there isn't a due process involved. i would have questioned, had i been on this board, what's the cost of emulating this business? would it cost me less than $19 billion to do this? could i have bought another messaging service, added my facebook brand at a significantly cheaper price? i'm having a hard time getting to a place where i think this is going to be accretive to facebook shareholders. i think what you're doing is betting on an already proven guy. look, he's a fantastic ceo and has created a lot of value. that doesn't mean that every decision he makes is going to be a good one. there is nobody that can actually stop him from doing this because he has 57% of the votes. and that really makes it interesting for people like me to say maybe he'll get one of these wrong and i can make a lot of money shorting his stock. >> and the amount of money they're paying for this particular company, i had a

flashback to the '90s, kevin, when you're having to justify a price for a company that's just getting started. you know, it's a guy that was on food stamps. it's those kinds of stories that while they are, you know, of the success story, it does smack of an overvaluation market right now where we're overly justifying these valuations. are we getting too rich? our valuations right now, do you think? >> well, you know, i think it -- you could argue that and say this, that clearly zuckerberg has decided that this stock is way overvalued because the majority of the purchase price is in paper. and he's using it. if this stock were to fall 50%, his purchase price would be half. and most of it -- what really shocked me about the deal was that not only do you have to pay $16 billion, you have to give up another $3 billion in more paper. why wouldn't you just say, look, i overpaid for you by a factor of 32 times revenue, i don't need to dilute my shareholders

anymore. who did this deal? and by the way, this is why i'm investor in the banks. whatever fee they're getting paid, i love them. i'm a shareholder. >> this is exactly why people were saying, is this a sign of desperation at facebook? should that be a reason to be cautious on their shares, kevin? but even understanding the valuation being lofty here, you got to the respect what whatsapp has built. this is not a castle built on sand. they have half a billion users, adding a million every day. how can you possibly get that kind of scope and reach and success anywhere else? >> good point. >> that's a question i look. i say to myself, if you gave me $19 billion cash today, could i not emulate this for half that price in and i would think some member of the board might have raised his hand or her hand and said, excuse me, mark, is there a chance we're paying a little bit too much for this? is 32 times revenue a justifiable price for the incremental shareholder that bought the stock today? because that's the question you

have to ask yourself. you have a different measure. >> the thing we're not bringing up is google could have bought them. and there's a competition factor. so you're going to have to make a larger bid than you otherwise would have knowing that the competition's going to come in with a pretty decent offer if you don't. so is it possible this was just kind of a -- >> a cheap way to not let google eat your lunch. >> exactly. >> that's the justification for paying 32 times sales? here's the way i look at it now. >> we're in the 90s. >> as an investor, here's my decision. it's a personal decision. facebook is no longer an investment. it's a speculation that somehow you can do this over and over again and from the old metrics overpay wildly and somehow create shareholder value in the long run. that's a speculation at best. >> if i'm the guy that founded instagram, i got $1 billion. i'm thinking, what am i missing here? >> highway robbery. >> should have held out for more. thanks, kevin. >> take care. >> great to see you.

so he would have passed. will mark zuckerberg prove the critics of this deal wrong? we want to know how you feel about this massive buyout. how will it look in three years' time? tweet us @cnbcclosingbell. >> don't forget to catch kevin and company tuesday on "shark tank." the dow is now up only double digits. 96 points at this hour. heading into the final 20 minutes here. the s&p 500 up 11. >> from facebook to twitter to pan door ra, social media stocks have been driving the evolution of the tech sector. when we come back, we'll look at whether these up and comers are ready to take over the technology world. >> and we've got another barrage of earnings coming your way as soon as we hit the closing bell. hewlett-packard, priceline, groupon, nordstrom all set to report. we'll get you those results as soon as they're released. stay with us. it's a stationery and gifts store.

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has been a star performer. in the last segment of our sectornomics series today, we look at those up and comers. some big names we talk about all the time that aren't necessarilyfanecessarily facebook. check out names like pandora, zynga for online games, yelp. these are all internet companies smaller in size but get a lot of headlines. there's a reason why. check out some of the performance so far. look at pandora. those shares are up 41%. that's just in 2014. so a little less than two months. 40% returns. another big one to watch here as well is another game maker. yelp is another one we'll watch as far as online reviews and websites for sharing ideas. those shares up about 33%. zynga another big one as well. on the downside, look at some of the more established internet 2.0 names that are giving up some of those gains we've seen

over the past year or so. twitter is down 11% so far this year. investors a little concerned with their last earnings report. but of course, if you want to look at the overall picture for these internet 2.0 names, you have to look at some of the big movers we may see after the bell. one is an old-world tech company. priceline survived the old tech bubble. it reports after the bell today. look for earnings of $8.29 on sales of $1.5 billion. the options market is implying a plus or minus 6% move for these shares. and groupon, of course internet 2.0. online daily deals. look for two cents a share on earnings. this one could be big. the options market pricing in a plus or minus 13% move. we'll have both those names after the bell today. back to you. >> all right. we'll watch for volatility on that one. that's for sure. thank, dom. see you later. heading toward the close. dow up 107 points right no uhw.s tomorrow is an expiration day,

