>> with flubber. kinder morgan upgraded outperform to neutral. stock trading higher. jetblue better than expected earnings and revenue. it is trading higher. >> that does it for us today. join us tomorrow. time for "squawk on the street." good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer and david faber. s&p company reporting from cat, alibaba, ford. futures holding up despite red arrows in europe today. fed's out of the way. ten-year below $2 and oil knocking on the door of $33. our road map begins with the busiest day of the quarter. facebook knocking the cover off the ball. stock is surging. >> another internet business did

beat expectations. alibaba reporting strong sales despite worries of growth in china. >> mixed picture for caterpillar. cut sales guidance but earnings better than expected as some cost cuts are paying off. first up, facebook surging on better than expected results, including profit above $1 billion the first time ever. revenue up 52%. mobile accounting for 80% of total ad sales. mark zuk bezuckerberg. >> 1.59 billion people use facebook each month and 1.04 billion every day. our growth near the 200 million people monthly and 148 million people daily this year. more than 1.44 billion people use facebook on mobile devices. >> total maus up 14%. almost 1.6 billion. if you didn't think he was a ninja, no evidence of macro

weakness x forex, is that possible? >> it's accelerated revenue growth. we need zuckerberg to take more time off. he missed the last month because he was on paternity leave. maybe the secret is he's got to step aside. this was the best quarter of the year. accelerated revenue growth. you don't have to accelerate it, put the number for what the dollar was. they are doing 52%. that was a step up from 44%. 100 million hours of video. talking about the customers that love it. your instant messenger, he's about to monetize that. after that, we said $19 billion purchase will pay off. the most exciting thing was the $2 billion he spent on oculus and how 250 million people will be using that in the gaming business. there is a moment on the call where someone says, you know what, you missed on mobile. he said -- this was -- tough

guy. he said, no, i told our product teams when they came in for reviews, really come in with mobile. if you try to show me desktop product, i am going kick you out. sometimes he says the crude leadership tactic works. >> that exchange got so much play last night we have a brief bit of sound. listen to this. >> we realized that mobile was growing faster than desktop and people were shifting their usage. it was the more important thing for people's consumer experience. that's when we made the shift, not in our business first, but in how we developed product. i told all our product team when they come in for reviews, really just come in with mobile. if you come in and try to show me a desktop product, i'm going to kick you out. you have to show me a mobile product. >> you've like this name since the high teens? >> yes.

i have liked it and made a big position for my action alerts plus charitable trust in the $20s. i don't want the fed to listen to this call. we didn't see anything q 4 that indicated broad-based macro weakness. this is the only company i can say actually said that. maybe this is what the fed was thinking about as facebook. otherwise they didn't seem to have any idea what they were doing. they talk about the incredible return you get on an ad, shop direct. the second largest uk company got 20 times the return. halo 5. get satya nadell on. the number of businesses advertising, you have 2.5 million companies. one of the things sheryl sand berg said was they better start catching up with users. the businesses haven't caught up with users. you are going to see a dramatic increase in the amount of money

spent on facebook. the staged rollout of these next products, instagram works so great. soon as they get it right, you are going to see messenger is going to be a dramatic uplift. that is going to be really big. messenger now is 800 million users, up 250 million users. then they got rid of the subscription fee. it's growing so fast, don't worry about it. we'll monetize it when it's darn ready. zuckerberg, sand berg, it's the best there is. and by the way, 20 times 2017 earnings. >> right. over $6 billion in free cash flow last year. that multiple with the growth they are seeing becomes somewhat reasonable. when you look at the larger media spend going on, you have to wonder where it's coming from. i think that's a key consideration for people who invest more broadly than just in facebook given the incredible

scale. the second quarter billings, big acceleration for dollars in ads right here in the u.s. where is it coming from? probably everybody. media has been strong the last week or two in part because there's been some people who have been sanguine on the overall market for advertising. >> the return here -- >> it might be all facebook. >> i'm using the 20 times -- i'm saying they are going to pull through the 2018 number to 2017. i think they are dramatically understated. there is no way. there is no way they can do that little begin what they are talking about here with messenger and what they are talking about what oculus. this virtual. i'm understanding they are talking about the virtual mall in your head. that you won't go to the mall. you'll look at what you see at the mall. you'll walk into one store. >> they were clear that is not going to be material this year. that is a longer-term play. >> i still think it's 2018.

