now. good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. as joe mentioned, today is the biggest day of quarterly results of the earnings season. take a look at some of the names of the wall. these are some of the companies reporting today. you have gm, 3m, caterpillar, lilly. after the bell, we get amazon and microsoft. you can see there comcast up to the wall. we have a great lineup of first on cnbc interviews. eli lilly's ceo will be joining us along with southwest, gary kelly, gm's cfo chuck stevens and caterpillar's ceo doug overhelm and that comes at 8:00 a.m. eastern time. as for the shooting in canada, the tension level stocks sinking on the headline. you did see a bit of a bounceback. s&p futures up by 14.

and the nasdaq up by 28 points above fair value. right now, we'll send it over to andrew with more on the chaos in canada. thank you. >> there are questions this morning and concerns in canada after a gun man killed a soldier. and he walked into the halls of parliament and began shooting there. it's the second attack by a suspect with ties to radical islam this week. and comes after the canadian air force joined the coalition carrying out air strikes against isis. jay gray has more from ottawa. >> as the first shots rang out, just pow. >> pow. >> and bystanders rushed to the side of a fallen soldier. but were unable to save nathan cerillo who had been standing by at canada's national war memorial. >> there's no greater pain that go than z looking a loved one. to have it happen this morning is underlined by sad anger within my hearts.

>> next, the gunlman hijacked a car and drove to canada's parliament building, walked inside and opened fire in the central hall of honor. three people were injured as lawmakers scrambled and the suspect was shot and killed by the sergeant-at-arms. a bystander says this video shows the gunman police have identified as michael joseph duvall, a recent muslim convert. last friday, officials in canada raised the terrorism threat level from low to medium. just three days ago, a man drove his car into two soldiers in montreal, killing one. >> this week's events are a grim reminder to the types of terrorist attacks we have seen elsewhere around the world. >> as investigators continue to

try and find out how and why it happened here. joining us now with more insight, retired argument colonel jack jack jobson. i think yesterday, colonel, so many times we just don't know what's happening. for -- i watched most of the coverage for the entire day. and most of the time i thought there were government hiden somewhere else. >> that's always the assumption that it's a plot and a conspiracy. it's been years in the making and more frequently than not, it's exactly the opposite. >> and you hear shopping malls was one of the targets which is our biggest fear down here, one of our biggest fears, a lone radical that is armed, maybe converted here, maybe even a u.s. citizen that's in the mall. >> we get a large, open society, you can't close everything down. and our immediate reaction is to lockdown everything. and that's not going to --

>> i would say canada was a little bit more open, at least in terms of their government offices. >> yeah. you can walk right into parliament. >> and without the sergeant at arms who, you know, what a hero. without them, he was a doorway away from parliament, some members of parliament. >> it says more about what we either have to do or are inclined to do about public buildings and public places than it does about lunatics and radicals. >> at least we have better security here. someone couldn't walk into the white house. >> they released the dogs, apparently, yesterday, right? >> yep. they got the guy. >> i'll tell you a funny story. when i was decorated, so that's 1969, and you do the math, we were on the south lawn of the white house. the floor was decorated at the same time. for different actions, but at the same time. and it was a beautiful day in october. they opened up the gates to the

white house grounds and anybody who wanted to to come in and watch. >> at that time? >> yeah. >> things have changed now. you've got to climb the fence to get in. >> at this point, it makes me wonder, it's almost like -- i don't know, if this is isis, but he hijacked a car and does not hurt the occupant in the car. so they're only looking for government and military targets at this point? >> no, no, i think the -- i don't think. i think this gooi is a loan lunatic. it doesn't mean there are people who won't put specific targets in focus. but the most obvious symbol, are government buildings. >> do you think that's why canada has been the object of these -- we have tighter security? canada doesn't seem to at least

raise the ire of the jihadists to the same extent the united states does. they're easier. they are easier. i'm not so certain that there aren't more organized cells in places like canada than there are here. we don't know who is lisping to what. at the end of the day, you need good intelligence. if you're not listening to the bad guys, you'll never be able to pick up on any of the conspiracies. >> do we have -- none of our guys guarding the tomb of the unknown or military, any government office, they don't have fake guns like -- >> they have real weapons, but they're not loaded. >> they're not loaded? >> correct. they march back and forth. >> so this guy is not ceremonial dead at this point, is he? >> no, that's true. but it was the sergeant at arms inside. >> the solar not armed than the

guy got him -- searching. i couldn't have let you do that. >> colonel, you bring up an interesting point, this idea that maybe in canada there are more organized cells because maybe the canadian government isn't lisping quite as closely. just opening that door makes me get back to the point that it's a huge defense for everything that's been done here pre-snowden. is this a defense for that continuing? >> and the government is complaining now about the software that appreciates eavesdropping on cell phones. we have to listen to people, if you want my opinion. and if you assume you're going to send your voice out on a radio frequency out into the stratosphere that you're entitled to privacy when all your signals are out there in the public space, that's ridiculous.

>> and you don't listen -- if you don't listen, you're not going to be able to pick up on the things that are going to hurt us the most. you're going to have some trust, government oversteps its bounds, it oversteps its bounds. we have to keep an eye on government, as well. we shouldn't be able to listen to people who are talking with signals out there, everybody can hear. >> colonel, the news cycle seems to be contracting on a daily basis, but, you know, last week it was all ebola all the time. this week, now we're back to isis. but thanks for your viability. >> thanks for having me. >> if that's not enough for us, dwroent we take a look at some other headlines in the news this morning. federal prosecutors reportedly investigating japanese auto partsmaker takata over an air bag defect. the wall street probe says this centers around possible misled statements about its contact

with regulators. it's up about 4.74 million. guys, in some cases, they have said you should not even be in the front seat of the car as a pass nger. what i don't understand is why they're saying you just shouldn't be driving these things because it's been drivers who have been killed at this point. >> they're not only going to disable the passenger air bag -- >> but they're saying until you get it disabled, don't have anyone in the front seat of the car because it would be impossible -- not in the front seat on the passenger side. but it's the idea that the driver is still going to have to be on the front side until they get those fixed. >> crazy. >> if that is one of my cars, i would not be driving. >> how many years have people been driving around clueless about it? we're probably overstating database i don't think anyone gets struck in the neck with

shap natural. >> no. more likely in some states than other because they're saying it's due to high humidity. procter & gamble is shuffling management. it's nom sure that's the word. i think they're shuffling management. >> last weekend, that was a pretty big show. >> that was over a year ago. >> reshuffling, i'd be okay with that. >> i think that shuffling has fallen off the hill. >> it's not like you to quibble. >> resufficientlying after a key executive decides to leave, healy, who apparently headed up the country's north american operation, probably in cincinnati, will retire in june. she is one considered a potential successor for at&t. the management team is putting

together a in you attempt. we will hear from the company's cfo around 7:00 a.m. earn time. at&t reported results that mission dollars 16 cents of revenue versus estimates of 64 krentsdz on $33.2 billion. right now, shares of at&t are down slightly after hours. the dow losing more than 150 points. other major averages following suit. joining us right now with more on this is joseph tanneas. also steven freedman, who is senior investment strategist at ubs wealth management research. gentlemen, welcome to both of you. joe, why don't we start off talking about the headlines that continue to really push down

stocks. last week, it was ebola. this week we're worried about isis again. is this a legitimate concern pressuring stocks? is this something that you think is distracting from earnings? >> i think it's a combination of several things. right? there's certainly no shortage of headlines out there to create volatility in the markets. having run in the equity markets so much over the past few years, it's easy to understand why many investors begin looking for reasons to sell. some of these are warranted. some of the economic data we got last week was less than inspiring. but if you take a look at the underlying macro picture, that narrative hasn't meaningfully changed. we still think growth will continue the move higher. as a result of that, we think these represent buying opportunities for investors. >> are these something that have a greater potential happening than some of the ones we've water about in the past? >> i think any of these, if you ask yourself, could this get worse? then what's going to happen? you're slightly right. they warrant being nervous about

and watching over. but if you take the sort of at face value, do they justify the market? do they justify the vix in levels of 30 or 31 inspect i'm not so sure i would agree with that. >> steve, how about you? >> i think it's very hard to -- the market gyrations we've seen over the last few days to fundamentals. it's a situation where the market had become one sided after volatility. and where you have a number of body blows which in isolation probably didn't matter. the combination ultimately led to this correction. >> what surprises me the most about this is even though we looked at it as a huge shock to the markets last week, if you look at where we've come back, it's only a 6% decline at the weakest. and we've bounced back, regaining almost all of that ground since then. we talk about this as if it was a major impact and, yet, we are looking at stocks that still continue to climb. >> well, if you take a look, there are quite a few bright spots out there in today's economy, in today's role.

you've got lower gasoline produces. that bodes well for the consumer. we think that's a good thing heading into the holiday season. we see these retail sales coming in better obviously than what we saw last time. you also have a very accommodative fed. now, i know that we're talking about the fed essentially taking its foot off the gas pedal. but i suspect you're probably going to hear a dovish fed when they come out as far as raising interest rates and one that might actually -- >> we already have from all the fed speak that happened at this point. is that the underlying most important thing? >> at this point, all the things that means as a source of a weakness, i think in terms of europe, probably the ones that netted the most. too, i think the market probably got ahead of itself. we've got pmi numbers today that are not great, but they're confronting in terms of holding it down and improving a little bit. and i think in your view, we have a situation where shots can bring session concerns, but ultimately, we don't think a

recession is in the cards. >> how would you judge earnings season so far? we have had had spectacular high flyers that have really surprised to the down side. have warned, have issued terrible outlooks and missed specations. you think about some of the big dow components. but maybe beneath that things are better? >> if you look at this, broadly speaking, you look at the averages, i mean, about two-thirds of companies are beating. the average is about corporates which i think has developed solid. i don't think we're seeing weakness. >> is that average of the s&p or clearly not the dow? >> no, the s&p. we're looking at as broad aggregates, not so much the narrow ones. >> and we job he, you say this is a buying opportunity. is it still a buying opportunity with the s&p at 1927 or are you talking about last week's levels? >> last week's levels are a better buying opportunity than today's levels.

