>> drop a couple on the ground. >> it opens it up to ill deeds, put it that way. >> what do you think? we'd like to hear from you, but we are going to hear from president in a couple minutes time. >> thank you for watching "street signs." "closing bell" is coming up next. see you tomorrow. >> and welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and i'm bill griffeth. a see-saw market day. the dow was above 17,000 for a time this morning, up about 75 points, but it fell off after the official announcement about eu sanctions against russia, which we're going to talk about in a little bit here. that put us back into negative territory, back below 17,000. so, we're watching this as we go through the day. then we get a flurry of major earnings that could change everything when they hit the tape about an hour from now. look at the list here coming up -- twitter, panera bread, amgen, dreamworksanimation,

american express. just a few of the names set to report when the bell rings an hour from now and any one of those could set the tone for stocks tomorrow. we will have all of the action realtime for you. we'll decode the reports so you know what they mean for your bottom line. >> and the moment twitter's earnings come out, we will talk exclusively with the ceo dick costolo. julia boorstin is at twitter headquarters in california. don't miss this inside look at what's happening with twitter. costolo speaking with us even before the earnings conference call and you can ask him. >> a lot of questions about twitter, its significance in social media, its earnings, growth rate. all those things we'll get into next hour. and it's not just president obama. the senate, we talked about this yesterday, the senate now taking steps to prevent companies from claiming their headquarters are outside the u.s. in order to save on corporate taxes. that man, illinois democrat dick durbin, has introduced a bill that would prohibit any federal

contract with companies involved in a tax inversion process. dick durbin will be here. there will be a lot to talk to him about on this issue coming up. >> his state hit hard by all this going on. keep an eye on walgreens. that's coming up. we're watching markets with the dow off about 30 poins at the moment, 16,952. meanwhile, the nasdaq is up about 6 points after falling yesterday, and the s&p 500 off about four to 1,974, as we head into the final hour of trade. >> we're waiting for the president. he'll be leaving the white house shortly. before he gets on marine one and heads to walter reed hospital, he'll be making a statement. we believe, we're told it's about ukraine, but we believe it could be a part of the situation today where they announced those sanctions, but all of that is relevant and all related and we'll wait for that statement from the president. i will say, those sanctions have hurt the market today, the announcements of those

sanctions. so, this could be market moving, whatever the president says, coming up in a few minutes. so, we'll watch for that. while we do, let's get to the "closing bell exchange" with sam stovall from s&p capital iq, david kudlow, nicholas colis and rick santelli as well. sam stovall, we've been highlighting the weakness in the russell 2000 lately. this is one sector that really is kind of having its own correction right now, isn't it? >> it certainly is, bill, down a little more than 9.5%, but the bottom really occurred in the middle of may. so, you could actually say that the sell in may is working if you're looking at small caps specifically, but it seems as if it's bounced off of that danger zone and now is trying to work its way back to break even. >> eric, what can you tell us about the action you're seeing? >> well, i'm not actually surprised. the russell 2000, if you look at its performance last year, was astounding. i mean it was out-pacing large

cap significantly. coming into the year, we were concerned about pockets of valuation problems within the 2,000, particularly biotech, some of the higher flying tech names. you've seen corrections. we think that the market is going to move forward and the russell 2000's driven by the domestic economy, which we think is straelengthening. >> david, is this the correction we've been waiting for, it doesn't happen to the whole market, just to segments of the market instead? >> well, that's what we've seen a lot of this year as these internal corrections or rolling corrections through different sectors, but we think there's more of a broader correction to come. as we move through earnings season, and this has been a great earnings season for stocks. we still believe we're in a secular bull market, but we think there's a more meaningful, broader pullback for the overall stock market the next few months as we come to an end to qe, which the last time we did qe-2, the market sold off 19%. also, we're going to get to the point where the fed moves from easing to neutrality to tightening. and when there's been an

inflection point, stocks have pulled back 5% to 15%. >> all right. >> both of those factors, we're looking for a pullback in stocks here. >> nick, want to raise the issue with you about tax inversions and about tax outversions, if we could use that language. take a look at windstream today, basically spinning off some of its assets into a real estate play that lets it lower its tax rate. nick, what happens if corporate america, having seen what they can do to invert now looks at their real estate, and i'm thinking of some of the biggest retailers in this country, and say, wait a minute, we could spin off all of our real estate, too. >> that's right. it's a very big opportunity for corporate america and a very significant one, and it's definitely a way they're trying to address what are still structurally very high tax rates in this country, vis-a-vis a lot of other ones. that's created a lot of imbalances and confirmations are sillplay trying to redress that using these innovative structures. >> rick santelli, talk of sanctions against russia took the wind out of the sails of the equity market today. what did it do to other markets? we've seen oil and gold go up a

little bit, then come back again. what about the debt market? >> well, you know, we could make a case that bund yields were affected because when they got down to the 1.11, 1.12 area, they went comatosed basically after that 10:40 eastern announcement, so there was no bounce, no mean reversion. the euro currency pretty much made its low of the session, the lowest since november, right after that. you know, we can't just look at the energy markets and draw conclusions because that isn't the energy that the pipeline that's controlled by putin going into that part of europe is represented by. but i'll tell you what, i know that these sanctions make sense to many, and i am not a foreign policy expert, but somebody like putin, with energy as his big trump card, to me, i'd certainly hope that germany and some of these countries, areas that are bordering and use that natural gas, have backup plans. maybe it's time we should look for bottoming coal, maybe, in the u.s. but i think, you know, after having lived through the '70s, they'd better have an energy

plan. no economy works without energy. putin has a lot of influence. >> yeah, all right. folks, we're going to have to go at this point. sorry for the abbreviated exchange, but the president, we're waiting for him. he should be stepping out of the white house shortly to make that statement on ukraine and the russian sanctions. so we'll get to that live in just a couple of minutes here. and we have 53 minutes to go until the closing bell. the dow's off 22 points again after some gains earlier in the session. it's been an up-and-down hour. the s&p 500 off about four, the nasdaq bucking the trend, adding eight. and volume on that index as well has been heavier today. still to come, that tsunami of after-the-bell earnings heading our way tonight. american express, amgen, twitter, panera bread just among some of the names reporting. we'll bring you their numbers the second they sit the street and tell you how they might affect the markets and your portfolio. and twitter ceo dick costolo speaking with us exclusively after releasing that earnings report. find out how he plans to pump up twitter's user growth and wait until you hear his plans to beef up advertising as well.

plus, is it new evidence that the housing market may be stalling, or are falling prices good news for housing right now? the contrarian view that might surprise you is still to come here on the "closing bell." don't just visit new york. visit tripadvisor new york. with millions of reviews, tripadvisor makes any destination better.

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down day right now, but we're watching all of the markets. anything's possible. this market just feels like it could go either direction, and it has today. the dow was up 73 points on the open this morning. around 10:30, 10:40 eastern time when they announced eu sanctions against russia, the market cascaded lower and we've been below 17,000 since that time, and along those lines, the traders are watching very closely for this statement the president is expected to make outside the white house. it could happen any time now, as he departs the white house for walter reed hospital there in bethesda, maryland, to visit with people there. but at any rate, waiting for that statement. could have something to do with ukraine and the russian sanctio sanctions. and as we await more earnings, bertha coombs is watching the movers. >> u.p.s. moved lower on weaker than expected second quarter earnings as revenue fell despite

increased profits. u.p.s. trading down about 3.5%. etna fell, despite reporting better-than-expected second-quarter results. however, it reported a rise in medical costs in certain areas, raising some investor concerns that a long run of growth in those might be ending, or low growth, rather, in those costs. etna's trading down about 3% on the day. and windstream surging after receiving regulatory approval to convert some of its assets into a reit. it is trading at about 10.8%. and telecom companies today, it was the best performing sector. centurylink, frontier, at&t and verizon. and gravity, meantime, setting in on el pollo loco. the stock moving lower, finally, after having an explosive run since pricing at $16 a share and opening at $19 on friday. investors today pulling back. it's off now just over 9.25%. kelly? >> bertha, thank you for now. now, that case-shiller composite

housing index released today showing a slight decline in may, the first time it's slipped in 27 months. the index is still running up better than 9% on the year, so, is a slowdown in housing prices here a bad thing, or would ko it help spur sales? >> let's find out. as we all know, all real estate is local, so we're going to go local with some realtors to get a view from different key cities around the country. from atlanta, it's joe gibson from keller williams in-town real estate. from las vegas, it's cynthia silver from century 21, martinez and associates. and from miami, it's patricia delana from century 21 premier elite realty. just a warning, the president could start his statement from the white house any moment and we'll have to be rude and step into that when he begins. patricia, let me start with you. miami's long been a very volatile real estate market, very hot, very cold. you guys are back to some degree, aren't you, at this point? >> well, miami's in a very

unique position, because what we're doing is attracting buyers from all over the world still for many different reasons. 62% of our buyers are foreign buyers, and 90% of those buyers are buying cash. we have buyers from brazil, venezuela, argentina, france, canada, colombia, mexico and peru. and what these investors see that's different is tremendous opportunity in growth right now in miami. for one example, there is the design tower. we have over 22 billionaires that have recently placed deposits on this tower. >> wow. >> we have the miami world center, brickell city center, with billions of dollars invested in miami. >> right. do you risk overbuilding, as in the past? >> i think right now the competition is healthy and creating a very balanced market, keeping prices very affordable. >> okay. >> and joe, how different are conditions in atlanta, and to what extent do you think the recent increase we've seen in home prices is now leveling off because of that increase, in other words, because it's gone a

bit too far, more than people can afford? >> sure. there is always a possibility of that, but the atlanta market is so strong, prices do continue to edge up, but it's a healthy kind of increase. we have plenty of buyers. we have more buyers than we have product. and i just don't see an end in sight. but it's a very healthy, healthy growth. >> i happen to know the atlanta market, you're kind of spread out, so is it equal across the board there or the closer you get to town or -- >> the closer you get to town, the better. we have a lot of densely populated in-town markets. the decatur area, buckhead, midtown, those city center areas are the ones with the greatest growth, anywhere from 10% to 20% growth over the last just year to today. >> and cynthia, jo made a point that gets to the heart of this, there's more buyers than product. is that your experience in las vegas as well? >> no. as a matter of fact, in las vegas, what's changed this year is that our inventory is up 30% and sales are down 7.5% versus the same period a year ago.