when i hear halo 5 was introduced on just the regular facebook mobile, i have to wonder what -- the reason i said that, they said there is supply constraint from samsung already. i didn't know you could get one. >> what is amazing is the different platforms for growth they have and the way they have not monetized in any way in some of these areas, including instagram. it's just at the beginning. another thing we don't talk about that often which is worth mentioning is the constant competition for talent in silicon valley. when you have a rising stock price as opposed to many others dealing with a very different picture whether it be apple or others, it can impact your ability to attract the best and the brightest because so much of compensation is composed of an equity piece. that is something else to keep in mind. it becomes a virtuous cycle. >> that is a great point. those of us who have kids in

college age that go to these great schools like m.i.t. or cal tech, stanford, they can't, many at the top of their class, unless they are at the top in computer science, they are not going to get a job at facebook. in that one area, computer science. i have a friend whose kid is in computer engineering they don't want to hear that. top, top. where you get $250,000 a year when you start. this place is getting the best and the brightest, the way it used to be. goldman. remember the top would go to goldman? now they think goldman is a clothing company. goldman slacks. >> was he computer science? that was fiction. >> very good though. >> one piece of sound from last

night. sheryl sand berg talking about the migration to video ads. >> customer viewing on facebook, 500 million people are watching videos every day. in terms of our business, that creates a real opportunity for us. we want the ad formats to match the format of what consumers were doing. we have the ability for marketers to use that format. >> we know about the value on video is much more than anything else you could find. the 80% ad revenue mobile. i remember sitting here with you when that number was zero, right? not that long ago. >> look, the key phrase in this whole thing may be that they make a lot more money on video, on your hand-held than desktop. they are the only one. everybody else when you hear desktop migration to your cell phone, they shudder. these 2.5 million customers, many of them are local.

that is a facebook page you develop. i get the sense facebook is just -- not necessarily taking share as much as no one may have thought about advertising on the web in small businesses. >> so they are creating a new area for advertising that didn't previously exist. >> yeah. that's how you get that kind of accelerated revenue growth, 52%. this is just -- people who never thought of the internet saying maybe i put an ad on. i saw this and said bar san miguel, i want facebook right now. sheryl sand bergi want to send her a check for $1,000 and i'll get $2,000 back. >> their ability to target ads is one of the great values as they have. >> other than that line she threw in about works okay with tv, i would shudder if i were a media executive who listens to

facebook. i wouldn't put money in. >> teens and twenty somethings whose facebook feed is much of the world for them. >> this is a good day for alibaba. yahoo is getting ads. >> alibaba, we can get to -- >> it was a good segue. >> very well done. alibaba did beat expectations with quarterly numbers. profit more than doubling. revenue jumping 32% on strong holiday sales despite concerns about that continued slowdown in china. overall, the number 400 million users they are talking about now, which they are obviously pleased with. and we are talking 35%. that said people wonder what the slowdown in china will mean over the longer term for this

company. they were very much focused on the call, not necessarily on judge us on our gross merchandise value percentage increases but our revenue. they are trying to build up the relationship and the value they present to those who sell on the platform so they can take a bigger part of gmv so revenue growth will be higher than gmv growth. >> ebay showed a shocking decline in merchandise, in the value there. it looks like that the one to keep was paypal. not ebay. ebay is a real slowdown. i was thinking about alibaba in the context of what did apple say the last month. do we have anything granular? >> i don't. >> wouldn't that be something to get? the marketplace number is 35% growth. i thought that was exciting. >> 32% year over year revenue growth. 35% year over year in china

retail marketplace to give you a sense. >> we've got to stay focused on that. >> stock is up. people were using the stock as a default short overall. >> yes. >> i want to be short china or i want to make sure i'm hedging in some way against the real decline of the consumer there. that is something to keep in mind. shares short of alibaba. >> a lot of people were short under armour as a paired trade against nike. >> fewer today. >> there was a downgrade to sell. the guy is an analyst sole from morgan stanley. i happen to have it with me. january 10th, he told you dual threat. he and the man who downgraded that. i would have normally said suboptimal. i was with this fellow from the spanish broadcasting, what happens -- does the heat. i said what happens when someone shoots and misses badly?

spanish he said that was ill advised. this was an ill advised downgrade. >> by the way, 48 cents beats 46. apparel up 22. foot wear up 95. >> supposed to be so bad the foot wear. >> direct to consumer -- 36% total revenue up 25%. plank on the call talk about guiding full year 16 resch ewe above consensus. >> anyone who knows kevin plank knows anyone who put a sell on this, you've got to go into the witness protection program. he'll find you. he has a particular set of skills. he does. he is not unlike someone in the movie "taken." >> will he be played by liam nissan? >> he'll have to be. >> anyone who says good luck to kevin plank will be found. unless they give up and go to buy today, he well find you and indeed kill you.

>> more of today's earnings reports. caterpillar, celgene, being qualcomm. oil shot up more than $1. >> another rumor, 5% cut. >> we'll talk about that when "squawk on the street" continues.ys obvious. sometimes they just drop in. 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. whyour boss?ork for? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.