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responsibility. what's your policy? welcome back. we've got the market trending higher here into the close before expiration date tomorrow and all those earnings coming out that you're going to be dealing with in the second hour. joining us now is bill smith and our own bob posani. bill, what do you make of this market here? pretty resilient. economic data for the most part kind of soft, but earnings have been good. >> yeah, earnings will continue to, i think, do well. the efficiencies brought on by technology, cost-cutting, corporate managers not spending mup. they're hoarding it. cash is all-time high on the sidelines. >> what's the catalyst to get them to spend that money? that's the question we've been asking for years. >> jobs. it all comes back to jobs. until they create jobs, until jobs are created, stays on the sidelines. >> bob, what is an investor to do? >> well, look what's going on today. look at the markets.

all ten sectors of the s&p 500 are up today. we still haven't -- crummy economic data this week. the market leadership today is sort of defensive. walmart disappointed, but it didn't hurt the market. i mean, it's not killing the stock market. i want to hear what nordstrom has to say after the close. that'll be interesting. right now the stock market is saying, well, we believe that most of this is weather related and things are going to get better. nobody has yet changed their mind on that. we're going to get more data. again, nordstrom starts getting really concerned, i think people start getting more concerned. as of now, that's the overall position. >> speaking of weather related, natural gas has benefitted greatly. it's up almost 50% just this year, in six weeks. you like it just longer term, though, as not just a weather play. >> we've been in natural gas for quite some time. ultimately we think this is the next industrial revolution, meaning, you know, five, ten years from now tractor and trailers, cars, trucks,

everything -- >> how do you play it then? >> we are in this by southwest energy. we're national fuel gas. companies that are basically exploring, et cetera. >> so the explorers. do you buy the pipeline companies? >> we buy the pipelines. anything to do with natural gas, i think you have to be involved with for the longer term. >> i was just going to ask, because once you see it pop over $6, don't you worry that after such a move -- it was the top commodity last year. it's been one of the top performers this year. we've had such a spate of positive news. isn't there a risk you're buying it at the top? >> if you're buying the commodity, i would have to agree. i think that you probably 're pe for a pullback. if it were to pullback, you might see pullback in the shares. use it as an opportunity. >> look at the natural gas futures contracts, the curve. front month you're $6. look further out a few months, we start dropping down dramatically. >> they're looking past winter like the rest of us. >> and the point is that even at $6, that's not going to halt the

extent to which natural gas starts to replace some of the other fuels we use, which is why you're betting on it. >> i also think one of the reasons for the run-up is there's a lot of speculation there as far as hedge funds that were short the actual commodity itself. if you remember a few years ago, that's what took natural gas over 14, 15. >> they keep asking me about investing in ung, the natural gas etf. invest in it if you want to, but the front month contract is $6. look further out. they drop dramatically. can you add? i'm not here to direct people on what their investments should be, but can you add? do you know how to look at a contract? >> just tell them the truth, bob. >> i think it's a little risky right now to buy into something like that. >> thanks, bob. bill, good to see you. thanks for joining us today. we'll take a break, come back with the closing countdown in a few minutes. >> hewlett-packard just moments away from reporting its results. we'll have instant analysis coming your way. and we'll have detail on that you won't want to miss.

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we've almost gained back and gone back to the high of yesterday for the dow jones industrial average. now we get earnings after the bell tonight. four companies to keep an eye on. all higher today. hewlett-packard. by the way, they're looking for 84 cents on $24.19 billion. david faber will help us out on that one. then it's priceline, groupon, and nordstrom. we'll especially want to hear from them in light of what we heard from walmart today. that'll be coming up in just a few minutes with kelly on the second hour of "the closing bell." bob, tomorrow we get expiration day. it'll be interesting to see what impact that'll have on the market. >> it's not as volatile as it used to be. there's so many options, expirations that go on. so unfortunately, it's not quite as volatile as it used to be. this was an interesting day. we saw the leadership, the same leadership group we've seen all year. we saw gold miners, biotech, pharmaceutica pharmaceuticals, all of them moving up. the reason i want

nordstroms so much is they didn't lower their guidance unlike walmart. nordstrom kept everything the same. so we're looking for -- i have $1.34 for nordstrom. i want to see whether they lower their full-year guidance, 2014 guidance, and what they have to say about how february was overall as well. so again, the key point is they didn't change any of their numbers. walmart did. we might be in for a surprise here. walmart didn't surprise us, but the guidance was disappointing. >> and the options market suggests groupon may be the big mover one way or the other. that's been the bet there, that they could have a 13% move one way or the other. gold miners, last year's worst performing sector. >> and this year's best. >> and it happens all the time. now they've become the best performing sector. >> you hesitate to do something as simple as say look at the worst performing sectors, find the etf for it and then buy it

for the first month or two. >> it's the basis of the dogs of the dow here that re. you take the worst performing dow component, buy it, and it's the best one next year often. >> what didn't necessarily work, the biotech continued to be really strong. so by and large, that particular trade, the gbx, the gold miner, as the dogs of the dow trade, worked fabulously this year. other than that, some other stuff hasn't worked very well. a lot of people thought banks would improve as the economy got better. banks have been a big lagger. citigroup's down 7%. down again today. just fractionally. >> they were pretty strong last year. they were so 2013. >> well, yes. the game here is we want to see the economy expand, more loans put out. we want to see more interest in loans. >> all right. thanks, bob. see you later. going out with pretty good gains here. gaining back what we lost yesterday. the question is, what is the

message of the market? what are they looking at that's making this market as volatile as it is? stand by. earnings coming your way here and that debate, who was more influential, elan musk or jeff bezos? that's the second hour of "the closing bell" with kelly evans and company. see you tomorrow, kelly. and welcome to "the closing bell." i'm kelly evans. here's how we're finishing. a surprisingly strong day on wall street with $1 billion of buy orders on the close. that reflects some of the bid in the market from options expiration that could affect things today, could affect things tomorrow. we'll watch volumes heavily. here is how things are shaking out. the dow up 92 points today. slightly off its intraday high but still up a healthy half a percent. the s&p 500 adding about 11 and the nasdaq rallying by 30 to 4267. let's talk this one out and get right to it with my panel today.