however, what we are seeing is that we did keep the bulk of the gains that we made in home values the same time last year. so, we're still selling at 98.9% of list price. >> ladies, stand by for just a moment. the president's not beginning yet, but we are getting a sense of what he's going to say. our correspondent michelle caruso-cabrera's stepping in with a preview of that statement. >> reuters is reporting right now that the u.s. is going to slap sanctions on several large russian banks that are state-owned. vtb, the bank of moscow, the russian agriculture bank, and also a shipbuilding corporation. they are not specifically including spare bank, the largest state-owned bank. it's not clear why. hopefully, we will get some answers to that later. the sanctions are very similar to what europe did earlier. they prohibit u.s. citizens or companies from dealing with debt maturities -- debt carrying maturities longer than 90 days. so, only short-term debt, also

no new equity. when it comes to the shipbuilding company, they're going to freeze any assets they have in the united states and prohibit all u.s. transactions with it. that's a much more standard kind of sanction regime that we've seen in the past when it comes to certain companies. so, sanctions on banks, but it's not that you can't do business with the bank at all, it's just that you cannot deal with their debt or their equity that matures longer than 90 days from now. it makes it very difficult for those banks to raise capital in the west if both europe and the united states are doing this, guys. and that's the intent. >> michelle, that's exactly what i was going to ask you. these sanctions on the financial institutions now bring the u.s. up to where the eu is? >> yes, exactly. very specifically. when it comes to these debt maturities and the way that they are, this is a different way than we've done sanctions nth past, right, or that we're familiar with, where they designate a certain entity, say in iran or a certain country, and say, all right, everybody in the united states or anybody who wants to conduct dollar transactions, you can't do that anymore with this institution. that is not the case here.

these are very specific kinds of transactions and very similar to what europe did. to your point, yes, kelly, you're right. >> i know there's no answer to this, very quickly, but the optics of this announcement, this is a pretty important announcement and this is sort of a lock buy by the president, if this is how it's going to work. he'll step out of the white house, head toward marine one, first make this statement and then head on to the helicopter there. this is the kind of announcement you would think they would go to the rose garden and make a big deal out of here. like i said, there's no answer to that. it's just very interesting how they're choreographing this particular announcement today. >> yeah. >> yeah. >> i don't know what else to say to that. >> i wasn't expecting an answer. i'm just making an observation. thanks, michelle. we'll be back to you after this happens here. let's get back to our guests on real estate around the country. you know, we keep hearing as housing affordability becomes more out of reach for those first-time home buyers, the rental market is so strong right now. jo gipson, is that the case in your town in atlanta? >> it is definitely the case in

atlanta. it's, again, a product problem. we don't have enough rentals. they're building them. construction for rentals has exceeded what it's been in years past, but there are not enough of them right now. >> patricia, can i just ask you something with regard to the news about sanctions on russia? we know russians have been a big presence buying in miami and in the florida area. can you tell us whether you've seen any change in that of late? >> not yet. a lot of our foreign buyers are buying in miami exactly for political reasons, safety reasons and acceptance. miami being an international city, foreigners feel more accepted and comfortable in the miami area. so, we still see that very strong. >> cynthia silver, what about your rental market? i mean, you guys, you got hit really hard. you more than any city maybe symbolize the boom in real estate we saw in the '90s going into this crash, and then you symbolize the hardest hit. is it --

>> that's true. >> is the rental market now strong because of that? >> it is still very strong here. having said that, it's interesting to me, as more and more of our potential buyers have returned to financial health and they're in a position to purchase homes, we've just developed other areas of our rental market that are super desirable, and thereby, we're commanding higher rent. we're even seeing more luxury homes and penthouses on the strip that are renting out or being purchased by investors as high-end rentals. the return rate on those is excellent. >> any idea on underwater or foreclosure rates right now? >> you know, we've got 70% of our home sellers above water now. and so, with only a third of the homes under water, it's been a vast improvement for us, but we do still have a high demand for rentals in all price ranges here. >> getting a real estate agent to talk about foreclosures is like asking a golfer to utter the word shank. you just don't do that and i apologize, but i know it's part of the market right now.

thank you all for your thoughts on the housing market in your part of the country. thanks for being with us. >> thank you. >> heading toward the close with 40 minutes left here as we await the president. it will be interesting to see. i mean, the market, the traders are awaiting to hear the fine points of what the president's going to say about russia and the sanctions and its impact on the markets and the european economy. so, we'll wait to see what impact it has to the markets. the dow down 20 points as we wait for that statement. up next, the tale of two restaurant chains. this chart will tell us the story. what chipotle mexican grill is doing right and what can panera bread do about it. results are due after the close today. also coming up, congressman darrell issa in a first on cnbc interview. we'll talk about the widening congressional investigation into alleged corruption at the export-import bank that is hoping to get recertification from congress. today a witness pleaded the fifth during a hearing. what is it with congressman issa and witnesses pleading the fifth these days?

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we're waiting for the president to come out of the white house on his way to marine one, making a statement about the situation in ukraine, the sanctions against russia to be announced. and our washington bureau chief just e-mailed me. i was questioning, you're doing this as sort of a walk-by, such an important statement. he says as soon as they turn that camera around, bill, you'll

see this major podium that the president's going to make the announcement on in front of "marine one," which should be very impressive. so, i stand corrected in that regard. thank you. >> not just saying it in stride, i guess. >> exactly. >> here's how markets stand. dow's off 25, the s&p's also negative on the session, down to 1,974, by the way. the nasdaq's up about seven points. and so, different directions for the second day running. on we go. a lot of interest in panera bread earnings out in a few minutes. morgan brennan previews that action for us. morgan? >> thank, bill. take a look at panera year to date, down about 16%. that's a stark reversal for the fast casual chain which was considered a growth story just last year. this year, the company has seen weaker sales while at the same time rolling out costly automation plan called panera 2.0. consensus estimates for q-2, $1.74 per share on revenue of $640 million. for same-store sales, we're looking for 1.7% increases both in corporate-owned and franchise

cafes, and also expect the automation rollout to weigh on results. also watching for potential impact from food inflation. so, ahead of the earnings, shares are up today more than 2.5%. guys, back to you. >> yeah, not a bad performance on the session, morgan. thank you. the names panera and chipotle used to go hand in hand when we were talking about healthier fast-food options and growth in the casual space and lately their companies and share prices have diverged. >> so, what is chipotle doing right that panera is doing wrong? let's bring in two restaurant analysts. nick is from wedbush securities and bob derrington from wunderlich securities. good to see you both. nick, what's your answer to that question? >> i think chipotle has been able to differentiate itself and continue to differentiate itself. it has prisicing power at the e of the day. its business model's conducive to running that line faster and faster so they can drive same-store sales gains.

