>> you can't even call them sore lo losers. >> in the magazine it was -- they described all the olympic winter games and they talked about lake placid, undisciplined, terrible olympics. i'll tweet out the picture tonight when i get home. >> thanks for watching "street signs," everybody. >> "the closing bell" is next. welcome to "the closing bell." i'm kelly evans here at the new york stock exchange where we are on track for, believe it or not, bill, a record-breaking day. >> what a day it's been. i'm bill griffeth back here at cnbc global headquarters. on wall street nobody seems to have a case of monday blues. the s&p 500 is close, we're not there now, but we're close to an all-time high on a closing basis. the gains have been impressive across the board to start this week off. i guess we're reversing some of what we did last week with the

expiration. >> bill, the question which we'll get to in one second is why. so here is where we stand in markets right now. the dow is up 161 points. the s&p 500 adding about 18 to 1854. if we hold, there will be a new record closing high. the nasdaq up 40 points above the 4,300 level at this hour, bill. >> let's ask that why question you posed. get to our closing bell exchange. our round table includes patti edwards from u.s. bank, quincy crosby from prudential financial, anthony chen from chase and our own rick santelli in the windy city as well. so, patti, why is the market up as much as -- the dow was up 190 points at the its peak today. why is the s&p near all-time high territory? >> we're getting through earning season and 75% of the reports have been better than expected. you add to that it looks like we've got a little bit of resolution in the ukraine and the fact that people had been taking money off the table and

it's time to get back in. i think people are just going where the best deals are and right now that seems to be the u.s. market. >> the u.s. markets. and that's where -- if you look at the action in europe overnight and asia to some extent, is it the g-20 statement, anthony chen, in your opinion because i'd be amazed if something like that coming out of that group of policymakers would be enough to hand us almost 200 points on the dow? >> i think the g-20 statement went a long way talking about boosting economic growth by 2% over the next five years and, of course, putting to rest any discussion of austerity whatsoever. all those things are suggesting that we are going to try to stimulate not only the u.s. economy but the global economy which will lift up the emergency markets that really have been the real pain for financial markets for quite some time. >> joining us, he made it through traffic, peter from cantor fitzgerald is also with us. earnings are one thing, the fed the another with the tapering, and there are those who feel we're in sort of a sweet spot

right now with the slower growth, the tapering, the good earnings. do you agree? is that why this stock market is doing what it's doing right now? >> yeah. you know, the earning beats are fine, 75% beating. that's actually not that out of line with the average beat rate. so i don't think it's stellar earnings. i really do think it's something of a goldilocks scenario in which we have just slow enough growth to keep the fed engaged and we're not so late in the fed easing cycle that people are worried we don't have the fed backstop. >> i want to go back to the point anthony was making about the g-20. we've been going back and forth, is it true that something like this statement can really cause a rally? you're saying austerity is off the table, that's supportive, but why did yueurope struggle s much and here in the u.s. we seem to have this levtation. >> especially when you consider

it's easier said than done. >> it's easier said than done but even in europe you're seeing less and less discussion of austerity. you have seen spain, the credit rating picking up. you're starting to hear forbes magazine saying ireland is one of the best countries to do business in the world when it was a poster child for problems a few years ago. you're hearing less and less of that drag overall. you're getting some good news in italy that maybe things are going to move forward and the ukraine situation that was mentioned a few minutes ago. that uncertainty is out there. and then let's not lose sight of the fact that the economy in the u.s. is slow growing, it provides more room for central banks to do their job. >> germany also today -- we came into this market with good data out of germany. the survey is a very influential survey. it provided a nice confirmation that at least in the largest economic block in the eurozone, germany, things are getting better.

>> that's a good point, quincy. so also over the weekend picking up on more people looking at emerging markets and saying, well, you know what? extremely depressed valuations, tons of outflows, maybe now is the time to actually try and start to look for opportunity in this space. is that a threat at all, that people are going to start to look elsewhere for opportunity as these indexes in the u.s. plumb new highs? >> perhaps so. there's already been bottom picking and moving into certain emerging markets, but i think there's one other element here. markets love m&a activity. one of the things that we have seen is that the acquirer's share price has moved up in a number of cases. that's very unusual and it's a very positive catalyst for the markets. it presents a halo effect on the sectors and subsectors in the markets, and the activity that we've seen is in number of sectors. so you continue this, you can see the market move higher. we'd like to see cash deals.

nonetheless, the market has been waiting for m&a activity and it's here now. >> let me ask mr. market the why question today. rick santelli, in your view why are we rallying like we are today? what's going on? >> well, the weather is an excuse potentially to keep rates in check, and they are in check as you look at these charts. we've basically gone nowhere since february 12th. the last time we touched 2.76% level and since then we've added 300-plus points to the dow. and i think when you add into that the notion that some of the data has been weak even over and above any weather implications. so, yes, you know what this is about? you can't fight it sometimes. and i understand that. as long as the three or four investors behind you are willing to pay more, as long as it's fresh in people's minds that 55 people went for $19 billion, there's obviously no shortage of liquidity looking for a home. i think that it's going to continue. it's not surprising at all.

how long the game goes on, that's another question, but obviously investors are interested in that today and i can respect that. >> and, rick -- >> one last point, bill, and that is that the head of the central bank in india a couple weeks ago was raving somehow central banks weren't doing anything. today his tune changed saying central banks around the world seems to be listening to what's going on in emerging markets. that's the message equity markets are hearing around the world. >> everybody seems pretty positive about the markets about you there's always going to be another side of the trade and it came this morning from our friend james grant, the long-time editor of grant's interest rate observer on squawk box. he's a hard money, sound money kind of guy, and he's worried about the impact that fed policy has had on all the earnings that we love so much right now. here is what jim said this morning. >> my fear is that because

interest rates are suppressed, therefore earnings are inflated, so when rates go up again, suddenly the hall of mirrors is shattered and we look at each other and see what actually is rather than what the fed wants us to believe. >> patty edwards, have we been tooli fooling ourselves? >> revenues has only gone up by about 7%. it is final for revenues to start picking up the pace and that's part of the reason you're seeing the m and a. companies are looking for revenue growth. they will have to get it somehow and i think m&a which be way a lot of them play it. >> it's a great point. it's one that's getting a lot of chatter, which is it's fine that you generally have seen the price of the index track earnings, but there really hasn't been that revenue growth. so how do you read this? do we have to kind of have a transition here where that top line does pick up?

>> well, i would think eventually we need to, and i would agree with mr. grant in that you had two effects on low cost of capital on the markets. the first is obviously through lower interest expense and better net earnings and the second is through price earnings ratios. when the cost of capital is low, pe ratios tend to rise. and so you have had a double whammy, and we have really not seen robust revenue growth, and, again, i keep coming back to the fact that we have an accommodative fed and a growing balance sheet this year. the balance sheet will grow another 7.5% and at the end of the day when you boil things down, that's operative. >> rick, you're not as much -- you are a fan of the fed as much as jim grant is, but i wonder as skeptical as he sounds about the impact of fed policy on earnings, isn't this precisely why the fed was adding all that liquidity to the economy right now, to help the corporations through these tough times. >> i don't know. i hearken back, i kind of remember the dynamic was to help

main street actually, but, no, i think jim grant's words should be carved in stone. very little doubt in my mind he's right, but that isn't the issue of him being right. the issue is how long will the game be afoot. how long will i be able to look behind me and see investors champing at the bit to pay higher than my high bid? that's the question. normally these things take a quhol lot longer to work out than many investors believe. >> you raise an interesting point. i wonder what quincy thinks about this. how much of this policy has been directed at helping corporate america which in fairness is indicative of main street. these are our big employers -- >> not much trickling down. you don't need an umbrella. >> they're the ones buying shares and benefiting from all of this. >> absolutely. the fed started this to create liquidity in markets. then they moved to the jobs mandate. it was supposed to be trickle down. the virtuous circle that ben bernanke outlined did not actually take place despite auto industry and housing, but i'll

tell you this, we saw a taste of what happens when the fed changes, not may 22nd, but in june. look what happened to markets globally. the market saw a taper of tightening. everything sold off. when tightening happens, something always breaks. it took fed speakers, it took the bank of england, the european central bank to calm things down those two weeks in june. we would have run into absolutely a lack of liquidity in markets. so we got a taste, a dress rehearsal of what can happen. by the way, janet yellen, she goes up on capitol hill this week. i don't want to be long going in because she is careful in those q & a. they can twist it, they can f torture -- >> going long yellen has been -- >> they can't handle normalization. that's what's going on.