>> it's the quick math skills. >> you buy, you want to buy cheap. >> pie cheap and sell high, that's the goal. >> would you buy at these levels, too? >> i think you would buy at these levels. if you are, in fact, a long-term investor, the valuations are certainly not cheap. i think that's just a sale. having said that, as you take a look at the global economy, you take a look at risk assets between the equity market. we continue to think there is some upside in the equity markets and more specifically in the u.s. i think earnings season is just kind of confirming that deal. you are seeing earnings numbers come in, probably growth numbers that will be in the high single digits. you're seeing revenues, you're seeing -- actually, you're seeing margins hold tight, which is a good thing. and you're seeing continued share buybacks. as an investor, looking at my return, i have to realize the majority of it here in the u.s. is probably going to come from earnings. and earnings so far are looking okay. >> gentlemen, thank you both for joining us today. >> coming up next, apple pay

went live this week, but word of a major glitch already. some customers paying double, that's right, they're paying twice. then, one of the last places in corporate america where you can smoke at your desk has decided to kick the habit. smoke if you got them. squawk will return in just a moment. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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auction we told you about last month. an early apple computer has sold for $905,000. that was well above expect ages. it is expected to be one of the first apple 1 machines built in steve jobs's garage back in 1976. the buyer? the henry ford museum. they plan to display the computer in its museum. >> the only case of technology actually getting more expensive at this time, right? >> you know, i'm a pack right. anyway, an early glitch for apple pay causing some users to be charged twice for purchases. this is a little bit of a problem but but it's being resolved. the problem affected some bank of america customers who took the twitter to complain about the error. the statement apple told nbc news, they are, quote, aware of bank of america's impacting, a small number of apple pay users.

they are working on a fix that would be available shortly and reversing any duplicate transactions. a spokes woman said the issue affected only about a thousand transactions. apple shares were trading near an all-time high right now. there it is. >> all-time high. also, camel cigarettemaker reynolds american will no longer allow smoking in its offices and buildings. the tobacco company currently allows employees to smoke at their desks, in conference rooms, hallways and elevators. the ban will take aefk next year. once they build indoor smoking yaes for whose what wouldn't to smoke, they can do that. kwlug electronic cigarettes. >> right. >> i can't even imagine. >> you really believe an actual high test soda is bad for aging yourself?

>> a soda? >> that's the latest. you're telling me the fuses on the end that control cell proliferation. >> what? >> people think soda -- >> sodas are just as bad as cigarette. not diet, but -- >> causing cancer? >> at causing cell aging. look it up. that came out last week. i'm not kidding. so i eventually see people who have a coke and they're like, you have to go outside now to drink a coke. i don't think it's secondhand smoke, but that's one of the things -- >> warren bust with his cherry coke is a genetically gifted man, then? >> exactly. oh, okay. i'm supposed to take viagra and drink avenue of being if i had to pro create. is that what they said yesterday? >>. >> not enough where you have a gut and you can't make it move.

there was something else i saw recently that -- other air bags the wind bags are bad. move on here. your money, your vote, john harwood paying us a visit today with some of the key races that could impact capitol hill. we're both, you know, redskins fans, so we have that to talk about. great win on sunday. and it turns out that ebola is bad for business. especially for texas health presbyterian in cladallas. the financial hit, next.

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good mortgages and welcome back to "squawk box" here on i'm joe kernen along with becky quick and andrew ross sorkin. today, erp.ings from caterpillar, gm,3m and comcast. amazon is set to release after the closing bells. the labor department will release initial jobless claims at 8:30 every thursday. and the conference board will release leading economic indicators and that is out at 10:00. also, comcasting results for two overseas automakers. in germany, daimler reported a big jump in profits amid certain demand for mercedes. but south korea's hyundai or

hyundai, like sundae. >> i have to call my friend in asia about that sxvrnd out. >> the steepest decline in a year and a half due to slowing sales growth. >> a lot of hyundais on the road. >> as you've noticed lately. they got it together in the past five years. we've had the ceo on a few times. >> i drove one in a rental place. >> i drove one. it was great. the ebola cases in dallas are taking a toll on the hospital where patients were treated. emergency services at texas hospital presbyterian fell by 53.3% since october 1st. the average daily patient occupancy dropped by 21%. surgeries performed there decreased by 25%. has lost 8.1 million in net revenue due to the recently ended policy of diverting er patients to other hospitals. i'm not surprised by these numbers. people have been saying for

quite some time that there was a decline. what surprises me is that half the people would still go given what happened. when you have your choice of hospitals, newer not talking about -- >> not that they're weird about subpar care, that they think there's some viruses still -- >> when you're a week out of two newses having been found with it, treating others up and down the ward, it's common sense when you have a choice about where to go. >> a cnbc freelancer, he doesn't know how he got it, either. >> no. and he's free and clear at this point. >> utz unlikely snau pick it you up aft of something that -- >> you're going to find, though, not just in dallas, but all of the hospitals that have any type of -- even the ones preparing for ebola are going to be reporting huge losses. one of the things that's happening is taking huge areas of the hospital effectively out of service. they're taking the machines,

advertising all day long by -- whether it's an x-ray machine or whatever taking it to these special wards. are the says going to reimburse them? or the federal government would reimburse the states. >> if you've got the cdc ordering you and saying, please help us out with this. are the statsz in charge of the cdc and such? it always comes back to money. >> but you looked at me with a weird look when i said i was surprised half of the people would still go to the er room. you would go? >> yeah, i think i would. >> and you would take your kids there, if one of the kids needs emergency care -- >> even though you know it's rational, you still might not do it?

>> i don't know. i don't know. because it most likely you have to have some pred close caught with bodily fluids. but it's period to pick mike waking up with some of the heart systems. i was thinking the hospital didn't know what it was doing. >> no. i think it was an irrational fear. >> initially, i was a -- >> it can show up at any hospital. >> right. it should have shown up at any popt first. >> patient zero. no one was expecting that. check on the markets, dow futures up by triple digits, 103 points after the declines we saw yesterday. yesterday happened to be the first time that he with saw the s&p and the nasdaq down for the first time in five sessions. dow snapped a three-day winning

streak. you can see s&p futures are up by just over 10 points. nasdaq up by about 21 points. in oil prices, yesterday, oil was down once again. it closed at $80 a change. something like $80.52. that was its lowest close since june 28th, wti. this morning, up to about $26 a barrel. at this point, you can see the yield is at 2.23%. the dollar looks like it is down against the euro, up against the yen, up against the pound. gold prices are trading down, 1,239.30 an ounce. another security issue for the white house, late yesterday, toous secret service apperehendd a man who jumped the white house feps. the man was attacked by secret service dogs. he punched one of the dogs that attacked him.

two of the dogs received injuries. the man was taken on a hospital volume evaluation and the white house was put on lockdown nor about 90 minutes. the incident came roughly a move of an intruder with a knife scaled the white house fend and people have asked. good morning, becky. in many of the country, people are already voting. this close to election day, we can start to make sense of how those votes are likely to fall. first, here is the senate that we've had now. 55 democrats, 45 republicans. that puts harry reid in charge. but now, if you project forward beyond what we have right now to the senate that's going to exist after the 36 seats now up are decided, we've got a senate where you are probably sure 45 democrats and 44 republicans are

going so be there. that leaves 11 seats left to be decided. those are going to choke the balance of this case. let's look at those 1 1 races. three of them, new hampshire, north carolina, kansas where greg orman, a businessman, democrats think he's one of theirs has a narrow lead over pat roberts. republicans have gotten lead in all eight of those. more br aelg in alaska. arkansas is behind tom cotton. mark, you all in colorado, in is a state that's been trending sharply. corey gardner has a lead there. iowa, fraley is a democratic conwoman. had high hopes. joni ernst is leading.

louisiana, caddie over landrieu. the marquis race is mitch mcconnell against allison grimes. he would be the leader if republicans take the senate. and in south dakota, mike pressler is leading in that race. where does that leave us? 52 republicans, 48 democrats. mitch mcconnell will be in charge. you don't know that all those leads are going to return. if you've got favorable trends for republicans in, say, kansas where pat roberts was behind significantly, now he's narrowed that lead. so the best guess that we have based on current conditions if the polls are decent this year -- they're not always --

we're looking at 52/48 republicans. >> come over here. >> he he's on his way. >> he looks good. >> i know to ask you who kwenl. is needy a research center? is that a right wing -- >> uh-huh. >> so i don't know whether this is true or not. the point they say the nation's big three tv networks, of which we own one of them here, in 2006, they breathlessly reported the democratic takeover of capitol hill in the anti-bush election of 2006. they've done analysis this time and cbs, abc and nbc, the coverage of this current situation, 6/1 disparity. there were 159 stories about the democrats taking over in 2006. that was in 25 on the big three.

is that a real criticism. and you, you're looking at me like i'm nuts, yanking your chain. >> you told the truth. i'm not arguing with that. >> okay. as a straight down middle guy, does this bother you? is it fair scientists no, look, i don't know what data they're using for that. there are a couple of things that i would point out. one, 2006 was an election where you had auto dominant overriding issue and that was the iraq war which was extremely koovent verbal, in everybody's faes. this is an election where there isn't a dominant issue. you've got a whole bunch of little issues. democrats are trying to use the war -- the outcome. >> even iraq is back, right? >> yeah, but it's not back the way it was in 20306. >> i was going to say, what about the last time when it was a vote on obamacare?

there was a fever in 2010 given where the economy was, where the deficit was, with the pass edge ofback of obamacare. i think all of the -- much of the media is less interested in washington at this moment because washington has been stuck for a couple of years. you've got an election with an agenda. and a lot of resources have moved jorchb line to digital been that happens if i aur there's not an exiting -- >> in any midterm election, you're talking about candidates who are many, many smaller -- >> but people have much larger ambitions themselves. >> if you had a chance to knock off mitch mcconnell and it's not -- >> even in the space, it's hard

for a senate candidate to command the breakdown. >> which name are you talking about that was big in 2006? >> the mitch mcconnell thing hasn't even gotten a look. >> consistent leads. now, the race is actually sort of close. he has a stable lead. everybody considers him the favorite. the one thing we have to keep in mind, polls are a little bit more jumpy in neat races by the time were there, pef>> it's not the same as the president. >> no, no, it never is.