when panera, maybe they've lost a little of the differentiation over the last few years. the sandwich sub category is extremely competitive. and really at the end of day, they're not in the same position as chipotle to move that line faster and faster. so, we've seen more of the group issues be a headwind. >> and i want to ask in a second what your views on the shares is, nick, but bob, same question. and you know, why is it that a couple of years ago -- in fact, it was panera who was almost first into this space, but now chipotle seems to have the edge here. and whole industry's watching them, by the way. >> kelly, i'd call it death by 1,000 cuts. i think panera bread's brand has been considerably more differentiated in years past. i think a lot of competitors have tried to steal some of the specialness of what the concept has, and in doing so, we've seen a lot of encroachment from whether it's a starbucks or a dunkin' donuts or a mcdonald's, try and capture some of that,

and i think it's being their business. it's affected their sales. >> i've long equated them with a starbucks. it's an inviting environment that they pose. you feel like you're in a comfortable environment there. i mean, so, why aren't we going there more often, bob? >> well, the problem, bill, is that there are so many options today. chipotle is far more differentiated in the marketplace. panera bread i think has a lot of brands that are trying to emulate it and the quality of the experience, whether it's in the decor, the quality of the food. and i think panera's at a stage where they're clearly trying to break away from the pack, as they have in the past. >> nick, what is your view in terms of price targets and the like for each? and why is it that panera, like bill was saying, it's a place where you can have a coffee, have a business meeting. shouldn't they be getting a lot more visits and a lot more of the starbucks model than they appear to be getting from this space? >> well, they're trying address that with the panera 2.0 initiative. when we have conversations in those markets where we've seen

that being implemented, like charlotte, like boston, we are seeing, you know, very impressive double-digit sales lift. so, i think it's just a matter of time until we see that being rolled out throughout the united states. and so, when it does actually, you know, expecting to see same-store sales come right back. >> okay. gentlemen, we'd love to continue the conversation, but we are waiting for the president. that may be imminent, so we're going to take a break, but thank you both for your thoughts today on panera and chipotle, as we get ready for those panera earnings here. we're heading toward the close, about 30 minutes left here as we wait for the president to come out and talk about the russian sanctions. up next, house oversight and government reform committee chairman darrell issa. we'll talk about the widening congressional investigation into allegations at the export-import bank. he supports continuing the bank, albeit with important changes. we'll talk that out with him. and lator, senator dick durbin speaks with us about a bill aimed at cushing tax

inversions, a hot potato issue on wall street. that's when u.s. companies, as you know, buy smaller, foreign firms in order to cut the taxes owed to uncle sam. senator durbin's bill could affect a lot of multibillion dollar acquisitions now in the works. but is it the right way to fix this snish that's one of the questions that you won't want to miss that he addressst coming up on "closing bell." stay tuned. re. ♪ ♪ during the cadillac summer's best event, lease this all new 2014 cts for around $459 a month or purchase with 0% apr and make this the summer of style. over 20 million kids everyday in oulack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents.

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comcast business. built for business. if you're just joining us, we're waiting for president obama to be coming out of the white house on his way to bethesda, maryland. he'll stop to a podium and make some comments about sanctions against russia. you may have heard the eu earlier in the day announcing sweeping sanctions against the russian government, and that took its toll on wall street, frankly. it took the equity markets down. we had been up 73 points on the dow, then it fell on word of those sanctions. so now traders are waiting anxiously to hear what the president has to say, an as soon as he makes that statement, we'll take you live to the white house. >> 70% sanctions, 30% internals. that was art cashin's assessment earlier as the dow is off 35 points. our next guest is just getting out of a hearing regarding the ex-im bank. it's the export-import bank that helps american companies do business overseas, a controversial agency lately, up for congressional renewal and

being scrutinized by the republican congress because many feel it's an arm of crony capitalism. >> today a key witness in those hearings pleaded the fifth. it was a witness that was called for by our next guest. he's joining us in a first on cnbc interview, representative darrell issa, who chairs the government veracyoversight and committee. and we apologize if we have to interrupt once the president cuts in with more on the sanctions against russia. >> absolutely. >> let me cut to the chase. do you believe congress will renew the charter before it runs out september 30th? >> i believe we will. i believe that the work that's being done now to express the need for reforms, making the ig's findings of nearly 40 ongoing investigations a matter of public record and getting us turned around to where we can believe that the investment made in helping american companies compete internationally is being made in a transparent way.

i think that's going to help go a long way toward getting bipartisan support for reauthorization. >> do you think kevin mccarthy shares that view? >> well, i commented yesterday that my opinion was that he did, that there were conditions under which he would do a short or even a longer renewal. but that's for him to speak for himself. what i think is important is that it's undeniable that the ex-im bank at times has made possible sales overseas of american companies that otherwise would not have happened. the question is, is that criteria clear and transparent? can we count on corruption not being part of it? can we aggressively go after people who, in fact, are corrupt in this organization? if we can do that, then i certainly think members in both parties would say, if it's necessary in order to get an export sale to have this kind of support, and if our competitors are doing it and we're competing against those countries, then i think you'll get that support. and that's what we were doing the hearing on today is

exposing, so we can get the reforms so people can vote on a bipartisan basis for renewal. >> certainly, fraudulent activity's one thing. that needs to be looked into. but these charges of capitalist cronyism, that there's favoritism that occurs when the bank makes these loans. the charges of corporate welfare for korpgs that probably don't even need the money to make these deals overseas, how do you police that? what changes do you propose to try and change an environment that is, frankly, part of the whole lending process? it is a very subjective process to begin with. >> well, it is subjective, but remember, the original intent is american jobs for exports being supported by guarantees or outright loans. if the american jobs is the first question, then obviously, a very large company like boeing or general electric is going to have larger loans and larger amounts of them. but it has to be based on whether or not that's actually the case.

in some cases, what we find, and year after year, what we find is that the majority of loans were made to small companies while the majority of money, by far, is made to just a handful of large companies, and that does beg the question of is there enough access to a small or medium-sized company that, in fact, has a product desirable overseas and needs ex-im support? so, again, regulating it and making sure it's honest and transparent i think is going to help promote the confidence, regardless of where those loans are made. >> just so you know, mr. chairman, we're inside the two-minute warning for the president right now. go ahead. >> speaking of that, i want to ask you about the president, the extent to which he's using executive orders on fronts from tax policy to immigration and whether that's an impeachable offense in the future. >> i shouldn't smile about something like this. clearly, the president has a need to use executive orders to honestly execute laws passed either by him or his predecessors. he shouldn't use it to distort

the intent of a law. that's why there's a case that's going to be brought against the president to try to hold him accountable, to make him enforce portions of the affordable care act that he's chosen not to, or at least come back to congress for that kind of approval. i think that's important -- >> but that doesn't sound like a scam, which is what john boehner called it this morning. >> well, look, when the president does things that are clearly outside of his lawful authority, there are two choices -- fire him, which is what you were talking about, or go to the court, get him to executive faithfully on his obligation. by the way, it's not just the president. we have organizations all the way down to small bureaucratic organizations that are not treating the american people fairly consistent with the law -- >> but would you agree this is an issue which john boehner has said the democrats themselves are using to their advantage? all right, we have to leave it there. >> mr. chairman, thank you for your time. we have to go at this point. yep, the president coming out right now. he's heading to bethesda to

visit some of the patients there at walter reed memorial, the hospital. but before he does, he'll go to this podium right now and sort of add on to the eu sanctions that were announced this morning against russia, and now we'll hear what the president has to say about it. >> good afternoon, everybody. in the netherlands, malaysia, australia and countries around the world, families are still in shock over the sudden and tragic loss of nearly 300 loved ones, senselessly killed when their civilian airliner was shot down over territory controlled by russian-backed separatists in ukraine. these grieving families and their nations are our friends and our allies. and amid our prayers and our outrage, the united states continues to do everything in our power to help bring home their loved ones, support the international investigation and make sure justice is done.

since the shootdown, however, russia and its proxies in ukraine have failed to cooperate with the investigation and to take the opportunity to pursue a diplomatic solution to the conflict in ukraine. these russian-backed separatists have continued to interfere in the crash investigation and to tamper with the evidence. they have continued to shoot down ukrainian aircraft in the region. and because of their actions, scores of ukrainian civilians continue to die needlessly every day. meanwhile, russia continues to support the separatists and encourage them and train them and arm them. satellite images, along with information we've declassified in recent days, show that forces inside russia have launched artillery strikes into ukraine, another major violation of ukraine's sovereignty.

and we have information that russia continues to build up its own forces near the ukrainian border and that more russian military equipment, including artillery, armored vehicles and air defense equipment, has been transferred across the border to these separatists. since the beginning of the crisis in ukraine, the united states has worked to build a strong international coalition to support ukraine, its sovereignty, its territorial integrity, its right to determine its own destiny and to increase the pressure on russia for actions that have undermined ukraine's sovereignty, territorial integrity and ability to make its own decisions. the core of that coalition is the united states and our european allies. in recent days i've continued to coordinate closely with our allies and our partners to ensure a unified response to the shootdown of malaysian airlines

flight 17 and russia's continued arming of the separatists. and i've spoken several times with prime minister ruta of the netherlands and prime minister abbott of australia. yesterday i had a chance to speak with prime minister cameron of the united kingdom, president hollande of france, chancellor merkel of germany and prime minister renzi of germany. we are united in our view that the situation in ukraine ought to be resolved diplomatically amid a sovereign, independent ukraine is no threat to russian interests. but we've also made it clear, as i have many times, that if russia continues on its current path, the cost on russia will continue to grow. and today is a reminder that the united states means what it says, and we will rally the international community in standing up for the rights and freedom of people around the world. today, in building on the measures we announced two weeks

ago, the united states is imposing new sanctions in key sectors of the russian economy -- energy, arms and finance. we're blocking the exports of specific goods and technologies to the russian energy sector, we're expanding our sanctions to more russian banks and defense companies, and we're formally suspending credit that encourages exports to russia and financing for economic development projects in russia. at the same time, the european union is joining us in imposing major sanctions on russia. its most significant and wide-ranging sanctions to date. in the financial sector, the eu is cutting off certain financing to state-owned banks in russia. in the energy sector, the eu will stop exporting specific goods and technologies to russia which will make it more difficult for russia to develop its oil resources over the long term. in the defense sector, the eu is prohibiting new arms exports and