>> this is fun. i always love sparking debate about fed policy. oh. thanks, everybody. see you later. >> appreciate it. great to see you guys. >> is this me? >> that's you. all you, sir. >> we have 50 minutes left in the trading session here, and we've had a rally. the dow was up 190-plus points at the peak today. now we have a gain of 154 right now and we're watching to see if the s&p is close at an all-time high. much more on this rally is coming up. plus, tech deals helping to fuel this strong market. they've been happening at a fast and furious pace lately. coming up, a look at what's driving that and which companies might be next. and dreamworks animation is getting away from its movies core. first they announced a publishing unit. now they're opening a shrek entertainment attraction in london near the london eye. when we come back ceo jeffrey katzenberg will join us and talk about this ambitious move in a first on cnbc interview. tdd#: 1-888-648-6021 there are trading opportunities

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might know like "the croods." >> joining us is jeffrey katzenberg, ceo of dreamworks animation who is out in california with our julia boorstin. julia? >> thanks so much. and jeffrey, thanks so much for joining us today. >> great to be with you. >> you're announcing this big deal with merlin entertainment. why are you making this deal? >> it is just another step in what is, you know, a path to building a branded family entertainment company, and, you know, diversifying, using the great characters and stories and ip that we've built up, some of which we acquired with classic media last year. and suddenly there are many, many opportunities for us to really diversify the company. >> and the stock is up on this news. how long will it take before we start seeing profits generated or real revenue generated as a result of this deal? >> the first will be next year. they're on track to open up the first attraction right by the eye in london which is maybe the greatest piece of real estate,

and that will be spring/summer of next year, and then, you know, we've committed to roll out a half a dozen of these with merlin, and, frankly, in success, there will be many more. it's a great product and they've done a wonderful job building these around the world. >> now, you say it's a great product. i think it's important to make it clear this is -- merlin is le legoland. you're talking about a whole different type of entertainment. >> they do legoland, madame tussaud. they have a number of midway products. they're a couple hours experience in it. what we're doing is really almost like live theater. you the audience will participate in a story with live actors and our characters from shrek and you have to help, you know, solve the story and save the day. and it's very clever, and i think a really fun, unique way to engage with our characters. >> kelly and bill, want to jump in? >> thanks, julia. jeffrey, it's great to see you.

just curious over time what you think the ratio of nonmovie income to actual movie income will be for dreamworks as you roll these kinds of things out? >> yeah. it's a little hard to -- right now today, you know, 75%, 80% of our income comes from our core movie business. you know, my ideal is three, four, five years from now that would come down and be 30% or 40% of our business. it's still the heart and soul of the company, and without those great new movies and characters, the rest of it can't happen, but i hope we are able to grow the company significantly now out into television, out into parks, out into publishing, many different things. >> the publishing business you just announced earlier this month, what's your plan there? how big could that business really be? >> one of the real places of great success in the publishing world today right now is kids, and both e publishing as well as hard covers. we own golden books.

you know, we all are familiar with that as a wonderful, wonderful property. and with all of the other movie properties and now tv properties coming from netflix, we actually now have the scale to have an in-house publishing operation. >> great. bill? >> jeffrey, on the whole question of distribution, it's clear you're testing different modes of distribution out there with publishing and with the licensing to merlin and, you know, this tablet that you've developed as well. but what about just going whole hog into electronic distribution of some kind? our parent comcast has made it clear that that's -- content and distribution are the ways to go to survey. why don't you guys just merge with netflix. you and reed hastings could run a whole empire. i'm sort of kidding in that regard but you know what i'm talking about. are you going to at some point make a full commitment to distribution to complement your content?

>> well, a couple different ways. first of all, netflix has become really -- dreamworks probably most important partner and customer, and we made a huge deal with them just literally six months ago. game changing for us. in making new television content, very specifically for that platform. so, frankly, their growth, this new deal that they've done with comcast, that's all good for us. we're very excited about it. but i think the next place for us where you're going to continue to see real opportunity is in digital distribution. as you know, we bought awesomeness tv last spring, which is a teen and tween girl youtube channel, which has had unbelievable growth and continues to, and we're going to launch a couple more verticals in that same space in the coming months. so that now gets us into distribution, direct distribution. >> we look forward to seeing

where that all goes. but i have to ask you before we run out of time about the cnbc 25. you're named as a contender, and we're curious who you think should be on the list of the 25 most influential people in business. >> well, so i can only relate to my world here. i would say for sure reed hastings and ted serandos as a pair. brian roberts, you know, i think and steve burke in terms of what they have done. you know, i think one of the really guys who has done one of the most amazing jobs as a ceo today in our space, probably the best job, bob iger at disney has really done a remarkable job there. and, you know, i think a coming up and getting ready to is there's a new head of youtube, susan and robert kinsel. >> a lot of contenders. >> you're very modest, mr. katzenberg. >> thank you so much for joining

us. we really appreciate it. >> thank you, julia. >> thank you, jeffrey. >> great stuff. we have 40 minutes to go to the close. the dow is up 150 points at this hour and the s&p 500 if it closes here, bill, i believe it will be closing a thet a new re high. >> what will russian vlad nelad putin do now that the government he supported collapsed and he's not confined by the olympics? >> and activist investor carl icahn is still at . accusing marc andreessen of putting his interests in front of shareholders. so how has it right in this case? is it icahn or an drdreessen? ea,

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welcome back. we've got some breaking news on bitcoin. mary thompson joins us with what's going on here. >> of course, on the day we had the head resigning from the big coin foundation, more news for bitcoin advocates. the security for trust wave is saying cyber criminals have released a malware called pony that basically steals digital wallet that is contain bitcoin and other digital currency.

this happened from september to february and $220,000 worth of bitcoin were stolen. a malware called pony released to steal thewallets that contain this currency. >> beware the trojan pony. >> yes. russia's prime minister is questioning the legitimacy of ukraine's new government saying instability in that nation threatens russia's interests. our chief international correspondent michelle caruso-cabrera still in that area, is in kiev now with the latest on all the uncertainty in ukraine as many wait for what vladimir putin's next move will be. good evening, michelle. >> yeah, we haven't heard directly from vladimir putin yet, bill. we have heard from several of his deputies and we know they're unhappy with the situation here in ukraine and the president of france, francois hollande called

putin today and spoke with him on the phone trying to encourage him to back a peaceful and negotiated settlement here, but what putin will do -- what his next move will be in what has become this chess board of ukraine is still hard to know at this point. at the same time the west tries its hand at influence as well. the eu's foreign policy chief catherine ashton was here in kiev. she was meeting with opposition leaders as they try to form a new government. the parliament here, a coalition government, and also with members of the international community trying to come together and put together some kind of aid package for the country whose economy has really been pummeled by nearly four full months of protesting. last week that crescendoed in a bloody confrontation between the protesters and the government and today in the square there are still thousands of protesters, but it is much quieter though extremely mournful and somber. russia is extremely unhappy that their ally, viktor yanukovych has been ousted and is on the run. he's wanted for the bloody

showdown we saw in the square last week. it remains to be seen what they're going to do. ukraine is at a pivot point between the east and west and both areas of the world are fighting over it to keep it in their sphere of influence. guys, back to you. >> and keeping michelle busy we should add. michelle, thank you so much. we know it's been a long day, a long couple weeks as well. hermitage capital ceo bill broward saying putin should be concerned about the regime change in the ukraine because if it happened in ukraine, it could also happen in russia. >> bill joins us tonight from geneva, switzerland. we know you're no fan of putin. you know that country better than most. first, explain your current relationship with vladimir putin's government and how it got there. >> i was once the largest foreign investor in russia with $4.5 billion invested in the stock market. i started uncovering corruption in the companies i invested in and started to expose it, and in 2005 i was expelled from the

country, declared a threat to national security. the police then raided my offices, seized my documents, and then stole $230 million of taxes i paid. my lawyer uncovered it and testified against the police. he was then arrested, tortured and killed in 2009, and they have since gone after him posthumously prosecuting him in the first ever posthumous trial in russia. i have a lot of experience with putin. >> while we've been focused on what ukraine is going to do, you say there should be just as much concern about putin's future being on the line here. even as people in the u.s. are talking about how putin has a step up on -- he's outmaneuvering us on the chess board and all of that, what is your read here as to how strategic ukraine is for russia and how vulnerable putin is? >> well, i think we have to understand that ukraine is kind of like a junior varsity version of russia.