it is great to see all of you. dave, since you're here, we're going to you first. what do you make of these markets? >> i think they're still bene t benefitting from all the money coming in from the fed. even though the taper's happened, the market is still getting $65 billion a month. i think we have that little correction, you know, over the last couple weeks which shook out some of the excess. i think we're probably on to new highs. >> a lot of people have been talking about earnings. do you think that has anything to do with this? we had rich peterson last hour almost foaming at the mouth about how strong this earnings season has been. >> yeah, sure. in the beginning of the year, we thought earnings would be somewhere in the 8% to 10% range for, you know, across the board in the s&p. i think we'll probably get that, with which will push the earnings to 115 or so or 120 on the s&p, which leaves a lot of room for growth to the upside without the market getting

overval overvalued. >> right, perhaps take some of the teeth out of the fed. so interesting yesterday everyone saying they could hike rates as soon as next year. all evening felt like there were these notes and people on the street dialing it back. what's really going on? what is the thinking at the fed right now? >> well, i think that it's clear they're going to have to revamp guidance in some way to give the markets more clarity about what they're going to do. i think there's been a lot of chatter about the unemployment threshold and what's going to happen with that. remember, there are two parts to the forward guidance. unemployment threshold and the inflation flethreshold. that begins to raise the question of how long, how much inflation might the fed be willing to tolerate as it continues to keep rates lower for longer. how much might they have to overshoot to get the economy where they want it to be. >> mary, what about you? what jumps out to you?

>> deals. deals, deals, deals. we were talking about what facebook is willing to pay for whatsapp. does this look a little topee to you? obviously a number of people are surprised by the $16 billion they're willing to pay. does this suggest anything about this run we've seen in the tech group? >> i think short term -- i mean, the market's always going to be susceptible to up-and-down movements. it does feel a little frothy because of all the deals getting done. but there's still a lot of liquidity in the markets. that's what's fueling it. until that changes, the trend is definitely to the upside. >> guy, do you like facebook here? >> hi. >> hi. >> you have to love the price action of facebook. huge reversal today. monster volume. the price suggests it wants to go higher. what did i take away from today? first of all, rich peterson foaming at the mouth. i hope you didn't get that on television because that's not a particularly nice visual. but i don't think the earnings

have been that great. a lot of it's financially engineered. huge stock buybacks. they're cutting back on everything. if you saw revenue growth was meaningful, i'd say, hey, you're on to something. but i don't think you're seeing it. i'm in the mary thompson camp. >> no, mary was in your camp before you could see her. she's over here giving you the high five. >> i'm in a dark room here. >> i know. >> i'm with you today, guy. >> mary and i go to similar schools. mary didn't get into georgetown, so she went to notre dame. but that's okay. >> and did you even get into notre dame? >> i didn't even apply. >> you knew you wouldn't get in. >> facebook down 2% earlier this morning, john fort. up 2% by the close. >> yeah, really curious. you know, this acquisition is absolutely huge sizewise. lots of people scratching their heads. a lot of people giving them the benefit of the doubt. >> i don't mean to cut you off, but i think we have news on

hewlett-packard. i want to get straight to david faber. >> thanks very much. hewlett-packard is out with better than expected earnings, at least according to its guidance. 90 cents a share. that's a nongap number. the revenue number also above the estimates of the analysts who follow the giant technology company. $28.2 billion was the revenue for the reported quarter. for the first time since the second quarter of 2011, this company had revenue growth, albeit extraordinarily small. 0.3% on a constant currency basis, but they'll take it given the long turnaround hp has been under and is in the middle of. they are happy to see some revenue growth, perhaps building a base for future growth from this point. as for the bright spots during the quarter that perhaps contributed to better than expected numbers, psg, personal systems group, including pcs, better than expected, up 4% on

the revenue line. they are talking about seeing signs of stabilization and perhaps a slowing of the contraction in the business. particular signs of strength in commercial notebooks were noted by the company. printing, while down 2%, another bright spot for the company as it had been the previous quarter with a 16.8% operating margin. should also note, by the way, net cash at hp of $1.7 billion. they got operating expenses down 1.4%. they generated $2.4 billion in free cash flow. and they had $3 billion of operating cash flow, hence they are returning cash to shareholders and they are for the first time in quite some time, kelly, actually having a net cash position at this company. it's going to be up and down from here, but certainly they are going to be pointing to science of a continued turnaround in what was a very troubled business a couple of years ago. >> we're seeing hewlett-packard shares moving up about 2% after hours. john fort? >> i mean, it looks to me,