imports and is halting the export of sensitive technology to russia's military users. and because we're closely coordinating our actions with europe, the sanctions we're announcing today will have an even bigger bite. now, russia's actions in ukraine and the sanctions that we've already imposed have made a weak russian economy even weaker. foreign investors already are increasingly staying away, even before our actions today, nearly $100 billion in capital was expected to flee russia. russia's energy, financial and defense sectors are feeling the pain. projections for russian economic growth are down to near zero. the major sanctions we're announcing today will continue to ratchet up the pressure on russia, including the cronies and companies that are supporting russia's illegal actions in ukraine. in other words, today russia is once again isolating itself from

the international community, setting back decades of genuine progress. and it doesn't have to come to this. it didn't have to come to this. it does not have to be this way. this is a choice that russia and president putin in particular has made. there continues to be a better choice, the choice of de-escalation, the choice of joining the world in a diplomatic solution to this situation, a choice in which russia recognizes that it can be a good neighbor and trading partner with ukraine even as ukraine is also developing ties with europe and other parts of the world. i'm going to continue to engage president putin as well as president pore cheoshenko and o partners in pursuit of a diplomatic solution, but it is important for russia to understand that, meanwhile, we will continue to support the people of ukraine, who have

elected a new president, who have deepened their ties with europe and the united states, and that the path for a peaceful resolution to this crisis involves recognizing the sovereignty, the territorial integrity and the independence of the ukrainian people. today the people of ukraine, i hope, are seeing once again that the united states keeps its word. we're going to continue to lead the international community in our support for the ukrainian people and for the peace, the security and the freedom that they very richly deserve. thanks very much. >> is this a new cold war, sir? >> no, it's not a new cold war. what it is is a very specific issue related to russia's unwillingness to recognize that ukraine can chart its own path. and i think if you listen to president poroshenko, if you listen to the ukrainian people, they've consistently said they seek good relations with russia. what they can't accept is russia arming separatists who are

carrying out terribly destructive activities inside of ukraine, thereby, undermining the ability of ukraine to govern itself peacefully. that's something that no country should have to accept. and the sooner the russians recognize that the best chance for them to have influence inside of ukraine is by being good neighbors and maintaining trade and commerce, rather than trying to dictate what the ukrainian people can aspire to, rendering ukraine a basile state to russia, the sooner that president putin and russia recognizes that, the sooner we can resolve this crisis in ways that doesn't result in the tragic loss of life that we've seen in eastern ukraine. go ahead. >> so far, sanctions haven't stopped vladimir putin. are sanctions going to be enough? and are you carrying lethal aid for ukraine? >> keep in mind, the issue at

this point is not the ukrainian capacity to out-fight the separatists. they are better armed than the separatists. the issue is how do we prevent bloodshed in eastern ukraine? we're trying to avoid that. and the main tool that we have to influence russian behavior at this point is the impact that it's having on its economy. the fact that we've seen the europeans, who have real, legitimate economic concerns in severing certain ties with russia, stepping up the way they have today i think is an indication of both the waning patience that europe has with nice words from president putin that are not matched by actions, but also recognition as a consequence of what happened

with the malaysian airlines flight that it is hard to avoid the spillover of what's happening in ukraine impacting europeans across the board. and so, we think that the combination of stronger u.s. and european sanctions is going to have a greater impact on the russian economy than we've seen so far. obviously, we can't in the end make, you know, president putin see more clearly. you know, ultimately, that's something that president putin has to do on his own, but we can do is make sure we've increased the costs for actions that i think are not only destructive to ukraine, but ultimately are going to be destructive to russia as well. all right? guys, i've got to get going. >> israel's attempt to discredit secretary kerry? >> the president there announcing additional sanctions on portions of the russian

economy. as he said, those three key areas -- energy, arms and finance. we didn't see much of a market response. the dow was down 50 points at the low during his statement, and when he was answering questions, but it has since come back. john harwood is standing by there in washington. i mean, you know, this is sanctions in slow motion, john. vladimir putin publicly complains about them, but it doesn't seem to change his strategy as it pertains to ukraine. >> question is whether it changes as they get more severe. this is the president seizing on a development he's been waiting for, which is a different attitude on the part of europe, in particular germany, italy, france, the united kingdom, to try to decide that they've gotten to a place that they were willing to suffer the pain themselves of inflicting pain on russia in response to the downing of that jetliner. so, i think the administration, if they got out too far in front, it wouldn't affect russia's behavior because europe's a bigger player with russia in any event.

and so, now the combination of the two both tightening at the same time in similar ways. you said, finance, arms, energy. at least it holds the possibility. we don't know it's going to work and we're going to find out relatively soon if it will, but since nobody believes that military action itself is an option, this is the best shot they've got. now, the president did get a question about arms to ukraine, and what he said was, the problem right now isn't the ukrainian military's capacity to respond to the separatists backed by their russian equipment. so, he indicated that that's not where they're going, and they believe that there's some room to run with these sanctions. >> john harwood, thank you for now. we want to get out to michelle caruso-cabre caruso-cabrera, who's back at cnbc headquarters as well. to the point john harwood was making, when asked whether the u.s. will supply lethal aid to ukraine, he says it's not that they need more arms assistance, it's that they're trying to

figure out how to prevent russia from being a proxy in perhaps stirring up more unrest in eastern ukraine. >> i think he's absolutely right. i would add that i think what's happening today and the conference that president obama had yesterday with the leaders of france and italy in particular, who are both very reticent to actually do something as strong as has been done today, this is a seat change for europe. now, that doesn't necessarily answer bill's key question, which is does this make putin act differently? we don't know that, but we've certainly gotten to a place where we weren't necessarily even close to getting to before. the europeans were not willing to go along. i think the key moment came not when the plane went down, because remember, everyone's reaction to the plane was, oh, maybe putin will realize that arming the rebels is a problem, and what did we see after that? he actually increased arms to the rebels. i think that was the moment when europe woke up and said, okay, we're not dealing with somebody who's like us. and so, now we have to do something different. so, italy coming along.

they were the most reticent. france coming along, that's a very big deal. but they're still going to sell that aircraft carrier to the russians, yes. >> all right, michelle. thank you very much. as we said, even through all of this, as the traders waited anxiously for this statement, we didn't see much of a response. you know, right now they're waiting for that gdp report tomorrow morning and then the fed decision tomorrow, so there's a lot for this market still to digest over the next 24 hours. >> yeah, even oil, gold, some of the areas you think would be much more sensitive, perhaps, than just equities are not showing the same level that you might otherwise expect in this kind of discussion, when it's happening front and center and right into the close here. >> we've got seven minutes left. we'll take a break and come back with the closing countdown for this tuesday. after the bell, then all eyes are going to turn to crucial earnings hitting wall street, including twitter. ceo dick costolo is here exclusively as soon as the numbers are released. keep it right here. that's straight ahead. you're watching cnbc, first in business worldwide. faster than , we believe outshining the competition tomorrow requires challenging your business inside and out today.

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time and sales data. split-second stats. ♪ its so close to the options floor, you'll bust your brain-box. all on thinkorswim, from td ameritrade. welcome back. in other international news, we have breaking news now on argentina. our kate kelly with the details. kate? >> thanks so much, kelly. the argentine mirabal, the stock market rallying about 6% on late-day notification that some friendly bondholders, people who lent argentina money through government bonds issued prior to 2001 and then accepted lower payments than expected in order to help the country through a difficult economic period, they are moving for some relief in

the situation which is pushing argentina toward default. a recent court filing in new york urging judge tom griesa, who recently urged argentina to pay all creditors at once and put them in a situation where they may reach technical default thursday morning, they're urging him to lift his order, insisting everyone be paid in full at the same time, i.e., end of the day tomorrow, and give some relief to argentina, which has claimed it can't afford this. so, some relief at least in the argentine market, although it seems dicey as to whether this will actually result in judicial action as asked for. >> kate, as you mentioned, that index up almost 6% on that news today. now out to bill griffeth and the "closing countdown." >> we're going out near the lows of the session now, kelly, down 53 points on the dow. transports are down 110 points now, so four days straight down for that index. and the russell has been lagging as well. here's the transport. look at this. right on the lows of the session. that's been a four-day slide after hitting those all-time

highs. that was the strongest sector for a while, not now. now we get earnings coming out at the top of the hour. twitter is the one we're highlighting because dick costolo, the ceo, will be joining us live to answer our questions and your questions about this company and their future. they're looking for earnings to be essentially unchanged. the break-even for that quarter. but the other companies reporting as well, look at this -- american express, amgen, panera and dreamworks animation all reporting in the next couple of minutes here, bob pisani. but this weakness in the small caps and the transports continues today. >> right. i think it's interesting. everybody says ukraine hasn't had any effect on us today. 220 or so? >> yes. >> formally, we finally got a formal word of what the sanctions were and were coming into effect. the market did drop lower. germany had been weak. we've noted this for a week now, germany's been clearly affected by this. buying yields in europe are at historic lows. obviously, they moved lower recently because of what was going on with the ecb, but just since the ukraine crisis,