>> there will be surprises. there will be people who had been trailing in the polls who are going to win. >> let me ask you one more thing. the editorial board of the "new york times" says to task the democrats from running from the president. they're really, really mad. the editorial board says all of these candidates should be sag it loud and saying it froproud. talking about all these great things that have happened. but if they do that, they're going to lose. the "new york times" is basically telling them to put themselves at the americans is he of the motor and say, yes, i'm an obama sparter atar suppo proud of it. >> this is the difference between being -- >> look, some of this is a peer game, all right? everybody knows that allison graham voted for obama.

she's a democrat. she's a delegate for her convention. the whole point of the exercise was to get her to say it out loud so it could be used as a division ad. do those democratic senators believe in obamacare? of course they do. that's why they got all 60 votes to pass in the senate. >> by not standing firmly with their own policies, democrats send a message to voters that the unending public criticism is legitimate when it's not. >> well, look, republicans are the same way. when they're down and they have an unpopular president, they have to pretend that they're not with the president. but eats notally pretend except or the journal and fast moves.

whose victorian guard are you? >> do i not stick out like a sore thumb? >> who are you guarding? >> i am guarding the american way. how is that? z. >> oh. >> isn't that right. the american initiative earns success. read it. >> i can't speak for anyone else. >> okay -- >> well, not just failure, european failure. >> yes, yes, euro, social, you know what my favorite term is what crudeman told me he was. he's a welfare status. after watching the history of the world over the past hundred years, these are still your ideas and opinions? i saw something yesterday that we need a 90% tax break here. everybody is better off with a

90% tax rate. >> we understood to the win. >> oh, you read it! oh, you coauthored. >> ghost writer. john harwood, thank you. coming up next, what investors want to hear from amazon as the company gets ready to roll out results. and we're going to be joined by today's earnings blitz and mario gabelli will have names he's loving right now. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on.

(laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

boib. u.s. equity futures at this hour rebounding a little from yesterday. we opened fine but around 10:00, the news flipping out over the situation in ottawa. and another negative from earnings and other things that usually it keys off of and ended down. we are indicated up 82 points on the dow. up 9 1/2 points on the s&p. getting back on the nasdaq and up 19 on the nasdaq. shares of eli lilly this morning, take a quick look at what is happening. up 32 cents this morning. it's a penny below estimates that revenue was above at $4.88 billion. those are the other individuals

we have. doug oberhelman from cat peller and gary kelly examine chuck stevens. we may ask him about the air bags. up next, am i a clown? huh? don't answer that. do i amuse you? tell me how. an actor wants his cut of the simpson's fortune. $250 million is at stake. and what is turning into a real life drama. someone is going to get whacked, perhaps. that's next on "squawk box."

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actor frank sivero is not amused by a mafia character on "the simpsons." i need to see a picture because he played frankie carbone. he filed a $52 million lawsuit for basing one of the three animated wise guys on his character. sivero said he lived next to "the simpsons" writer that

producer james l. brooks, he was highly aware of who he was. louie. all right. louie appeared in 19 episodes of "the simpsons." according to the lawsuit, they have gotten $12 billion of revenue because of that one actor. several revenue streams including video games -- >> i think that they should just give him the money -- >> $250 million? >> easy. slam dunk case. >> wouldn't the writers of "good fell fellas" be the ones that get it? >> right. why would he get it? the whole thing is preposterous. but anyway. there it is. the legal system in america. amazon set to report after the bell later today. and analysts are expecting the

online retail giant to post a big loss. but also big gains in revenue. here to handicap today's after the bell report, managing partner here. it's so hard to figure what's going on at amazon these days because they have 10,000 different businesses. if we're looking for one or two or three things, what do we pay attention to? >> i think investors will be looking at the quarter. i think right now the street's a little over 20% growth. but you are seeing a lot of changes on the side of what google is doing in their product ads and shopping and delivery. >> but which piece of the puzzle do you care about? the retail piece? any of the new media stuff they're talking about? do you care only really about the web services which are very difficult to measure. >> i think i'm really caring about mostly the retail side.

amazon's core business. the enterprise side of it is important because it gives them more ability to move into the seller base, but if you're talking about them as a retailer, they are similar to google in the fact you are going to that experience to search for your product. and if it's efficient for you, she seller in terms of selling through that channel, then you're going to focus there. for the buyer, there's benefit from that. >> you've taken them off your conviction list. >> we still have a buy on amazon. we don't add it to our super conviction list. we are seeing a lot of changes in the environment that are not good for amazon. i think 20% of amazon's traffic does come from google. they're making it harder for places like amazon to take that consumer off of google's experience. google really wants you to look for that product on google. if you don't see it on google, you find another product on google. and i think that the integration that they're doing right now

with sellers and the direct feed of inventory that google is piping into its platform is a big concern for amazon. that's why thigh feel they need to invest so much in content, hardware, locations in terms of physical stores. and i think they have to move that much close tore the consumer. >> we got to run, but do you want them doing physical stores? >> i think amazon has to figure a way to look at this whole package for the consumer. we have to help them find the item, get the item, and they have to be happy with it. what do we have to do to make sure our channel is the best channel? >> ken, thank you for this. we'll revisit you after the bell. still to come this morning, supermario is set to join the conversation. two more big hours of "squawk box" straight ahead. we'll be right back. i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn! prilosec otc. the number 1 doctor-recommended frequent heartburn medicine

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earnings central overload. the biggest day of the season for quarterly results. from gm to 3m. and from pharma to flying. the ceos of southwest airlining talk to us first on cnbc. plus the love connection. dr. love himself picking stocks and giving us the market play-by-play. the second hour of "squawk box" begins right now. welcome back to "squawk box," everybody. it is earnings central today. number of earnings just hitting the wires including comcast which is out with its numbers. out with an adjusted number of

73 cents a share. revenue looks in line with expectations at $16.8 billion. we should point out operating cash flow. operating cash flow at the company up 7% to $5.7 billion. free cash flow up 26.7% to $2.5 billion. the company points to a number of different things that have helped lopg the way. brian roberts is the chief executive officer saying the video customer results for cable were the best for a third quarter in seven years saying that's because of higher internet speed service, also business services and video results that were strong as well. >> some of it i'm noticing, there was higher spending on some customer experiment. which i have talked about. which more than 5 million boxes deployed to date. i'm not going to go over it again, but i love my -- i've got a few of them. >> a few of them, like, nine?

i think you actually have nine. >> that's bad to say you have nine cable boxes. but i get a deal. if i didn't work here, i'd have a problem. >> that is true. >> i'd have a cable bill that i couldn't -- i'd have to -- it'd be like the government. i'd have deficit spending. zb >> but the idea they've increased video runs counter to the narrative that nobody is going to buy video services anymore. there are -- if you look closely, it's still declining. but customer net loss is improved by 36%. so declining by 81,000. in the year ago period it was 127,000 in the third quarter. >> it's going to be a much slower burn than i think people anticipate. with all the conversations around hbo, we'll talk to mary over this, i'm not sure the

whole thing breaks down. i worry that it breaks down, but i don't think it breaks down as quickly as people think. >> nbc universal operating cash flow was up 13.3%. >> nbc, theme parks continue to outperform. 18.7% increase in revenue. there weren't as many good movies. >> "despicable me 2." you're playing off of comps. about how successful that movie was. >> right. but mario, we want to bring you in. nbc universal, this is something where there was comcast saw a lot of opportunity because it was an underperforming asset. up 13.3%. that's pretty good. >> not bad. i don't have any particular insight. you've got the numbers. but on balance, the stock at seven times ebita, that's cheap.

is video marginal and is voice marginal? but speed is the king. and obviously the main event short-term is consolidation in the cable business. they go from 24 million customers to 30. >> time warner cable. >> and they have major markets. and that's a pretty good deal. >> and that deal has been pushed out probably towards what do you think? the summer? spring? >> we have an election coming up. and to have some of the individuals in various positions in the senate and the house change and that'll be interesting. >> in terms of the stock price, though, is there any type of overhang that you see as people await to see what happens? >> no, i think there's a lot of other dynamic tensions. for example, last night somebody carried a story that alibaba is looking to buy content, go into hollywood. make jack ma is in love with the casting. who knows. the policy is he's bringing content over to china. it's a window he can exploit.

so nbc has been giving -- universal has given good content to comcast. so brian did it right. >> do you own either one of those stocks? >> i own time warner cable. we sold our aol but kept most of the time warner cable. and the arbitrage part of our firm are buying more. >> our guest host again today is mario gavelli. >> let's look at what's going on in the headlines. apple says they're aware of issues with apple pay service that's doubling charges for bank of america charges. they say a fix will be available and they'll be reimbursing any customers. probably only about a thousand transactions took place where they were charging you twice. but that will be fixed. at&t could be under pressure today. quarterly profits missed estimates by a penny.

