federal reserve chairman janet yellen continuing a second day on capitol hill. she's testifying before the house financial services committee. we will bring you the latest as that testimony continues. it has moved to markets. carl, yesterday markets in the green, fairly narrow range for the markets today as the q&a gets under way. >> first up this morning, less than 24 hours from a vote that could decide the future of the internet. the fcc is expected to vote on tom wheeler's proposal which would reclassify broadband internet service as a public all utility. supporters say it's the best way to make sure providers can't interfere with people's access. hillary clinton talking to kara swisher yesterday. take a listen. >> i would vote for net neutrality because as i understand it, it's title two with a lot of changes in it to avoid the worst of the utility regulation, so it's a foot in the door, it's a value statement. >> jon steinberg, did she make

news yesterday? >> not really. i would vote for it if it is as i understand it because nobody understantes what it is. the hill reported collisioner clyburn on the fcc wants to let the bill go through as it is but remove regulation around interconnection, the big feud comcast and netflix had months back. that would be a significant change and probably would allow for a certain amount of free trade and free commerce some are concerned would be limited by net neutrality. >> i don't know what this does. all kinds of stuff on the one hand removing this interconnection stuff might allow comcast to keep doing what it was doing and netflix oh, wait a second on the other hand by removings this that provides more ammunition for the netflixs of the world or really for the fcc to back up netflix's position and say wait a minute this harms consumers when you to this because nobody understands net neutrality and for me, this is just a huge red herring. the bottom line issue if you

don't have competition in local broadband chances are the prices are going to go down and your internet is not going to get faster. >> this is such a political issue where someone says i want the internet to be free, i want you to get whatever you want. that's going to resonate with every consumer, every voter the reality is it isn't great for business. look at the history of this stuff. 1982 as part of the consent decree to break up the bells, not allowed to go into long distance. 1996 that's the wrong move. they need to go into long distance. microsoft almost destroyed by their anti-trust case. now google is being attacked because they're too powerful. ultimately technology plays a role in moving these things along and the government just mucks it up for no reason. >> take off all the seat belts and let corporate america run wild. >> this is different. this is going into these companies that are investing enormous amounts of capital and building out broadband networks and they can't make money off them. let them compete. >> cnbc's parent company comcast

took out a full page ad to that saying vote against it to this effect the big guys built this infrastructure and we like to keep building it. do you think that argue holds? >> i have a nuanced view. my view is that if they are left completely with no competition to do whatever they like, they could start choking off all small sites. example that the ceo gives, sellers wouldn't get on the internet. that's possible if all the broadband is reserves for netflix and the people that pay a lot of money. the other hand we're not going to have faster speeds if they can't make more money off the enormous capital plans. our broadband ranks low in the world and it's not going to get faster with more government heavy-handed regulation. >> somebody writes in at&t was the best phone company in the world, yet we're keeping the post office. it does say something about government priorities. it's true. >> i think the worry is just one last thing on this, it's like when microsoft seemed to have a lock on the operating system market. nobody dreamed that apple's ios would actually become -- and android for that matter -- would

become more dominant. what if we put in place regulations that discourageds over from creating operating systems because microsoft is one, and we don't really need competition. >> twitter's ceo dick costolo speaking to the magazine and talks about his comments that the company sucks quote/unquote dealing with abuse but he had an interesting pitch to get new twitter users. he says, quote, i meet people who say i don't tweet. i think there's still a misconception that the reason they'd sign up is to tweet. when i meet them i tell them you don't have to and that is probably a barrier to some new users. >> here's the problem i see with this dicks costolo saying that. in the past, the stas testics show that if you don't tweet on twitter, you don't come back. you don't engage. the service just really isn't that interesting to you. it's one thing to say you don't have to tweet but the experience thus far has been if you're not engaged and creating content you don't come back. i'm not sure twitter has fixed