they've moved lower. clearly, that's in response to that. a little plight to safety there. we have spanish bond yields below u.s. bond yields. >> yeah, right. >> strange? is this not strange? >> that inversion continues here. speaking of which, earnings continues at the top of the hour, but tomorrow we get the gdp report for the second quarter again and then, of course, the fed tomorrow afternoon. so, again, a lot coming up here. >> yep. and remember, this is a little bit unusual for today because normally there's a thing called the fed drift, where the day before the fed announcement usually has been a positive day for the world market. that's obviously not happening and here's the impact. by the way, american express, another company that does a lot of business as well in europe, we'll be looking for any comments they have on the impact of people buying in that country, these countries as well. >> always about the guidance, that's for sure. thank you, bob. >> that's right. okay. >> see you later. we're going to go out down 55 points, but there is a lot more to come. the tone will be set by the earnings that are coming out that we mentioned just a moment ago, and you can stay tuned. we've got dick costolo, the ceo

of twitter, joining us to answer questions about the company's future. that guidance will be key for that company that has really fallen on hard times the last few months. stay tuned now. it's the second hour of the "closing bell" with kelly evans and company. i'll see you tomorrow. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. and it looks like markets are going out on their lows of the session. take a look with the dow jones industrial average shedding about 66 points here. that's 0.4%. 16,916 is the level for the blue chips. the nasdaq, positive most of the session today, turning negative at the bell, down about two points. and the s&p 500 off about eight, almost 0.5% to 1,970, sitting just on a level that many around here had been watching. let's get right to it about our "closing bell" panel today as we wait on some more earnings, including twitter imminently. first, let's talk markets. lance, doug holtz-eakin, cnbc's own kate kelly, and also with us for more on markets today is

"fast money" trader brian kelly. welcome to everybody here. and doug, look, we went out on the lows almost 70 points off the dow, in fact, related perhaps to president obama just announcing sanctions against russia. is this reaction warranted? >> this is the traditional response to geopolitical risk. markets have actually been ignoring it by and large, so this is actually probably a more reasonable reaction. >> it's interesting the way that the eu suddenly was a step ahead, it seems. and now the u.s. is catching up on some of the sanctions they're imposing. is that how you read it? >> the real question is how severe the sanctions will be in practice. we've heard the sectors that the president promised to hit, but the eu is not with tough energy sanctions and without that, you don't hurt the russian economy. so, we've had this dilemma from the beginning. >> and brian kelly, undeniably, any harm to the russian economy will do harm to the global economy and here in the u.s. >> yeah. certainly we saw it in some of the visa numbers and you just mentioned american express. we'll see what happens there. you know, i mean, it's very

interesting, because i do think this is the first time that the stock market in the u.s. has acted as it should to these sanctions, because really, what's the end game here? putin is not going to back down at any point in time, which means this is going to escalate. and that is not good in general for the global economy. >> kate, do you agree? >> and in terms of putin not backing down, look at europe. i mean, they need the natural gas supply that's coming from russia in order to get through the winter, which, yeah, we're in july right now, but that's only a few months away. so, their hands are a bit tied as well. i mean, it's a tough situation in terms of the hard realities of commodities supplies alone all around. >> doug, that goes back to why the eu suddenly has gotten ahead on this, gotten out front on this. is it because they want to take action now with the hope that something will be resolved come the winter season? >> certainly, if they're going to have a problem, it's going to be now. i think they're also hoping that the ecb will bail them out a little bit on the growth front. they have two big fears. one is winter heating and the second is a recession. they're growing at 1%. if you hit russia hard enough, you practically deliver a

european recession, and that's a big problem. >> look at already what's happened in germany. we've seen the ifo benchmark sentiment survey down three consecutive months, underperforming where people had hoped for an economy that up until next, brian, had been pretty resilient. >> it has been, and particularly in germany. and we know germany has china as their largest customer, so that's always a concern when you start to see germany weaken, because it does mean that perhaps china is starting to weaken, despite the fact that the shanghai composite has gone up over the last couple days. these are concerns, and if germany at the core is falling, then the rest of europe should probably fall as well. >> we've seen the transports in particular take it on the chin for the last couple of sessions, and no exception there today, down better than 1%. is this, again, one of these things we should read to some extent, guys, as a gauge of what's more to come? is it that the transports in particular could be vulnerable here? doug, what's your sense of things? >> they're vulnerable on the international front, so international transport's a big deal.

for me in the earnings, i'm looking at american express because it's really retail sales and it's going to dictate how much strength there is in the u.s. economy to survive what is a weakening global picture. there's no doubt about that. >> yeah. brian kelly, one of the, i guess questions, if you wanted to put it that way, that people have had s why oil and gold haven't responded more here. >> the reasons for gold have pretty much disappeared. so, we've had, you know, negative interest rates. those are gone. you had china buying. you had india buying. those are all gone now. and now you're starting to get a stronger dollar. so, for gold, that's very tough. on this dollar, i would watch and see what russia does. because if the ruble gets weak enough, there is a potential, and it's a very, you know, it's a tail risk, i guess, that russia backs the ruble with gold. that would be kind of their parachute out of a really weak currency collapse. so, that's something to watch on the gold front. >> wow. see, i mean, all the same -- kate, talking through whether

russia would take a step like that? >> i'm sorry? >> hang on a second. we're going to get more on these american express earnings that are now out with bertha coombs back at headquarters, everybody. hold on one second. bertha, it looks like a beat on the bottom line, at least. >> looks like it beat on the bottom line. american express reporting $1.43 per share. that's 5 cents ahead of expectations. $8.66 billion on the top line was more or less in line. the company says card member spending rose 9% from a year-ago levels, and overall, the growth rate accelerated from earlier this year with higher volumes across all of our businesses in the u.s. and internationally. back to you, kelly. >> bertha, thank you. so, no sign necessarily of what visa was talking about here, at least in the initial read. we're going to dig through the release, lance, but i wonder if this doesn't then again make investors question whether it's a visa-specific issue instead of a geopolitical one here. oh, hold that thought, guys. we have got twitter's quarterly

report out. julia boorstin -- >> you promised a wild ride. >> -- joins us now with the numbers. julia? >> that's right, kelly. twitter's beating at both the top and bottom line with average monthly users of 271 million. expectations were 267 million. now, revenue came in at $312 million versus expectations of $283 million. and non-gaap adjusted earnings per share, it was 2 cents per share. it was expected to be a loss of a penny per share. so, that's 3 cents better than expected. now, going through the various metrics here, kelly, that look at twitter's profitability, advertising revenue per user came in at $1.02. it was expected to be 96 cents. so, that's better than expected. also making gains. there's been a lot of comparisons to facebook there. so, making gains there. then there's another metric here, ad revenue per 1,000 timeline views. that came in at $1.60. it was expected to be just $1.49. joining us now to talk about these better-than-expected

numbers, twitter ceo dick costolo. dick, thank you so much for joining us today. >> sure. >> surprising the top and bottom line. what drove revenue growth better than expected? >> we had a great quarter across the board, i'd say. revenue up 124%. that's great acceleration year over year for us again, a fourth quarter of revenue acceleration. the monthly active users, as you mentioned, up to 271 million. that was a net add of 16 million. the highest number of stlut net ads in the quarter. so, i think it was the highest number of net ads in five quarters, rather. so, i think it was a combination of things across the company that have really come together for us and i'm very, very happy about that. >> it in terms of user growth, how much of that is thanks to the world cup? and will you be able to hold on to those user, or will they drop twitter once there's no more soccer to talk about? >> so, i think fantastically, it's generally been the case that it's product changes that have driven new user growth and these live events that drive more engagement from our active

users. so, it was over the course of the quarter product changes that we've made and that we've talked about that have driven the growth, not the event itself. >> so, how many new users were added before the world cup? can you tell us, like, how much of that was just a total reduction of churn rather than just this big world event? >> sure. i would say that it was a continuous set of growth across the quarter. it was no one moment or one-time thing that affected the growth in users. it was the combination of product changes that we've talked about over the course of the year that are starting to deliver the kind of results we wanted to see. and as i mentioned, the world cup drew engagement, more engagement from our existing users, and it was the product changes that drove growth. >> in terms of the revenue increase, i know you recently launched app install ads. how much are they to thank for this increase in revenue? >> well, i don't want to steal my own thunder on the earnings call that's coming up -- >> please, steal your thunder. >> although if anyone was going

to steal their own thunder, i am a likely candidate. so, we will talk about that in a bit. but obviously, i'm delighted with the increase and the acceleration in revenue, even advertising revenue up 129%. acceleration there as well, so that's all fantastic. >> kelly, you want to jump in? >> dick costolo, julia, thank you. it's great to see you. can you talk about what your revenue projection or plans are now as we head into 2015? i mean, how fast and how sustainable is your revenue growth? >> well, anthony nodo, who's just joined the company, will be talking more about guidance going forward on the call coming up. >> you raise your gibs here. your 2014 total revenue guidance is up to $1.33 billion. the prior guidance has been $1.2 to $1.25 billion. what explains that differential and the raised guidance? >> i think the differential is due to the success that we've had over the course of the beginning of the year and our view as to how that success will translate into the back half of the year. it's pretty straight forward. >> kelly? >> can we talk for a second just