david, like the midpoint in the range of epfs for the coming quarter is a little lower, but they brought up the low end of the range for the fiscal year overall. also, services margins not looking that great at 1%. i think that's a little bit of a deterioration. then at the same time, as you mentioned, pcs looking a bit stronger than expected, both on the margin line and revenue line. as you take a look at the health of the business overall, do you feel better, do you feel worse, are they just pulling the right levers? >> you know, i think they feel better overall. as you point out, it's a 22.8% gross margin across the business. of course, they don't look at it across businesses. they look at it for each of those businesses. they would like to continue to cut costs, i believe, john. they're in the midst of a significant reduction in work force. they're about 29,000 through on their way to 34,000. speaking to meg whitman, they've also talked about continued

potential cost cutting taking place in 2014 in addition to trimming more heads. overall, meg whitman has been saying there are going to be ups and downs but certainly one would expect they're feeling a bit more confidence here at this point. hard to say where the pc business goes, though, isn't it, john? it's obviously an incredibly low-margin business. by the way, hp continuing to cite increased and significant price competition not just in pcs but also in the enterprise services group as well. >> yeah, doesn't look like that'll be letting up any time soon with lenovo jumping in as well. we know they don't care about those margins being in the 3% range. >> lenovo of course will be a tough competitor on low-end servers, as you point out. although, hp will tell you, listen, they've got their plate full right now in terms of integration, not just with the ibm server business, but with the acquisition of motorola. perhaps an opportunity for hp to move there. they continue to focus on

efficiency, on cost cutting, on streamlining the organization and on innovation. one would have to say at this point, though, that it seems to be going perhaps better than many anticipated at least a couple years ago. >> and david, we're looking at a company that's had a turnaround story the market has believed. now we approach a quarter that indicates they're moving in the right direction. if i've been on the sideline, maybe skeptical, what's the their ti narrative that gets me involved? >> that's a good question. i think they'd say, listen, we are at the forefront of innovation. we are making the changes we need to in i.t. perhaps ahead of our competitors as we deal with pressures from the cloud or big data or security and offer a suite of products to our customers, not just about giving them more speed but actually trying to help them solve their problems. i think they would be focused on that and the fact that printing is not dead. it's still a pretty darn good

business. >> david faber, sir, really appreciate it. thank you for joining us after hours to walk through some of those numbers. don't miss david's exclusive interview with hp ceo meg whit man. that's happening tomorrow at 9:00 a.m. on "squawk on the street." we'll see where the shares are trading by then. we're moving back a little bit after hours again. not unusual. got do digest what's happening as people kind of look through the business and decide what levers, if anything, they're going to pull in the months ahead. >> yes, indeed. just wanted to mention also groupon numbers are out. looks like the stock is trading up nearly 11% after hours. >> wow. and that's where we heard dom say we're probably going to get a move on this one. group groupon never fails to disappoint. guy, last word. >> be careful with hewlett-packard. go back to february 2012. basically the same time of year two years ago. this is exactly where the stock

failed at and traded it lower from. valuation is reasonable. i didn't see what total operating margins were, but i will say last year at this time, they were about 10.5%. they're probably slider closer to 8% now. operating margins continue to deteriorate. valuation is reasonable, but unless the stock opens and closes above $31 tomorrow, i think you have to be really careful on the long side. >> all right, guy. thanks very much. appreciate your time. of course, olympic curling coming up at 5:00 p.m. on cnbc. get your second screen ready. your tablet, smart phone, laptop, whatever it is. guy will be streaming live on fastmoney.cnbc.com. it all starts 5:00 p.m. eastern. more on the street's results coming up. plus, whatsapp, it employs about 50 people. what does facebook's $16 million acquisition say about where the labor market it headed in this country? also ahead, forget about punishing winter.

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welcome back. a flurry of after the bell action hitting wall street. dom chu joins us with the latest. >> lots of volatility. let's start off with hewlett-packard, just out with their earnings report. reported better than expected first quarter profits and sales. it also raised the lower end of its full-year guidance. it's now down-ish. maybe flat. still, very much off its after-market highs. priceline posted better than expected fourth quarter profits and sales. shares also up but not as high as they were previously, earlier on in the session. groupon earning 4 cents a share, double what wall street was expecting. sales also coming above street views. it was up 13%. then there's nordstrom posting earnings of $1.34 a share. sales coming in just a tad light at $3.61 billion. nordstrom sees full-year profits below wall street expects.

shares down in the after market. back to you. >> lots of companies moving around as they digest those reports. thank you, dom. we want to get a bit more color on the numbers from hewlett-packard. david, great to see you. what's your take on the quarter? >> certainly the major surprise was in the personal systems group, psg, showing revenues of about $8.5 billion, which is about $1 billion better than the street had expected. from that standpoint, looks like going into the end of calendar 2013 we actually had a bit of a budget flush by corporations buying up hewlett products. that's basically what drove the revenue surprise in the quarter. obviously it's nice to see hewlett not having to report a tenth consecutive quarter of year-over-year revenue declines. >> personal systems. explain that one. >> personal systems is basically their pcs. everything going from desk tops through laptops and notebooks. >> okay. looking at it as well. david, question is, if this is a company that's moving towards more of a service-based earnings model, do you see evidence of

that during the -- do you want to see that? >> well, we don't see it yet. given hewlett's roots historically in terms of its strength and hardware, we wouldn't necessarily want to see them move away from that entirely. i mean, there was a period of time where hewlett thad serp the world's largest pc manufacturer. if we go back to 2001, they spent $25 billion to buy compac. obviously, $25 billion more than the $19 billion we're seeing facebook spend today. >> want to bring in the panel here as well. also, just some news we're getting this hour. "the wall street journal" reporting the u.s. may propose new limits on overseas corporate tax avoidance. i bring it up because of course any time we're talking about some of the big tech companies that have a lot of offshore cash, this becomes an issue. dave, would you expect this to move shares after hours? >> depending upon looking at the company and how large the overseas cash hoards are and obviously the nature of the regulations, whether they're punitive or being designed to encourage cash to come back