as revenue per phone user fell 8% from a year earlier. and u.s. prosecutors are investigating japanese automaker parts maker takata. the probe centers around whether takata made misleading statements to people who drive around with this for years. there it is. >> and the big story yesterday, i'm sure -- i actually -- this is when you do watch some cable news. many questions remain in canada this morning after a gunman killed a soldier and then just walked right into the halls of parliament and someone had a camera and began shooting there yesterday. i saw that video. probably 20 or 30 times yesterday. i never -- gunfire is loud in an echoey tile -- but like a marble

interior. >> and you can see all the law enforcement agents ducking and clearly fear ful of what was going on. the police are not releasing a lot of information about the slain gunman. just his name and age. but one has found out a lot about michael zehaf-bibeau. he was charged with a robbery in 2011. they quote unnamed sources saying he intended to return to libya but was not given a valid travel visa. they quote a friend of zehaf that said he wanted to study arabic and religion. a man with the same name as

zehaf's father is quoted in a washington times article. he was in libya to join the rebel fight. here's the one thing to remember about libya in 2011, this was the fall of gadhafi. we saw many try to restore that country and there are conflicting groups still now. there are anti-jihadist groups. it's a mess. so it's unclear what his mission is. the same friend interviewed said zehaf is disturbed saying at one point the devil was after him. his mother works for the canadian federal government as vice chair of the refugee board. she was divorced from zehaf's father back in 1999. the soldier killed, nathan zarillo. he long dreamed of a career. >> did you see his picture on the front of "the daily news." a good looking young guy. unarmed. >> they started putting guards

there recently because of vandalism issues. it's a one-month rotation they go through. >> just infuriating. >> i think ultimately the bottom line on what we saw on the market reaction. >> was there a shooting in a shopping mall or not? >> no. >> there was not? >> no. the toronto police, the royal canadian police say absolutely no. and the mall says as well only the parliament building. >> okay. >> but it -- so to bring up an unseemly conversation, the market moved to its lows on those fears, the mall was a big plot when it became increasingly lone wolf possibly, then the market came off the lows. >> he was a canadian national, the shooter, right? >> i believe so.

where was he born? that, i have not seen. but some arab descent. middle eastern descent. >> all right. thank you, michelle caruso-cabrera. let's take another look at stocks. you know investors have been on a stomach churning ride this month. check out the vix. it measures fear. since the start of october, it surged to close to 30. then it came back to earth. yesterday it shot back up again. it's been at incredibly suppressed levels for the last five or six years. the dow posting a double digit decline after the shooting michelle was just talked about. the terror fears north of the border at this point leads to questions about how quickly we will move on a single bad headline that comes out. joining us now to talk more about this is mario garive rks will li. we know you are a bottoms up guy.

but with everything that's happened with the slides in stock last week. i have to imagine you start reassessing this saying they look better when they're cheaper down 6%. >> the dow was a thousand. it took 16 years to get past the thousand. we should be used to that volatility. and you've had these corrections like 1907, 1929, october of 1987. and so on. so you get this volatility. and why shouldn't there be volatility? bernard quoted back in the late 1920s saying the market goes up and down, it fluctuates. so we look at the intrinsic value over a period of time. what do we know? then we look at mr. market, the psychological of the market and the volatility around that. you do your best to try and keep

clients staubl. >> i'm guessing that last week you were buying stocks. >> i was on an airplane wednesday from tokyo to new york. unfortunately there's no wi-fi. that was an interesting time. the market did rally a thousand points. you're obviously sensitive day-to-day. as much as we think long-term, we were also very sensitive to deals. but what happened to sectors of the market. for example, when the inversion, you know, undermined the deal with -- >> i meant for good prices. a deal. and knowing you -- >> we're value investors. >> knowing you personally in everything, you know. i know things about you. you know that. >> i should have a wand like men in black and come in and wand you to get you to forget some of those. >> you showed up at a dinner and you had scoured the garment district to find a gift for someone that -- i mean, it was a

raincoat for like $200. not that there's anything wrong with that, but you are a man that looks for value in all parts of your life. that's all i'm saying. there's nothing wrong with that. >> there's no doubting i would ask oscar de la renta for a discounted price. from my point of view you've got an interest rate back to 225. you've got oil at $83. >> 80 and change this morning. >> you have self-correcting mechanisms in the market. but looking at a global gdp, europe is 20%, u.s. is 20% in rough numbers. china and japan at 20%. so we focus on what's going to happen in that part of the world. then you look at earnings. then corporate cash flow. pension costs are rising dramatically because of the lower interest rates. even with the highway transportation bill extending

some accounting issues. then b you look at profits. and the earnings releases that are coming in are pretty decent. so then we look at the multiple and the psychology. and mr. market goes up and down all the time. that's not bad. no margin of safety at 1900 on the s&p. it's a reasonable place to start. you kind of pick your place and start buying stocks. for example, yesterday, ggg, 60 million shares. stock closed at 72. it's an ignored stock. no debt. great cash management. and there's so many companies like that that we like and if the stock with come down ten points with point, that would make it more interesting. >> can we get a shot of that crappy thing you bring in here every day? >> the briefcase? >> have you seen this vinyl thing -- >> the infamous briefcase. >> people in his position

typically get something that costs -- >> i think it's endearing. >> it's not endearing. it's a shtick. he makes his clients think he's frugal. >> that's not a shtick. >> that's the crappiest -- >> i don't want one. never bring me one. >> people show it to me -- >> don't ever bring me one of those. >> relax, joe. you'll never have it. >> we got to go. >> we'll have a lot more than him. >> you criticized the bag and now we got to go. >> i know. john lickliter will join us to talk. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy.

see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern. e financial noise financial noise financial noise financial noise

eli lilly reporting earnings at 66 cents a share. a penny shy of estimates citing as we have watched over the quarters patents. they have been on a healthy streak so far this year outperforming the broader health care index by almost 15%. joining us first now on cnbc to talk about the numbers, john lickliter, chairman and president of eli lilly. we talked to you specifically about eli lilly. and i understand a lot of it is specific to your company, but can you just talk about your view on the overall economic backdrop as we watch the fed deal with when to raise rates and what's happening in europe.

is it better than it was a year ago? is it the same? are you expecting a better economic activity? >> i think our outlook, joe, for the u.s. is we're pretty bullish on the situation here, the economy seems to be recovering. i think europe is a little bit more of a challenge as the economy sort of remains stuck in many countries in europe. that, of course, affects the government decision about things like reimbursement of medicines. so our business in europe has been somewhat flat. on the other hand, this quarter we reported 21% sales growth in china. we're still doing a very good business in japan. our actual sales performance in japan was muted by the weakening of the yen. so i think all in all we feel the economic -- the current economic circumstances are really not going to be -- not

going to affect our business in a negative way to any great extent. >> okay. so the dollar is something -- i guess you need to -- you have headwinds based on currency fluctuations too, right? >> we do. the stronger dollar amongst the currencies have had the impact of depressing our sales outside the u.s. but we're sort of naturally hedged in other parts our income statement, for example, the way we calculate our manufacturing costs. we rise and fall with these exchange rates. but again, you know, we tend to look at the underlying performance. even though our sales was down 16% this quarter. if you take out the two big patent losses we had in the last year, our underlying sales growth was 7%. most of that was from volume. >> john, you rently -- did you recently restructure a few -- not restructure, but your portfolio, you were out of

something and went into something else. animal health or something? when was that? is it done? is it paid off? >> well, we haven't exactly restructured our portfolio. we have, i think, been quite clear in recent years that we're interested in growing that animal health business. we acquired the novartis health unit. >> that was it. >> that will make us the number two animal health company globally. it's a god business. and we're glad to be in it. >> you know, mario gabelli is here. i always think he's kind of whacky, but he is very smart and always ends up being right normally. you brought me -- you never brought me a gift. thank god you didn't bring me a crappy bag, but you brought me catnip? >> no, cat litter. >> ten years ago. >> nothing but the best. it was clumping cat litter. >> you knew pets were going to be huge. >> it's whether you're in production animals or whether you provide products for the

veterinary channels with regards to companion pets and cats and dogs. that's 170 million. >> you still like that whole area. >> yeah. somebody's going to put their arms around in not too long the distant future. what eli lilly did was put their arms around that. clearly companies are buying pet foods. what doesn't work for procter & gamble may work for someone else. >> how much for you is pets? >> globally it's a $30 billion business. about 60% is food animal, 40% pets. once we complete the novartis acquisition, it will be in companion animals. >> and in other parts of the world there's gray area on what is a pet and not food. i don't know how you -- never mind. john, we appreciate it. we got to go.

and mario, we may talk mar because -- what's wrong? i'm right. pets and food. i'm not saying specific places. it's a big world. you watch "walking dead." when we come back, a flood of quarterly reports coming in at 7:30 eastern time. gm, 3m, caterpillar, several airlines and more. we're going to bring you up-to-the-minute earnings news as it happens here on "squawk box." take a deeeeep breath in. and . . . exhale. . . aflac! and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming... not that great at yoga.

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up next, ready, set, report. whatever you want to call it, this is a flood, a barrage, an overload. it is happening. next we have quarterly results from all corners of corporate america. gm, 3m, and many more.

all coming up after this quick break. "squawk box" will be right back. as we head to break, look at the futures. dow still in triple digits. 102 above fair value. s&p futures up by 13. "squawk box" will be ragt back. ♪

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. welcome back to "squawk box" this morning. a flood of earnings hitting the wires including 3m. dominic chu is here to help us wade through this wave of earnings reports. dom, walk us through what we've seen so far this morning. >> if you look at the overall picture for what's happening with earnings, look at the number of earnings that have come out. in the past we've talked about this idea that earnings season was going to save us. and it has for the past three or four quarters. every time we've seen issues of what's happening with regards to the economy in europe, asia, or anything else in terms of the home front here. earnings have always seemed to come back during this season and

bail us out of whatever worries that we've had. and we've seen these markets go to record highs. the question then becomes whether that's going to happen. >> we want to hit the pause button because -- oh, i thought we had phil lebeau on the phone from gm. i interrupted you. you can go on. >> that's okay. because that's going to be big. anyway, this idea we have earnings coming out right now is something of a huge focus for investors. only because with all the volatility we've seen over the past couple of weeks, this idea that you can actually have earnings come out and say, all right, things are actually doing pretty well for the economy. the one theme a lot of traders and investors will be looking for with a lot of these large cap multinational companies is whether -- >> dom, 3m is out. it looks like they beat the street. $1.98. >> i was assigned 3m.

