2014 and 2016. >> history will look at him how? >> positively in that he did help avoid a greater cry sus but possibly could have done more and articulate wlads he did in a different way. >> thank you for joining us. brian, thank you for joining us. check out "street signs" at 2:00 p.m. on tuesday. mandy is here. i'm talking off. thank you. good morning. and kwm to "squawk on the street." i'm david faber with jim cramer live from the new york stock exchange. carl quintanilla taking an early start to the weekend. we are live with an interview with hewlett-packard. futures as we end the week we are looking for what might be a slightly, slightly higher opening there. for the ten-year note yield,

last time i looked around 2.5. >> there it is. >> 2.53. >> flat looinds. think there's something happening there and it doesn't happen. >> it is amazing. a look at europe which has been less than amazing although you can see, mixed picture over on the european continent. road map starts with yeah, hewlett-packard's earnings report. more job cuts coming an exclusive interview with hp's meg whitman, on her continued efforts to turn this massive company around. it's been a rough week in retail coming to a close now. another retailer, though, lowers its outlook but the gap surprised to the upside. the secret? athletic wear, old navy, and the stronger april. show me the money. russian president vladimir putin's working the crowd and moving the market ahead of elections in ukraine this weekend. >> hewlett-packard is where we'll start. announced plans to eliminate an

additional 11 to 16,000 jobs. that is on top of 34,000 positions hp said it would cut or has cut 31,000. this is a restructuring plan announced in 2012. the company also did report a slight decline in revenues that were very, very small amount wee below what analysts were looking for in the revenue number for the profit number it was in line. we're going to talk shortly with the ceo of hewlett-packard meg whitman live and as always, exclusive. you've done some work this morning and going to join me in the interview as well. >> of course. thank you. >> give me a take here. the stock did trade down a bit. the earnings came out early. we've seen this happen a number of times. somebody hits a button somewhere and a part of a release is released and apparently some of the news organizations may have botched the crawl the web for these earnings releases and find the link. the market did react a bit

negatively. >> the market reacts before thinking. this is a turnaround. multifaceted turnaround. lots of acquisitions made. peel back the onion, keep seeing things that don't go right. tepid environment for technology, enterprise spending and what meg whitman has done is fix the balance sheet then get the earnings per share to stop going down. only then can you begin to take the offense. these turns around goes defense to offense and she's now at that inflection point. i like the quarter. >> interesting. >> i like the quarter. >> you know, it's a good point you make and one i've mentioned a number of times, free cash flow. $2.3 billion this quarter. they have gone from obviously a net debt position to net cash position and it's now i think it's almost $3 billion.

i've got so many different numbers. >> you can control your destiny it and people have to recognize, sure, we can knit pick, toner wasn't that good. you have razor blade model on printers. you go through the companies i deal with, other than a few companies that have something real pizazz, the enterprise isn't that good for anybody. the corporate. so let's not look at this in a vacuum and say this meg whitman is a failed turnaround. it's anything but. on scheduled turnaround where all you have to think about i hate to use this, but there was a lot of dead wood at hewlett-packard. >> let's get to it. meg whitman has been listening in standing by. there she is at hewlett-packard's headquarters in palo alto, california. as always, very much appreciate your being with us this morning. >> good morning. happy to be here. >> it was year ago during one of our interviews, a year ago to the day where we were talking about this turnaround, you and i

yet again, and you said when i asked about this year, we do believe growth is possible in 2014, probably not in every business, but we hope overall we'll see growth in 2014. after yesterday's report, meg, that is hope realistic? >> so, at our security analyst meeting in october of last year, i said it was unlikely that hp was going to grow in 2014, that there would be pockets of growth and there were this quarter like pcs and networking and security, verityka, some of our security enterprise services, but i would say the good news is that the rate of decline has slowed dramatically. this was really the third quarter of flat revenue which you might say well gee, that's not all that exciting. it's way better than where we were a year and a half ago where we ha had quarters down 7%, down 6, down 9. my in my view the turnaround is right on track. >> right on track meaning as you say, pockets of growth this year

and then real growth in 2015? >> well, we certainly hope so. we have not given revenue guidance for 2015, but remember, we're managing a portfolio of businesses. we've got some businesses declining, some businesses are holding their own and some that are growing quite rapidly. if we can continue to grow the fast-growing businesses and stem the decline in the big legacy businesses, then maybe it will turn out the way we hope. we haven't given revenue guidance for 2015. >> understood. there were a lot of questions on the conference call yesterday, meg, about the increase in work force reduction. a lot went to this question of growth in 2015. for example, tony, a number of questions like this, saying are you cutting these jobs and, obviously, the incremental savings you'll get as a result, is it a sign you're not as confident you can grow earnings per share in 2015 without work force rebalancing? i know you answered the

question, but i want to ask it again because there is that key about 2015 and what these job cuts really mean for you? >> yeah. so no, i remain confident in the future of hewlett-packard. but as the longer that i have been here, we see opportunities to get more efficient and more effective. this was company that was a product of many acquisitions, go all the way back, compact, eds, nearly 17 software acquisitions. and these acquisitions never got integrated quite the way they should have and there are still big pockets of inefficiency. what it will help us do, david, it will help us serve our customers better. our customers still tell us we're a little difficult to do business with, we don't make decisions as quickly as we should, we need speed, agility, need to be nimble in a changing marketplace. while no one likes to reduce the work force, this will be good for our customers and good for hewlett-packard. it will make us a stronger

company. and obviously, you know, we will be able to create capacity to invest in the growth engines of this company whether cloud or security or big data or mobility or our next generation of servers or next generation of networking. we have a lot of opportunities to make incremental investments in r&d. you've seen r&d increase significantly this quarter. we're going to be pouring money into r&d. >> right. you know, meg, another big picture question some of the critics would offer yes, your' getting smaller, some would say shrinking to grow but still an enormous work force, still an enormous company, and there's a belief somehow you can't innovate as quickly as many of your smaller competitors. how do you dispute those who simply believe no matter how small you make the company you're still always going to be too big? >> we're a big company and compete against other very big companies and compete against little start-ups and what big

companies have to do is we have to make scale work for -- to our advanta advantage. go to market work to our advantage, supply chain and make sure where we are focused we are innovating. and i would argue actually that our printing business is one of those areas where we are excellent innovators and we're now transferring that to our server, storage, our networking, converged infrastructure business, our sass business. so we've got to innovate but we've got to use scale to our advantage otherwise big companies will always fall to small companies and listen i think there's a real role for our customer relationships, service capability all the things we do well as an organization. >> right. you mentioned printers and this quarter there was some concern, particularly in terms of toner sales, overall revenues were down 4%, margins were up, it was profitable, and grew in terms of profits, but to this point on innovation, explain to me how it is that the toner sales, for example, are not doing as well

as some thought, supply sales perhaps not quite up to speed, and yet you're talking about this unit actually accelerating. >> yeah. so remember, it is a razor and razor blades business and so you recall when we made met, hp had been out of the laser jet market. we had been out almost seven years. we introduced a lineup of multifunction printers. those are taking whole that will improve the stall base and toner will rebound but '15/ '16 toner will do better than it has for sure. >> jim cramer here. good to see you as always. >> hey. >> let's stick with printers for a second. you have a terrific 3d printer operation in israel. a lot of startups you mentioned coming in taking different areas. why don't you crush them? crush everybody in that business? >> well, we're focused on

business 3d printing, not consumer 3d printing. we'll announce a 3d printing technology at the end of this year and we think there's a real opportunity here. this is an acorn that we're planting that will become an oak tree in the future. this is a business we need to be in. it's very consistent with our heritage. but we're doing that in a lot of businesses. you know, innovation, you have to plant those acorns before they become oak trees and you have to have patience in terms of development cycles. you have to continuously and consistently invest in r&d. >> okay. meg, you mentioned again this start-ups. there was a moment when you answered tony's question, you said look, come on, we have five major business units, 150,000 stores. 66 -- 66 countries. i still don't hear anybody talking about how if you can maybe fine tune that, maybe get out of business, and be in mobile, social, cloud, connectivity, i know that those

are a more fis issues but when you dealt with salesforce.com at dream force i thought the emphasis would be on at least one of those. i did not get mobile, social, cloud, connect it tifts when i went through your -- connectivity when i went through your presentation yesterday. >> i started out my presentation talking about the innovation that went to the marketplace and led with helian which is our cloud offering distinctive in the market, enables to run work loads in public, private cloud with one click work load portability across those different ens built on open staff and this is a differentiated offering. it is exactly what enterprises need. we're solving a real pain for them and the response has been terrific. nfv, another innovation, the telecommunications industry about to go through one of the biggest shifts they've ever gone through and we're well positioned. so i actually led off yesterday

with the innovations in the enterprise that i think will distinguish hp. >> enterprise services revenue was down 7%, meg, over the prior year. you cite delayed key account revenue, runoff from fiscal year 13 continued. operating profit margin flat. not a lot of focus on the conference call but i would like to ask about it, an important part of this company to be certain it is not growing, but you seem to be positive that it can. why is that? >> well, we had an unusual event last year and a bit of the year before where big accounts ran off in a very unusual kind of way. that doesn't typically happen. and so that runoff will be largely through at the -- through at the end of '14 and then we actually have the ability now to turn to a proactive selling motion. we've got an entirely new sales team, new sales leader and saw over 200 new logos in what i would call the new style of

i.t., strategic enterprise services, smaller contracts that are meaningful to our customers. we have to improve the profit margin in that business. it was flat year over year. good news it was up sequentially from 1% to 2.5%. what we've said we've got to get to a % to 9% operating margin there and there's work to be done. in these turnarounds there are businesses performed very well, businesses where more work is needed. enterprise services is one of those businesses. >> >> when it comes to storage you're disappointed. that was a word i believe used by your cfo in her prepared remarks in the conference call. what's disappointing? i know that world is changing quickly but what gives you the confidence that you can execute properly to take advantage of the opportunity? >> yeah. the storage results were disappointing. they were down 6% year over year. although we believe we'll grow a point of share in the market.