onshore. >> right, of course. that's, i think, part of obama's budget he's going to be unveiling, which sounds like more of a wish list for his party as opposed to something that would have broader bipartisan support. in other words, not really going to pass, so this may not be relevant anyhow. john fort, hewlett-packard, how much of a tell is this for investors waking up tomorrow and trying to look more broadly at tech? >> i don't know how much of a tell it is because they're giving nongap eps guidance at this point. there are levers you can pull to make sure that comes in within a certain range, as long as you're good at managing your bottom line. it's nice to see personal systems doing pretty well. at the same time, you've got this windows xp flash happening for the next few months. likes like hp might be benefitting from that. we saw that showing up in some mic microsoft numbers a few weeks ago. this 1% services margin, though, i think is a concern. now, this is a completely different universe from what

we're seeing facebook say operating within. i'm not sure it tells us much about facebook, google. >> david, what's your read? >> my read is hewlett-packard really represents old technology. hewlett-packard is a company really missed mobile. they're coming in with notebooks and tablets, but obviously at a great delay relative to apple. i think for hewlett, you're going to have much greater competition from dell as a private company around that windows xp phase-out. also, the competition coming from lenovo and a host of other white box pc manufacturers. so hewlett-packard sort of locked in its own little realm and doesn't represent the leading edge of technology. >> that's for sure. again, just thinking through any broader ramifications. how do you interpret a hewlett-packard? >> i think a hewlett-packard -- >> sorry, dave here. >> i think again it's part of what we're seeing with respect to earnings growth. one company doesn't really make the market for sure. but i think this is a piece of

the earnings growth we're seeing and companies are coming back with stronger earnings. i think we're going to continue to see that. i think it's positive for the market. >> we'll see you tomorrow. david garrety, thank you very much, sir. we'll keep an eye on hewlett-packard. also, facing a new reality, speaking of facebook. a $16 million buyout of whatsapp. will the new tech economy leave the majority of workers out in the cold? we'll discuss that with a top economist coming up next. plus, some say zuckerberg is paying too much for whatsapp. we want to know how you think the deal will be viewed three years from now. tweet us your thoughts@cnbcclosingbell. we'll put the best ones on air at the end of the program. make it happen with fidelity active trader pro. it's one more innovative reason

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find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. welcome back. want to give you a look at shares of groupon, gyrating after hours. they beat estimates relative to the street. they're now down, though, better than 6% as investors take a closer look. not the only example of a company in which there's been a bit of a double think. we'll see how things shake out. more on the blockbuster deal between facebook and whatsapp. what does this mean for the labor market going forward? with us is andrew mcafee, co-author of "the second machine age: work, progress, and

prosperity in a time of brilliant technologies." great to have you here. what do you think about that? are we making a big thing out of the fact they have so few employees? >> i think it's an example of some things we're seeing. instagram, for example, was bought for about $1 billion. it had 13 employees at the time. i compare that to eastman kodak, another photography company. at its point, it had over 140,000 workers and it's now bankrupt. so there's a lot of disruption. >> but is this unusual? have we gotten to the point where the disruption is happening to such an extent, the benefits flowing to so few, leaving so many out in the cold that we need to seriously rethink what it all means? >> i definitely think the disruption has kicked up a level. digital technologies are going everywhere in the economy. they're not just confined to the high-tech sector anymore. but let's be clear. we're creating a lot of value with all of this disruption. and that's a positive thing for

our economy and society. we do need to be mindful about what's happening to our work force, but the pie is growing and that's good news. >> want to bring in the panel as well. that reminds me of larry summers when asked about whether we need to be raising the minimum wage. he was saying, look, it's more important for the u.s. that the pie is generally growing than we try to change the portion size, if you will. >> that is true, i think from a macro standpoint. i believe that you participated in a panel last night where the theme was, can tech help rebuild the middle class. i wonder how you square those two things. one is sort of a picture of, you know, do we need fewer workers in order to see that kind of growth. two, what happens to the hollowing out of the middle class and the workers kwho may not be able to participate in the new economy? >> well, the first thing we should do is try to grow the economy more quickly. we need to keep in mind our economy is adding jobs every month. we're not in a low-labor economy

yet. the best solution for helping everyone out is to make sure economic growth is faster. that will lead to better job and wage growth. >> i want to jump in here. i mean, it occurs to me more than half of apple's employees now work in retail, which is not the image that we have of the company, considering how profitable it is. you know the retail employees don't make that much. also, consider safeway is in the process of potentially being taken out while amazon is looking to go into grocery delivery and investing in robots at the same time. >> so the new future is the old future. >> yeah, i mean, while they're employing more people, they're employing them at lower wages, probably going to try to go nonunion with those grocery jobs that are going to replace union grocery jobs from safeway, one might imagine, looking big picture. what does this mean for what the workers' life is like in this country over the next few years? >> well, it depends on what level of education or skill we're talking about. the life of workers at the top