>> well, it's a fluid block. 3m is out. that's two cents better than expected. the revenue numbers -- >> nope. >> i'm interrupting all of you because -- >> revenue, sales, it was $8.14. usually you can use that. but they have other ways, but that would be below. because it's 8.238 was the estimate for 3m. i'm looking at the shares which it looked like they're trading sharply higher. even though it wouldn't be necessarily on the two cent beat or whatever it was. i guess they're bragging about their margins too. 23.34% f 23.34%. and local growth which is, you know, i think gm is now out.

>> phil is ready. so we're going to go to phil lebeau. mr. lebeau is on the telephone. he's got gm's earnings zbp we have general motors beating the street by two cents a share. reporting 97 cents a share earnings for the third quarter. that excludes 16 cents special items. revenue coming in lighter than estimates. the street was expecting $39.8 billion. $38 million in special charges, 1030 coming from that and you have a writeoff of russian lones about $94 million. you break down the different areas of the world where general motors does business. they continue to be the growth engine coming in at $2.5 billion in profit in north america with a margin of 9.5%. that's extremely strong in the auto business.

$1.4 billion in net income in china with margins of 9.6%. two other areas we want to focus on. they lost $400 million in europe. that's basically break even to where they were in the third quarter of last year. and they were break even for the third quarter of this year in latin-america. but again, general motors beating the street by two cents a share. we have chuck stevens coming up first an cnbc. we'll be talking with him in about 20 minutes. >> lots to talk to him about. >> i would think the futures must have gone up on cat. cat is getting it done here. cat on a hot tin roof. let's look at the chart. $1.72 as the adjusted number and the street was looking for $1.36. sales also higher. above $13.5 billion. what was it? $13.55 billion and the estimate for sales was $13.188 billion.

then in front of the guidance, the company seals full year net at 650 and the street oos only at 626. they had a big beat here in the current quarter, but to see an adjusted forecast a good. >> they're looking for revenue in sales to be about $55 million. what's interesting, caterpillar's chairman and ceo who's going to join us in about 25 minutes talks about how currency impacted were actually -- they worked hard to make sure they have a broad geographic reach. that they have a broad manufacturing footprint. they're making a lot of the stuff where they're selling. as a result that has helped out significantly. we've seen most of these big multi-nationals with huge headwinds when it comes to currencies. that is not the case for caterpill caterpillar. look at this. we were up 100 points before we

got this. at this point up 140 points. >> and then the gm trade up as well. >> what's interesting about this, too, is they -- >> 3m is up $2 too. >> they say in here from an economic perspective we believe there is a reasonable likelihood that world economic growth could improve in 2015. growth oriented monetary policy should support continued modest improvement. we believe the infrastructure for places like india, turkey, and the united states. so that's good for caterpillar. >> they said cautious optimism for improved economic growth but significant risks and uncertainties could temper growth. stop the presses on that one. we talk about that on a daily basis. >> dominic, you're getting the headline earnings of these big

companies. but the ignored ones like dana earlier, the stock had been beat up. we think the stock could be up 50% the next 12 months. and they supply parts and components to the global auto industry. >> which do you think is up 50%? >> dana. 170 million shares and they reported results and announced a buyback. going from $2.50 to $2.75 over the next five years, those are the ones ignored. you don't talk about them and that's the real dynamite companies that we like to look at. i did mention mueller industries. but a whole bunch of companies like that that are yummys. >> let me tell you about united airlines. announcing its third quarter profit. looks like an adjusted number of $2.35 a share. that's better than the street was expecting. also taking a look at what

they've talked about in terms of revenue passenger miles. up 0.4%. consolidated load factor of 85.8%. and so take a look at what's happening with that stock. it looks like it is -- actually, it's mixed at this point. >> i think that is this morning. and that is in a nutshell you can see the whole market in the last two weeks with where ebola took that all the way down. it went down to $40. the minute it seemed like the cloud lifted a little bit on whether anyone else was going to come down with it last week, it snapped back 25%. it should have because it had lower oil prices. but they were only being held down by the prospect of people not flying. >> this is not a big stock, but because we talk about it all the time. you see underarmour down.

they beat on the top and bottom line. yet i'm trying to understand what's happening here. >> they also boosted the outlook. >> is that what happened is this. >> if you look at the profit and sales, they did better than expectations. oftentimes for this company like a company like under armour, often times it is because the outlook looked better. >> depends not only on the fundamentals. dana was expecting a lousy quarter. stock came in, did well. and boom, you get a bounce. zblo do you see -- you're supposed to -- oh, you're going to do that. >> also recap comcast. this is the first time we've done earnings that were assigned. it's usually the fly by the seat of our pants. that was two cents above

estimates. i think it was higher. it was like 99 cents. revenue was slightly below expectations. results were helped by a jump in earnings at nbc universal. if you look at the -- for the total company. free cash flow up 26.7%. alg r. >> and mario has talked about how well the company will do with the merger. which the company says it's confident it will close on that deal early next year. not in the summer. do you have an indication it might not be until the summer? >> there's been a debate. >> whether there's a first quarter of the year. >> but there's a chance it won't

be the first quarter? >> what the government is going to do with it and what that would be. >> focus on the neutrality. and there's going to be give and take. but on balance there's no logical reason this shouldn't be approved. just give something back. >> the company for its part say in the calls today when they're talking about it, they will say they're confident the deal will be done early next year. >> and i hope that's the case. >> unless you'd just like to say they're blowing smoke or something. >> i hope they're right. >> okay. i want to give you the chance to say something about it. >> andrew, it won't be a valentine's day present, but it may be there for easter. so thanks. >> there you have it. when we come back this morning, investors feeling the love for southwest. find out how the company is positioned to improve. look at the futures. a lot of help here coming from big dow components with big beats along the way.

check it out right now. dow futures up by 144 points. caterpillar helped out tremendously. we'll talk to their ceo in about 20 minutes. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow. ♪ introducing synchrony financial. bringing new meaning to the word, partnership. banking. loyalty. analytics. synchrony financial. engage with us.

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welcome back, everybody. southwest airlines flying high this morning. the company reporting 55 cents a share. that's two cents better than the streets were expecting. we have southwest airline's chairman and ceo. great to see you. >> great to be back with y'all. >> we have watched what has happened with the airlines stocks. as we were just talking about, the ebola scare really putting pressure on a lot of those stocks. the results we're getting from you from united continental this morning really kind of offsetting some of those concerns. what happened during the quarter that was so positive? >> well, you know, for us a lot of things are coming together here in 2015. it's a historic time. it's a historic year and a great year for us to celebrate. the economy's been more stable this year. energy prices have been very

stable for close to the last two years until the recent drops. and then travel demand has been very strong. obviously the results go through the end of september. even beyond the end of the quarter into october, our demand has continued to be very strong. so all things look really positive. >> that's a key question, it's worth noting that you are in dallas. that's where so many of these scares originated in the hospital there in dallas. and some of the nurses traveling from that area. you point out that even since the quarter ended, you've seen strong demand. you have not seen any downturn in passenger demand? >> absolutely correct. we're continuing to see very strong load factors. great on time performance. we just launched on october the 13th, new flights from love field. they're running at above 90% load factors. so bookings for the rest of the quarter looked very good as

well. so everything looks really good. >> one of the nurses -- cleveland came back. i mean, you didn't convene any meetings in dallas with your staff in the middle of that just to say let's just talk about what's happening here and what our response would be? i mean, you're a smart ceo that thinking about all contingenci s contingencies. did you guys have meetings about it? >> well, joe, that's a different question. in terms of our preparedness, absolutely we talked about it. we talked about it and talked about it and talked about it. i feel we're very well prepared. i think the media deserves a lot of credit here. the public is very well informed on the risk. >> that's one of putting it. because -- oh, yeah. when you were watching oil prices go down and watching your stock go down, it was clear what that was, wasn't it? >> well, it seemed to be. again, there are different

factors. declining oil prices actually presents a concern to many in the investment community that economies around the world are weakening and therefore travel demand will weaken. but that's not materialized and i don't expect that. >> gary, you guys are famous for hedging your fuel costs. you're on that hedging committee of the company. how has your hedge worked out thus far and what's it going to look like over the next 12 months? where do you see fuel prices going? >> past couple years it worked out as intended. if you go back to the 1990s, we were very consistent. hedging was a modest activity for us. and really didn't garner headlines. until energy prices took off in the 2000s. so it feels like that's the period we're in. it's insurance coverage. we've got some modest hedging gains here in the third quarter. we've got a great hedging position. it goes out through 2018.

it's designed in the way we participate in those declines. but we've got a long way to go to see how it is over the next years. >> gary, just a quick question. anything particular with regards to your fleet that we should be thinking about in terms of orders for boeing or air bus? >> well, we're an all-boeing carrier. we will soon be an all-boeing 737 airline. i would underscore that's the fact and we have no changes planned there. we're in a fleet modernization phase where we're retiring older aircraft, replacing with newer that are more fuel efficient. we're also planning to launch the new boeing 737 max in 2017. there's no change in those plans. we're retiring boeing 717s in favor of a lot more efficient 737. that will help our cost, our fuel consumption, our greenhouse

gas emissions, and our earnings going forward. so fleet modernization is a big initiative for southwest airlines. >> thank you. >> gary, thank you for joining us today. it looks like the stock is up by about a dollar right now. thanks for your time on this busy morning. >> thank you all so much. up next, we have another first on cnbc interview with the ceo of gm. the latest on the company's results and what you need to know about the big air bag recall after the break. also at the top of the hour, caterpillar's ceo on the landscape of the economy. "squawk box" will be right back.

gm was out with quarterly earnings. two cents above estimates. revenue maybe lighter than expected. joining us now with a first on cnbc interview, gm cfo chuck stevens. good to see you. thanks for joining us. >> my pleasure. >> we saw strong north american numbers. that's not a surprise -- i don't know if anyone was predicting we'd snap back to this amount of vehicle sales. but really strong demand in north america. and gm back as a name people are buying to satisfy demand.