about privacy, dick? some of the questions coming in from folks about twitter have a lot to do with, you know, the security of their accounts. and this, as you know, is a huge issue in the u.s. and also internationally, almost the more successful twitter is, the more people are looking to interfere with it. >> sure. well, we've implemented a bunch of privacy and security techniques for our users and to protect our users, like two factor authentication. we've implemented a very novel and compelling approach, the two factor authentication means you have to have more than just a password to get into your account, to boil that down. we take that very seriously. we have a whole product team focused on user safety and privacy and we'll continue to invest in that as we become increasingly the world's information network. obviously, it's the case that we need to take that seriously and address it. >> do you view facebook as a

competitor, dick? >> i'll tell you how i think about the landscape. we have a very clear set of goals that we are looking to achieve, and they're all based on the core characteristics that make twitter the world's realtime information network, that we're public, that we're realtime, that we're conversational and that we're widely distributed. we're going to invest in those characteristics in service to our goals, and there will be lots of other companies that achieve success in this secular trend of the mobile landscape, and that's great. >> but now, your monthly average users, 271 million, it's just a fraction of the 1.3 billion that facebook has. your average revenue per user is starting to make gains on facebook. you have $1.02. facebook this past quarter had $2.06. you're about half of what facebook has. will you be able to have the same average revenue per user -- i'm sorry, advertising revenue per user as facebook does? >> we don't think there's anything structural from preventing us from having the

kinds of financial results you see from other players in the space. >> do you think you'll be able to have the same size audience as facebook does? >> our goal is to have the largest total audience in the world and reach every person on the planet. that's our goal, nothing less than that. >> now, you did add more than expected users this past quarter. you still only have 271 million. that's up from 255 million at the quarter. so, you're growing, but it's not growing that fast. how can you accelerate twitter user growth? what are you doing to make that leap? >> we have a very clear product road map that we've laid out. we're implementing that product road map. we've added a number of product executives to the company, daniel graf, of course, running consumer product, a bunch of other executives who are implementing this road map. i like the progress they've made in service implementing that roadmap, and that 16 million net new user ads this past quarter is the highest number we've had in five quarters and i'm very happy with that. >> but do you need to change what twitter is all about and make it more of a content consumption platform and less in

service of the people who like to tweet? because there are probably fewer people who want to tweet than people who want to read tweets. >> when you think about the 271 million monthly active users, the majority of whom create content on the platform, that content is obviously appropriate and applicable to a global audience and a broad audience. we've talked about the reach and impact of twitter before, both in syndication off of our owned and operated properties, and we have hundreds of millions of people that come to twitter and don't log in that come to our properties. so, that audience that we have that already creates content is applicable to a much broader audience and we'll be talking more about that on the call. >> how important is commerce to your future? do you have the raised guidance? is that because you're going to be starting to generate more revenue from commerce? >> as we've discussed before, i think that the possibility of in-the-moment commerce, now commerce, if you will, that's afforded by a platform like

twitter is enormous and we'll continue to explore the possibilities. i don't think we have anything else to add. >> can you address to what extent mobile app install ads are driving your revenue growth? >> well, we like the opportunity presented by mobile app install ads and i'll let anthony and the team talk about their guidance for that on the call. >> have you opened up to -- sorry, go ahead, kelly. >> no, look, i understand if you want to leave the numbers to the cfo. i'm just curious as a strategy whether mobile app install ads are an important part of your revenue growth? >> mobile app install ads are a great opportunity. we've obviously headed down that path and like the success we've had there and we'll continue to invest there. >> now, we opened up to questions from our viewers, asked them to tweet in, #askcostolo, and we got a huge range of responses. >> i saw a bunch of those. >> i'm sure you saw some of them. we want to go through them sort of rapid fire style. give us your fastest answers.

how many fake accounts does twitter have and be honest? >> i think that we announced in our s-1 that we have less than 5% of all accounts at any given time are sort of fake or spam accounts. that's a challenge that obviously is something that applies to every platform in our landscape. we do a great job i think of eradicating those the moment we find them, and in fact, i think we're getting better at that. >> why is there no edit feature to typos? >> well, there's something about the public nature of the tweets and broadcasting in realtime and having that realtime information stream that i think is delightful, and i'm not sure if being able to edit them in hindsight is the kind of platform we want to create. >> you don't let people fix their typos. okay, how do you plan to increase the user base without ruining what makes twitter great to users? >> i think if you look at our apps on ios or android now and compare them to what they looked like a year ago, you would see that they're, frankly,

extraordinarily different. and yet, we've been able to make those changes as a cohesive set of product changes over time without disturbing or disrupting this growing core now over 271 million monthly active users, and i'm proud of that. >> unfortunately, i understand we have to let you go and prep for your conference call, which starts shortly. thank you so much for joining us. we appreciate it. dick costolo, ceo of twitter. kelly, back over to you. >> thank you for having me. >> our thanks to dick costolo. julia, thank you as well. we'll get more reaction to twitter, which is staging an impressive rally at this late hour on those earnings in just a moment. first, though, we want to round up all the other big names that have just reported after the bell. bertha coombs has the highlights for us now. bertha? >> all right, we begin with american express. the dow component reporting second-quarter earnings that beat street expectations. revenue at $8.66 billion. that matched what the street was looking for. the stock is currently trading up here just a bit after hours.

panera posting second-quarter earnings of $1.74 a share. that was in line with street estimates. revenues coming in a little shy at $631 million. the stock at this hour is a little bit lower here after hours, down about 1.7%. buffalo wild wings, fantastic quarter, they had a fantastic quarter. they say they added one full point to their earnings. their earnings beat both on the bottom and top line. nonetheless, they are sounding off after hours, down 5.5%. amgen also posting better-than-expected second-quarter results, also announcing that it plans to lay off 12% to 15% of its worldwide workforce and close sites in colorado and in washington, kelly. >> and those shares responding positively. bertha, thank you for now. our thanks to everybody. we want to thank brian kelly. stick around and catch him coming up on "fast money" at 5:00 p.m. they're talking to the ceo of

spirit airlines about its earnings beat this morning. again, that all starts at the top of the next hour. here the panel stays with me and we've got a couple guests joining us. we have more on the twitter results to come. shares up almost 27% after hours, more than $10, trading just shy of the $49 level. up next, a twitter shareholder reacts to the results and the interview and tells us whether he's buying or selling the shares following that big report. and after some very strong years, sales supplies out-pacing demand in the auto industry. we'll tell you why that could be bad news for carmakers and shareholders but potentially good news for consumers later on the "closing bell." you're watching cnbc, first in business worldwide. the world has gotten you far, but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro.

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welcome back. let's continue the conversation on twitter, but here, and bring in two analysts to react to those earnings as well as what twitter ceo dick costolo told us minutes ago. twitter shareholder robert luna is here along with the panel. so, welcome, everybody. lou, your first thoughts, first reaction here on a 27% after-hours move. >> yeei think it's a huge move promising signs. another 16 million monthly active users compared to, i

think last quarter it was about 9 million, but i'm still not convinced. dick costolo said he wants to bring twitter to every person on the planet, but there's a key problem there. he has to face reality, and that is that simply twitter doesn't have much utility for every person on the planet. i think it is a niche product, which he is combating and fighting that categorization, but if you really look at the numbers, facebook at 1.3 billion versus twitter's 271 million. at the end of the day, mom, dad, even grandma understand facebook, but they don't have a clue what twitter's for, and that shows up in the numbers. they have a lot fewer users. >> robert luna, kind of to that point, what's your average cost on twitter and did you buy more here or lighten up on the position? >> our average costs, kelly, on twitter is in the low 30s. a 25% move up after hours is never a time i get too excited about going out and buying a stock. you know, i was kind of hoping for a little bit of a sell-off to add to our position. i would not be doing that at these levels. but i think this was show me the

money time for twitter and to get bearish on the stock right here dubs maoesn't make a lot o sense. i can't find one metric they didn't beat on. this was a positive result for twitter. and when you're looking at the base, yeah, it's less than a quarter of what facebook is, but as an investor in social media, that's really what the opportunity is. there's a lot of room for expansion, a lot of room for multiple revenue sources. i think twitter's a stock that you want to own as an investor right here. >> how much room for expansion is there, lance? >> you know what, i think there's probably more than people think about it, because although facebook and twitter are quite a bit different and not everybody can use twitter in the way maybe you think about tweeting out, we're live tweeting dick costolo's comments. not everybody's going to do that. but when you think about twitter as an information network that a lot of people can watch, and that's where world cup showcased that possibility. it brought in so many eyeballs who could get great realtime information about what was happening in the world cup, and by the way, they worked it like crazy. i think the question about whether or not that played a

role in those numbers, i'm sure it did, but it also was a proving ground. they did it better than they've done anything else. and twitter will repeat that over and over again to prove, yes, this is a network for everybody. >> i think that's a fair point, but i do think there are going to be a lot of barriers to entry. i mean, how many globally, sort of leavening events are there like the world cup every year? i mean, there are very few things that so many people around the world care about. >> oscars. >> julia asked a good question about -- the oscars. how about the emmys? how about the tonys? >> how about the epsys. >> julia asked about maybe more people want to read tweets than provide them, and i think there's a huge portion of society that doesn't care. i think in the media, we see what an important tool it is, but that may not be true of others. >> but you know what -- >> right, and i say that -- >> twitter's better than a network because the percentage of people who are actually participating and putting content up is far greater than you would find with a traditional network. this is a new kind of media delivery system. it's sort of an amalgam. and i think that it's strength