i think we performed slightly better. this is largely a market problem as i understand it and only three things going on. first more efficiency that is being gained in the storage market through compression and then provisioning. then there is the high-end market is moving to the midterm market. you can get a fabulous storage product that used to cost you much more that is now very, very cost effective and then i think a lot of customers were taking a pause. gee, what's going on with flash. what about these lower prices in storage. what should we do as organizations. and my belief is this will accelerate in the second half it's what a lot of the suppliers are saying. i think our competitors believe that. we have to see that market come back. our objective we always want to outperform the market which we did but we've got to -- the good news we are perfectly positioned with 3 par to the extent people start buying again 3 par is perfectly positioned for what people want in the next

generation of storage. >> that middle tier that delivers high tier in a sense. finally meg, personal systems group, never very profitable but sales were up and as you told us last quarter, a while ago, when there were a lot of doubter ere commercial pcs are not dead, still hanging in there. do you continue to see stabilization and/or potential growth when it examines to the commercial -- comes to the commercial side? >> our pc business grew 7%, commercial faster than that. operating margins were up and focused on profitable growth. i think that's partly because of the migration from xp to windows, from a delayed refresh program. a lot of businesses held off to see what was going to happen here. we see some -- we think we'll have a couple more good quarters here but the market we do think the market is in a slow decline and we outperform the market pretty dramatically this

quarter. so listen, it's funny, isn't it? remember when we first started when i came to hp, we said pcs are dead, printers are dead. i guess neither turned out to be the case. >> no. maybe a slow death. with some good moments. meg, finally, a number of people seem to be making a lot of the cash flow, above the investors that follow the company's expectation of $3.2 billion. there's chatter i picked up on the call, maybe you should do a deal, maybe a larger deal than you thought about. this man to my right was talking about it. is that something you would consider? a larger acquisition again to try to transform a company as you continue to try to turn it around? >> well, let me say this, and repeat what i've said before, any acquisitions we make will be returns based. they are likely to be small to medium-size acquisitions. in the areas of cloud, big data, security, maybe some of our core

businesses if we see a particular market segment where we want to play and we don't have the product. so we'll be very disciplined about this. we will make sure it is -- those acquisitions are aligned to our strategy and i have to say i think they're in the small to medium sized range. >> and finally, meg, once you hit 50,000 or roughly in terms of job cuts are you done? >> well that will be the end of the restructuring program we started in 2012. what i've said after the first restructuring program we have to build productivity into the dna of hewlett-packard and so we always, every year have to be more efficient. i will say we live in a new world order. we have competitors who are the most respected biggest companies, companies in the other parts of the globe and the start-ups you recognize. we have to be efficient in how we do things so we're easy to do business and our customers choose us because they like our

products and like how we service their needs. so -- but we will build that efficiency into our day-to-day operations. there won't be another big restructuring for sure. >> as always appreciate your time. thank you. >> great. nice to see you. >> good to see you. meg whitman, ceo of hewlett-packard joining us as she does every quarter which we always like to point out. >> good and bad. >> she's there. >> that's what's important. >> different than some other ceos. >> there's people who dodge us. she held herself very well on the big issues. turning around, one thing that didn't come through in the conference call, we're hard to do business with and we're going to change that. sma something remember steve jobs talked about how intel was hard to do business with and started sam sung. it's a little damming but can be changed. >> with all those acquisitions she pointed out and a large work force. no surprise when you talk to hewlett-packard employees there are potential continued cuts.

>> must be tough to go up against the new firms in california, all the great companies and you're cutting while they're expanding. it's very difficult to get the right people. >> all right. coming up we've got russian president vladimir putin speaking out on numerous issues ahead of this weekend's elections in ukraine. hear what putin told cnbc. it's going to be another look at futures as we end the week ahead of the long weekend. more "squawk on the street" live from post nine when we come back. you, my friend are a master of diversification. who would have thought three cheese lasagna would go with chocolate cake and ceviche? the same guy who thought that small caps and bond funds would go with a merging markets. it's a masterpiece. thanks. clearly you are type e. you made it phil. welcome home. now what's our strategy with the fondue? diversifying your portfolio? e*trade gives you the tools and resources to get it right. are you type e*?

predibut, manufacturings a prettin the united states do. means advanced technology. we learned that technology allows us to be craft oriented. 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.

this morning we are remembering our good friend and my long-time colleague mark haynes who passed away three years ago tomorrow. mark the founding anchor of "squawk box" and co-anchor of "squawk on the street." we remember him for his knowledge looking out for the small investors' best interest and his steady hand during the dotcom bubble, 9/11 rand the financial crisis. mark called the stock market bottom of 2009 we call the haynes bottom. our thoughts with mark's wife cindy, his son matthew and daughter meredith and as you saw we were also both mets fans. >> right. >> still waiting for that championship as i know mark is wherever he is. >> yes. >> and you have the meg whitman interview and what are you thinking about when you interview meg whitman? no free pass. mark haynes would sit here and he did not care about making

friends. >> no. >> never. >> never knew when he was going to suddenly turn and it was going to get really interesting. >> and that's a great tradition because it's when you book these guests people should know at home that there's always someone who says boy, i hope -- you got to get that guy on again. it's not one shot. mark was one shot if he felt the person was dishonest, dissembling, are trying to pump a story to the public to get the stock bought he didn't think was right. >> "squawk on the street" will be right back.

dog: what, what? mattress discounters what, what? mattress discounters memorial day sale ends monday? but mattress discounters has the largest selection of memory foam mattresses under one "roof." comforpedic, icomfort, optimum, and wow, four years interest-free financing on the entire tempur-pedic cloud collection, even a queen size sealy gel memory foam mattress for just $497. better hurry! the memorial day sale ends monday. ♪ mattress discounters

♪ ♪

♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. you're watching cnbc "squawk on the street" live from the financial capital of the world. where the opening bell is set to ring in less than three minutes. we're going to do the mad dash now, and it's going to be an interesting one. we're going to do stocks that are not yet public stocks. >> and yet they will capture america's fantasy like no other. >> and have implications for a lot of different things. start off with alibaba which will be public most likely late this summer. >> right. >> bernstein has been writing on this company for some time and

keeps moving its valuation of alibaba up. >> until this morning, when they actually cut it. they said not 250, but 230 billion. now this is carlos, he's very good. why is he very good? because he understands the core of the business and why it should be valued the way it is. i just thought in light of jd.com which is not nearly as good as alibaba. >> doesn't have its margins. >> immediately does say listen, the 230, has to do with tax rate, with very small things, but the idea here, david, is if this is 230 billion what does it do to yahoo! and yahoo! is undervalued if he's right. >> and, of course, the key will be the tax efficiency at which they're able to dispose perhaps the stake they're going to be selling the ipo although it seems unclear they will do that. even more so what will be left which will be at least 12% if not more of alibaba. >> if that's the case then yahoo! will get about 9 billion

after taxes which i'm supposing they should buy yelp, grub hub and opentable and the yahoo! restaurant would be your one-stop app. >> talking about apps maybe they should buy ubber. would only cost $12 billion. another one in mad dash here. >> we were talking behind the scenes the valuations of a lot of these companies, in the private market have been shrinking because the public market just went -- they took all the air out of it. these stocks down 25, 30%. >> software as a service, watching those multiples that's your words contract has a huge impact on venture companies. >> yes. >> because when they're raising their next round they're taking public market multiples as their valuation and it comes down. but ubber is not. >> no. that's what's important. they were upset they were lumped into this $10 billion quo sheriff's department with airbnb. a lot of companies were talking about box, drop box, 10 billion. they come up with $12 billion.