>> we're pleased with the numbers in north america and overall. revenue in north america was up about 10% year over year. and really that underpinned our performance. $2.5 billion of profitability. 9.5% margins. fifth straight quarter of year over year margin growth. so overall very pleased, strong results at north america for sure. >> i mean, gm, you know, chevrolet, apple pie. you guys got to figure you can't win for losing. you're finally getting out from behind the old recall situation. now air bags. can you comment on -- was that kind of a blind side hit for you guys? you don't buy all of them from takata, but some, right? >> yeah. if you're talking specifically about the takata issue, you know, i think largely we have that behind us. because we had done and read across on where we might have

had those issues. so this recent news beyond the impact announced in the saab and vibe vehicles are not really a major issue for us. >> so it's not for gm, but might be for some of the japanese automakers at this point. certainly looks like it's in front of a lot of automakers, not behind them, right? >> it could be. we'll have to see how this plays out. >> all right. our phil lebeau points out that just a couple weeks ago -- you're pretty bullish over the next five years. while ford seems a little bit more cautious about the future over the next five years. and people are wondering. whether it will be justified. >> we laid out a specific plan a couple weeks ago at the global business conference. really driven by three drivers. and north america continuing to

execute to our path to 10% margins. that's a plan we've been pointing to the last couple years. you can see it the last -- year up very much on plan. as we said, we expect our revenue to grow faster than the industry and to maintain those margi margins. we have clear initiatives under those critical drivers or critical profit improvement initiatives to take us from where we are today to the objectives we laid out which is 10% margins in north america. profit in europe. and 9% to 10% margins in china. >> i was going to ask you about the volt as gas prices go down. but we're out of time. anyway, i appreciate it. gm cfo chuck stevens, thank you.

hope to see you next quarter. >> thank you. when we come back, the ceo of caterpillar doug oberhelman and what he's hearing from his biggest customers. also check out the futures this morning. caterpillar, big beat. gm beats street expectations. comcast beat, united airlines beat, 3m beat. right now dow futures up 152 points. "squawk box" will be right back. 3w4r57

. welcome back to "squawk box." i'm andrew ross sorkin. look at the futures this hour. things look like they are going to open up higher and dare i say a lot higher. dow looks like it would open up 158 points. nasdaq higher as well looking like it would open up 36 points higher. and the s&p 500 would open 17 points higher as we get a stream of earnings this morning. let's recap, andrew, some of those earnings reports we have that are already out. comcast earned 73 cents a share

for the third quarter. helped by better performance at cnbc. wait a minute. go back. i like the way that was going. helped by better performance at cnbc parent nbc universal. >> they didn't segment us out. >> no. i will mention one thing. we did mention about cable networks. even though and it's well documented across the universe of cable news networks, tough comparisons because of elections or whatever. but ratings have come down. but distribution is up and all-time highs for financial results. not necessarily charging for advertising, but still a great business. >> you got a higher multiple today too. you're 12 times your cash flow opposed to nine times. so you're worth a lot more, joe. >> really? us individually are worth more?

>> collectively. you're a team. >> will you keep me updated on what we're worth? >> whatever you like. >> i want a mark to market. except in the bad times. >> then don't call. >> dow component 3m earned a -- is this you? >> this is you. >> it was a reaction shot. it was a good one. were you ready for that? >> okay. >> dow component 3m -- >> there was a mario one. you look clueless. got to get the eyebrows up. >> you just look confused. >> never. >> $1.98 a share. revenue was slightly short of consensus, but you wouldn't know it from what the stock is doing. the company also narrowed its financial targets for the year. citing the negative impact of currency fluctuations. and united continental. the ceo says the company is still in the process of

improving efficiency and increasing profit margins as they have put together two really giant airlines with different systems and cultures and sort of different interest groups. you're okay with them in. >> it's newark. it's where you fly out of. >> i love continental. it's coming around. right? >> and the margins are getting better. they need to get back. because the other guys have done really well. >> i think it was difficult but worth it. i think it's working out. >> among the other stories that we're following at this hour, we do have more details on the shooter who killed the soldier during an attack on canada's parliament yesterday. that man 32-year-old michael zehaf-bibe zehaf-bibe zehaf-bibeau. we have more details and will bring them to you as soon as we get them. the labor department releases

their numbers at 8:30 eastern time. and apple is increasing stores in china. cook said in the future china will become apple's biggest revenue contributor. caterpillar out with results moments ago. and this is one of the big movers in the dow helping to propel that average. it's up four points, caterpillar after it handily beat street estimates. shares of the heavy equipment maker are surging in premarket. says here, doug oberhelman, let's dig deeper. that's what i have to deal with every day. we're going -- do you get it? dig deeper, caterpillar? someone's pretty clever in there. right? >> we really can't dig deep enough most times in our business, joe.

thank you. >> ground breaking results they're just saying in my ear now. give me some more. doug, you're on a lot when -- and we appreciate that. and it's not always this positive. what would you say changed in the last six months or so with your business globally? >> a couple of things have really gone our way this year. it's all about internal operational efficiency, our team addressing in a really flat sales environment. top line for two years now. getting after operational improvement, safety, quality. just day-to-day blocking and tackling that you have to do in a business like this. i was thinking about this the last couple of weeks. the boom west saw in 2000s. when things are booming it's hard to catch up on operational efficiencies and do the things like manufacturing around standard work. when things are collapsing when things were last year, we gave

up our top line as we saw mining go down. you're scrambling just to catch up. so in a kind of a positive perverse way, this year's been great because we've had had steady sales, steady productions. and we're getting after lean manufacturing. it shows we're getting good cost reduction from our supply base as well. operation is really what makes me feel good about this year and certainly this quarter. >> doug, looking at this cycling coming out of it over the next two or three years, what's different as you expect incrementally versus previous cycles over the previous 20 or 30 years? >> it's no question that the recovery is going to be slow. and if you look at our sales history over my career, almost 40 years at caterpillar, most recovery's come out of the blocks pretty fast. we even saw that in '10, '11, and '12.

it's good for the world arguably. but slow growth, recovery from this i think will kind of keep a break on anything above 3% to 4% around the world for the next couple of years. that gives us a chance to work on market share, new markets, new products that we're introducing the next few years. you just got to keep your eye on the ball every single day. it's a really interesting world out there as you know and you reported on this morning. >> doug, your stock's up more than $4 today. obviously the street likes what it is seeing with this. but doug kass points out part of the reason you got there was because of share buybacks. obviously your revenue came in. you're now seeing for the full year. you expect revenue to be at $53 million. because of the beat you're seeing in this quarter. i just wonder because this is a

conversation that's taking place all over right now. one is the good news, every share the shareholder owns is worth more when you buyback shares. the other is the accusation from some corners that when you're buying back shares, it's financial engineering. that's what people have accused ibm of this week. how do you know the difference? >> that's a great question. in our view we look at share buybacks and really return to shareholders a bit differently. we absolutely have to focus on a strong balance sheet. and we have that. we went into 2009 with a debt equity% over over 50%. we barically saifd our credit rating. we barely held our dividend. what we're looking to do is really make sure our debt to debt equity is solid. today it's in the low 30s. that's about all the cash we

really need to have on our balance sheet. but we think that's where we need to be financially in the strength of our balance sheet to weather any storm that may come. it also gives us flexibility for any growth that may come up. whatever is left over, we are going to return it to shareholders. >> you're not borrowing money to buy back? that's what ibm does sometimes. you're not borrowing money to buy back shares but you're spending less money on cap-x. do you borrow money for the buyback? >> we've not borrowed any money to buy back shares. our debt to debt equity ratio has improved as we've taken cash flow into the balance sheet. our cap-x is down. we invested fairly heavily since 2010. so our footprint around the world today is in good shape for the next two or three years

without a big drain an cap-x. i hope we get back to big cap-x spending. >> what do you think about buybacks versus dividends? >> that's a great question, andrew. our shareholder base is just about split evenly. and some of our funds like dividends, some like buybacks. that's a balance. we've communicated with all of our shareholders that our balance sheet really takes priority in the strength of that. because we go through such cycles and maybe on an increasing basis. if we could find things to buy, we'll do it. but what's left over is going to go back to the shareholders. what i look at is over time what's the -- we're not stock pickers here. we never will be. that's not what we do. but we just focus on that balance sheet and maintaining the strength there so we're healthy no matter what comes at

us. >> just a quick question. the dollar much stronger. how do you position yourself against competitors like the japanese with betting on incremental business. i know it's quality and service, but how do you do it? >> great question. and we've worked -- in fact, becky's written articles about this and we've talked about this. but it's taken us decades to create a manufacturing foot print where we sell. so in japan, we're a big producer inside japan. and we export from japan. so we get the benefit of that. >> is that product line or by market position where you're exporting to? >> it's a little of both. the bulk of our machines, the ones that are our mid-size machines where there's a big demand in asia or china, we try to make them there so we don't have to ship them.

the big mining equipment is mostly made in the u.s. and we export that around the world. but we produce in dozens and dozens of countries. we make an excavator in six or seven places around the world depending on the demand. that means cost and currency. we bring all this back and we're well balanced. in the quarter, the stronger dollar was a slight stronger impact to us. it takes a long time and it's really about manufacturing and supply chain. >> thank you. >> doug pointed out you come on with us whether the news is good or bad. we appreciate that. because we know you well enough from all your appearances, do you have a cold today? >> i do have a cold, becky. >> sorry. we hope you feel better. >> i'm kind of on the tail end of it, but yeah, i do. if it sounds a little froggy,

it's not lack of enthusiasm. i've been traveling a lot lately. >> well, i'm glad you're feeling better. congratulations on the earnings and thanks for joining us today. >> good to be with you all as usual. when we come back, we're going trucking with super mario. before we go, these are the companies who have reported within the last hour or so. more on these names and more stocks to watch in just a bit. (receptionist) gunderman group. gunderman group is growing. getting in a groove. growth is gratifying. goal is to grow. gotta get greater growth. i just talked to ups. they got expert advise, special discounts, new technologies. like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! (all) awesome! i love logistics.