that to make it accessible to people who want to view it as a news reader. the 140 characters and -- >> don't you want to convince people it's not as much work as it seems to be from the outside. >> it's one thing to say it, another thing to reengine near the product to people who don't understand the rts and hash tags and twitter language that has made it difficult to understand. i think they need to do work on the product so that it's a good experience. >> i agree with jon on everything today. >> really unfortunate. >> basically a second sentence costolo needed to say. you don't need to tweet because we have twitter light or we have twitter home page where you go to get all of the world's news or we have the new version of the app or bought flip board and you get all the tweets without having to dos this thing only geeks want to do. there's a part missing because right now you can't actually do what dick is suggesting. >> it seems the point he's trying to make, there's already enough content on twitter for you to consume. you can use it as a news feed you don't need to create your own content. >> no normal person can consume that news feed.

>> how do you define monthly active users when you say the word active does that have to be someone that not only takes content but gives content. >> it doesn't. people plugged into third party apps like espn or ios system they can count as an active use fer they engage or see tweets. you don't have to tweet to be an active twtser. >> to hp shares down big after the revenue line missed estimates last night. company gave lower than expected guidance thanks to significant negative impact from the stronger dollar. meg whitman was with us this morning and here's what she had to say. >> there's some real bright spots in the business. the pc business continues to do well. perhaps the biggest turnaround in the last couple of years, last couple quarters is our industry standard server business which grew 9% in constant currency. we had a good security business, graphics business, so some real bright spots and, of course, the key to growth in the future is the turnaround of enterprise services, which still declined

due to key account runoff and weakness in amia but we expect a better second half in the growth rate of enterprise services. >> sort of a flat tape today, hard to see if there's much broader impact to the ciscos and microsofts of the world. nobody is doing great on this news. >> i don't think that the others should be dragged into this hp result. this was not a good quarter for hp. two areas that you would expect to see growth, networking and software, didn't grow. those are huge enterprise businesses where hp does not have a lot of share. you expect them to gain share in the environment like this. seeing growth in consumer pcs and industry standard servers nobody thinks the future is there, there's a huge amount of running room or margin to be gained there. that's troublesome. when you see them having the currency excuses, the best companies that performed this earning season didn't make the currency excuses. apple and cisco both come to mind, both in the consumer side and the enterprise side. i think when you see these companies, this company split up into hp inc and hp enterprises

it's an open question, which one has the opportunity even to be the growth company and that's become less clear from this quarter. >> this currency thing is amazing. personally i'm seeing it. when i began in the summer one u.s. dollar got me 0.58 british pound sterlings now i'm getting 0.65 british pound sterilings. selling advertising in the u.s. and shipping it back to hq to be converted into pounds. look at companies where they have the core business in europe or in the uk or something like that and have large american subsidiaries the reverse is working quite well. i'm thrilled about the strong dollar. i'm the only person. >> lot of people look at hp and say oh, i'm so sorry you're a big global conglomerate. you asked for that and now paying the piper. >> it depends on how you account for it. the reality we've locked in terms of doing our budgeting and targets we've locked in exchange rates. i am going to everybody saying, now i should get to use 0.65 instead of 0.6. everyone is saying jon, you're stuck with 0.6. >> the new weather it's good

it's bad when it's bad it's good. >> yeah. >> jon steinberg daily mail north america. as we said at the top of the hour fed chair janet yellen continueses to testify on capitol hill. steve liesman at hq with highlights. >> hey, carl. she was -- fed chair was just asked, let me find my remote and turn off the sound, asked about monetary policy and the extent it did help the job market. she said it did make a significant contribution to the it turnaround in jobs. no real forecast as to what will happen with rates and she's not really being grilled on this issue as i said in the last hour, the big issues right now are dodd/frank and whether or not the fed thinks there needs to be reforms to the rules, something the congress is definitely interested in and the issue of whether the fed ought to follow a rule in the making of monetary policy, something that yellen yesterday and again today, kayla, pretty much vehemently opposed. >> steve, thanks so much. we'll bring you back as headlines continue to develop from that testimony on capitol