you had a clep toe kratic regime. it's a much bigger version of the same thing in russia. what putin got to see was people said, we're fed up with this. we don't want to have it happen anymore. and no matter what tricks the government in ukraine tried to play, the power of the people overcame that, and this is putin's worst nightmare because if it can happen in ukraine, it can happen in russia, and he doesn't -- and putin doesn't know what will trigger it off. in ukraine i don't think they ever would have expected an eu treaty would have triggered a revolution but that's what happened. >> that's the thing that triggered this whole confrontation was the treaty is thee u at the expense of any relationship with russia at the same time. so now what happened do you think to that eu treaty and what does putin do about that do you think? >> well, the eu has said very explicitly that they're ready to open up the talks about the treaty again.

i think the u.s., europe, and others are ready to step in with imf funding for ukraine, and i think the ukrainian government would rather take their money from the west than from russia. i think you will see a treaty being signed. i think you will see financial package being agreed with ukraine, and then i think what you will see is russia -- they're not going -- i don't think they're going to send troops across the border. that would be crazy. but what i do think you will see is that russia will do all sorts of provocative measures, really subtle provocative measures over the coming months and years to try to bring ukraine back into their influence and they have a lot of leverage. they have gas. ukraine lives off russian gas. they have a lot of trade with russia. russia can play hardball and they will because that's what they do. >> bill, at the same time, doesn't russia need ukraine in order for the pipelines that funnel gas to its western european customers, it's a relationship where they both need each other, do any not? and how much does that complicate the billions in aid that whether it's europe or the

imf or entities in the u.s. may want to hand over? it's not so simple as just relinquishing funds, is it? >> you're absolutely right. i mean, this is a highly complex, messy exercise which almost certainly won't work out for anybody. ukraine has flip-flopped from one side to another. there was an orange revolution where the western candidates won and then the yanukovych came in on the russian side. it's a tug of war going on between the two sides and it's not going to be simple no matter what. >> bill, does it all ultimately depend, and i hate to put it this simply, but on the oil price? that's how much room to map nuf maneuver to support ukraine that russia may ultimately have? >> i think everything in russia depends on the oil rice. the reason why russia hasn't had a yanukovych revolution is because people are richer in russia than they are in ukraine.

why are they richer? because the oil price is above $100. if the oil price were to drop and there's lots of reasons why it might, drops down to $60, then russia will be in the same situation in the future as ukraine was in today. >> wow. >> bill brouder, good to see you. thank you. >> thank you so much. >> and meantime, markets going lower here. we're still with a healthy gain of 137 points. the s&p is up 14, but it's getting closer to that all-time height territo high territory. >> and, bill, ben willis, some of the floor guys talking about verizon and how a rebalancing there related to the vodafone deal may be impacting the appearance of the buy or sell close pressure. we'll keep an eye on that. the s&p 500 is on track to close in uncharted territory. the question now is whether it's

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welcome back. rally day on wall street. this has been one of those days where when you ask why is the market rallying, it depends on what you and. short covering, the g-20 communique over the weekend, the fall of the ukrainian government, all the mergers and acquisition activity, and on and on and on. the simplest answer, kelly, more buyers than sellers. the dow up 145. at its peak it was up 196 points today. the s&p is in record territory right now with a gain of 15 points. >> how about more buyers than stocks, bill? barron's making the point again the wilshire 5,000 is the wilshire 3666 in fact. >> right. >> supply and demand. it always comes back to that. some retailers have been blaming bad weather for lackluster earnings recently.

>> but not every retailer is a loser from the polar vortex. courty reagan takes a look at that part of the story. >> expect to hear a lot of weather commentary but for good reason. it's not really an excuse when it has a real negative impact though you probably won't hear a lot of thanking mother nature for those that it might have helped. barclay's retail analyst allen rip kin thinks home depot was a beneficiary. jeffreys is recommending decker's, the company that owns uggs saying channel checks con i remember the ugg brand has benefit the immensely. we believe sales trends over the holiday period and throughout winter have been robust. jaffrey thinks the cold weather helped macy's early in the quarter but tight control of the inventory likely didn't leave left of it to sell in january and polar vortices likely kept

shoppers inside. maybe they're shopping on websites and potentially shopping on more macy websites than department store space which haven't had as much traction online as macy's have. >> we want to bring in evan gold who analyzes the impact of weather on business and have a little bit more discussion about this. so etcvan, we're going to get me retail numbers later this week but people are trying to figure out if january and february were about unusual weather patterns or something else. what's your read? >> weather certainly had a pretty significant impact so far this winter. we've seen it where all these major storms have kept people housebound, unable to get out. so it definitely is going to have an impact not only on overall retail traffic but individual category sales as well. >> do you think it creates pent up demand or is this a lost opportunity? are we losing business here that won't come back? >> i think in certain respects you're going to see business that just doesn't come back. you know, the recent polls were about a $50 billion impact.

certainly a certain segment of that does come back, but we think there's about $4 billion that simply doesn't come back based on restaurant traffic that you don't make up, hourly wages, just simply sales that don't get made up. there will be some pentup demand as we saw here in the east last week where it finally got to feel a little bit like spring, people got outside, start to think about those outdoor projec projects. there will be a spring, i promise you, but right now we're still a little stuck in winter. >> i'll leabeliever it when i s it. the city had the impact of higher energy prices is taking $20 billion out of consumer wallets in first quarter. so is the impact almost perhaps being felt more subtly through higher energy prices do you think? >> absolutely. there's going to be a certain amount of sticker shock as those heating bills come due. what's that going to mean is there will be more money spent on basically people paying their bills and less discretionary income, so you may feel the impacts a little bit over the next couple of weeks but, again,

spring will hit and customers will get outside and look to spend. >> courtney, we're making this doom and gloom scenario out here. there's got to be winners in some of this in the retail sector as well. >> sort of the ones we ran through, home depot and lowe's will sell shovels and snow blowers and then you have decker. some analysts looking at that and saying, ugg, that brand, it's got to do well when it's colder outside. and channel checks tell us that's the case. you have others it's going to hurt. nobody wants to get out of the house when it's really, really cold. the winter weather makes it tough for those delivers it come through. folks are shopping online. this year i think the weather probably did have an outsize impact but the warmer it gets and potentially the earlier it gets, maybe that pent up demand is actually even stronger. people feel so good and are so happy to see the spring, maybe they will buy more spring merchandise. >> i don't know if we can real quick show what's happening with treks. the shares are up 20%.

they make a lot of sort of composites, plastic and wood materials. evan, they're up 20%. they're completely exposed to trends in the housing market. for anyone who is looking at the housing data and wondering if that's a passing phenomenon the way it cratered in january and february, a company like trex seems to be saying, no, we're seeing through this. >> absolutely. all of the outdoor home centers right now, while courtney was saying they had a favorable bump due to, you know, all the cold weather over winter, spring is their christmas. they are ready for spring as well, and they're very anxious for the calendar and mother nature to start screaming spring so people can do those decking projects, all those outdoor lawn care projects they have on the docket. >> evan, thanks for the weather forecast. we can't wait. >> courtney, thanks. >> thank you. >> great to see you both. we have about a little more than 15 minutes to the close as we watch the indexes. the high of the day we were

almost up 200. we're only up 130 right now. >> the dow has not had a 200-point gain yet this year. >> correct. it's barely had a string of strong gains. we're back where we started jan 1 basically. >> but is this rally for real? what happened to that 10% correction we were supposed to get? we have an all-star panel on the markets coming up on that. ford is reportedly ditching microsoft's in car technology in favor of blackberry. is this a smart move for ford to link up with a company that's been struggling like blackberry? your thoughts later on "the closing bell." because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we.