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welcome back, everybody. many are calling this is stock pickers market. our guest host is mario gabelli. we'd like to play rapid fire with you. let's talk about janus. this is an interesting story with bill gross leaving pimco going to janus. you like the stock. >> well, i liked it at $8. i didn't like the deal with daiichi because that would provide them a shield against another merger potential. however, you got to give the ceo credit of attracting and creating this infrastructure. so the japanese are changing the culture with regards to their

investment philosophy. daiichi is a funnel entity to the united states for janus. that could be a very significant input in their equity especially with bill gross joining them. janus has 188 million shares. the stock closed yesterday at $14. cash exceeds debt. i'm going to be in denver. hope to see them in a couple weeks. we'd like to own more. >> it'd be like gabelli, pimco, gabelli leaves gamco. you can't leave and it's still gamco. >> why not? we've created a model of investing based on gram -- >> so you're sue per --

>> but i get paid more than i should for running money. i'm going to remain overworked and overpaid. >> that's why that is cheap. >> you took a term 30 years ago and left wall street and went into something else. >> don't make me mention how much you make. >> how much i pay in taxes is even better. >> that's right. >> i want to talk boulder brands. that's one of the stocks you own. i don't know that much about it. >> we own about 8% of the company. we've owned it for a long time because we like gluten free. the stock was down $3 yesterday to $9. the only issue -- >> you buy more when it falls like that? >> i bought a little bit. the reason we're concerned is the insiders -- we want to go back and figure out when that happened. i think this is a company that should be sold. i think you -- >> sold to who? like a big consumer brand?

>> somebody who wants to be gluten free in a bigger way. it's not the atkins diet. there are people with celiac. $9 wherever it closes, they got $250 million in debt. the gluten free products are going from 40 million to 60 million. that isn't cheap and the margin business is coming down. they knew it. that's why they made so many acquisitio acquisitions. you got to buy it. cash flow is going to be terrific. i think the stock doubles. maybe even many for. the earnings are going to be in the $5 a share area in five years. the movie business content, globalization, mobile phones. buy it. >> did you want them to buy time warner? >> the question is always price. do you overpay to get the assets where they're clear synergies?

or do a retail deal? the answer is it's not -- >> were you one of those investors who -- that stock went down. twenty-first century fox went down because people thought they were going to massively overpay and didn't understand that time warner was not going to do the deal. >> this paid retail for dow jones. they paid retail for other assets. this one here they said time-out. let's step back, buy our stock back. they have great cash flow going. >> you were happy when they said -- >> no, because i owned enough of time warner and so i kind of see a need for consolidation in the content business. my bet is that sony and viacom come together because of the merger of paramount. alibaba would buy the boat. next? >> navistar. >> they are simple. this is the big trucks on the highway. there's 230,000 in the united

states. 2.4 million on the road. the farmer has a huge crop, they can't transport it because the barges inland waterway transport is clogged up, the railroads are carrying oil. the economy is improving. the cash flow of the truckers is good. and if they ever come back with depreciation, you'll see a huge earn bings gain. this is a double. >> we got to go, but you just said sewny and viacom. are you making that up or is that something you think is a real idea? >> from my point of view, consolidation of content companies would work. with viacom -- >> do you think sony would ever do that? >> would do cbs first and put that together again? that's what makes speculations. if i knew it, i would share it with you. but i don't think anybody has ever talked to me. independent of what, why not? if you're sony, you just got a billion shares, the stock is $17

billion market cap. that's a minnow. and they can sell them insurance assets for mark to market for $4 billion and in addition to that you've got music, movies. and then they have to deal with all electronics. with abi running japan, layoffs are happening. >> we'll continue and have much more with mario throughout the program. >> and we'll talk about the canada chaos yesterday. questions today after a lone gunman kills a soldier outside of canada's parliament. then at 8:30 this morning, weekly jobless claims. that means leisman's probably in the house. "squawk box" will be right back. . an unprecedented program that partners businesses with universities across the state. for better access to talent, cutting edge research, and state of the art facilities.

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stephen harper addressing his nation. harper himself was in the building when the gunman shot a soldier. he was then killed in a shootout with military personnel. the soldier corporal nathan sirillo was murdered in cold blood and reassured people about safety in his country. >> let there be no misunderstanding. we will not be intimidated.

canada will never be intimidated. in fact, this will lead us to strengthen our resolve and double our efforts. and those of our national security agencies to take all necessary steps to identify and counter threats and keep canada safe here at home. >> in the united states and new york city in particular, police are sending more coverage to areas with the canadian government. says there have not been any threats made against any locations. coming up when we return, jobless claims data and what you can expect during the trading session. jim paulson is going to be joining us. and before you cast off your credit cards in favor of apple pay, you may want to wait for a glitch to be fixed. we'll tell you about that when we return.

all right. here we go, everybody. we are a few seconds away from jobless claims data. let's check out the futures and how things stand ahead of those numbers. dow futures now up by about 164 points above fair value. we've been in positive territory all morning long. but things took off after caterpillar reported.

but caterpillar beating by a wide margin in terms of the earnings per share number. if you've been watching, it's up by 3.6%. also if you've been seeg what's been happening with the 10-year note, that's key too. the yield now at 2.24%. let's get down to rick santelli. >> jobless claims rise rather substantially but from a really low level. 264 up to 244. ramp that up to 283,000. we're basically looking at an area of 17,000 where under 300, the market is non-plus. of course even though it is good news, we continue to monitor all the historics regarding jobless claims and the improvement in the jobs sector. we haven't closed above 2.25

closing in on two weeks. but what really drives us home is just think. a week and a day ago we were 186. by any standards especially in percentage terms, that was just one home run of a trade for anybody that dabbled. on the sell side, the one time you could get away with it a week ago wednesday, of course we're going to continue to monitor the european data. a couple of tenths improvement pmi and everybody was giddy in europe. the bar is so low, nobody's going to limbo under that bar. back to you. >> last week when we talked to you you pointed out something interesting. it seemed the oil markets, stock markets were leading the other markets. do you think that's reversed at this point? >> you know, i think the energy market is one of these markets a lot like treasuries where objectivity is in the eye of the beholder. i know we have supply issues. i know despite all the

politicians or many politicians we're becoming very energy self-reliant. so there's a supply issue there. but processing that supply turns into demand. and i really think it could be that easy a barometer of domestic is impacting oil as well. but nobody wants to talk about that side. we just like treasuries. there's many components to treasury yields being as well behaved for 2014. but one of this is less growth from an optimum standpoint. i think everything is always up for grabs, but i would still say the only adult in the room continues to be the treasury market. >> okay. rick, thank you. we'll talk to you again soon. steve leisman joins us as well. what do you think of these numbers? >> i think they're up from a very low number. but the four-week moving average at 281 falling 3,000, that's the last four weeks, lowest since may 2000. we know there's not a lot of

firing going on based on the jobless claims numbers. also continuing claims also declined 38,000 to 2.35 million. those are reported with a weak lag. and they suggest pretty robust numbers for the employment report. i want to talk a second about growth here. we haven't had a second to talk a lot about the overall growth outlook. stocks have been volatile. growth has really not been. i want to show you the latest cnbc rapid update. and what it shows is there's growth expectations. 3.1%. you can see a line at 3%. four of the last five quarters. except for the aberrant q1. and they think 2.5% is the potential. they think that should be about soaking up slack in the economy. with a range of 2.6 to 3.5. we've been up and down three

tenths here, two tenths there. but the growth has been remarkable stable. moody's at 3.1%. morgan stanley at 3.1%. and there's 2.6% on the bottom. you can talk about all the reasons for the volatility. it's not the economic outlook. the economic data. doesn't seem other than that one retail sales report you've had a lot of -- i don't know, what do you think? >> i think the numbers you are talking about are real. the nominal growth rate are higher. >> so add 3.1% and 4.7%. the revenue numbers which should be matching the overall nominal growth numbers are running 3.8. >> except the revenue numbers are you're looking at the s&p. and 30% or 40% of that is non-u.s. and so as a result of that, you've got the currency dynamics. >> and you have the weak overseas growth. that would explain. >> also you have small caps that

are u.s. centric. >> you know what's been interesting, though, forget the economic numbers we've been getting along the way. we look to earnings season as a time to get some insight into what ceos see. while a lot of companies have been beating expectations, they say they're doing these things despite what the economy may throw at them. i've been surprised. doug oberhelman of caterpillar. >> what's the advantage to a ceo to get up and sing and dance about the outlook when you do have elements that, you know -- >> just uncertainty factors. >> meg whitman did it well. stocks have done extremely well. that's the model to follow. why would you want to get up and say europe a going to boom, china's going to have -- and we're going to do extremely well. >> overall if the pie is growing, if you maintain as a

company, your rev nigh should go down. >> if you own the whole world, you should. >> i remember stuff that happened in high school but can't remember yesterday. >> used this phrase about how we did it ourself. self-help idea. >> the self-help idea was much more about that he thought he was doing it on his own opposed to being forced to do it by dan lowe. meaning they were making -- >> i heard we're doing it despite the economy. >> he did make some comments in the actually press release that were tied to that. that we foresee this momentum continuing despite what the economy may throw at us. >> andrew's been using the self-help line. he's been using that phrase for about a year now. actually since dan went into the stock about all the things they were going to do sort of on their own without the need for

pa activists. >> do you remember the girl in casablanca. where were you last night? i don't remember. i don't remember yesterday that well. i remember freshmen -- this guy freshman year in high school. yeah. he had -- some thoughts on how these economic numbers could play out in the markets today. we're joined now by jim paulson, chief investment strategist at wells capital management. and still with us -- you're here today? >> i was saying go see girls gone. then you would really have an updated version of what you did. >> andrew has seen it every ben affleck movie when it comes out. >> "gone girl." >> so many things have changed lately. i'm going to tell you something that steve just said because i

thought about it. he said the volatility has been really unbelievable, but the growth has not been. i think we need to recalibrate our volatility. i think the volatility given what the fed has done for the past three years, i think the volatility has been uncharacteristically low. and that now we're just back to sort of normal. has the volatility, is it really just absolutely insane when we think 1% moves are the end of the world up or down? >> no, i don't think that is, joe, but certainly what we've done in the last week is outside the box of normal volatility steve was talking about the fact that real gdp growth now is 3% plus if we take the last four out of five quarters in the united states, that hasn't changed. but certainly the expectations around it changed a lot in the last two weeks where everyone went real scared we had this big global slowdown coming and now it looks like it's okay again. i think that's kind of what happened.