they are brazen in the world. >> they told you they were going to be, remember. >> he told me it was after worldwide domination and i think he may do it. he's got everything that we want, david. he's cool. he's young. he's rich. i've had it. >> could have been all those things although tough to beat. >> you can't go back in time. >> those of us who use ub ubber terrific product. >> also going to be borrowing money too. i was talking to a banker, yesterday, $50 million, just open up a bit in terms of on the capital market snide can he invert? >> i don't know. >> i don't know. you heard the opening bell here on the s&p 500. you're looking at it the real-time exchange at hq. heritage insurance holdings a provider or is a provider of residential insurance in florida celebrating its initial public offering today. at the nasdaq, finjan holdings, owner of patent technology to

protect users from on-line threats. >> oh, boy. >> and boy there are a lot of those. >> we saw fireeye upgraded today. barclay's. fireeye is controversial. i know jim cramer on twitter a couple things i say periodically, fireeye is the best product. but the stock got too high. it then went down because people felt there was a big lockup expiring that people from the acquisition would sell. they haven't. next thing you know you've got a stock that had been more than cut in half that's coming back. just remember that the company's product doesn't necessarily always have to do with the stock price. >> right. i mean that -- if there was ever a story about multiple compression, fireeye would be it. >> yes. >> and then also a lot of stock for sale as you said. also they did a -- >> no. >> they sold a lot of stock. >> but the company -- i want people at home appro po of mark haines' three year passing, we're trying to do something different here. we're trying to analyze both the

company and the stock. that's a lot harder. on the conference call with hewlett-packard you had all these analysts, good analysts saying meg help us we have to make our model. you and i are not about the molds. tryi model. >> i marvel at the analyst so many questions on these calls trying to get their numbers right and i think it was rightzis. >> and tony. >> wait a second, how can you tell us about the cuts and the cost savings and not give us a number. >> and meg said what do you want from me? >> the next day on the reports, they were the most glowing. i thought they were rebelling. no. there's also a back channel where niece guys were pieced. >> by the way on the subject we did speak to meg whitman not more than 10, 15 minutes ago. here's what she had to say about the long turnaround of the company she's been running for over 2 1/2 years. >> at our security analyst meeting in october of last year i said it was unlikely that hp was going to grow in 2014.

i would say the good news is that the rate of decline has slowed dramatically. this is the third quarter of flat revenue you may say it's not that exciting, it's better than where we were where we had a few quarters down 7%, down 6, down 9. my view the turnaround is about right on track. >> talking about turnarounds this is a stock price itself has turned around after being down 2.5% yesterday. during the trading day because of that glitch where they released earnings early and after market as well. >> not once in the conference call, you asked why do i like the story? did she ever once mention that enterprise spending was down and therefore hewlett-packard is going to be the customers are hurting. i've heard all that stuff from a lot of companies. it wasn't from her. she didn't give a single alibi. she was disappointed where it paid to be disappointed and did not blame the customer. that was a nice change of pace from a lot of technology companies. >> change of pace in the stock over 3%. >> should be.

>> let's move on to retail we haven't hits this morning, gap, gamestop. gap, the stock is down 15 cents. they were fairly positive on the call, the transcript of which i see is right there. >> my problem with that is that i like this guy very much, this glen murphy, and you don't usually get an analyst, a ceo that starts the first line, everybody here was actually pretty disappointed in our earnings results. so he grabs the bull by the horns and say here's what we have to do better. a road map guy. saying certain things, get better, old navy turning around, gap hasn't turned around yet. talk for china. but in the end it's not that exciting. he's saying listen, have faith in us we're going to get better. what we need to hear is the kind of thing we're hearing from a fresh market. this is tfm. they said basically you know what, we're not blowing up. we're not as bad as you think. we're going to slow down our growth because we want to be

more focused. that's a direct shot at whole foods where a lot of people said they ought to slow down the growth and figure out how to be more focused. i don't know who has the right approach but the stock is up because they didn't blow up. >> heritage insurance which says it is a pilar of strength and character, by the way, just so you know -- >> strength and character? i want my carrier to have strength and character. both of them. >> pilar of strength and character. the cow bell. let's talk about gamestop up over 6%. >> all right. >> after a -- they're benefiting from playstation, from xbox 1, although somebody who has an xbox where are the games give me more of them. where are the developers? i want more. more cow bells and games. >> the undercurrent of the gamestop call, paul raines, i've had him on a couple times from "mad money," he said listen don't write us off. of course many people have because the short position is

27% here. but what i thought was great about the gamestop call he said you know what we're doing pretty darn well even when supposed to be doing not well at all. there's a lot of loyalty to this story. do you remember when walmart said they were going to start getting into the used game businessp well whatever walmart did has not worked. the used game business is strong. a read that's positive on this, you may not like this take away, pay attention. >> i want to hear it. >> read positive on this, xbox, a read positive on hewlett-packard is the microsoft software. may i suggest for a suggested -- >> don't do it. >> don't do it. >> i was trying -- >> really going to go there. >> i was thinking about it? >> really. >> i was thinking about it. >> i heard jay leno and israel. if he can pull that off i'm going off with a line about microsoft being better than expected. >> you kind of said it. >> i throw it out there. >> okay. >> i think microsoft could be a better than expected quarter ahead because of what i'm hearing the undercurrent here, xbox, enterprise software,

windows, i like these things that i hear. don't you laugh at me. don't you snicker about that. >> a pregnant pause. >> did i say sears -- i could have said sears is great. i could have gone off that limb. >> didn't you hear him at the annual meeting. apple had its tough years '05 through '07, sears is just going through that. >> look -- >> the stock by the way -- we're being facetious. the stock down 3%. reported numbers yesterday, but it does seem as though there's a follow, reanalysis. >> stock was up and gary came out and made jokes about a club you don't want to join. gary actually -- hey, gary, i've known gary since 1984, you were a little too tough. because the pension is peaking and that's been a huge contributor, the fact is that the ebitda, there was a lot of explanations, still in a lot of good malls, they are getting out of the worst stores. they have no -- they are shrinking and they're not

growing. they're not shrinking to grow. they're selling off things. people say listen, it's like engine one is off of a four engine plane. engine two, fine. engine three, when engoin four goes off. there are problems here. at the same time you understood why it went up yesterday. people say they have enough cash to last through this. they don't have a very big chunk of debt coming due for a while. so i mean eddie lampert is keeping the ball in the air. i think that -- >> when down looking at maturity schedules it's not saying a lot. >> trying to say listen venders don't give up on us. one of the things that happened on the call, they're calling him eddie, like kind of recognize -- hey. >> call you jimmy. >> when try to infer coleak alty. >> people are allowed to. that person being my mom who passed away almost 30 years ago. let's leave jimmy in the dust. i think eddie lampert does not necessarily have a strategy to grow but he has a strategy to stay in business. the analysts want to bury it and

you can't. he has smart owners. >> he does. between him, berkowitz and tish you have a lot of stock locked up which is another reason why people shorting this thing do it at their own peril. >> canada they're going to sell and still they've got a lot of things they can sell, automotive. whole rap against it they keep selling the jewels. what are they left? i've wanted lampert to close the bad stores and he's doing that. look, i shop everywhere. >> you do. you don't shop there. >> no. >> i have my standard ps. >> we're going to keep an eye on stocks moving. over to mary thompson on the floor who also has more on what's moving this morning. mary? >> good morning, david. modest gaps for the market, broad-based gains. weakness in banking stocks, oil companies and drug stocks actually just turned flat. they were a little weaker. the dow up 24 points and the s&p 500 is within striking distance of an all-time closing high. just about three points below

those levels. of course today we're keeping watch on the retailers in the wake of all those results and also dow component hewlett-packard. we're also watching the emerging markets. etf touching a seven-month high as investors taking a risk on approach in the last week with the markets on track for their first weekly gain in three. they're a little bit -- they have turned higher, they were weaker at the open. take a look at the groups that have been leading the markets higher on what is expected to be a strong week or the sector. health care tech, consumer discretionary financials and energy let's get back to those retailers. of course you heard jim and david talking about them earlier among the companies with good companies, the fresh market good sales numbers that's giving a lift to its shares. gamestop, strong numbers on the sales and earnings front. foot locker also coming out with strong earnings and sales. the retailer of athletic apparel up just about 1.5% and xwap coming in with earnings a penny

ahead of expectations. air row postal a disappointment. hurt by weak mall traffic, promotions and bad weather in the quarter. we want to mention visa and mastercard, two credit card processors say they plan to stay in russia despite some pretty significant financial -- i don't want to say sanctions but financial regulations that will be imposed on the companies if they stay in russia to create systems and they plan to do so. those were imposed after western imposed sanctions against russia. both of those stocks responding to that. let's take a look at the two companies going public at the new york stock exchange. you heard heritage financial. it opened actually 11: 11155, b the range talked about 14 to $16. we're waiting on parsley energy priced 18.50 above the range of $15 and $18 a share. dow up 32. back to you. >> thanks very much.