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ask your doctor about axiron. welcome back. so we're starting here with a bang as you can see. the s&p 500 if we hold these levels at 1,850 will be closing a the a fresh record high. seema mody, what is driving these big gains today? >> kelly, we're going to start with netflix hitting a record high on news it agreed to pay comcast the parent of this network for faster speeds for its streaming services. on the tech front, another deal to add to the books, rf microdevices and triquint semiconductors deciding to merge in an all-stock deal.

health care is being led by huma na. one of the leading providers of plans said rate cuts may not be as bad as anticipated. trex hitting a record high as the composite deckmaker reported better than expected earnings. a two for one stock split and a $50 million stock buyback. dillard's losing ground after reporting weaker than expected fourth quarter earnings. >> i think we have trex on our front porch. we used it in the ceiling. >> did you lay the boards yourself, bill? >> oh, you bet i did. >> i guess they're not boards. >> they're not real wood. they're fake. >> you have to have something to hold up against this ice and weather. >> i'm not a carpenter. i just play one on television. heading towards the close, record territory for the s&p, but the dow is nowhere near

that. we're well off the highs of the session. the industrial average was up 196 at the peak. up 147 points right now. >> yes. and investor optimism about the state of the economy, is that one reason why the s&p 500 is closing at a new high today? coming up, we'll hear from someone who says the economy is actually a disaster right now, and that's echoed among a lot of people. what does he see that most investors don't? find out coming up on the "the closing bell." 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 some brokerage firms are but way too many aren't. why? because selling their funds makes them more money. which makes you wonder. isn't that a conflict? search "proprietary mutual funds". yikes!! then go to e*trade.

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welcome back. we are off the highs of the session. the dow was up almost 200 points, but now we're up 137. still a pretty decent way to kick off this monday as the s&p here, bill, could be closing at fresh record highs. 1,le 5 -- 1,851 is the latest. perhaps you can tell us, a, what's driving these gains today. b, whether investors are facing a climate of higher interest rates, lower interest rates. does it not seem like we're searching for direction here? >> well, i think we're -- with regards to higher or lower interest rates, it's still very much a wait and see. we would need to see better economic numbers before we even could consider the fed talking

about tightening in 2015. but as for the reason for the stock markets going up, look, we're coming off a good q4 although earnings expectations have really come down for 2014. there's basically no bad news. there's a lot of us with a wait and see with all the economic numbers coming out. >> what do you think, oliver? >> generally agree. i think if you look at q3 and q4 gdp numbers for the u.s., they were very, very strong, strongest in a dozen years or so. you've had good corporate earnings come out this year and this past quarter and the anticipation is for that to continue to strengthen. so general mood on wall street right here on the new york stock exchange with investors, we're talking to individual investors is we're more concerned about missing out on gains than we're worried about losing money right now because the last few pull backs have been very, very small. i remember when we were talking about a month ago we were sitting here at the end of the january saying is this it? it was a 6% or 7%.

>> if you blinked, you missed it. >> exactly. >> let me ask aaron -- erin a question. since you guys at s&p capital iq are focused on earnings, the contention is fed policy has distorted the earnings picture. that it has artificially inflated corporate earnings with all this easy money out there right now and it's going to be an ugly earnings picture as the tapering continues and they start to remove that. what do you think? >> i disagree on that point. i think when you actually look at the difference between the earnings and the revenues, we can see that there really isn't that much money going out. our revenue growth for last year was 2.8%. they've ratcheted it down for 2014. it's about companies being more profitable. so certainly having cash flows does help that momentum, but i think what the fed really has done and ultimately was always

their goal was increase housing, get that economy rolling, get people spending on housing, and, therefore, the cash flowed. >> we have to go but real quick? >> she's absolutely right but keep in mind earnings have been growing and there's strong cash balance sheet and dividend payout ratios are very low. >> there won't be a reckoning if interest rates rise? >> there may be a reckoning but it certainly won't be all of a sudden. >> i guess that's mildly reassuring. thanks very much for being here this afternoon on a monday where we have kicked thing off on a pretty strong note. >> we'll come back with what could be a historic closing countdown here if the s&p closing at a new all-time high. >> will we or won't we? that's the question for the s&p in particular. you're watching cnbc, first in business worldwide. 0

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♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. three minutes left. while i'm thinking about it, i'm co-anchoring the nightly business report on pbs. check your local listings for the time. it looks like we will have an all-time high for the s&p but the dow continues to come appreciably off the peaks of the day. the s&p needs to close above 1,848 and change. we're there now with a gain of 13 points. the dow up 123 as we head toward the close. bob pisani you're standing near a post on the floor of the stock exchange.

>> we're at the post of verizon. take a look. we have a lot of people. verizon completed its vodafone transaction on friday. they paid a large amount of money, verizon did, to vodafone to buy out its interest in verizon wireless. verizon now controls verizon wireless. it has to be reweighted in the s&p 500 and that's what the traders are doing here. they're looking to get the final closing price on verizon to buy into that company because it's being reweighted. meantime, bill, it's getting a little hairy with this closing high. 1,848.38 is what you need -- >> did i jinx it? it is coming back off now. >> we're 1,849.6. we're one point away. it can go either way right now. we were much higher a little while ago -- >> how much of that was short cover? a lot of guys have been telling me they think it's short covering today. >> earlier in the morning as we hit the new highs, the market just rocketed up.

the intraday highs before 10:00. a lot of people simply have not -- the minute that happens, you get the psychological thing where people worry and they get back into the market. they're worried about losing out. once you pass these intraday highs, but we've come off of that quite considerably and 1,858 we were around, so we were almost 10 points higher but it looks like we will make it. verizon, all the telecom stocks are trading to the downside. normally the reweightings do not result in dramatic price changes if it's dot the way everybody wants it. they result in big volume moves. you will get all these people here have tens of thousands. back to you, guys. >> thank you, bob. we'll keep an eye on the s&p. the closing value is 1,848.38. we're about a point above that. so as we head toward the close here, it looks like we may do that. the dow really pulling back. again, at the peak it was up 196 points on the open this morning. now a gain of 116 or

thereabouts. and there's the s&p as we head toward the close. stay tuned. much more coming on the second hour of "the closing bell," and this week we got retail sales as we highlighted and janet yellen testifies to the senate on thursday. so a big week coming up. stay tuned now. here is kelly evans and company. i'll see you tomorrow. and welcome to "the closing bell," hour two. i'm kelly evans, and it's going to be a squeaker here for people looking to see whether, in fact, we're closing at new highs for some of the major indexes on wall street. we've started off the monday on a positive note but was it enough? it looks like we lost momentum just heading into the close. i feel like i'm calling a footrace or something. here is a look at how the major indexes are doing. the dow looks like it added about 102 points when all is said and done to 16,205. the s&p 500, this is the one we've been watching, and it looks like it will be just shy of the 1,848 level that in mid-january marks the closing high. so we will not in fact have gotten there today.

we'll watch and see if the numbers change but the nasdaq meanwhile adding about 30 points. the outperformer of the session though, not by as much as we've seen at some points, 4292 is the level there. let's get right to it right now with today's panel. joining me now, dan greenhouse from btig, very very own kayla tausche and dom chu, steve grasso will join us in a second and i spy guy adami, our "fast money" trader. maybe dan, you can tell us why stocks rallied so much today. >> i'd like to say it's because everybody is celebrating the life of great hall ramus but its probably not that. we have reversed the previous decline related to the emerging market kerconcerns. >> it wasn't systemic. guy, the question becomes, all right, so we had this pop. people are moving past those concerns. why couldn't we hold the almost