hill. meanwhile we want to check in on the markets. fairly range bound at this hour. the dow is negative, the nasdaq had been, its 11th straight day of gains but turned negative moments ago. s&p down by 3 points. fairly close to the flat line at this hour after some fairly weak data out of the housing sector as well. shares of first solar rallying after earnings topped estimates, however revenue and current quarter outlook coming in below analyst expectations. despite that, that stock up nearly 5%. dollar tree also in the green after earnings and revenue beat estimates. same-store sales jumping 5.6% in the current quarter. that stock up, carl, 3%. >> all right. when we come back shares of lending club down sharply after the company's first earnings since going public. the ceo is with us in a first on cnbc interview. look out apple watch. pebble's new smart watch smashing records on kick starter hitting its fund-raising goal in 17 minutes. the ceo will join us later on. and the latest episode of

"modern family" unique filmed using apple devices. how exactly does that work? one of the top producers will talk to us later this hour. "squawk alley" is back in a minute. in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. for some, every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars. whto have an unlimited mileage warranty on a certified pre-owned mercedes-benz?

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alley." lumber liquid daters is down. the company revealed on fourth quarter earnings conference call it will be the subject of a negative story on an upcoming episode of cbs's news program "60 minutes" and says immigration and custom enforcement or i.c.e. officials executed warrants at the company's headquarters this happened a couple years ago. now the department of justice may seek, again, may seek, criminal charges against the company under the so-called lacy act. an act that really prohibits the sale and trade of endangered species and wildlife and plants. fourth-quarter results missed earnings and sales estimates so interesting news coming out at least here, kayla, about lumber liquid daters a fifth of its market value being shaved. back to you. >> thanks so much, dominic chu at headquarters. watching shares of lending club falling to the tune of about 16% this morning after the company posted its first earnings report as a public company. joining nous a first on cnbc

interview is ceo renaud laplanche. good to see you. >> good morning. >> so revenue was a slight beat, earnings x items was a beat, before we get to the guidance for next year, walk us through your first quarter as a public company and your takeaways? >> from our standpoint it was a great quarter. we grew faster than we had initially planned. we did triple digit growth rate so we grew revenue 8% from last year and we continue to roll out new products, new features and very good experience. gives us confidence to set another very high target with fast growth coming into 2015 and what we said yesterday is that we were planning to enable about $7.6 billion in loan origination this year which would be as much

as the eight years combined. eight last years combined. >> $7.6 billion is, obviously, a huge number for loans for a company like yours to underwrite, but you guided the market lower, which is what seemed to spook them yesterday. you called 2015 an investment year. how much are you going to be spending? >> yes. so i think the first time we come out with our own guidance, readjustment between our internal plan and the investors' expectations. our guidance reflects our plan and we believe now that the convergence between what we're planning to do and what investors expect is a good thing. in terms of investments, we're really foe s cussed delivering fast growth over the next several years. we have the opportunity to be transformative for the banking system and deliver a great product, better cost efficiency, better transparency and more

consumer friendly terms than has been the case before. and that requires our continued ability to invest in new product development and engineering. we've hired over 100 people just in the last quarter. and so we will continue to capitalize on our ability to attract top tenants and deliver great product. >> growth can come at a cost, renaud, but you say you're not focused on profit margins in the near term. how long do you see the company being in that mindset? >> i think we guided to a margin of about 10% in 2015. roughly flat from 2014. and we said that we believe the long-term ebitda margin at scale is in the 40s so i think what you will see is us going from a 10% to about 30% margin over the

course of several years. >> renaud, this is jon fortt. you're saying that you're going to spend, it sounds like, a lot of this money on people, on engineering. can you be a little more specific? do you see mobile developers as being key here? are you investing in big data, in date a base developers? what's the bulk of that going to go towards? >> two main areas of investment. one is of new products and it does include new delivery platforms like mobile, it does include the enablement of new partnerships like the one we announced with google and alibaba and a number of community banks over the last month. it also includes a lot of automation, as we want to continue to preserve our low-cost advantage against the other traditional carriers and continue to use technology to automate tasks that would be