we're watching hewlett-packard, only about 0 cen70 cents from 5k high. >> they should release their earnings earlier all the time. this is a story where upon closer review, it's kind of like a call in the field, upon closer review it is really clear that the cash is building, the r&d is being spent. she's doing everything that you want from a turnaround. meg whitman speaking of. and why should the stock have been down. i didn't get why. because toner sales weren't that good? >> no revenue growth. >> with when you start a turnaround you have got to get that balance sheet great. now it is. if they want to do an acquisition which she said they don't they can do it. they're going to buy back stock. still going to cut expenses. >> 50% of free cash flow for buybacks and dividends. >> they're not salesforce.com, they're not work-day. they're not trying to do that. oracle is a step ahead. >> mary mentioned aeropostale,

too soon to buy? >> it's too early to buy aeropostale. those who want to buy aeropostale take a look at williams sonoma which has figured out how to appeal to that demographic and that's what you should be buying. aeropostale is a company that people talk about all the time. it's not worth talking about. it's just -- sorry. you don't shop there and -- i shop there like it's total me too. you go to pottery kids and teen, that's what they're buying. wall murals and that fancy west elm. kids no s nknow where to shop. let's stop talking about aeropostale. that's merry go round. remember mgre. they disappeared. >> we'll stop talking about that. head to the bond pits where we'll join rick santelli from the cme group in chicago. >> thanks, david. if we look at ten-year note

yield intraday chart we are definitely drifting a bit lower down several basis points on the day. we settle at 2.55 yesterday. two-day chart really shows you the 2.52 area. basically today and yesterday's low yield is significant. open chart month to date. the things that need to jump out at you are simple. on a closing basis since we had the sub-250 close a week ago thursday the closing range for tens tight, 2.51 to 2.55, still falls short of the it technically significant february 3rd low closing yield of the year until a week ago thursday at 2.57. add three for slippage, want to keep an eye on the 2.57 to 2.60 zone. on june 5th is mario draghi's big day. and on that big day, he is going to decide the next chapter of the down move we've seen on the euro versus the dollar.

look at a single day and you can see it was toying with testing at 136 handle getting very close. open the chart up, these are the lowest areas should we close here since february 12. three plus low on the euro versus the dollar. much of the decision process of what happens on june 5th will be aimed at further weakening of the euro to boost european exports. david, back to you. >> thank you, rick santelli. russian president vladimir putin saying show me the money. but that's not all. hear what he told cnbc in an interview ahead of this weekend's ukraine yan elections. later on squawk alley at 11:00 eastern getting you off the couch and into the theater. meet the ceo of a company you might consider to be a priceline for movie tickets. we'll be right back. tdd#: 1-800-345-2550 trading inspires your life.

tdd#: 1-800-345-2550 life inspires your trading. 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. in a we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.

ahead of elections in

ukraine this weekend vladimir putin saying he will respect the choice of the ukrainian people. putin sat down with cnbc's jeff cutmore at an international economic forum. here's putin showing off some of his typical swagger. >> give us the money back. you know, that would create very good environment for further discussions. people in ukraine want to see emerge from this projected crisis and we will have respect for the choice that the ukrainian people will make. we will watch very closely what will happen. >> one of the more interesting comments, jim, where he actually admitted that sanctions are having a bite. >> yeah. >> taking a bit of a toll. >> look, say anything good about him immediately people just -- obviously he's viewed as a villain in this country.

look, i mean, he was basically saying a lot of stuff that -- that is -- from the old days of kissinger. saying this is the way the new world is. your president may think he knows what he's doing but we're going back to a world where we are able to not deal with you. >> right. dealing with the chinese again. we talked yesterday about the 30-year. >> right. >> contract if you will. where they're going to be selling natural gas to the chi sneeze. >> charl krauthammer wrote i thought a fantastic piece. get it in the "new york post." saying listen our president may misunderstand to have china allied with russia at this moment, two countries that can do whatever they want because they don't play by the norms, be careful. they're not rules players. neither one when it comes to intellectual property or when it comes to pollution. these countries are rogue and they're powerful and they're with each other and did it have to be that way? not clear. i wish it weren't. >> yeah.

>> up next we're going to have stop trading with jim. "squawk on the street" is coming right back. ♪ you've reached the age where you've learned a thing or two. this is the age of knowing what you're made of. so why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain... it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action. viagra. talk to you doctor.

starts at 6:30 a.m. - on the (vo) rush hounose.und here but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour. (announcer) at scottrade, we share your passion for trading. that's why we've built powerful technology to alert you to your next opportunity. because at scottrade, our passion is to power yours. female announcer: when you see this truck, female announcer: it means another neighbor is going to sleep better tonight because they went to sleep train's ticket to tempur-pedic event. choose from a huge selection of tempur-pedic models, including the new tempur-choice

with head-to-toe customization. plus, get 36 months interest-free financing, two free pillows, and free same-day delivery. are you next? announcer: but don't wait. sleep train's ticket to tempur-pedic is ending soon. ♪ your ticket to a better night's sleep ♪ that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business.

♪ all right. time for cramer and stop trading. what do we got? >> sometimes what happens in this world of the crazy world of the stock market is a company that consistently delivers consistently delivers and people yawn. foot locker, okay. i mean foot locker never really went down. it's been delivering so well. they deliver a plus 7, 6% comp number. take this stock higher. that's fantastic. this is one of the best operators in retail. people don't pay it enough attention. >> the old bullworth. it was woolworth and then got split and veneny tour and foot locker. >> good read for everybody in the sneaker business. >> bernstein, very controversial call. chipotle, algorithm, everything, from here, chipotle here's what you need to know. i happen to be in the mexican

restaurant business. there is no company i know that can put through price increases for a guacamole for the -- for everything that's gone up in this gawk apocalypse is what i allude to. bernstein says there have been price increases from the decline of the march peak. it's time to buy chipotle. they can raise price and therefore will be able to get the gross margins up. >> what would this company have to do to have you not like it? >> chipotle? >> yeah. >> have bad tooed and not grow earnings and bad comp stores and a place you would never think of going. series of things. i only don't go to sears. >> that's it. >> i even go -- >> put a chipotle in a sears you would go. >> absolutely. put a starbucks and chipotle i'll have a burrito and get a triple cappuccino and right back to shopping. >> what to we got coming up on "mad money.." >> isis, stock down but they

have nis novel way to -- this novel way to solve problems. it's up again today. viasat. in a war with go go and maybe at&t. this is to have really good -- want to watch netflix on a plane. >> yes. i do. >> that's -- >> so do my kids. >> want to watch buffer. you watch go go. >> go go is going to land on your head. they're going to send a plane and land on your head. viasat allows you to watch netflix and lot want to watch "orange is the new black" which i would recommend to you. >> would you? >> "orange is the new black" fabulous show. >> still have to work on "house of cards". >> i never got to. >> "breaking bad". >> we're on season five but we took a breather between four and five. >> where are you on "24". >> never mind. >> "game of thrones" i'm up to date. silicon valley i kind of like. >> that's because you don't

shop. i don't have time to watch all those. >> there you go. >> have a great weekend. >> you too. >> hope your boy plays. >> he's not going to play. >> oh. >> baseball tournament where your kid doesn't play because he's injured. all right. anyway, nobody really cares about that. what they do care about breaking news on new home sales and market reaction. that's coming up after the break. also ahead the ceo of gamestop that stock as we told you getting a lift on earnings and the retailer sales outlook. keep it here on "squawk on the street." what can your fidelity greenline do for you? just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review.

call or come in today for a free one-on-one review. and i get a lot in return with ink plus from chase i make a lot of purchases for my business. like 60,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning business even more rewarding. ink from chase. so you can. ♪ here's a good one seattle... what did geico say the mariner?

we could save you a boatload! ♪ foghorn sounds loudly ♪ what's seattle's favorite noise? the puget sound! ♪ foghorn sounds loudly ♪ all right, never mind doesn't matter. this is a classic. what does an alien seamstress sew with? a space needle! ♪ foghorn sounds loudly continuously ♪ oh come off it captain! geico. fifteen minutes could save you fifteen percent or more on car insurance. carsthey're why we innovate. they're who we protect. they're why we make life less complicated. it's about people. we are volvo of sweden.

welcome back to "squawk on the street." breaking news. april new home sales, definitely better than expected, 433,000. we're looking for about 420 to 425. the 384 of last month originally released was 14.5% drop. gets upgraded to 40 which makes last month a minus 7% job and 407 to 433 is up 6%. keep in mind to put this in perspective if you were to add a million to the current number that would bring you to the high watermark of the series reached in the summer of 2005. david faber, back to you. >> thank you very much. rick santelli. it was yesterday at about