200-point gain we had for the dow midday? >> look, i don't know if it is systemic or not. i think the jury is still out. i think for now it seems like everything is calm, but things could flare up at any moment so i'm not necessarily in that camp. why didn't we hold the highs today? i think the animal spirits are at work. i'm not really sure why we went up. i think a lot of it was m&a activity. you saw the facebook deal. i just think it's exhausting itself. look, i got to tell you, you know i have been wrong for about 40 or 50 s&p points. >> you thought we would go lower than we did. why does everyone cite merger and acquisition activity as a sign that the market will go higher? >> we have been talking about how there's no confidence in the corporate board room. they haven't been willing to put that you are money where their mouth is and look for growth.

this is a sign that maybe they are looking for growth if they haven't been able to see it, if they have actually been becoming leaner and increasing their margins, that maybe we are at that peak and maybe they do need to start doing this. i don't think that the activity that we've seen so far is really enough to say this is going to be a blockbuster year for m and a, but it's putting a bid under the market when there isn't a lot of reason to say there's a reason why people are buying. >> the last blockbuster year for m and a was 2007. >> 2000 actually. some of the best years, wasn't this the very peak of the dotcom boom? that's why the facebook/whatsapp deal had so many people talking because it was almost this question of are we already signaling or coming towards another market top here? >> when you have as many all stock transactions as you have, it's one thing when you're borrowing money, deploying cash, if you're using your stock, the conventional wisdom is you're

using your stock because you think your stock is richly valued. more than anything else, it hasn't just been this year in 2014 where you can make money just anywhere. the market is pretty much flat for the year even with these kinds of gains. you can't say it was defensive and cyclical. the best performing sectors are defensive like health care. but the worst performing are telecom. it's a stock pickers market. you have to pick where you put your spots. >> very quickly, with respect to something dom just brought up with respect to the all-stock transaction, from an academic standpoint, what you want to see as an existing shareholder is a takeover with cash. that means any assumed accretive gains to your stock price, you're going to get all of them. >> why should you use cash when you can lever up? >> this is a much more complicated conversation, but in theory if i'm an ibm shareholder to use an example, if i buy another company with cash, anything that that company provides to me in terms of

accretive gains -- >> and by accretive you mean what? >> by buying that company that's going to be beneficial to me as an existing shareholder, i get 100% of those gains because i paid for it with cash. if you pay for it with stock, in theory and again in an academic sense, you are sharing those gains with the new existing shareholders. >> dan is just being greedy. he just wants the cash all for himself. a lot of times especially recently you have seen a caller so there is a range and there is sort of a guaranteed amount you will get, but it is nice to see some of these acquiring companies giving stock to say, hey, look, you can participate in the upset. this can go one of two ways. at least they're giving that you opportunity. >> when you use equity capital, the cost for equity capital is a lot higher than the cost of using debt. meaning you have to generate a lot higher of a return on that capital than you would using the debt. when you use stock there are pitfalls there as well. >> i don't want the producers to scream but we do need to talk about why this tax code, our

system still prioritizings or incentivizes people to use debt instead of other means. whether it's banks trying to raise capital, whether it's corporate america, whether it's individuals. steve grasso is going to join this conversation right now. i don't want to throw this big question at you. maybe we can just talk -- >> i would have rather jumped in on the other one. >> you're just off the floor. i see a lot of activity at verizon. does that have anything to do with the late-day sell-off we just had? >> this is obviously with their own issues. this is reweights with their own issues internally with verizon, specifically how they generate -- between the indexes that need to hold it and everything that's going on with the stock. >> it's related to the vodafone deal. >> totally. you're going to have another issue tomorrow as well because you have guys that are evening up and turning their position based on the vodafone. >> if i'm holding the s&p 500 stock, do i have to worry about verizon right now? >> no, i don't think so. i think it's a matter of getting back to what dom had said, if you think the overall market is

going up, then you own everything, and i know you said it's a stock picker's market but 70% of all stocks trade with the overall trend. so right now dan has been bullish. he's been right, right, dan? >> i'm not going to deny. >> so he has been bullish. he's been right. but this can turn around quite quickly, and then 70% of all stocks go straight back down again. >> guy, what are you seeing in terms of correlation? what are the patterns here in this market as we've worked through the first couple months of the year, we came off a little bit, we're right back up, it almost feels like march 1 is a reset of jan 1 or have things changed underneath. >> a couple sectors have stuck out to me. defense stocks have been unbelievable for the last 18 months, something we have talked about for a while. look at like lockheed martin today. interesting when they're cutting back our defense budget, cutting back our defense to the levels we last saw world war ii, so it's interesting those stocks have been on fire. health care obviously great. then you start to connect the

dots and look at trex today. that's pretty interesting. that trade is over but what does it mean for home depot tomorrow? and my sense, you might see a ridiculously good quarter out of home depot and maybe we take out the 82 level. so a lot of this is connecting the dots. looked a nvidia. that stock has done nothing for five or six years. it's gone slightly higher but not nearly as much as the tape. maybe there's something going on there. maybe all the m&a chatter is starting to catch up. a lot of interesting krog ccros currents. it's up regardless. you want to make money, you want to be right. >> i want to jump in real quick and draw everyone he is attention to what's happening with the s&p 500. according to bob pisani, we haven't closed this index yet because we can't close it until this vsh is verizon is revolved. so you might see the numbers moving around a little bit on your screen and that is the case. there's a sizable crowd gathered around there, 1,847 is the

level. we're watching the level closely again because if we close above 1,848 and change it will be a record high. but there is this issue steve was talking about that has to do with verizon and the vodafone deal. they're rebalancing. if you own something like the s&p 500 which all these big funds do or you have to track it, whatever happens with that index affects you and affecting buying behavior. >> if we can bring this back away from the he esoteric debat what matters is earnings. we're coming out of a fourth quarter earning season that was stronger than the average strategist expected. earnings were up 8% to 10% in the quarter. we can argue about why that is or where the growth came from. at the end of the day as larry kudlow likes to say, earnings are the mother's milk of stock prices and if you're going to keep having earnings quarters like we did, stock prices should ultimately keep moving down. >> i will go with this 3%. >> we've been saying that for three years now.

>> that makes it even more ag e egregio egregious. >> earnings estimates have already come down significantly over the past two months. analysts are trimming down their estimates in some ways by half to what they thought it was just at the beginning of january. so again there are some expectations. >> earnings are backward looking where the s&p is the best forward looking indicator. >> true. >> the problem we're dealing with now is how much of this as you guys have been covering is going to be blamed on the weather and people think there's pent up demand. >> that's why i think the trex case is so interesting. >> we've had 2.9% revenue growth for this past quarter. as much as we can say there's been 8% to 10% growth on the bottom line, we can't argue about where that's coming from because largely it's coming from cost cuts still. >> can i jump in? i know you want to move off this, but nat gas prices last year average $3.62. now they're averaging $4.88. that's a huge increase to

discretionary spending. where is that going to come out? >> and citi's figure for this, it's nice to have some sense of the hit, we're talking about $20 billion out of consumer wallets q1 on slightly higher gasoline prices and nat gas prices which explains some of the weakness. >> and compound that with the fact that some of the emergency unemployment compensation programs, the extended benefits on the part of the government expired, there are reasons to think as grasso just noted that the first quarter might not be gangbusters. by the time earnings season comes around, we get a lot of retailers this week but by the time earnings season comes around, how many companies will be talking about poor weather as an excuse to either bring down -- >> they already are. >> i totally agree. that said, very quickly, after a 30% up year for the s&p 500, would it be the worst thing in the world if q1 was up for down plus or minus -- >> if we took a pause. he have a jpmorgan investor day tomorrow. are there a couple quick points people need to watch for? >> three things i think people are watching for.

first, capital return to shareholder. they are going through a stress test. they had a buyback program and a dividend in place but they don't have a great relationship with washington these days. the big key is whether they say anything about continuing to return capital to shareholders. number two, an update on litigation. they're in the middle of a lot of ongoing federal investigations and investors want to know where those stands. number three, we'll see a pullback from this branch footprint. they have some 6,000 branches, and they have been the contrarian bet. >> shares were up almost 1%. guy, last word, do you buy the financials here? >> blackstone, love it, loved it for a long time. you want a beta play, check out fortress. >> thanks, everybody. be sure to stick around and catch guy coming up on "fast money" in just under an hour's time at 5:00 p.m. i'm going to miss curling though. much more ahead on these go-go markets. we have your money covered with full team coverage from the new york stock exchange. the nasdaq, the chicago merc.