manual in the more traditional environment, which both lowers cost in the long run, but also helps us deliver a better experience to our customers by putting less of the burden on the customer, to go for the loan application process and loan servicing process and continue to automate these tasks and deliver a good experience. >> renaud, how concerned are you about competition, because lending club is the largest in the space, you're the first mover, the first to go public back in december, but we saw your competitor on deck, also go public and raise a bunch of capital for itself and now we're expecting social finance or so-fi to go public this year. do you worry if the companies raise enough money they could put up a bigger fight against lending club? >> we don't think so. i mean they -- you see several marketplaces emerge in different niche, more focused on student

loans, more focused on different type of small business loan market than we're focused on. we're primarily in consumer lending and with the addition of small business but in a different segment. but i think more broadly, we're 6,000 banks in the country so certainly room for three or four different market bases and what we've seen so far is a lot of platform effect and market-based dynamics that tend to favor the larger marketplace with better access to investors, access to the type of investors that demand a lower return on the investments which is enabling us to lower the interest rate on the consumer side and deliver more value and also ability as a larger player to ink more partnerships with companies that prefer to deal with larger marketplace, so we believe our competitive position as actually

improved over the last several quarters. >> finally, renaud, we've been talking about interest rates. janet yellen testifying on capitol hill for the second day. an expectation that the fed funds rate will go up later this year. what will that do for your business? so many loans are priced off of -- priced off of the spreads and i'm wondering if you think that will affect demand and your revenues? >> we don't believe we are rate sensitive at all. we're compressing the spread between the risk free interest rates, the investor side, and the lending rate on the borrow error side and we are doing so by operating at a lower cost than the traditional players. and so when the interest rates start moving up, the costs on credit cards or credit card interest rates, prime plus, will adjust automatically. we will also increase our interest rates on the borrow error side and provide higher

return to investors that all these rates are expected to move pretty much in tandem. >> renaud, as you embark on a growth year, congrats on your first quarter as a public company. a bumpy road as you've found out the hard way but hopefully you'll come back and see us. >> thank you. i'll see you next quarter. >> renaud laplanche, the ceo of lending club. >> when we come back, we're getting some new numbers on just how many people are actually using apple pay. we'll bring those to you when "squawk alley" returns.

the numbers are in chase bank says there are more than 1 million apple pay customers and accounting. released data on early pay saying they were roughly nine years younger than average user but made 20% more. chase is one of the bank partnered with apple pay. interesting bar chart broke down the transactions the majority happened at the top five apple pay merchants.

we can't really tell how much penetration there is across the board. >> i think this number kayla as you point out is significant. 1 million and it's that apple demographic, younger and tend to have more money to spend on things. that high margin demographic. wonder if this starts acceler e accelerating adoption of apple pay. if those people are spend morgue at places that offer apple i want to be up with of those. >> the top merchant the apple store. >> right. >> waiting to ssee from the mert side how much they're rolling it out. >> whole foods had interesting stats about the percentage of their customers using it. it was high and impressive. >> lots of kale being purchased with apple pay. >> europe about to close bring in simon hobbs at post nine. >> one week from tomorrow the european central bank will pull the trigger on buying 60 billion euros of sovereign debt, record

lows for italy, spain, and germany selling five-year paper. we've taken a pause on the rally but what a rally it's been. i should mentioned warren buffet gave an interview with one of the german newspapers saying he's looking to buy more german companies. great market, lots of people, purchasing power and the germans are productive. this is the rally we've had. record highs, of course, this week for the german dax, for the london market, and here you see the greek stock market, actually doing well. if you have parts of steel not only would you have made 11% on the athens stock market you would have made more than 10% on the bonds. meantime if i take you to athens the debate now that eurozone has accepted, of course, the proposals on the table the big debate how are they going to pay some of the bills coming up. there's no funding from the rest of europe until they've done a better deal in april, and according to rbs they'll have 11 billion euro shortfall near term. will the imf give more money,