3:30 hewlett-packard mistakenly released at least most of its earnings report, 88 cents a share was in line with estimates, the revenue number a bit light and some of the businesses not performing as well as investors hoped. the stock started down this morning it is up almost 6% now, a big run at hewlett-packard as it approaches, in fact, its 52-week high. this after our interview with the ceo of the company meg whitman in the midst of a multiyear turnaround as we always do every quarter with her continue to discuss both positive and negative. one thing that wasn't in the earnings release when it first mistakenly hit are cjob cuts. that was page two. we did find out about that at roughly 4:00. 34,000 job cuts had already been slated but hewlett-packard is talking about another 11 to 16,000 additional cuts. could take the number to as many as 50,000 under a 2012

restructuring plan which was running for three years and hence continues to run. a lot of questions about why the additional job cuts. here's what meg whitman had to say. >> so while no one likes to reduce the work force, this will be good for our customers and will be good for hewlett-packard. it will make us a stronger company. and obviously, you know, we will be able to create capacity to invest in the growth engines of this company. >> we're talking about as much as a billion dollars in cost savings but not all of that going directly to the bottom line as you heard meg whitman mention. a number of the savings will be reinvested in the business to grow which is not something at this point that meg is talking about for 2014 in terms of top line growth. although they did seem to focus on profitability. as for businesses that might contribute to growth, many have asked about 3d printing and where hewlett-packard is on that.

here's what she had to say. >> well, we're focused on business 3d printing, not consumer 3d printing. we'll announce a 3d printing technology at the end of this year and we think there's a real opportunity here. this is an acorn that we're planting that will become an oak tree in the future. this is a business we need to be in. it's very consistent with our heritage. but we're doing that in a lot of businesses. you know, innovation, you have to plant those acorns before they become oak trees. >> innovation has always been a key question for a company still of the size of hewlett-packard despite what is a shrinking work force, sara. >> which she really put a positive spin on that, didn't she? that shrinking -- this is a good thing, going to be leaner and meaner and more nimble and i thought it was interesting she admitted some customers still not thrilled with the service there and as long as they can consolidate -- >> too many layers of bureaucracy, to go through to make a decision and get something done quickly which in this world especially ever more

becomes a value part of the value plroposition. >> a concern the strongest unit is one of the lowest margin which is pc sales you would expect to do well anyway given windows xp was no longer being supported and businesses had to buy on the quarter. >> that's right. the revenue number did benefit from the commercial pcness particular to the -- pcs to the shift you mentioned. while revenue wise it comprises the top line, it does not comprise a lot of bottom line. >> well she certainly portrayed some confidence because the stock as you said is having a positive reaction. >> stock on a huge tear frankly, up almost 6%. >> reaction earnings. >> great stuff. we're watching retailers. there's the stock, as you can see the turnaround up nicely. the retailers front and center today. as you can see taking a hit, especially some of the teen retail names. looking at shares of gap, they're down this morning, following results that beat by a penny. shares of air row po stale lower

by 18%. that slide started in afterhours. american eagle also in the red. let's bring in adrian tenet senior vice president and specialty apparel analyst with janney montgomery scott to talk about gap. but retail is all relative and compared to aeropostale, gap is not doing too horribly. >> gap had a little bit of a difficult quarter. we know all the weather issues. there was excess inventory coming into the year which they'll clean up. but we've got to tell you, gap really is doing well with old navy. so although the gap division is struggling the old navy division is starting to pick up momentum. >> i thought that was interesting in terms of same-store sales, negative for gap, negative for banana republic and positive for old navy. why is this a bright spot? is it about the consumer and low income? >> i think it's about the value proposition. so old navy has been doing phenomenally with this new advertising campaign. they are focusing on key items

an bringing the family back in. typically when you get the momentum of that core customer they tend to keep shopping at the same place for some period of time. they have the momentum right now. >> what about aeropostale. clearly there is an issue about how much cash they have in the bank with the berm they've got. on the sidelines sycamore which could come through with a lifeline and extended stake. at what point should investors buy in your view? s. >> i don't think they should buy aeropostale at all. here's the thing, sycamore can give them a lifeline but the fact of the matter is of the three as, abercrombie, american eagle and air row po stale aeropostale is the most measured and as the price points come down the margin and pricing is pressured at aeropostale. hemorrhaging cash, too pane stores and too much inventory and negative comp. i would stay away from aeropostale altogether. >> do you think it could go out of business in your professional view? >> it takes a long time for these retailers as you know,

right, they have revolvers, lifelines thrown at them. i would tell you this, in the next five to ten years, air row postal will be a shadow of its former self and somebody in the space probably will go under but it will take a long time and be very messy. >> the common thread between these names all having trouble are that their teen retailers. what happened to teen retail? why aren't they cool anymore. >> so so the teen over the course of the past few years, basically teen unemployment has remained north of 20%, hasn't come down, down a little bit, as high as over 25%, you are starting to see, you know, just other avenues for them to spend money. and this whole notion of cheap fast fashion continues to compress that price point. it's a difficult environment to be in. >> i wanted to ask about international expansion. i know that was a key theme in the gap report as well. they've got more than 80 stores in china opening their first old

navy in china. do you expect the gap brand, so american, and old navy to some extent as well to be a hit there? >> they opened in japan. old navy in japan. they are in china. the chinese and asians want american brands and they are absolutely a hit over there. >> what about this style of gap? it certainly has had momentum over the last few years going back to basics making the basics cooled again. any sense they're losing that? >> that they're losing -- that -- actually they -- >> the fashion, the trend, the cool factor. >> they have done quite well over the past couple years. they have new creative director at the gap division whose products started coming in in the first quarter. it was -- the timing with the weather was a little challenging. we'll start to see that kind of global creative footprint even more so in the fall season. so that's the one thing is, you know, when you start to make these changes, you never really know what the uptake will be

with consumers. we'll keep watching that. >> sounds like you like gap. not so much aeropostale. thanks for joining us on what has been a busy week for the retailers. >> thank you very much. >> up next on "squawk on the street," vladimir putin slamming western powers during a q&a with cnbc's jeff cutmore this morning. live to russia to get more details on that. plus, pulitzer-prize winning columnist jim stewart joins us to weigh in on putin, the global economy and the markets. we'll be right back. yup. all five of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line anytime for 15 bucks a month. low dues... great terms... let's close. introducing at&t mobile share value plans... ...with our best-ever pricing for business.

♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. female narrator: through memorial day at sleep train,

female narrator: through memorial day get 36 months interest-free financing plus big savings of up to $400 on beautyrest and posturpedic. even get three years interest-free financing on serta icomfort and tempur-pedic, plus free same-day delivery, setup, and removal of your old set. when brands compete, you save. but this special financing offer ends memorial day at sleep train. ♪ sleep train ♪ your ticket to a better night's sleep ♪

welcome back to "squawk on the street." shares of housing stocks gaining on a better than expected number in terms of new home sales. the april report showed an annual rate of 433,000 units. that's above forecasts for 418,000 with march's number revised higher as well. check out names like leonard, dr horton and pulte group, all of them rising again on new home sales after a nice run yesterday. simon on existing home sales. back over to you. >> thank you very much. meantime the russian president vladimir putin was live on cnbc earlier today saying he will respect the result of sunday's presidential election in the ukraine but slamming western powers for their sanctions against his administration. for more insight on what we witnessed live on tv this morning let's bring in jim stewart, columnist for "the new york times" and a pulitzer prize winner. >> good morning. good morning to you. >> it was an extraordinary piece of television in many ways. >> absolutely. first of all i have to say, the

idea that putin has gone on cnbc i think is actually quite encouraging. it shows he wants to re s ts to sophisticated business and financial audience. he was care about the markets and how these actor in the financial world are reacting to what he's doing. >> what do you think the strategy is here? >> i think it started to become clear. seemed crazy at first but i don't think it is so crazy. did a bold thing with creimea ad now he's backing away. for russia they want all the ben fises of controlling the ter forebut not the obligations. extragts the economic benefits but don't want to take over the social security and welfare of these populations. this economic union or whatever he's talking about is kind of getting there. he's shown the west is not going to come to the aid of the ukraine and they're not going to have any choice but to go along with this. in a way he's kind of pulling off what he wanted. >> interesting you started out talking about business, corporations, the impact on the economy.

we did learn visa and mastercard will continue to operate in russia. rethinking the entire payment system despite the fact they're going to incur losses on the higher security deposits that moscow is imposing on them. should we be concerned about that? >> well, i think it depends. i mean from an investor point of view this is good. we're seeing a normalization of this. i think it's interesting that on cnbc putin says that he's -- he hates the idea, he's slamming the west for doing sanctions. the west doesn't want sanctions either. isn't that abundantically clear >> it doesn't want its gas cut. >> it's more i think the threat of future sanctions that has hurt the russian economy and it has been hurt. i mean it's got inflation issues, it's got interest rate issues, growth rate issues and putin has to be aware of that. >> to bring it back to the markets, is sunday an event risk for the markets? the election in the ukraine. can we sail on regardless through the memorial weekend?