find out if today's rally is a one off or is there room to run? plus, this could be the year of tech mergers and acquisitions as tech companies sit on piles of cash. find out what could be in play sooner rather than later. you're watching cnbc, first in business worldwide. always call y 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. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates.

welcome back. a noteworthy session for several reasons. today we've got the s&p 500 closing near a record high, if it will in fact close. we've got bob pisani on the floor at the stock exchange to he can change that in a moment. sheila dharmarajan in the nasdaq and rick santelli. >> bob, first to you. when is this index going to close? >> i don't think it will close at a new high. the story is verizon completed its transaction with vodafone. they bought out vodafone's interest in verizon wireless on friday. it's now being rebalanced in the s&p 500 and it looks like $46.23, they're just completing this deal now. the last price before that was $46.54 for verizon. it looks like the s&p will be down a little, and, kelly, 1847 we're at right now. the old closing high was 1848. i don't think we have a new high on the s&p 500. >> it looks like we're just going to miss it, bob. please do flag us as soon as it

looks like that index is closing. in the meantime shall want to get over to she'll ila. what was driving the nasdaq? >> today there was a flurry of reasons. tough talk about tech m&a. we've seen $50 billion worth of deals done in 2014 so far. that's the best year-to-date we have seen since 2000. a lot of people really talking about this trend and what they're also noting is interestingly we are seeing acquirer shares get bid up after these transactions. yesterday rf microdevices up 16% after it said it was going to buy triquint. people say that may be a sign board rooms may be more willing to do m&a. we could see some more m&a down the road. >> rick santelli, here is the debate that's been circling wall street right now. it goes back to the comments jim grant made this morning about whether the market here is overvalued once we start to think about what earnings and

revenue really are in a higher interest rate world. but how can we even have that conversation when interest rates are still so much lower from where we started the year. >> well, i think that's true, and i also think anybody who doesn't believe that using interest rates as a crutch at this point doesn't make a huge difference just when you figure out your options pricing, traders, change that risk-free interest rate 50 or 100 or 120 basis points. see how the value of that option changes. now, think about a stock and how earnings are discounted. the most important thing is steve grasso said it the last segment, the weather asterisk is just a green light for stock investors. there's a spread relationship between zero to a lot of impact in weather, and i think that a lot of impact is what's priced into equities. a smaller impact into treasuries which for ten days the closing yield of a ten-year note has been between 2.71% and 2.76%. that speaks volumes. >> it has been remarkably

stable. that's what's so interesting. it feels like i would say a coiled spring but that implies it's moving upward. is it fair to say that ten-year has just been sitting while investors more broadly try to figure out what the next move, what the next direction is. >> i think its telling us its idle speed is suspect. that seems to be contrary to what's driving stock verinvesto. hey, if i was a stock investors, it would certainly seem i would go with the momentum, risk on trade as well. >> and that speaks to what's happening in the tech sector right now. >> that's exactly right. we are continuing to see this momentum trade on. remember last year some of the momentum stocks chocked up 100%, 200%, 300% gains. we're seeing that continue. but those stocks are delivering on results, tesla, facebook, netfl

netflix. these companies are actually delivering. so it kind of makes sense -- >> are they really delivering or is it momentum? listen, i'm not going to try to argue the tesla momentum trade, but they made 23,000 vehicles in 2013. amazon has moum billihow many b sitting on the sideline. i'm not sure how they define perform. >> you have all those momentum stocks that are doing well, but today we saw just a sheer woosh up in the first half hour as we pushed through to the new intraday highs in the s&p 500. that's purely technical moves there. not a lot of fundamentals behind a lot of that. though that happens quite often. >> bob, all the same -- >> by the way, kelly, we did not make a new high. 1847.61 is settled out. >> are we closed now? >> it looks closed, yes. >> 1847. we're just shy of that level. going back to the point rick raised, i wonder if the word we should be focusing on is growth. in other words, investors are willing to pay for growth now because the broader environment still suggests we're kind of

growth starved. so those names, yes, even a tesla, even at the high valuations that can at least deliver it or deliver the promise are the ones being rewarded. >> you can argue about the technical moves and whether stocks are overvalued. i'm not necessarily disagree with you, but as you said it's all about growth, this environment, and these are pockets of growth investors are willing to pay obviously a ton for that kind of growth. >> hey, rick, would you buy a tesla? >> you know, i would buy a tesla if it was my seventh car and the city i lived in never had temperatures under 55 degrees. all right. well, when you move and that's the case, let us know and then maybe we'll get interested in the shares. thank you, guys. >> all right. >> appreciate it. we've been talking about the facebook/whatsapp deal but never mind that for right now. we want to ask what could be the next red hot tech merger? we will explore that issue coming up. it's a big story. we'll be right back. and no one's around, it does make a sound? ohhh...ugh.

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if we want to be ready for a longer retirement. ♪ ♪ welcome back. the s&p 500 today touching a new high although not quite closing at that level. seema mody keeping tabs on all the movers for us. >> a lot of big movers. zhuo lily out with earnings after the bell. the daily deal site for moms and kids' products posting better than expected fourth quarter revenue. stock is up in after hours trade on strong guidance, up 10.8%. then there's tractor supply up in the after hours trade. this after it raised its buyback plan by $1 billion. the stock up about 1% after hours. a different story for solar city which is getting hit after

saying it would delay its fourth quarter earnings results. now, in the regular session, facebook hit a record high. ceo mark zuckerberg saying whatsapp is a great fit for his company. joseph a. bank moving higher after an offer has raised. 3-d systems fell after bank of america downgraded them to underperform from buy saying it sees top line growth coming at the expense of margins. so that was one of the losers in today's trade. kelly? >> all right, seema, thanks very much. we want to focus in on tech mergers. it's been red hot even beyond the $16 billion facebook acquisition of whatsapp. my next guest predicts it will, quote, turn into a frenzy. a ami amish, it's great to see you. do you mean frenzy relative to even the dotcom times? >> it's a little different this

time. i think tech is here, it's too big to fail. it's great to be on the show again. this is just a tip of what's going to happen this year. the chinese say it's the year of the horse. everybody needs to jump on the tech wagon and really look at it as the year of the unicorn. that's how i'm looking at it this year. all the big players are always buying 10 and 15 companies. whatsapp has really caused a stir, but think about what google has done with nest. mobile is really driving this massively, and there's a lot of other sectors from the internet of things which are also going to be seen for the wearables. drones is a hot topic. gaming is -- cash gaming is really going to take off. so, you know, there's going to be a lot happening in this space right now. >> i want to bring the panel in on this with some perspective as well. steve, what do you think when you hear this kind of talk? >> well, you always look at these stocks, and you always question it a little bit. i question it the same way i question when a company grows

its buyback. i always wonder where the real growth is coming from. obviously gobbling them up. but i just by the top players right now instead of trying to pick who they're going to take out because obviously it's a monopoly for them. >> that's an interesting strategy. this is how i look at it. you got your apples, amazons, your googles, people were talking about yahoo! even could be -- we'll see what marissa mayer says. those aren't the sexy names. i think if you want to be a little more aggressive like we are, i'd break it into private and public. if you're a public investor, you want to try to figure out which of the sexy names are going to take off or maybe get acquired. if you're a private investor like i am, the vc money is huge this year. the last two months have been record deals right now. my dream scenario if you want to talk about it is imagine if apple bought square, twitter, and tesla. they would just jump into those markets. m&a wise, you will see apple do

some big things and you will see -- >> we thought carl icahn had a big wish list with the buyback. that's not a bad wish list. >> well, you know, carl, if you think about what carl said today about ebay and pay pal. apple has this huge opportunity in payment. whether it's pay pal and it breaks off, probably what he's trying to do -- >> another possible target. t kayla. >> marc andreessen said he thinks every company that failed during the dotcom bust would succeed today because the internet has such a more mature infrastructure today. do you think by nature of where we are on the tech landscape that a larger portion of companies can and are succeeding? >> that's a great question. marc andreessen is a visionary. i love marc andreessen. anything marc says i would pay attention to. so i definitely agree with what marc is saying. i think it's a different world than 1999 -- >> but is that good or bad? i guess that's a good thing, right? but i'm thinking through what

does that mean? does it mean that the infrastructure, the cost is so much lower now so there's a lot more successful companies and that's a good thing or does it just mean a lot more players chasing after a similar kind of space? >> it's a great thing. it's a different world now. technology is what fuses everything. it's in your house, it's in your car. everyone -- the smashrtphone market is ridiculous and growing globally. there's huge opportunity with tech. everything is going tech. >> dom, i just worry when something sounds like it can't fail. it's a no lose. >> that's what my dad always told me. if something sounds too good to be true, it probably is. technology has not led the way higher since the depths of the financial crisis. it hasn't really been the leadership role. what gets it to be that leadership role or puts it in that leadership role again? >> you know, that's a great question. i think what you're seeing here is back in the day we're talking the '90s, it was a little different with the personal computer out there. mobile is driving everything. content is king as well. if you see the m&as that yahoo!