p.m. . so, yeah, it's not for everybody to deliver and create, but it's for more people than you would think. >> doug? >> but twitter's the most monetizing that. twitter's the most monetizing that. i would agree 100% that they are the best place in the world to get realtime news to break realtime news, but they're focusing on advertising. and at the end of the day, not many of us can communicate in 140 characters or less, so it becomes more of a portal than a destination, and people include links to where they can provide more in-depth coverage, and you have to monetize those eyeballs for a shorter period of time as they're passing through, not when they're staying put like they do on a platform like facebook. >> i think that's what we're starting to see now, right? they're just now starting to increase monetization. we're seeing that in today's numbers. again, i don't want to get too bearish here. when you look at dick costolo pointed to one unique proposition that they have to offer advertisers that facebook doesn't and some of the other social networks doesn't, which is realtime. so you know, journalists like yourself, kelly, are being kind

of dragged on to twitter. the expectation now is that if you want realtime events, journalists, businesses that you're dealing with are on twitter. so, the ability to advertise in realtime i think is something yet that is going to be coming in following quarters. >> doug? >> o, i think we're seeing those numbers start to play out, though. >> i don't think that can be the end game, though, because if you look at traditional news outlets who have tried to turn themselves into online platforms, they're not making any money. so, the more they think of themselves as just an information network i think the more they have to be innovative and be an amalgam. they can't look like a traditional news source. it won't pay. >> and i do think twitter's so popular and heavily used in the media, in public affairs of all sorts, whether you're at the white house or you're in private pr, but beyond that, i still anecdotally have lots of friends and family members to whom i have to explain what twitter even is. and if i tell them -- >> they have an about tabitha says "what is twitter?" so, if you have to explain what you are to masses -- >> last word, lance.

>> we explain all sorts of things. remember how a lot of people are finding twitter. they're finding tweets on other sites. it's embedded all over the place. by the way, seems like some of the advertising, revenue program is starting to work. they are seeing an increase on per revenue per user. >> and so far, shares are still up almost 29%, 30% after hours. it's about $11, just shy of that $50 marb. >> i think the market's speaking. >> we'll see if anything they say on the call changes that trajectory thus far. thank you for now, everybody. the earnings have been coming in fast and furious this hour. up next, we'll recap the results from twitter, american express and all of the other big names reporting after the bell. also, senator dick durbin unveiling a bill to curb corporate tax inversions. it does nothing to change the tax code overall. we'll hear the details from the senator, who's here, in just a few minutes. tdd#: 1-800-345-2550 there are trading opportunities

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welcome back. another wild day for earnings after the bell here, so bertha coombs joins us to round it up. bertha. >> yeah, i've got big reports and they keep coming. we begin, though, with twitter, reporting a 124% jump in quarterly revenue to $312 million, easily beating street expectations. its monthly active users rose 24% to 271 million. the stock, as you can see, surging there after hours, up over 25%. amgen posting a better-than-expected second-quarter profit as well, helped by strong sales of its arthritis drug enbrill, up around $1.25 billion. it also raised its full-year

forecast. the company also saying it plans to cut up to 2,900 jobs or 15% of its workforce and close two plants. that stock also getting a boost after hours here by about 3.4%. and american express reporting second-quarter earnings that beat street expectations as well. revenues came in at $8.6 billion. that was in line. the stock is trading higher. well, it's about flat at the moment. the company saying that customers spent 9% more than a year ago. panera posting second-quarter earnings of $1.74 a share, in line with street estimates. revenues, though, coming in a little light at $631 million. panera also cutting its profit outlook for the year. the stock is up here after hours, up 1%. kelly? >> bertha, thank you. the auto industry has had a heck of a ride the last five years, but are carmakers on the verge of becoming a victim of their own success? our phil lebeau is going to explain why sales might have topped out, straight ahead.

and the u.s. senate now taking action to try and eliminate tax inversions. coming up, the man behind a brand new bill, senator dick durbin joins us in a first on cnbc interview. stay tuned. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires 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.

welcome back. the political football is tax inversions continuing to grab headlines in washington. my next guest today announced a bill called the no federal contracts for corporate deserters act. his aim is to make it too financially painful for companies to change their home offices to an overseas address in order to escape high taxes. joining me now, senator dick durbin, the author of the bill, a democrat from illinois. senator, welcome. >> good to be can you. >> i know you take this issue personally. some of the biggest companies involved in tax inversions include ones in your backyard, potentially walgreens. how much revenue here is the u.s. potentially losing and how much is this just a symptom of our broken corporate tax code? >> there's an estimate that walgreens, if it decides to renounce its american corporate citizenship and move overseas, would be spared paying some $4 billion in federal taxes over a five-year period of time. of course, that means that other taxpayers will be called on to make up the difference, other companies as well as individuals.

i don't think that's fair for a company that's built its fortune here in america. >> the effective tax rate that most companies pay is well below the official or headline tax rate, if you want to call it that, and even as you move on one piece of this issue, there are other ways, including spinning off real estate that companies are going to try to lower their tax rate, and they say that's because the u.s. isn't competitive. what is your response to these companies? >> well, i'm for corporate tax reform and individual tax reform. i was a member of the simpson bowles commission and voted for that. i believe in it. we haven't quite reached that goal and it's hard to reach. it's politically extremely difficult. our corporate tax rate at 35%, the nominal rate, is if not the highest, one of the highest in the world. but the effective tax rate, as you mentioned, is 25%, lower. and if we're going to play this kind of scenario that says, well, if there's any corporate tax rate in the world lower than the united states, ours is too high, it's a race to the bottom. we won't be able to keep up with other countries with even lower corporate tax rates.

>> all the same, you can't prevent a company in this day in age from moving. you know, you could set up an island tomorrow and have a company move its headquarters there if it thought it would get favorable treatment. and one of the companies recently involved in this, hospera, is under pressure because it's in the generics business and mylan and others in the generics business have already made this move. there's the theory that's one piece of this. there's what's happening is the other piece. and whether your legislation will really do anything retroactively to have stopped these companies or starting now. will the whole congress be able to get behind you on this bill or on any others to come to keep this from happening? >> well, understand, we are modifying or changing a law that's been on the books for ten years. what the law said was very basic. if you are an american company that's given up your american corporate citizenship to lower your tax rate, so-called inversion, then you're disqualified from bidding on federal government contracts. it's pretty obvious why. if you don't want to pay the taxes to sustain this government

and this nation, why should you be profiting from this government's business by bidding on it? we want to give the advantage to american companies that are based here and have their employees here. this bill that we've introduced today is going to tighten this up, one of the loopholes that's used by the corporations to move overseas will be changed substantially by this bill. >> would you support the president moving to executive order to tamp down on this issue of inversions? >> yes, i do, and i'll tell you why, because this is a growing trend. it used to be an exception, an unusual procedure, and now it's become almost routine for these companies to walk away from america when it comes to meeting their tax responsibilities, shifting the tax burden, as i've said, to other companies as well as individuals. that isn't fair. we can't sustain and grow a good nation that has the services we need to succeed. >> you know, one thing that people may not an wear of is that the u.s. is unusual in the way that its tax system is set up, because it basically says you have to pay the u.s. on profits you earn anywhere. many other countries just say

you pay us on the profits you earn here. so, when these companies move their headquarters, they're still paying to uncle sam, just paying on what they earn here. why not move the u.s. towards that kind of system, as other countries, currently many of them already have in place, which is you just pay here on what you earn here, end of story? >> i can tell you, i'm open to suggestions, but i want to make sure the bottom line is this -- american companies based in america that keep their jobs in america pay a decent wage, have a decent benefit package are advantaged by the american tax code. that to me should be our bottom line, and it should really guide us in our policy. if we start rewarding companies that are dreaming up ways to leave america, push jobs out of this country and avoid their tax responsibility, shame on us. >> and senator, just before we let you go, related to the question i asked about executive order, john boehner seemed to suggest that this talk about impeachment if the president uses his executive authority was -- it was a sham to talk about impeachment. he says it's actually a talking

point by the democrats to boost turnout ahead of the midterm elections this fall. is he right about that, that this is actually an issue, impeachment, i mean, in which the democrats say, fine, go ahead? we think it's a political winner for us. >> speaker john boehner and the house republicans dreamed up this notion of suing the president in court for the exercise of his executive authority, even though the executive orders from the president are far fewer than they were under previous presidents. it's pretty clear he wants a confrontation. we've seen confrontations in the past. the one that's ordained by the constitution involves an impeachment process, and some of the leading republicans are not dismissing that. john boehner may have second thoughts now about his lawsuit, but he's on the record starting this conversation. >> and senator, you have no doubts the president is within his authority here? >> i can tell you the president has been challenged in court where he has overstepped. he has been told by the court that's the case. but overwhelmingly, we have a situation where john boehner and the house republicans refuse to take up critical measures like

comprehensive immigration reform and then criticize the president when he uses his authority as president to try to deal with some of the challenges. speaker boehner can't have it both ways. it reminds me of when president lincoln said to general mcclellan, if you're not going to use your army, do you mind if i borrow it? there comes a time in washington when speaker boehner should use his authority to solve some of our problems. >> understood, senator. we will leave it there for now on these thorny issues facing congress and we'll see if we have any movement before the recess. senator dick durbin of illinois, a state personally affected, we should say, by these inversion issues. thank you so much for your time. >> thank you. we have a news alert on ibm and bertha coombs has the details. >> ibm electing two new board members to their board of directors. alex gorske, the ceo and chairman of johnson & johnson and peter voser, the former chief executive of royal dutch shell, who now serves as the director of roche holdings. so, a little bit of health care coming on there. mr. gorske will be a board

member effective september 1st and mr. voser's election will take effect on january 1st. back to you. >> bertha, a busy hour for you. we really appreciate your coverage on all of these news items 37 twitter's earnings scorching cnbc.com. the hot list is ahead. plus, are red-hot auto sales hitting a peak? phil lebeau takes us behind the wheel. you do a lot of things great. but parallel parking isn't one of them. you're either too far from the curb. or too close to other cars... it's just a matter of time until you rip some guy's bumper off. so, here are your choices: take the bus. or get liberty mutual insurance. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. see car insurance in a whole new light.