>> there's always risk. i mean you've got some crazy people with guns over there. so anything can happen. but i do feel the odds now are it's going to be orderly. russia will respect it. there will be a legitimate political government and that's all good for the market ps i wouldn't go to sleep. >> speaking of the risk if you look at the vix which is sort of the fear gauge on wall street, we're seeing lowest levels in a year. the volume has been so sleepy this year, we're going into memorial day weekend but earlier -- >> wait and see, isn't it, on so many fronts. >> where is this complacency coming from. >> a lot is from the geopolitical sphere, a sort of a calm settling in nothing horrible has blown up. in comparison to what it looked like a few weeks ago that's better. these numbers are coming in. the weather is still kind of an issue for the first quarter. that's behind us. you know, comments from the fed and other places are sounding pretty good. >> stay with us. i want to cross back. in fact, out to st. petersburg where our very own steve sedgwick, part of the team there, that carried this live event, able to join us with a

little bit more detail and a little bit more color on what was a fascinating piece of television. over to you. >> it was extraordinary. you and i have worked with jeff most of last 10, 15 years. we know what he's capable of. it's an extraordinary piece of television between jeff and vladimir putin. i'm slightly less optimistic on some points than your panel there. putin was making the point, yanukovych is still the legitimate president and he wants to see constitutional changes. what he means by constitutional changes in ukraine is the fact that he wants to see more influence for bold power in the east and southeast of that country and that would mean kiev unable to exert control over what could well be a buffer zone within his own country. i think that was a subtle point about constitutional change rather than the election. jeff was hammering away at him on a host of issues and whether he would work with the government once we had a new

president and legitimate. listen to the first exchange. >> do you accept the legitimacy of the election that is going to take place on sunday in ukraine? >> translator: oh, come on, really. he's a difficult man to deal with. where did you get the guy. >> of course the audience is a home audience and just like previous species we've seen to the doom of others it was a rap russ audience. a lot of subtle subtext as well. the fact that jeff got out of him we will cooperate with the new head of state was i think a progression and yes something to hold on to. but there are huge problems ahead for ukraine which are going to keep it weak despite, of course, imf and new money going into the country. not least the fact that they get their energy, they get their gas from russia as well and they've been given a loan, given discounts and the russians still want their money. listen in. >> give us our money back.

you know, that would create very good environment for further discussions. >> so look lot of issues still. i think there was a few olive branches saying we still want to be a partner with the eu. we are reliable partner. but some subtle not threats nosily, but just implications from the fact that russia is saying it will be a swing producer to the east and the west and, of course, russia only has a finite amount of energy. it can't necessarily provide the same amount of energy to europe in the next decade if, indeed, it is getting $400 billion worth of gas to the chinese over 30-year period as well. also accusing the west once again of aggravating the crisis, of backing a coup d'etat from the legitimate president yanukovych. jeff was at his best but mixed. we're looking at the positives. markets looking at positives. but still big problems aheaedea

politically and economically for ukraine. the relationship between mr. putin and mr. obama. i think that looks broken at the moment. back to you. >> worth pointing out. steve, safe journey home to lond london. steve sedgwick. before we let you go let's mention the column you have out this weekend, "the rise financially of the american artist norman rockwell" or at least on the sale of the paintings and prices they're getting. >> it's my memorial day theme column. there are these interesting similarities between the stock and art market. in this case it can pay to be a contrarian. normen rockwell was probably most reviled by the critics of any major american artist of the 20th century and all of a sudden his paintings are selling for tens of millions of dollars. a painting that sold in 1995 sold for over $9 million. almost 14% annual rate of return. >> isn't that a reflection of the insanity of the art market

which many would argue is the next rich hedge fund guy who realizes he has so much money doesn't know what to do with it. >> it's not so insane. like the value investors who look for underpriced stocks. norman rockwell was always a great painter but because he didn't fit the fashion of the times he didn't sell. >> not creating any free cash flow. >> kind of like gold. not going to earn a return. people are comparing him to andy warhol. walk into a room and there's a rockwell on the wall you know what it is. you also know it costs many millions of dollars. there is this prestige factor? and price -- >> guggenheim did a retrospective, george lucas owns them and spielberg. >> the stars align. >> bring the glitter into it, you can create a valuable artist. >> if you have the means to get these to line up. i'm not saying go out and buy an artist that nobody likes thinking it's going to soar in

pricep. that's a risky proposition. fascinating american story how an underdog like this can be the darling of the art world. >> do one of the great jim stewart books in the art market then get back to me. that would be a good read if you spent time on you. >> have a great weekend. enjoy the holiday. jim stewart from the times. >> up next a pharma stock nearly doubling in value. could have huge implications for the industry. more on that when we return. tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. predibut, manufacturings a prettin the united states do.

means advanced technology. we learned that technology allows us to be craft oriented. 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. you wouldn't have it she any other way.our toes. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess.

side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about experiencing cialis for daily use and a free 30-tablet trial. whon a certified pre-ownedan unlimitedmercedes-benz?nty what does it mean to drive as far as you want... for up to three years and be covered? it means your odometer... is there to record the memories. during the mercedes-benz certified pre-owned sales event now through june 2nd, you'll get complimentary pre-paid maintenance and may qualify for a two-month payment credit. only at your authorized mercedes-benz dealer.

shares of one pharma company are absolutely soaring because of one single drug and the move says as much about the company's business model as it does about the treatment itself. meg terrel back at hq on this company ptc we don't talk about. >> much smaller company before today. shares up more than 50% on recommendation of their approval on a drug in europe.

this drug is designed to treat muscular dystrophy with no really good treatment options about 35,000 patient in the u.s. and eu with this disease. and you know, it can really be a horrible one. affects boys, can put them in a wheelchair by the age of 12, fatal by 30. a need for treatment options here. this is what's called an orphan drug business model and it's a very hot area in the pharmaceutical industry treating diseases with few patients who need treatment options. you can get a lot more patent protection on those drugs so they can be exclusive for a longer period of time and companies charge 200, 300,000 per patient for these drugs. analyst says this could be a billion color drug. it's important in the context of the disease, there are a couple other companies working here so rep to therapeutics, ser rep ta had news, and they got a patent forn their drug. per sen sa had bad news on a

phase three tile. their stock lost a lot of its value. they are still working the disease but seeing the good news from ptc therapeutics back to you. >> meg back at hq. >> straight ahead on the show gamestop getting a boost today thanks to strong xbox 1 and playstation 4 sales. but it's the national rollout of three new technology retail chains the best way to capitalize on it. we'll talk to gamestop ceo in an exclusive interview next. ameriprise asked people a simple question: in retirement, will you outlive your money? uhhh. no, that can't happen. that's the thing, you don't know how long it has to last. everyone has retirement questions. so ameriprise created the exclusive.. confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today.

take this simple test. press your tongue against it, like this. it moves! do you feel it? it can happen with every denture. these movements may irritate your gums. but you don't have to bear with it. you can try fixodent plus gum care. thanks to its formula, your gums become one with your denture. this helps stop movement and helps prevent gum irritation so you can keep enjoying life. [ apple crunches ] fixodent. and forget it.

could mean less waiting for things like security backups [ apple crunches ] and file downloads you'd take that test, right? well, what are you waiting for? you could literally be done with the test by now. now you could have done it twice. this is awkward. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business.