did as well on the content side, look at pinterest. they get all these users and then they monetize. what's leading the way is tech. when you go on google, you search something. when you go on to buy something, you go on amazon. you're going to see apple potentially buy tesla. you're going to see a lot of big players that you never even thought about buy technology companies. everybody. >> amish, we have to go but what are your three top picks right now? >> private or public? >> public. >> my three top picks on public side right now, i have been so bullish on facebook. i actually -- so facebook, twitter, and the third one i'm going to say is apple. >> kind of getting back to this point you just bet on the big horses in this space and the question even about public versus private tells you so much about these markets. we have to leave it there. thank you so much for being here, amish, and we'll see you even if a company like apple gets a bid as a result. jump starting the economy, up next steve liesman tells us if the top economists think that's what we need to kick things into high gear right now. plus billionaire investor

carl icahn as we just discussed calling for ebay to spin off pay pal and force board member marc andreessen to resign over an alleged conflict of interest. who has got to right on this one, icahn or andreessen? that's just ahead. ask your gastroenterologist about humira adalimumab. humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohn's disease. in clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. humira can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. blood, liver and nervous system problems, serious allergic reactions, and new or worsening heart failure have occurred. before starting humira, your doctor should test you for tb. ask your doctor if you live in or have been to a region where certain fungal infections are common. tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores.

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welcome back. so what will it take to breathe new life into this economy. leading economists have been hashing that out at this year's 30th annual national association of business economics conference in arlington, virginia, and steve liesman is right there in the middle of all the action. steve, great to see you. what are you hearing? >> well, i'm hearing that there's a long-term prospect that the u.s. economy could be growing quite a bit less than it had been growing. dug elmendorf from the cbo making a presentation and saying that the long run growth potential of the economy, that's how fast the u.s. economic engine can run, may be now more like 2.1% compared to 3.3% over the prior 60 years. that is roughly $200 billion less a year in annual output. some of the reasons for that are the aging of the population. we're not going to do anything about that. cyclical weakness. that could potentially come back. discouraged workers. a lot of questions about whether or not we can fix that problem,

and fiscal policy which people say can be fixed. tax reform along with immigration reform and regulatory reform. several areas listed as places we can help the economy. larry summers, the former treasury secretary, saying today that lower potential growth probably means lower real interest rates for some time to come, and we should get used to that. very controversial suggestion from him, kelly, as you know. he's saying more government spending is the answer, but that, of course, is debated by others, for example alan greensp greenspan, who says government spend something potentially the problem. >> absolutely, steve. stay right there if you will. we want to bring marshall aurerbach into this conversation. marshall, what's your reaction to the talk, this idea that the economy is going to grow more slowly over a much longer period of time? >> well, i certainly sympathize with a lot of what larry summers

in particular was saying. i do think fiscal policy is something that could be used to rectify a lot of problems we have, but there's no question that the data has been very, very poor over the last several months and it's not just weather related, as many of the bulls on wall street have tended to ascribe. >> marshall, you can't overlook the fact that the second half of the 2013, even after the fourth quarter downward revisions, is going to have been one of the strongest periods yet in this recovery. >> yes, and the indications are that for the last month of december and january, the data has been very, very poor. we've had poor retail sales, the unemployment, we've had a lot of discouraged workers as steve pointed out. the ism numbers were not good, we had big inventory build. it seems this is being ignored. it's not just a question of weather because we are seeing a lot of data from previous months being revised downwardly as well. >> if you're right -- >> you know, kelly --

>> hang on steph ove, one secon. is this the end of the circle? are we headed to another downturn, marshall? what are you saying here? >> i'm saying certainly that we are looking for growth somewhere in the range of 1.5% to 2% at best, and it could get lower because the whole trajectory of fiscal policy which so many on wall street continue to applaud, they say isn't this great, this deficit it cois coming down, bu it continues to suck income out of the economy and it continues to lower our potential long-term growth rate especially as you have high prevailing levels of private debt. >> what were you going to say, steve? >> i was going to say what's interesting about the conversation here is it looks kind of through this whole weather situation, through next month, you know, beyond last month, that, you know, the real investment decision people have to make, there are two decisions. one is what is the potential growth rate of the economy? how much do i believe -- >> why does that matter for

investors? why does the potential rate matter? >> because really that's the long run speed of the economy, okay? think about what kind of engine you have in your car. do i have an engine that will take me 80 miles an hour or an engine that will take me 60 miles an hour maximum? okay. and that's going to tell you how much profit our companies can generate. >> look, profits -- i think profits are an important consideration, but ultimately it comes down to spending power, aggregate demand, and if you don't have that in an economy, then it doesn't matter how much regulatory reform you have. it doesn't matter how -- >> normally i'd agree with you, but in this economy right now, you have pretty low demand -- pretty low growth but you have tremendous profits. certainly profits as a percentage of growth, and there's a big question can that continue or -- >> yeah, i think that's an anol nomly. you can't keep getting that on the basis of more restructuring

and more financial engineering. ultimately you have to get some top line growth and we're not seeing that right now, steve. that's a raet problem. it's a function of poor aggregate demand in my opinion. >> is it also a function of the globalization of the world that companies in the united states especially have found a way to make more per dollar of revenue than ever before, that they are supremely leveraged to every dollar of revenue that comes in, and we may be in a long run period of stagnant wage growth but high corporate profits. that certainly has not paid over the past several years to bet against the ability of american corporations to profit from what revenue comes in the door. >> well, profits have been very, very good but ultimately, as i say, i don't think this is sustainable and the external environment is equally poor. in europe we're seeing marginal growth but in many countries you have depression-like levels of unemployment. now we're starting to see horrible data coming out of the emerging market and china which does call into question the ability of say u.s. companies to improve via the external trades.

>> marshall, what would your policy response -- your ideal policy response then be? >> well, i would stop the deficit terrorism for one thing. i think we have pay too much focus on this whole notion of fiscal sustainability and keeping -- and not worrying enough about getting higher employment, higher growth. if you get higher employment and higher growth, you will get lower deficits by definition because you will have more taxpayers in the economy and you'll have many more people spending money. i think that should be the main obsession with policymakers right now. >> last word, steve? >> well, i would just say that it's interesting to me that data has come in that's been very poor, and the market seems to be shrugging that off in part because it thinks a lot of it is weather, but i think there's this idea out there which i think is proven to be true, that companies have found a way to profit, and i hope marshall is right to some extent that some of these profits eventually go to workers but i just don't know. i think it may be more of a sustainable model than marshall

is giving it credit for. >> i think it's a financialized economy. that's the real problem actually and i don't think that is a sustainable model over the longer term. we have to make stuff, not just financially engineer thing. >> we'll leave it there, gentlemen. thank you both. carl icahn is on the attack yet again. this time the billionaire investor and ebay shareholder renewing his push to spin off pay pal. he's also calling for board member marc andreessen to resign due to alleged conflicts of interest. so who is right in this battle royale? plus, we want to know what you think about ford dumping microsoft for blackberry in its car technology system. is this a good branding move to ford? tweet us your thoughts@cnbcclosingbell. though @cnbcclosingbell.