range is pretty good and getting better these days. at the bottom, interestingly enough, technology has not had that much of an effect on people at the bottom. now, those aren't great jobs. they're not great careers. we want to think about what kind of security to provide those people. but they have not been in the sights of technology. >> wait a minute, andrew. that's actually, i think, contrary to the view that some people have. are you saying technology has done more to erode kind of the middle america, middle management kind of jobs as opposed to the lower end jobs. >> yeah, the lower end jobs are people like home health aides and janitors and security guards. they have not been displaced by ro tbots yet. where we have seen the impact is squarely in the middle of the education range. people who are doing relatively routine information processing. that's the stuff technology is already really good at and only going to get better. >> mary, real quick. >> who should help retrain this work force? should it just be companies, or

does it need to be the educational system as well? number of people blame the fact that our education system doesn't, you know, train the people with the proper skills, but companies really have to show there is demand for this and work in tandem with them. isn't that right? >> yeah, i completely agree. our educational system is still turning out people who are pretty good at routine information processing and like we just talked about, that's not the skill that's going to be in demand going forward. >> but the problem is we don't necessarily know what skill is going to be in demand, do we? is it all coding, engineering? >> the stem skills are definitely very, very powerful ones, but you're right. i don't think we know exactly where the future is taking us. that means to me we need to be very fluid and dynamic with what we're doing. i also like this idea of everyone having more skin in the game and companies not just sitting back and waiting for everyone to show up with a college degree at their front door. i don't like that approach very much. >> all right. and we want to come back and talk about some of these

options. thanks so much for being here this afternoon. really appreciate it. so it's not the weather afterall. is housing hitting a speed bump because prices have become unaffordable? that discussion coming up. ♪ [ male announcer ] even more impressive than the research this man has at his disposal is how he puts it to work for his clients. morning. morning. thanks for meeting so early. come on in. [ male announcer ] it's how edward jones makes sense of investing.

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welcome back. well, the conversation is shifting in housing recovery. it all has to do with whether it's weather or lack of affordability that's a major stall factor for the sector. diana has the details on this one. what do you think? >> that's the big debate, kelli. is it weaker affordability or just the bad weather? the bulls and the bears are duking it out, but the cries of, quote, affordability shock, are getting louder. home prices and mortgage rates way up last year. so as buyers come out of hiding into the spring market, they're finding it much more expensive. how much more? 21% according to a new report from realty track, the online sales an analytics company. they looked at the average monthly payment on the median priced home with 20% down and a 30-year fixed. with a 10% rise in prices and rates going from around 3.5% to 4.5% that, payment goes from $714 a month to $865 a month. now, some markets, though, are

seeing a much steeper jump in monthly payments. the 50% range. that, of course, is counties in california. but also in michigan and nevada. now, we've seen home sales nationwide down for four straight months. but the good news is price gains are easing and inventory is rising. that's what the bulls are harping on. but the bears say weaker affordability is why california is seeing that huge drop in s p sales, down nearly 14% from a year ago in january. now, national existing home sales for january are out tomorrow morning 10:00 a.m. they will for sure only add fuel to this fiery debate. kelly? >> yes, i think you're right. stay with us, diana, for a moment, if you will. for more, we want to bring in real estate analyst. with what you're seeing, how much sticker shock is there in this market right now? >> there's a real big sticker shock. you know, we've been seeing signs of this for the last couple of years with pending

sales reports. their lowest level in two years as of january 30th of 2013. we've been seeing signs of this for some time. >> you emphasized all four regions. that's exactly what this is all about. if you look through the new home sales reports, or maybe it was housing starts the other day, the one that really plunged, you saw wide regional variations. so you're saying this isn't just specific to one part of the country or another. >> no, it's not. certainly we've seen stronger gains in some parts of the country than others. california's been really hard hit. for example, today it takes now $96,000 to purchase an average home in los angeles county. one year ago today, it took $68,000. so how many people out there just randomly started earning $30,000 more a year? it's playing a big role and also of course rising interest rates decreasing affordability. >> diana, what's interesting about this is even if some of the housing data has turned over, home builder stocks have done well. they're still near their 2013 highs. if this is actually about

sticker shock, perhaps there shouldn't be quite so much optimism. >> right. perhaps there shouldn't be. but again, we've seen this boom in the home builder stocks. we saw them come down a little bit last year. but there's still a lot of emphasis on that spring market. when you look at housing starts, yes, those can be affected by weather. we saw that in the midwest. but a home doesn't not ever get started just because it couldn't be started this month. it'll just get pushed off to next month. it's the sales that we really need to focus on because that's where the affordability issue is coming in. i'm talking to mortgage brokers out there as well who are saying they're having a hard time qualifying folks. the next five weeks are going to be crucial. you have to qualify for that loan in order to get into is the spring market in march, april, and may. so again, you want to see, is it harder to get that loan now because of new regulations? you have to have 20% down. do people have the money to do this now with the higher rates? >> and this is a hugely important piece that we haven't actually discussed yet. this has been a debate about the demand side and whether it's

weather or pricing that's holding people back. what about the supply side? how much are the changing -- potentially huge changes happening in the mortgage space, how much affect is that having on the mark here? >> well, from what i'm hearing here and have talked with mortgage brokers and bankers, it it's not having a huge impact yet. looks like it's going to price out about 5% of the conventional buyers. but it's going to price out a much greater percentage of the overconventional buyers. so for the jumbo market, for example. particularly entrepreneurs where there's new rules and regulations around the sorts of income that can qualify someone. that hits a lot of people who are self-employed. although the home builder stock is up, why did their home builder confidence level drop? the largest drop ever since the history -- since we started recording. >> but that's precisely why people were talking about the weather. they were saying, look, you can't expect in one month the biggest drop ever to have nothing to do with the fact