relief for hard pressed investors in gamestop. xbox 1 driving hardware sales up 81% at the largest retailer of video games. sales of used products rising for the first time in three years. here for a cnbc exclusive is paul raines the ceo of gamestop. paul, welcome back to the program. >> thank you, simon. it's great to be with you again. >> looks like the console cycle is working for you this time. >> it is, simon. it's incredible the consumers have adopted this new generation. hardware up 81%. new generation software up close to 50%. gamestop is driving most of the growth in this generation. >> you know, paul, inevitably the questioning comes down to will digital download unseat your bricks and mortar strategy. it was evident last night on the conference call. the bears like pacific crest will say look at their new

software sales down 20%pp. how can you be suggesting in the coming quarter overall sales will rise 12 to 19. that doesn't add you. >> sure, simon. we love to talk about why digital gaming is good for game stop. that's sort of old thinking about music and movies. gaming is different. our digital receipts grew 9.5%. our businesses have robust growth. we're growing at a rate that is slightly faster than our top four publisher. we're participating in the digital sales as well. as far as this next quarter, you know, we see that as titles emerge in the back half there will be very strong option of new titles with next gen software and old gen declines that's where you've seen the gap in the first part of the year. >> paul, the landscape is changing rapidly. i mean forget what might be happening with apple tv. we don't know. if you look, for example, at google which may be buying twitch for $1 billion, we're 43

million gamers watching each other every month, the center of gravity could shift could it not towards google and somewhere else. >> no question. that's why our company if you follow us you know we've driven a high rate of internal change. we're well positioned in console and digital gaming but by no means our only business. we've doubled our revenues last quarter and we're an apple dealer as well. we have knowledge of where gaming could be headed and something new happening in the technology space. we have a community 36 million around the world are rewards members and we're trying to serve them with whatever kind of gaming they need. we like our position on that, simon. >> when i think of gamestop i think of a mall store or at least a physical store. how do you change the perception in consumers' minds you are the go to place for digital gaming sp. >> i'm not sure that we want to change your great procession of our great stores. we still have 6200 stores or so

in 15 countries, but our power up rewards program has allowed us to introduce our good gaming customer to new digital properties like our congregate mobile site, pc download business inside our gamestop stores and console game business. consumers are hybrid consumers. they like to do both. we've been able to introduce people but we see the store as the place where the community gathers and we introduce you to new kinds of gaming. >> paul, let me come on to the big idea, this aggressive rollout you have now, 300 to 400 new technology stores around the country. we saw it there a few moments ago, the brands from gamestop, simply mac from mobile, spring mobile, and cricket which is a prepaid phone operator, prepaid phone retailer. why are you advancing in these areas when you see the likes of

best buy or radio shack pulling back? >> well, certainly we've competed with many of those players in the past and been very successful. on the first point i would say our customers are looking for a higher level of service and buy, sell, trade model. candidly we are an exclusive partner and that's different from these other competitors. we are an exclusive an apple dealer at simply mac and our partners like our higher service levels and offerings. at at&t we're an exclusive partner. we have access to better offerings, new services like digital life and u-verse and anything else that may come along and we provide in exchange a high level of service. the reason we enter technology brands because we saw that we had ajay sensies around our gaming business such as real estate, buy, sell, trade, great human talent, power up rewards and balance sheet and found we can be successful in being a family of specialty retailers that make your technology

products affordable and simple. >> who's bigger competition right now, walmart or amazon? >> you know, candidly we've gained share against both of those companies in the last if five years. so we are the smallest player in the video game space with the largest market share. i think we're maybe one of the only ones like that. i would say they're all important. we also have significant digital competitors. we're in a pc download business. we compete with players in the game space that congregate. in europe we compete. so gamestop is a place we can never rest and have to drive a lot of change. we have massive competitors. >> before we let you go, i watch -- i spent hours going through the investor day presentation you had last month. >> yes. >> throughout that you teased your audience about the arrival, imminent arrival of more wearable products and said with simply mac your team spends a lot of time with apple in

cupertino. do you expect apple to launch a virtual reality helmet or headset for 3-d gaming? >> boy, simon, i can't go there on discussion of product that haven't been launched. i will say we've been in conversations with the folks at facebook about oculus rift and that headset and we sell a lot of wearables like fit bit and jawbone at simply mac and spring mobile. i think the point we make is the world will have more and more connected devices and we're going to be in the middle of selling new ones and letting you trade your old ones we can refurbish and resell. >> if you look at the landscape of the businesses and consumer electronics should apple be in gaming in some form? >> i think apple is one of the premier technology brands in the history of the planet and i think whatever product they can't wa want to get into will be successful and we will be pleased to provide a service in distributing their products and any other ones that come along. >> paul raines joining us, ceo

of gamestop. >> want to take a moment and check out the markets. the s&p 500 trading above its record close set back in may of last year and within striking distance of its all-time intraday high. we have a bullish vibe here with the dow transports trading at a record high with the dow jones industrial average up 53 points as we speak heading for the first week of gains for u.s. stocks in three. with that market setup over to dominic chu for a quick market flash on southwest airlines, dom. >> so sara, like you said, the s&p 500 is just 0.2 about a 5th of a percent from an all-time high. love is in the air. the company is trading at all-time highs to levels dating back to its ipo in june in 1971. see there shares up almost 2% on the day. a nice run for those airlines specifically, vare, southwest. back over to you. >> trading at an all-time high. thanks. still ahead the rumored google gadget that could turn a hallway in your house into a virtual

reality game space. more on that when "squawk on the street" comes back. ♪ [ male announcer ] tora bora fallujah argonne khe sanh midway dak to normandy medina ridge the chosin reservoir these are places history will never forget but more important are the faces we will always remember. ♪ but more important are the facan you start tomorrow?mber. yes sir. alright. let's share the news tomorrow. today we failrly busy. tomorrow we're booked solid. we close on the house tomorrow.

i want one of these opened up. because tomorow we go live... it's a day full of promise. and often, that day arrives by train. big day today? even bigger one tomorrow. when csx trains move forward, so does the rest of the economy. csx. how tomorrow moves. for that moment, where right place meets right time. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting and trading features, plus powerful mobile apps so you're always connected, wherever you are. because at scottrade, our passion is to power yours. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked.

five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.

treasuries are rising after new home sales. down to chicago at the cme group. rick santelli with the santelli exchange. good morning. >> good morning, sara. thank you. i would like to welcome my buddy and our special guest for the last trading day in front of a three-day weekend, ira harris. first of all, for cnbc to have putin on this morning. everybody was glued on to it. made a about boatload of news. your impression? >> we've talked about putin and his stance. pretty much as -- and he's invoking, his stance on ukraine, everybody forgets history, i don't forget history sos easily, james baker and others made a commitment to -- >> gorbachev days. >> rudy of germany there would be no movement east of the german unification of nato.

>> we could argue who lies, who's judging, misjudging. but on a simple foreign policy level his arguments with nato are grounded in facts. >> well -- >> to some extent. >> right. everybody has a different interpretation of those facts. but the two plus four talks they were called, amazing nobody has gone to jim baker here, about as missing in action as our good friend gerhard schroeder. there are more arguments here than meets the eye and putin is invoking that. >> switch to the financial angle. what's the ruble versus the dollar. >> five month highs. 3410 against the dollar. 3390 the 100 day moving average. so that tells you the sanctions or whatever was going on has had no bite whatsoever. >> markets are important these days and i tell you what, we've talked about, could argue who's right, who's wrong but in the

end i don't think putin is going to march through europe. this is about energy, boundaries and nato. we were talking there's sort of a cuban missile crisis type of analogy isn't it? >> everybody thinks the u.s. back the soviets down during the missile crisis. there was another opposite site at the rate our installations came out of turkey people argue that's what khrushchev was concerned about. also a quid pro quo, we have to find it. >> let's switch gears a bit. june 5th, the ecb meeting, this is huge and some of the returns coming in on the elections in europe like the netherlands. to summarize we should have an idea of who these parliamentary officials are by monday. how do you think it plays out on june 5th? >> we've seen really pull badly in the netherlands. if france and italy especially go farther to the fringe parties. >> what about sarkozy's letter

is. >> that was an act of desperation. >> if they poll stronger than we thought, you can look for some aggressive action from the ecb. there will be pressure from the french. >> french want what? >> 10% devaluation. >> they're on record of saying that. when you don't control your monetary policy they have to hope for something hoping to get political leverage to drive the euro lower. >> at this point it's not an interest rate game. it's about the foreign exchange side. this is the issue i've had with france. we can talk about the eurozone as an economic power house but in the end the french keep reverting to the manipulations not that we don't do the same thing. it really is going to be a beggar thai neighbor argument in europe wouldn't you say. >> everyone trying to depreciate the currency and the g7 allowed the japanese to do that. we go back to october of 2012 after the g7 meeting when they gave a wink to the japanese you to do that. same in europe. especially with deflation in the southern peripherals it's a very

dangerous thing. so -- >> we're out of time. hope you have a safe and happy memorial day. we may have issues but we live in the greatest country on the planet. back to you, sara. >> thanks very much, rick santelli. >> up next on the program why memorial day is going to cost you a lot more. jane wells up at the crack of dawn at the grill. she's been there all morning. jane? >> love that apron. >> never too early to start grilling, simon and, in fact, we're looking at the meat while i'm checking my fewertures. that's how we grill. how long before high beef price comes down? we'll have that after the break. who do you work for? your boss? yourself? your parents? your family? at baird, what matters most to you... matters most to us. as an employee owned firm, our financial advisors have the freedom and resources

to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ my mom works at ge. carsthey're why we innovate. they're who we protect. they're why we make life less complicated. it's about people.

we are volvo of sweden. trwith secure wifie for your business. it also comes with public wifi for your customers.