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welcome back. auto sales on a tear over the past five years. some automakers now are fearing

that they may be flooding the market with more vehicles than dealers can sell. maybe that will be good news for buyers, though. phil lebeau has that story for us now. hi, phil. >> hey, kelly. it will be very good news for buyers and we're already starting to see that. incentives last month were a little richer than the same month a year ago, and when you look at july auto sales coming out on friday, the expectation is the pace will be about 16.7, 16.8 million, a very strong pace relatively speaking. it will be the fourth straight month with sales over $16 million. the expectation is that next year, we could have sales hit $17 million, but take a look at this chart, because this says it all in terms of the growing concern on wall street. when you look at auto production and how much it has grown from 2010 through 2014 and then go out even further, and it's going to continue to grow when plants in mexico come online and they're sending vehicles to north america. that has analysts worried that the auto industry will be adding too much inventory. excess auto inventory could

spark incentive war, and that is the big fear here, is that you have them doing what they did back in the aerial 2000s of saying, hey, you want $5,000 off that vehicle? we'll make that deal happen just so we can move the metal. and a lot of people in the investment community, they're already worried about this. look at the difference between the automobile manufacturing index and the s&p 500. not surprising, kelly. you want to invest in the auto sector at the beginning of the cycle, not at the end. and a lot of people look at this as an indication of, boy, maybe we've seen these guys add a little too much capacity. >> so, and phil, please stay with us. i want to get some thoughts from the panel, but it's so interesting the extent to which autos, kate, could decouple from the economic cycle here, or if not, what that means for broader growth. >> no, absolutely. and this is going to be a key indicator of what kind of position we're in going into this second half of the year. and i do think it's an important gauge, because we have this running sort of wager. is the economy in better shape or not? i mean, i have one hedge fund trader i talk to a lot who says they've been arguing with their

boss all year as to whether to be bullish or bearish and there are arguments for both sides. so i agreed, this is a great indicator. >> we've also talked about the credit aspect in all of this, doug, extent to which the availability of financing is driving a lot of this activity. but phil's also getting to the heart of the supply-and-demand issue. >> fundamentals are the key here. certainly, we're not going to see the auto industry driving more rapid pace of economic growth. to the extent it's going to keep up with the economy, it's going to depend on the strength in the household sector, and that is an open question right now. we just really haven't seen the kind of combined job and income growth that looks like growing at 3% to 3.5%. it's still closer to 2%, 2.5%. >> lance, have you bought a car lately? >> actually, i have. i bought a mazda. millennials, who are a lot younger than me, are not interested in having their own car. we just had a conversation about the alternative transportation, like uber and lyft. these businesses i think are more attractive to millennials than spending the money on something that's going to depreciate really, really fast. >> but even if that's the case, somebody has to drive around

that vehicle. phil, do you get a sense as to whether stuff like uber and lyft and the private car is fueling more demand for autos or interfering with it? >> i don't think it's fueling more demand, and i think that when i talk with people in detroit, when i talk with the automakers, they find it interesting, but they're not to the point where they're worried about it, and that's because it's a pretty small market where uber has an impact. you're talking about metropolitan new york or metropolitan san francisco, l.a., chicago. overall, it's a really small impact. but car-sharing, no doubt, is coming in the future, and on a more wide scale, and that has the auto industry a little concerned about how do you keep sales going at a pace of 17.5 or 18 million if you have more people saying i'll share a car, i am not going to buy my own? >> and phil, what do people think is the ultimate run right here? to play devil's advocate, going into this year, i don't know people would have expected the sales pace to be this strong. is it possible it keeps surprising to the upside? >> that's the expectation in the near future. increasingly, i'm hearing people in the auto industry saying

look, i wouldn't be surprised to see something go over 17 million by early next year and the pace is 17 million next year, maybe 18 million two or three years down the road. nobody's forecasting that it goes beyond 18 million. in fact, they think it's going to actually pull back into that 16 to 17 million range when you look out over the next five years. >> thank you, phil, for now. >> you bet. >> meanwhile, maybe argue more strongly when buying your car over the next several months. bertha coombs has another update. >> u.s. steel is moving higher in the after hours as they reported a narrower than expected second-quarter loss. steel prices improved, but the impact of bad weather, particularly when it came to their flat row steel from the first quarter they had higher repair costs and maintenance costs that continue to weigh on earnings in this quarter. they do anticipate that things will be better during the current quarter. the stock right now trading up here to 8.4% at the moment. back to you. >> and bertha, thank you.

if you think that's impressive, take a look at what's happening to twitter right now. the shares are up over the $50 mark after reporting earnings earlier this hour. it's at cnbc.com cnbc ablaze ant list" is coming up next. comer, the ceo of genworth is joining us as the parade continues. we'll be right back. the cadillac summer collection is here. ♪ ♪ during the cadillac summer's best event, lease this all new 2014 cts for around $459 a month or purchase with 0% apr and make this the summer of style. machines will be sprayed to be made.

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if we can't offer faster speeds - or save you money - we'll give you $150. comcast business. built for business. stories. in the last half hour, it's been all about twitter. for that and the whole lot his alan wasler is wack, hi, allen. >> twitter rocked our world. it was pulling in 300 readers every second. now it's cooling down a bit. it was our sixth post-looked up ticker. it's raced up to number three closing in on facebook. before it came in, we had two other stories that were major heavyweights, an electromagnetic

pulse warning, that was new for us. finally a video mash-up of all of mark faber dr. doom's greatest hits, every time he predicted doom. those are heavy-hitters. it's all about twitter pretty much. >> i did notice, it's great to have you back. >> thank you, kelly. up next, we will look at the data. we will talk more about twitter trading up almost 32% to $50 and change. come friday, don't miss "closing bell" when reality tv star john tapper returns to the closing panel. we'll be right back. ♪ everybody nigh you didn't give for the lip to big john ♪ ♪. [ male announcer ] what if a small company

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yyyup. with xfinity internet soyour family can use all their devices at once. works anywhere in the house. even in the garage. max what's going on? we're doing a tech startup. we're going public! [cheering] the fastest in-home wifi for your entire family. only from xfinity. welcome back. a lot to digest on micro and macrofront. we had a ton of tern e earnings. we are waiting for the figure, fomc, of course. 26th is up 30% over $50 a share after hours on these earnings, lance, a huge move. >> yeah. this is, it's probably the first really good move dick costello has had as ceo of twitterching he's talked about keeping their head down and focusing on the

other things like growth, like revenue will come. that's what he said wage to md directly to me. he doesn't want to go, we won, we won. he has a lot to do. >> if my twitter feed is any indication the safety issues that came up in the interview are causing a lot of concern and anger, particularly among women who think there are harassment on twitter. there are issues he needs to address before we can declare victory for them. >> doug, what are you keeping an eye on? >> i'm keeping an eye on the fed the economic reports later in the week. an ongoing debate on what shape the economy is in. the fed will give us a read on that. >> strong, you think? >> i think more of the same. i don't see the foundations for,

as i said, an act secceleration 3.5%. >> what about senator durbin talking about avoiding tax avoiders? >> that's fuzzy thinking at its worse. this is a tax problem. contracting is supposed to be getting services for the american people that are essential and done at the lowest possible cost. this says, let's throw out the guy that can get it at the lowest possible cost and we will end up with inversion. >> by the way, i want to note that argentina has growth of 3%. they pay be in default 36 hours from now. >> what a world. >> that's what i'm watching. >> so much to get through. we are watching twitter as we get into that call. we will hand it over to melissa lee at the mel heldment.

you have a lot under tap. >> we will be trading those comments as well as the crazy action of twitter in the after-hours session. it's on heavy volume. if you are thinking about. if are you if an amazon trade, we got the three charts you need to know about. >> uh-o. don't go away. over to you guys. >> "fast money" starts right now. new sanctions against russia sparking a late-day sell-off. we'll have more implications for oil in the broader market coming up. right now, shares are soaring after hours, the number of monthly users beating the expectations. dick costello spoke before speaking to analysts and had this to say on how it was impacted by the world cup. >> fantastically, it's been the case product changes have gimp driven new user growth an these live events that drive more engagement from our active users. so it was