we've had an unusual climate. >> yeah, but kelly, even the builders in that report said, yes, part of it was weather, but they said it had to do with supply costs, land, labor, all sorts of other issues that were bearing down on them. i don't think a ten-point drop in that sentiment can blame entirely on the fact it was cold and snowy in february. >> they're talking about land scarcity as well. it's becoming more difficult to buy buildable land. >> that's not going to help. so many factors working against this important part of the market. that's going to make the next five weeks really important. thank you, guys. one to keep an eye on, absolutely. now, tesla's elan musk or amazon's jeff bezos? don't miss out. we're going to continue our series of the battle of the game changers coming up next. and be sure to cast your vote online. you can head to cnbc.com/25. we'll be right back. ce, there wn who found a magic seashell. it told him what was happening on the trading floor

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the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. welcome back. as part of our 25th anniversary this year, cnbc is compiling a list of the 25 greatest influencers in business over the past quarter century. we need your help. who should make the list? today we've got a face-off for you, and it's the game changer showdown. phil lebeau is making the case for elon musk. john fort is here to argue for jeff bezos. phil, kick this off. >> i'm going to give you three reasons musk should be in that

top 25. let's start with the fact he has successfully started an auto company. i'm not just talking about a kit automaker where they're putting a few cars together. this is the first successful auto startup in 85 years. he's proving that electric cars are in demand. how much demand? look at the conference call yesterday where they talked about surnling demand for the model s. more than 22,000 have been sold or were sold last year. 35,000 expected to be sold this year. demand is growing in europe. china deliveries are picking up. two huge markets there. and finally, when you look at theirs of tesla versus other automakers over the last year, there's no comparison at all. if you were an investor in te a tesla, look at that chart. that says it all. i'll leave you with this. morgan stanley out with a note today about tesla. the final line is we are witnessing the most disrupting

intersection of manufacturing ever experienced in the auto industry in more than a century. that says it all. >> i'm tingling. john fort, why does jeff bezos get it? >> bezos did a heck of a lot more than turn the book business upside down when he founded amazon.com. he began reshaping the way the world shops for just about everything. yes, amazon posted $74.5 billion in sales in 2013. the reason bezos' towering ambition. it seemed like ebay was the better play. it offered a wider selection and didn't have to deal with the pesky problem of actually delivering physical goods. but bezos turned that minus into a plus by building out a warehouse and logistics operation that makes shopping on amazon nearly as reliable as going to the store yourself. of course, that's not all. bezos was a pioneer in data and in the cloud. now he's going retro, buying "the washington post" last year for a quarter billion dollars. he'll be a shoo-in 25 years from

now for the cnbc 50. >> good point. >> in reality, obviously both of these guys in their own special way have been extremely important to their sectors. but i like what phil is saying. we've totally transformed in technology and auto space. can you make the case for bezos doing the same kind of thing with a market even if he's changing the model? >> absolutely. that's a tough market to break into. so much respect for that. you also got to consider e-commerce. if there's one person who was there from the very beginning and continues to shake things up even now, it's jeff bezos. of course, meg whitman was right in there. you consider what jeff bezos is doing, not only with e-commerce. >> want to get thoughts from the panel. mary, what do you think? >> i'm with bezos. if it was ten years out, we might be saying elon musk. given what bezos has done since he started amazon, he's the man. it's interesting. if you talk to executives,

they're always watching what he's doing. >> do you mean because it's execution versus idea generation to some extent? >> it's a combination of both. it's execution and idea generation. and as john pointed out, he's gone beyond just retailing or online shopping into the cloud, et cetera. so people watch him for what's next. i think that's important. >> in regards to that, kelly and mary, you ask any auto executive who they're watching in the industry right now, it's elon musk. >> right. >> they have boardrooms set up dedicated to figuring out what tesla is doing at general mot s motors. there's no doubt he's dramatically changing this entire industry. >> musk is also into solar and space exploration. >> but we had to confine it just to one industry. we're just confining it to the auto industry. you talk about bezos being there from the beginning with e-commerce. i'm not denigrating what he's done. but elon musk was there in the beginning when you talk about electric vehicles. you're talking about starting an all new form of transportation,

truly getting it mass marketed. that's what tesla is doing in terms of taking people and convincing them they can drive an electric vehicle. >> and he made money sooner than bezos. so, yes, he does get a check point there. >> i want to know who dave's pick is. >> i'd have to go with bezos. as impressive as musk is and what he's done, he's doing it whereas bezos has already done it. >> i have to choose jeff bezos. hopefully -- i think that john's comment about can he figure out the newspaper industry, i think this is, you know, a perfect example of what a right kind of logical mind can do for an industry that's struggling to find its way. hopefully he -- >> what is he doing? can you shed light on it for the rest of us? >> we're actually making very many hires right now, surprisingly. we've been in a crouch-down mode. now we're actually going out there finding people, adding folks, particularly in the digital space. we believe this is sort of the beginning of what we believe

will be the bezos era. >> don't you think it was weird to have ezra cline do his own venture? isn't that what this whole thing is supposed to be about at "can the post"? >> they're hiring people, kelly. >> they're also hiring on top of that and making investments in the digital space. i think that is going to be the future for the post and hopefully if he can figure this out, my hat's off to him. hopefully he just keeps me employed. >> phil, i think you're outvoeted. . >> that's fine. i figured that was going to be the case. look, at the end of the day, i think we will look back and people will say, what's elon musk done not only with the auto industry but also with solar city and space ex. he's truly more than just an sbep n entrepreneur. he's an inve to be. he's a transformational figure. >> all right. guys, thanks very much. remember to make your pick online. head to cnbc.com/25 to cast your vote. i suspect both of these guys will wind up making it in.