not so with internet from the phone company. i would email the phone company to inquire as to why they have shortchanged these customers. but that would require wifi. switch to comcast business internet and get two wifi networks included. comcast business built for business. barbecues across the country will be fired up this memorial day weekend but it's going to cost more this year. jane wells has the grill going this morning. in case i don't get to say this to you later on if that is your home you have great lawn. >> oh, thank you. it is not my house. it is producer jeff daniels' house. you could perform surgery on that lawn or on this patio. it is pristine. it is a beautiful place. i will let him know. it you have a beef with beef prices, get used to it. sky high prices are expected to be with us for the foreseeable

future until demand tapers off which isn't happening yet. this time of year the restaurants start to compete with consumers for barbecue grilling meat. why is beef high? drought starting record feed prices, farmers cut back their herds now the feed is low and beef prices are high, cattle ranchers will build their herds back up. dick rode who's been in the meat business says don't expect any relief soon. >> chicken can be raised in five weeks. a sou will have two to three liters a year. always two. sometimes three. they'll have 10 to 12 piglets. so consequently they can turn the shortage of pork around the about six months. cattle takes two years. >> now the usda reports meat in freezers down 17% from a year ago. how big is chicken? chicken and cold storage is down 15% to lowest level in supplies

since 1995 when production was half what it is now. wings are down 27%. jpmorgan says this suggests, quote, a floor in prices. a floor. until production increases and/or demand slips. they see this as a positive for sanderson farms which buys feed, now at low prices, and sells meat now at high prices, also kind of positive for tyson, slightly enough for hillshire. guys, back to you. >> all right. jane wells, let you get back to your grilling. love the apron. >> thank you. >> fabulous. >> jane wells, looking fabulous on the eve of memorial day. cooking up beef. now from steaks to soy protein, meat prices seem a little too high for you for summer barbecue, you might want to consider the meaty texture of a plant based burger. demand for meat alternatives is growing and gardein is one of the meatless product makers taking the trend to the masses. yves potvin is the founder of

gardein and the man said to have created the first veggie dog more than 25 years ago. that's quite a claim to fame. good to have you. tell us about the popularity of veggie veggie dogs and other meatless meat. >> well, you know, with gardine has been on a rapid growth, as you can imagine. anytime for recall, hysteria for e. coli, or the price of a meat goes up, there's a consumer that is always on the threshold, looking to say, i'm ready to make a switch. and most of the consumer are flexatarian, looking to diversify the meat intake, so memorial day weekend is the perfect day to try. >> given what jane was telling us, supplies are low, prices are up. is this a cheaper alternative? really, how much cheaper? >> well, actually, plant-based protein is very stable in price.

our product has not increasing price in five years, and just because we use a variety of protein. we use soybean flour, wheat flour, aquino flour, so we diversify the source of protein, therefore we can offer an even price on a regular basis. >> what's the nutritional value of what you're doing? how does it -- how does it stack up? is it just people are chasing something that might look or taste like meat, or is it actually delivering the nutrients? >> actually, our product delivers 28 grams of protein, is low in fat, no trans fat, no cholesterol. at 75% less fat than traditional hamburger. so it not only tastes good -- and i think that's the key, important thing, is the product like gardine deliver on taste

and texture, and that's where people are switching. >> so it still contains fat. when you say it's 75% less fat, there's still fat in plant-based protein substitutes. >> yeah, there is fat. we're not fat free. but it's good fat for you. there's no -- it's not trans fat. there's no trans fat in our products. but instead of having 20 gram of fat, you might have 5 gram of fat in our product. >> clearly, americans are becoming more health-conscious, but they are still meat eaters to the core. i was looking at recent gallup polls, for instance. vegetarian numbers, 5%, vegan 2% of americans. do you really see this becoming mainstream? >> 38% of the american population have meatless item once a week. and that has doubled since the last five years. so people are not turning from carnivore to vegetarian or vegan. people are turning more to be

flexatarian. anyone health conscious is looking at the label now and saying, let's see if i can introduce plant-based protein in my diet. >> i guess the real question, what it comes down to, how's the taste? can you tell the difference? i like it. i'm into it. i don't like meat. i think it would be a turnoff to heat "plant-based meat." >> yes, absolutely, but you have to try it. anybody who try our product, 50% of our population buys the product again. and so, that's quite a statistic when you calculate that chocolate is 32%. so you have to try it, and i think, you know, we've just won an award from "better homes & garden" as best new frozen item. and won an award from the national restaurant association. our company is winning awards every year for great-tasting product. so you have to try it. >> can you tell the difference between the fake meat and the real stuff? >> he's a french chef. of course, he can. >> do you think that -- >> yes. yes.

but, you know, i quite often compare our industry to the car industry. i consider our product like more the hybrid or the electrical car. so, yes, you can see a difference. but, you know, it's a very slight difference, and it's actually tastes very good. has a great texture. so. >> all right. sounds good. it certainly is an alternative for some americans dealing with the higher prices. thank you for joining us. >> thank you, a great pleasure to be here. let's send it over to jon fortt with a look at what's coming up on "squawk alley." 140 characters or less, jon. >> okay. hp's threat from the cloud. what might apple really want from a beats deal? and the priceline model for movies. that's 110 characters. we'll see you coming up on "squawk alley." financial noise

financial noise financial noise sfx: sounds of marching band and crowd cheering sfx: sounds of marching band and crowd cheering so, i'm walking down the street, sfx: sounds of marching band and crowd cheering just you know walking, x: sounds of marching band and crowd cheering and i found myself honoring america's troops.de ich is actually ite fitting because ico has been servingng band and crowd cheering and i found myself e military for over 75 years. aawh no, look, i know this is about the troops and not about me. right, but i don't look like that. who can i write a letter to about this? geico. fifteen minutes could save you fifteen percent or more on car insurance. you are gonna need a wingman. and with my cash back, you are money. forget him. my airline miles will take your game worldwide. what i'm really looking for is -- i got two words for you -- re-wards. ♪

there's got to be better cards than this. [ male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com. first round's on me. that's keeping you from the healthcare you deserve. at humana, we believe if healthcare changes, if it becomes simpler... if frustration and paperwork decrease... if grandparents get to live at home instead of in a home...

the gap begins to close. so let's simplify things. let's close the gap between people and care. ♪ welcome back to "squawk on the street." check out what's happening with aruba networks. shares are taking a hit after reporting earnings that matched analysts' estimates with sales that beat, but gross profit margins were a big question mark. analyst at jpmorgan said the reported margins with below its estimates. they reiterate a sell rating on the stock. analysts at northland encourage a buy on this weakness, they

have an outperform rating and $27 price target. back over to you guys. >> all right, dom, thank you. i want to point out here, the russell -- everybody has been watching the small caps, underperforming the broader market -- on this day where we're seeing gains across the s&p, nasdaq, and dow, we are seeing the russell small-cap index actually outperforming, up about .5%. now, if you add it all up, the pain is still there. it's down more than 7% from the record high back in march. but a lot of people are talking about now perhaps the worst is over for these smaller stocks. stan greenhouse put out a note last night. >> the broader market, in the meantime -- >> up, and heading for the first weekly gain in three weeks. we're also near record highs. record territory on the s&p 500. >> of course, top two gainers on the s&p 500, hp up 6%. gamestop up 4%. the ceos of both of the companies, of course, respected ceos, have been on the program this morning. in a many sense, sarah eisen, jock done. >> got it covered. >> time for the memorial weekend. >> let's go out there. we'll grill some meatless meat.

in the meantime, let's send it over to kelly evans and "squawk alley." >> thank you, sarah. thank you, simon. guys, have a great weekend. good morning. it's 8:00 a.m. at hewlett pack headquarters in palo alto, california, headquarters. in for carl today and "squawk alley" is live. ♪ and welcome to "squawk alley" on this friday morning before memorial day weekend. a long weekend, but already a busy morning here. joining me, jon fortt, kayla tausche, or should i say, i'm joining you really? it's good to be here.

>> we are excited to have you. >> yeah. >> a lot of fun here, and thankfully, you can be a part of it, too. >> we have to start with hewlett-packard right away. shares up 6%. they started down this morning, but in rally mode. here's the chart. hewlett-packard trading at 33 and change, up almost 6%. the company said it would eliminate between 11,000 and 16,000 jobs as part of its restructuring plan. hewlett-packard posting earnings yesterday, and here's ceo meg whitman talking about the cuts in an exclusive interview this morning. >> so while no one likes to reduce the workforce, this will be good for our customers, and it will be good for hewlett-packard. it will make us a stronger company. and obviously, you know, we will be able to create capacity to invest in the growth engines of this company. >> jon, why are the shares rallying? is it something meg said? >> well, i think, maybe. but it's also a testament to how undervalued hp has been over the past couple of years. keep in mind, even at these levels, it's at about a