allowed to auction t bills, questions there. the greek banks are in negative territory. that's partly because these guys are actually being kicked out of europe's answer to the s&p 500. the stock 600. but also because citi is running with a line they don't see the ecb will normalize relationship relations with these banks at that meeting next thursday. recall they have a decision not to accept greek collateral on their dealings with the bank so that obviously is a concern for them moving forward. again these guys have rallied strongly as you'll be aware over the last few sessions. finally let me see where we are, let me take you to brussels and show you the european parliament. mario draghi in session for the european union parliament. the head of the ecb is about to give testimony and answer questions to the nep. the members of the european parliament. you may get the market moving, may get information not only on the greek banks but where we are on the qe. just to repeat the big

announcement in cypress on thursday 60 billion euros a month. back to you. >> thanks, simon. the apple watch has competition maybe, apple's new smart watch smashing records on kick starter, raising over $8.5 million and hitting fund-raising goal in only 1 minutes. pebble's ceo will join us in a first on cnbc interview next on "squawk alley." but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

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hi, everybody. i'm sue herera. here's your news update at this hour. fed chair janet yellen as you've been seeing on cnbc back on capitol hill testifying before the house financial services committee this time. she told legislatures that she is not asking congress to alter the dodd/frank law because it provides considerable flexibility to the fed and other regulators. house speaker john boehner said house republican leaders are waiting for the senate to act on legislation to fund homeland supreme court. he said, quot -- security. he said it's time for the senate to do their job. funding will run out if an agreement is not reached by midnight prooi. a texas jury ordered apple to pay a $533 million fine after finding the company's itunes software inprijed on three patents of smart flash llc. those are related to data storage and payment management and apple says it will appeal.

research firm jd power says new technology features will be desirable to buyers when they make their next vehicle purchase. according it tos study if a vehicle doesn't have the latest technology 15% said they wouldn't buy it. that's up from 4% last year. and it's your cnbc news update for this hour. back to "squawk alley." thanks, sue. smart watch maker pebble has released its latest smart watch model the pebble time. see if they get morris date it to endorse that on crowd funding site kickstarter the fastest funded ever on the platform, currently has over $8.5 million in backing already. eric migicovsky is the co-founder and ceo of pebble and eric, lots of controversy in a way around this. you're already established,

still using kick starter, really impressive the amount of interest this has brought in already, but actually i want to ask you about smart watches in general right now. do you think you're actually up against the apples and samsungs of the world, gives the feature set you've focused on or are you something different altogether? >> well, we've been working on smart watches about seven years now. i think we have a deep understanding of what people are interested in doing on their wrist. we're the most popular smart watch platform in the world right now and what we showed with pebble time is that the direction we're taking, making a watch that's -- that works really well as a watch but also very smart is the one that consumers actually want. >> so, would you say battery life is really important then? you're advertising about sevens days you consider to be average use. questions about how long apple's watch will last, maybe as few as 24 hours or less under what would be regular use.

do you think that's a dealbreaker if a watch lasts for a day or less it won't be mass market? >> i would say that the consumers are speaking, you know, speaking with their dollars right now. but a recent survey from the npd group said 32% of smart watch buyers say battery life is the most important thing they care about. >> eric, no doubt you have a fan base already putting their money where their mouth is on kick starter. $8.5 million or as we're looking at it right now, just above $9 million, but when you think about the gorilla set to be in the ibdstry, apple, we're expecting later this year, $178 billion in cash, is that daunting? how do you compete against a company like that? or do you try to? >> i think you do what we're doing now which is going to the community that supported us from the beginning, we've shown our hand, what we're working on and the next step is to see as you've seen over the last 24