speaking of our website, heating up. which stories are at the top of our hot list next. plus, how facebook's $16 billion buyout of whatsapp, how will that be viewed three years from now? tweet us @cnbcclosingbell. your thoughts on air coming up. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. ♪ ♪ where you think you're gonna go ♪

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test. test. test. test. test. test. welcome back to busy session after hours. pretty busy on the website as well. alan, what's on the stop of the hot list? >> it's been killing it since it broke late last night. the whole facebook buying the what's app. messaging facility. you were talking about it earlier. our readers have been obsessed with this story. usually when you see a merger story, you see a big pop in traffic and it dies off as it gets old. people have been staying with it. this is our latest analysis, taking a look how crowded the messaging space is and how facebook isn't talking about that a lot. people have been diving into it. i did a count of our overall coverage. over 100,000 unique visitors

have gone in on check it out. number two, art cashing director of floor operations, he does these interviews every so often and they popped. he thinks the market is less about the economics, more about options exploration, and is also worried a bit about the weather next week. he has a big following. then finally, number three, this has been to be the favorite story, the interview that michelle caruso-cabrera did with the dutch speed skating coach. this thing has been on fire. in fact, the interview has been livened to by the biggest newspaper in the netherlands, plus the biggest network in the netherlands. it's been crazy. >> explain this one for people who missed it, alan. >> he went up there and said the reason we're great speed skaters is because, basically you americans do it all wrong, you throw all your good athletes

into something like football, which he said sucks. >> oh, right, right. he was not a big fan, was he? >> no, he wasn't, but this is a terrific interview. i encourage people, check it out. we have all eight minutes. add joe joe kernen and him go after it a bit, too. >> they were both vehemently yelling will the relative qualities of football ver speed skating. >> it was quite -- >> it was revealing. >> done in a collegial manner. >> alan, thanks very much. kevin plank will be coming up tomorrow. there will be much more to talk about. "squawk box" 8:30 eastern. we'll see what joe has to say about that one. get in thor final tweets. how does facebook's acquisition will be viewed three years from now. your thoughts are coming up, right after this.

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welcome back. a reminder this week, double the screen time, double the fun. catch the latest curling action right here on cnbc next. you don't want to miss a second. on the other device, stream fast

money free-style. melissa lee joins us with a preview. >> hey there, we have the ceo of i-max. we'll also ask rick gelfund whether or not his technology is being stolen in china. that's a big issue for this company and others the so a key issue there that we'll delve into on free-style. >> when can we watch it in 3-d? >> freestyle in that will be scary. you don't want to see guy adami on 3-d. >> on the big imax screen. we'll see you in a couple minutes. >> see you later. we've wanted to know how about the facebook deal be viewed three years from now. here are year thoughts. that's an interesting point. the wall street walrus points

facebook will be over 100 by summer, #callingit. and that's what facebook/what's app. deal is in two years. ed tweets three years google will be fighting for their life against facebook. actually that's a valid point, jon fortt. it does seem to amount to a struggle between the giants. >> definitely facebook and twitter. blackberry has to be excited maybe they got a pop of this, but disappointed that blackberry messenger wasn't available. >> has anyone used what's app.? i am the newest user here. it does have a lot of advantages. look, i remember the days of $100-plus monthly phone bills for text messaging. this is 99 cents a year and the first year is free. >> if they can make it into the next generation of skype, it has

potential when you consider the reach into emerging markets, but the question i've got is how much are phones in these emerging markets willing to pay for a subscription service? where will that money come from? they've got to figure that out. >> they are mobile, though, in emerging markets. i want to pivot to that, groupon, what's happening after hours. i hope we can show the report. the report earns are better than expected. fast forward about 30 seconds, and it's not -- it turned negative. it is down almost 11%, apparently on concerns of acquisition costs? >> it's going to post a loss in the current quarter because of acquisition costs. we do want to note, though, he is forecasting retch above expectations. so as we look at this earnings season and some of the complaints are we're not seeing revenue growth. groupon will deliver it next quarter as well form. >> the weekend next week, what's important for you? >> i think we'll see a

continuation of this trend. as you said, the market has weakness, and i think it put in a nice bottom. i think it will challenge the old highs. >> could they spoil the party? >> next weekly policy palooza. we also have the monetary forum on friday, where there will be an interesting paper presented by big-name economists on the role that financial stability should play in monetary policy decisions of the that's been a big debate. there's been talk about putting some of those concerns westbound the forward guidance. >> this is a reflection, again, of what happened the last time around. should the fed have been more proactive at the time? the answer quite clearly seems to be yes, but it's hard to do in the moment, to identify it, to lean against it >> the other issue they would

say is monetary policy is a blunt tool. so is it appropriate to burn down the house in order to exterminate the rats? >> meanwhile, we'll keep an eye great