there wasn't volatility on the ground. but among the expectations. you know, overall. i'm impressed. you were talking about 5% nominal gdp growth. i guess my central problem that i still worry about here is if we're at 5% nominal gdp growth, three real, two inflation, i think that's clearly unsustainable with an unemployment rate that's now in the 5s. and factor utilization going to break through with a 0% short rate and a 2.25% 10-year yield. i think those are incompatible. the stock market needs to yet adjust or figure out what they're going to do as interest rates are reconnected with the economic cycle here which still hasn't happened in my view. >> most people, you know, what people are arguing about is that inflation number that you just gave. and maybe u.s. is too. but what's the global rate with sort of what we compare our

bonds? in germany, their's is .8 of a percent. i don't know. is it really 5% right now? 3 plus 2 or is it 3 plus 0? >> but u.s. only. >> i'm talking u.s. but i'll tell you what. i don't think u.s. bond investors are going to sit still with the 2.25% yield on the 10-year if the inflation rate starts to accelerate in this country. i just think you're already close to a zero yield on your 10-year bond. if this starts accelerating at all, i think bond investors won't sit for that even if they've got deflation in japan. >> we've been hearing this for a long time. one of these days it's going to happen. but anybody that's gotten too

early on that has been wrong. i ask you a question. is there volatility now or was there just no volatility before? what is volatility in this market? >> well, i think, joe, we had massive record-setting post-world war ii volatility during the '08, '09 aftermath. we had 80 vix readings for awhile. unprecedented except for the great depression. so i think you follow that incredible volatile period with a period of lower volatility. that's not necessarily uncommon. you know, we had that after world war ii where you had a lot of volatility and then a very stable period for a period of time. i would suggest that we're still in a period where we might sustain lower volatility readings than average more times than not the next several years. maybe for the balance of this recovery. but certainly the volatility that we've had in the last

couple years has been far below average. so this is more normal, if you will. a vix of 15 to 18 i think is a more normal reading. >> all right, jim. thank you. >> thanks. >> we'll see you soon. we're going to get more from mario in just a bit. coming up, stock os then move this morning. caterpillar, 3m and others in focus today. "squawk box" returns with that and a lot more in just a moment. where you headed at such an appropriate speed? across the country to enhance the nation's most reliable 4g lte network. how's it working for ya? better than ever. how'd you do it? added cell sites. increased capacity. and your point is... so you can download music, games, and directions for the road when you need them. who's this guy? oh that's charlie. you ever put pepper spray on your burrito? i like it spicy but not like uggggh spicy. he always like this? you have no idea. at&t. the nation's most reliable 4g lte network.

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so we'll take a look at some stocks to watch this morning. general motors is rising after reporting 97 cents a share, 2 cents above estimates. results were driven by strong demand in north america and china. and caterpillar well above estimates of $1.36. also raised the outlook profit for the year. and shares of under armour are under pressure. even though they beat estimates on both revenue and earnings. and it raised its forecast for the year. apparel sales did fall short of analysts forecasts. although sales of footwear and accessories are -- what the hell is an under armour footwear? >> they're shoes. >> i have a pair of under armour sneakers.

>> i did the tough mudder. they are the sponsor. they make a special shoe joous for that. >> i thought under armour was for under -- >> they've been expanding to all kind of things. now it's everything. >> it's like nike. >> you want the compression to make your feet look smaller or something? you have feet -- they are disgusting. >> thank you. >> you're welcome. >> performance wear. >> it's sportswear. now they have gisele as a spokeswoman. they're like nike. >> so they have -- okay. all right. i think it's a stretch to think you can do things like feet. like under armour things with shoes. up next, apple pay hits a snag but good news is on the way. we'll get the details after the break. plus cramer's take on what you need to watch when the ball rings on wall street. "squawk box" will be right back.

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will be reversing duplicate transactions. the spokesperson for bank of america said it affected about a thousand transactions. not a thousand users, but transactions. apple shares trading close to an all-time high. let's get down get down to stock exchange where jim cramer joins us now. take your pick. a lot of dow components. a lot of other things. what caught your attention? >> i listened to your interviews. i thought the southwest, especially the ebola inquiry you made showed a lot of confidence. it was a good quarter. caterpillar revenues weren't up big. they are making so much money per piece of equipment. i think they are starting to get rid of the drag that was mining. i understand why the stock is up. this was a key name for the shorts. they needed to name to come down. your interviews showed me if you're still short it, if it gets back down a couple of bucks, you can cover it. there is not enough there to

bring the stock down. >> there are times when buybacks make sense. after the ibm news, this thing said a buy back is some sleight of hand at this point. if you're using cash. look at icahn. his rationale for apple. >> could they build more plants even though they don't need them, share the profits more or return capital? returning capital has been a terrific theme this quarter. caterpillar is a gdp play. they can't help it. if they think 2015 is going to be better. they think ultimately the second half of 2015 will be good, why not buy back stock. who bought back stock the most aggressively? yahoo. some make sense because there is so much cans.

some of them don't because there's not enough cash. ibm's operating cash flow was not good. cat's was great. >> we agree. if you are buying a stock to support it, that doesn't make sense. if you're buying to maintain earnings per share growth, that is important. genuine parts, 2% buyback which accelerates the growth, if you're buying the because it's below what you think is intrinsic value, that's terrific. >> mario, what am i going to say? that's the best stated thing i heard about buybacks. you laid it out. >> you had it right. what are they going to do? catch it by navistar with three months of earnings own the whole company. >> right. you're thinking my stock is down because it's a member of the s&p. i'm not seeing the weakness. i'll take advantage of the fact s&p knocked my stock down. in some cases that makes sense. booing was more difficult. we expected the dreamliner to

start making money. most companies are saying you think our stock and our company is doing nothing. our stock does not reflect the fact our company is doing better than you think. let's buy back stock. genuine parts. inexpensive stock. why shouldn't they buyback stock? >> not only that, some companies, i happen to like interpublic and he is doing a great job. he talks about a stock buyback but number of shares outstanding doesn't change. >> you look at the number of shares at the end of the quarter and they are knocked down and brought back stock. that says we brought back what we issued. i want actual shrinkage. after this, you know what? they are doing better than we think. i like that. i like confidence, by the way. not a bad thing to have. >> who is playing tonight? >> this is the first thursday night game worth watching.

chargers/broncos. >> does cbs know how to promote a game at all? why don't i know who is playing tonight? do they have no idea how to make an event of something thursday night? >> it is a very disjointed notion between doing way thought they do, make it to be the hallmark like we do sunday night, and throwing it at you. >> i don't know who is playing tonight. that is a sad commentary. moonves has to get off the whole want to be an ambassador idea. what's going on? >> nothing. bulls and knicks. that's the seen. >> the world series has been very exciting. i like the world series. these are two really class teams going at it. >> and you like the royals. >> i love the royals. this is their year. >> see you in a couple of

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time for rapid fire responses from our guest host mario gabelli. we want to know the following. walking dead versus homeland. that's a little amc versus showtime/cbs question. >> i like them both. i happen to like "walking dead" but i like "homeland" more. >> which stock do you like more? >> i would say that cbs at the moment has been beat up so much that they can have a bounce here. >> iphone/galaxy? >> neither one. >> favorite guilty pleasure. >> easy big question. >> apple pay or paypal. >> american express?

>> hold on. apple stock versus ebay stock before the spin-off? >> you've got a lot of qualifiers there. i happen to own more of ebay than apple. apple is a very interesting company with 6 billion shares at $100, that's $600. i get nose bleed. >> coke or pepsi? >> i like them both. i'm betting on dr. pepper because it's $15 billion. they had good numbers, good cash flow. buying back stock, 200 million shares of a $65 stock. >> is bundling dead? >> no. but it will change. why should i pay for espn at $5 and somebody else at $2 when i don't watch sports. as a result of that, something will be priced out. >> google or yahoo? >> at the moment, selling off my yahoo in light of what the taxes they have to pay. i'm going to be out of them.

>> marissa did not convince you? >> no. they have to do a better job deferring taxes. >> she said she is going to figure out how to do it. >> i hope so. within that context, i hope durbin is around and watches the inversions. >> bayer or meyer? >> meyer in the street should be sold. >> mario gabelli, thank you. >> thank you. >> thank you for joining us. >> we're done. time for "squawk on the street." good-bye. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer at the new york stock exchange. faber is on assignment. probably the busiest day for earnings. caterpillar, 3 m airlines, all leading the charge. cat is nudging the market higher. ten-year yields up 224. german manufacturing, a pleasant