hours the community rise up and support us. this world can't exist with two platforms controlling everything in consumer electronics. it needs an interested third party that cares about what we're working on. >> a lot of discussion, eric, about going back to kick starter, for a company as established as yours, you said you wanted it to be a bit of a spectacle, a little bit of an event and the headlines have driven that. how many times can you go back to this well? >> i think this is less about the match-up. this is about going back to the community that started it all. these people that backed us, 69,000 people, saw smart watches as the future before anyone else in the world knew this. it's clear smart watches are a thing. apple coming into the space. google has made their play. and what people are doing today is they're doubling down on pebble to say these guys, us, they think we know what we're doing and we know what we're doing and we know where it's going. >> but can kick starter be a sustainable source of capital

for you? for how long? >> so i mean we've been a profitable company since we launched on kick starter three years ago. i can't say this enough, it's not just about the money. for us, it's about rallying the community and seeing who's interested in what we're working on. i think kick starter is an amazing platform. we haven't launched all of our products on it. last year we launched the pebble steel on our website. this is much more about how we communicate with the base rather than just how we're raising money. >> eric, you said that there needs to be more platforms and that's interesting to me. i'm wondering the exit tept to which you -- extent to which you see pebble as a platform? where does it go from here? do you end up with other devices linking into this, a developer conference that you start, are you becoming an operating system provider on the scale of an android, for example? >> yes. i would say 100%. we have a thriving developer community that has been built up

around pebble. there's 26,000 developers who are building apps on the pebble platform. we had a conference this year and what we're saying with pebble time is it's not just about software. we're expanding to hardware accessory makers. there's a new port on the back of pebble that lets sensor venders and other accessory makers actually build products that work with pebble time itself. >> what's ahead for the company, eric? obviously pebble time is what we're talking ability today, but walk us down the horizon one five ten years from now, what does pebble look like? >> i think we're intently focused on building devices that people can use every single day. that's -- for us, the goal is to make a product that's inns dispensable that you can't live without. we have our work cut out for us and over the next five to ten years you will see pebble playing a more key and vital role in your everyday life. >> all right. eric migicovsky, with quite the kickstarter milestone, co-founder and ceo of pebble, thanks for joining us.

>> thanks very much. when we come back, "modern family" like you've never seen it before. tonight's episode shot completely on apple devices. how did they actually put all this together? producer steve levy tan will join us with answers. yoyour friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions, backed by a trusted network of attorneys. so visit us today for legal help you can count on.

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levitan. coming up on the half february has been on fire. the dow on pace for its biggest monthly point gain ever.

are stocks getting too stretched? the traders weigh in. plus, what's going on with alibaba? after all the ipo fan fare the stock down big time this year. star analyst bob peck on whether the street got it wrong. and is retail guru dana telsey cooling off on the sector? her call suggests she might be. we'll see you in about 15. >> all right. thanks. we'll be there. motorola today hand delivering mystery boxes this morning. i got one. inside the $150 motoe with double the storage, quad core processor the lte version slightly higher price tag than the last version but a screen a little bigger than the iphone 5, 150 bucks for an lte smartphone running lollipop android. this might be a game changer for the low-end of the market. we talk about xiaomi and some of the things happening in emerging markets. this i mean how do you make money in android when motorola

now owned by lenovo, a chinese company, is able to put out a phone like this, five megapixel camera, quad core processor, storage, the goods, for 150 bucks. >> the answer is you don't make much money and the margins are so thin in this industry. what say you to that? >> yeah. i mean that's sort of what it appears to have come down to at this point, but apple has still managed to make not just as much money as it used to, but more money. so i think the smartphone market you have to question how does it end up looking? does the high-end belong to apple alone? is someone else able to kind of live in that tier and create an ecosystem that's not asailable. we haven't seen it yet. samsung is suffering and this isn't going to make it easier. >> borderline disposable, buy them and throw them away and that will be it. >> 150 buck, come on, what do you buy for 150 bucks. >> diapers.