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things that happen in silicon valley where they probably have no conception that it might be wrong, carl is at least i think making a somewhat fair point about where andreessen's allegiances lie. in the end i think it's going to be hard to requequestion that m andreessen isn't doing the webe he can as a board member. >> i mean -- >> lena, go ahead. >> i have to disagree. i think he's reaching here. some of the companies that he even mentions as possible conflicts are so -- the competition is so little, and some are not even competing against pay pal. i think it's just a good example of how wall street doesn't understand silicon valley. >> leena, one second. elon musk, the guy who started pay pal, he says by having ebay

own pay pal, he likens it so if target owned visa. david sax is saying if you allow pay pal to pursue its destiny they could become one of the largest -- >> absolutely. that's a different issue. going after andreessen and donna hoe for these conflicts, i think it is reaching. >> it is reaching a bit. some of the things in the letter were sort of warmed over bits from clips as the ebay response showed but i kind of like it about carl that he's willing to mix it up and go after these guys in silicon valley where in the valley people will not touch these folks whatsoever. icahn has proven he's willing to go after for god's sake even apple. >> but he has to get his

information right if he's going to go after them. >> if you're saying strategic strategically this would be the right move, then why shouldn't the people who he cites as standing in the way of this move be pushed aside? >> well, you know, i mean i'm not saying that it's the right move. i think there is a right to question whether or not in the future pay pal is going to be, you know, best fit within ebay, but, you know, to go after andreessen for these conflicts doesn't really make sense. i mean, andreessen is a pretty brilliant operator. he's obviously helped pay pal become what it is and ebay as a company. so i just don't really see the match in the way the thinking is happening right now. >> again, carl has played this game so many times. he knows how to create a little action out there and that's what he's doing now. to the central issue, kelly, of whether pay pal and ebay should be together, i think arc of history probably has to say and i'll bet leena on this, i'll bet her a dollar, that within three years --

>> a bitcoin. >> those companies will be separated. >> within three years, dennis? >> yes. >> leena? >> i don't know if this is -- if the bet is worth it. i actually agree here. i do think that pay pal is going to eventually surpass ebay in revenue and i really think that they're going to eventually be valued more and it will make more sense to have it as a separate company. but, you know, going after directors and the ceo the way that icahn has just not -- i question his tactics. >> i'd say we cecil csee silico valley represented by leena -- >> he does do the ad hominem attack sharper than most meme do, and then not allowing people to focus on the main point which it sounds like on both coasts there's some agreement. we have to leave it there but it feels like everyone is coming

down in the same place. >> i'll get the dollar from leena in three years. >> we'll bring you back. >> thank you, dennis. keeping the snoops away. that's what the new black phone promises to deliver as a result of its souped-up apps and android modifications. the black phone. we'll check it out next. we'll be right back. e craft ori. e craft ori. no one's losing their job. there's no beer robot that has suddenly chased them out. the technology is actually creating new jobs. siemens designed and built the right tools and resources to get the job done. tdtdd# 1-888-628-2419 n take you in many directions.t spark your curiosity d# 1-888-628-2419 you read this. watch that. tdd# 1-888-628-2419 you look for what's next. tdd# 1-888-628-2419 at schwab, we can help turn inspiration into action tdd# 1-888-628-2419 boost your trading iq with the help of tdd# 1-888-628-2419 our live online workshops tdd# 1-888-628-2419 like identifying market trends.

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welcome back. the race for mobile security is on. between hackers and the nsa, privacy is a prized commodity. and while apple has quietly issued updates over the weekend for its major security breach, a company called geeksphone is introducing a product called the blackphone. take a look at this. the phone valued over $1,500, hopes to be the super secure answer for those concerned with government snooping and hacking. and i want reaction from our panel now. would you buy it? have we gotten to that point where people want and need such a secure device they're willing to pay up for it? >> whether they want it and whether they need it are two different things. i don't think people will be willing to pay for this. i think there's a need for it on a certain level, but the number of people that think they need this is so small. >> how worried are you, mr. grasso, about the security of your mobile device? >> i'm constantly checking to make sure my information is out there.

you have to get security monitoring software. you need to know who's got your information. >> you've got that kind of stuff? >> yeah. >> what kind of software? >> it's all stuff you do. it's all advertised on the internet. i'm not going to start giving them -- >> no, i'm actually just curious because i don't have life lock or any of these things. should i? >> things like that. >> do you guys all have these things? >> i don't have these. but when i look at the fine print of something like blackphone, doesn't look that effective. it's not nsa proof. if the government wants to listen in, it can. the only thing it does is look at the fine print of your own apps and turn off all the wi-fi enabling. you can probably do yourself on your own phone if you knew how to do it. >> for $1,500, you could buy a heck of a lot of burner phones, like $30 ones. use them for like a month. it is like "m.i." >> is -- >> when you least suspect.

>> there are only $600. >> i caught him shaving off his fingerprints before he came on to the show. >> i will say, the touch print sensor on the iphone doesn't work every time. and makes you wonder about how much we can pivot towards using this technology and only using it. i want to know if dan has the sophisticated software things to protect your security. >> i'm still on a flip phone. >> you are not. >> it's a motorola star tack. >> it's a hot pink razr. >> i use the star tack. >> it's not a bad strategy. it's signaling and in reality more of a fire wall. all right, $1,500. we've been asking what you think of ford hooking up with blackberry, speaking of mobile, while dumping microsoft in the car technology systems. tweet us @cnbcclosingbell. mine was earned in korea in 1953.

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and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. welcome back. there's been a lot of tech news today. ford is reportedly linking up with blackberry to power the sync software in its cars. we wanted to know what you think about this move. is it smart for ford? michael tweets, that's like asking which dinosaur is going extinct first. glenn tweets, it is a good idea because of low costs and security. and jeff tweets, ford should hook up with apple, instead, so

siri can drive our cars for us and talk the entire time to keep us company. what do you guys think? smart move? >> i like the fact they've all got skin in the game. ford had a bad experience with microsoft and now blackberry is trying to bring itself up from the ashes. they both have something to prove here and i think they both have the motivation to do it. >> i haven't heard so many people talk about blackberry as a long story in months. seems like everyone's starting to look at this and go, they've got the enterprise software stuff going on. look at -- >> it was security and enterprise. that was what kept blackberry -- people, exactly, but the whole idea is you want to talk about splitting a company, how do you get away from hardware with what really moves the needle? >> well, you saw the hardware business, did they not? i think they're trying to focus more on -- >> that was the problem when you saw the stock cratering. people didn't see you can separate them. they didn't think you could survive. >> i think it's an extremely confidence-building sign to see that a long-term product that

something ford would be building in future models is based on a company that a lot of people were saying, well, we didn't really know, two years, what's going to happen. that's a really good sign. >> quick final thought, mr. green, on markets. >> uh -- >> as we look toward the rest of the week, a lot of consumer names and earnings. we're 90% of the way through the season. >> traditionally, this would be when you'd stop caring. but the companies that report this week are primarily earnings. home depot and a number of other companies, they'll give you realtime assessments of what's going on according to the weather. that been said, what's going on is not all the weather. hopefully we can glean some insight separate one from the other. >> what are you watching tomorrow? >> put it this way, i'm watching mac macro. we have to see another pullback. and when i get that pullback, i'm still holding my breath to buy google on a discount. >> thank you so much for being here. and "fast money" is coming up in a few seconds. melissa lee joining us with

what's on tap. a whole hour now, melissa. >> a whole hour with commercials, but still uncensored. we're going to take a look at the threat scape out there with bank of america analyst who put out more than 100-page research report on where the vulnerabilities are. we are going to trade that. the topmost breached industries, defense and health care. >> well, i think you should do the freestyle commercial breaks online. >> well, we'll explore that. we don't want to blow our cover. >> have a great show. >> thanks. "fast money" starts right now live from new york city's time square, i'm melissa lee. we are back here on the big screen that we did have a lot of fun on the interweb. if you missed us online, we'll have some of our favorite moments later on in the hour. emerging market turmoil in both the ukraine and venezuela, dennis gartman will bring you his top three trades coming up. and the s&p 500 hit a record high in today's