>> yes. a coat. it's fashion at this point. >> yeah. thanks for bringing that to us. janet yellen's testimony continuing on capitol hill. bring back steve liesman for an update. steve? >> thanks, kayla. in the past hour there was a heated exchange with fed chair janet yellen and republican scott garrett who by the way is the hometown congressman for cnbc here in anglewood cliffs over the issue of the fed's independence and whether or not there's a bias at the fed with who it meets with and who the fed chair meets with. listen to the sound here. >> i'm sorry. we meet with a wide range of groups. i think it is a complete mischaracterization of our meeting schedules and my meetings are entirely public, my schedule is completely in the public domain. >> that's where i'm taking this from. this was just handed to me. it's good that -- >> i'm sorry, i think if you have -- >> this much is in public

domain. we're trying to make a little more in the public domain with -- >> these are private one on one meetings and i don't think it's appropriate. if i had breakfast with you, i would not make a transcript of what we discussed over breakfast. >> when discussing -- >> more on the issue of monetary policy the fed chair was asked about the strength of the dollar and lower import prices and she talked about all of them and the effect on inflation and whether or not the fed would raise rates. >> we do think that these factors are transitory and if we gain confidence that that's the case on the basis of incoming data and continue to see the labor market improve, we would consider still raising rates. >> so that really is the test that we just heard the fed chair lay out, the issue of making sure that downdraft we've gotten in inflation and prices is transitory en route to raising

rates. >> thanks steve liesman at headquarters monitoring day two of janet yellen on capitol hill. when we come back apple already has the largest market cap and now it's taking over one of television's top shows. take a listen. >> dad, did you know it was mitchell's birthday today. >> of course. i already called him because i'm a consider eight person who cares about his it family. >> i reminded him and dialed the phone. >> and remember you can recline. it's still america up there. >> thanks, dad. in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. for some, every dollar is earned with sweat, sacrifice, courage.

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hey, dad, take the phone away from your ear. >> why would i do this? i can't hear you. >> put it in front of your face. >> oh. how did you get my phone? does this mean when we talked the other day you knew i was in the can? >> i do now. >> with you howe was the presentation? >> went well. the client wants us to swap out the hand set. >> darn it. >> no. joe bit me. he's teething. i don't think it's a coincidence that andy took the weekend off. like a beaver. i'm afraid to wear short pants. >> that was a clip from tonight's episode of abc's "modern family." what makes it unique is that it was shot almost entirely on mobile devices using iphones and ipads instead of hd cameras and the episode plays out on one character's mac book through social media, face time and other tech multitasking. joining us is the cocreator and

executive producer steve levitan. good to have you with us. >> thanks. great to be here. >> you've said you're a governing councilet etgadget geek. what was the genesis for writing this episode? >> the original notion occurred to me when i was face timing with my daughter in college and i was on my computer and there were many different windows open and i was -- there were e-mails and i was working on a script and websites and all sorts of things and i could see her, but i could also see me and my wife was in the box with me and i realized you had quite an unbelievable snapshot of my life, you could tell so much about me looking at that screen. i thought it would be an interesting way to tell a story. i then brought it to the writers' room and we worked out the story line and it's a pretty interesting episode.

>> steve, i think there was a story line a few years back that centered on someone in line to buy an ipad and makes you wonder, are you just a lover of apple products? did you consider using say samsung phones and tablets for the episode or apple all the way? >> well, i am a lover of apple products, but i'm not, you know, schilling for them. it's what i use in my life. therefore it all seems organic to me. there's things built into the apple ecosystem, you know, find my phone and various other little details that just really worked for us and it's what we know. it's what we work on. so it just seemed like the natural product line to use. >> we talk about these tools in our daily lives all the time, at least on our air. obviously you see it yourself. i wonder if you wonder why it took so long for someone to write an episode this way? >> well, i think we're just

watching families change the way that they communicate. i think it's fascinating the way that we're in touch with our kids now so much more than we useden to. i mean i remember when i went off to college we would call our parents on sunday nights because that's when the long distance rates were low and you think about it now and we're texting our kids every two minutes and face timing with them and it's changed the way the family dynamic and so for us, you know, we're a show called "modern family" so we're always interested in the changes in families and what's new and so it just seemed like a natural thing for us. but it's not -- it wasn't an easy episode to make, maybe that's why it's been daunting for some. we're really happy with it. >> steve that's an interesting point. i've heard that you had some challenges like figuring out could the actors hold the phones themselves or did someone else have to hold them for them?

putting the shots together was a challenge. technologically how far are we from the point where the shot that you get from a phone, an iphone, is almost as good as the shot that you'd get from the cameras you normally use? >> i think we're there. i mean, you know, again not to sound like i'm schilling for apple, but i think this goes with most high-end smartphones these days, it's very, very close. the difference really comes in difficult lighting conditions where our cameras, which are, you know, extremely expensive, are a little more -- have more flexibility to them. but, you know, we've actually snuck in some shots taken with iphones before on our show and just never mentioned it and no one would know. so the image quality that you're getting off of the standard smartphone today is pretty miraculous. >> yeah. i would have loved to have been the dp on the set when you shot this one. bob igor who runs disney and owns abc is on the apple board.

any response from tim cook on this particular episode? >> not directly. i mean we've -- we've worked with apple before, just, you know, because we use a lot of technology in our show, but, you know, i just contactd the people that i know and said i have this idea for an episode, we weren't asking for any product placement money or anything like that and they have been very cooperative and, of course, very happy about all this. i think it's going to reflect very well on apple and also kind of reflect strangely on us all as we see how addicted we all ares to these devices. >> yes. also on you as a producer for all your success, continuing to push the envelope. we certainly applaud you for that. >> thank you. >> steve, thanks again. >> my pleasure. >> steve levitan of "modern family." >> with markets back in positive territory let's send it over to dominic chu back at hq for a market flash. >> kayla, maybe face time will be easier on a flight if this

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we talked about hillary clinton's comments on net neutrality at the top of the hour. during her interview with kara swisher nice exchange about wearable tech. take a listen. >> apple watch or fit bit? >> well, you can tell i'm not doing fit bit. and i haven't gotten into the apple watch yet. i'm not in a wearable frame of mind yet. >> okay. >> you know, i mean, three people have given me a fit bit or a jawbone or, you know, and i look at it and i think, do i really want something telling me i should do what i know i should

do? >> that is a great moment. she said she was two steps shy of a hoarder because she doesn't throw away devices. that's why she has an ipad and ipad mini and iphone and blackberry. great questioning by kara. >> i guess she's not part of michele obama's let's move campaign. >> airline miles instead of steps maybe. >> very nice. clearly not doing a lot for apple stock today which is -- which was down by more than a dollar. interesting some of the calls lately, colin gillis on this morning not a fan of the stock, just from a fundamental point of view, mill lon vich talking about the capital distribution a source of disappointment down the road. >> ibm down by 11 points. the dow has been able to inch into positive territory sympathy of hp down 10%. >> yeah. and you mentioned hp, that's making it tough for a number of names. cisco down less than 1%, though, these hp issues might be more hp

issues. >> what a month for tech for the month of february, 37 nasdaq compone 100 components have double-digit gains. incredible month so far. that does it for "squawk alley." back to headquarters, wapner and the half. ♪ might as well jump >> welcome to the halftime show. meet our starting lineup for today. josh brown the ceo of ritholtz wealth management. john and pete najarian the co-founder of ohm, steve grasso is on the floor of the new york stock exchange today and steve liesman has all of the headlines from day two of janet yellen's testimony on capitol hill. our game plan, what's ailing alibaba? after the biggest and most hyped ipo in history, the stock down 19% this year. star analyst bob peck on whether wall street was simply too bullish. the story on