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caterpillar's up sharply this morning. fourth quarter earnings above wall street estimates overshadowing a q-4 revenue miss. >> 16 is going to be rough and challenging again, i think. i'm very happy with our performance in '15. >> of course, revenue guidance not so good for the year. they do not see commodities or the global economy recovering in '16. >> it's one of those stories like slum burger. schlumberger. he comes on "squawk" and mike jackson. >> rain or shine. >> which is always good. all he did was guide down to a number that may make the dividend that some people would say stretch. the one thing that is true is that he actually did the guidedown number. a lot of people this quarter guided down and then couldn't do

the guide down number. 3m guided down and blew away the number which is why the stock has been unstoppable. this is a day where oil's up. that stock closely correlates with oil. that is because there's a lot of rumors that russian energy minister says opec and other countries ready to meet on any format. every time that thing has come out, whoever said it, the saudis betray you. i had core labs on. they were talking we don't know what saudi will do. eventually oil will go up. there will be a lot more oil produced in america again. maybe down 200,000 barrels a day. so the saudis, i think, won't stop until they wreck the industry. the shale deal closed yesterday. you won't see that show up till 2017. there is a big short squeeze

going on. because people thought iran was going to come. in the iranian oil has not hit this. >> oil was up sharply because of some of these headlines. >> 6% move in crude. >> the short squeeze. oil has become volatile. people said i remember in '86 when oil went from $26 to $10 in three months. core labs came on "mad money" and said there's only a little bit more than a million barrels a day in excess. i think there's more than that. the inventories in the united states pretty much the highest ever. there was 10 million barrels in excess in '86. we don't have that now. if saudis blink, that is a real price. remember 40, 45 is where most of the u.s. companies need it. $40, $45 before their balance sheets are okay. a lot of private equity money on the sidelines. >> i don't know. that is a big story today. >> we'll get cramer's mad dash and count down to the opening

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welcome back. as does or as goes wti often does go the market. we see whether we follow through on the broader equity market given that big move in oil this morning on news of its february meeting of opec. the cartel perhaps maybe something will occur that is seen as positive. i don't know. the market certainly at this point is saying maybe there's a shot. >> up $10 in a week. that's a lot. the china decupling is interesting. china is going down for a bunch of data and suddenly we don't

care about china. how did that happen? >> it is time for mad dash. we've got six minutes to the opening bell. >> doubters are being refuted. let's talk paypal. i have tremendous faith in dan shulman, the ceo. i've got to tell you. david marcus doing well in facebook. they delivered a great quarter. a giant buyback 5%. you are seeing an acceleration in many different aspects of it. i'm wondering whether it's not going to be one day we look at mastercard and visa and paypal. this is the millennial play. one of our friends on air, i didn't get her permission ahead of time who went to our christmas party, holiday party said i would like to thenmo the money. that means i can send money to you. by the way, there's a lot of people who say they don't want to be in the payments business.

they did praise apple payments. this is the acceleration in terms of the amount of money that goes through it. then they've done $5.5 billion this year. venmo will be the way younger people exchange money. my kids use paypal and say it's much more concerns. they don't know american express. i was a proud member since 1980. doesn't mean a think. i've got to be a proud member of paypal in 2015. >> the company ebay into paypal and the marketplace business. ebay itself not a strong performer with the top line under pressure. this is the growth company though. it always was. >> would have been great to have the two together. if you could put the two together. sorry. that already ended. >> we have so many stocks this morning. we are right back.

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you're watching cnbc "squawk on the street." the opening bell about 1.15 on the biggest day of earnings for the s&p. what a series of moves we had on the dow alone. the last four sessions moved 200 points up or down every day for a net change of about 60 points. and nowhere fast. >> people have to get used to this. yesterday there was initial reaction with the fed. maybe they had gotten a little off the lock step. upon further review, it was literally one of these situations where someone threw a red flag, the refs said we reviewed this and we'll reverse the call. the march tightening is not in sync with what a lot of people were looking for. on very little volume. everything is very little volume. we'll should know that. futures totally in control. >> trading like a penny stock, some say. >> i don't disagree with that. >> and the algorithms are in

control. i believe that. >> it's facebook. if you like oil going down, you will like to buy s&p puts. >> here is a look at the opening bell down here at the big board. the new cover of "time" has the new barbie doll with what some say more curves. a different look for that huge franchise. >> people don't want to believe this. i met with them to tell people at the sales force literally at their incredible confab. mattel has been in touch with the customer. it turns out, you know what? they found what the customer really wants. they want to be more curvacious. >> at the nasdaq, usa network and comcast celebrating the mid season premiere of its drama "suits." a lot of biotech and drug

stocks, celgene, lilly. >> vmy, is that because you want me to call it bristol-meyers? bristol-meyers has an unbelievable cancer franchise. there's been a lot of downgrades. those people are ill advised. it is extraordinary. they keep minding more and more uses for it. this is a biotech story that is in the guise of a pharmaceutical company. do not give up on lilly. they did the inline. it's alzheimer's you want to hear on the conference call. bristol-meyers goes higher. >> the beating some of these stocks have taken likes of gilead, what is the multiple on that thing? >> i don't know. people were unhappy with the line for celgene. i think celgene's cheap.

i don't know about gilead. it's been more pharma than biotech. pharma. people like pharma. funny because you got one candidate bernie sanders who i think says she's companies are really just a tech consumer, hillary attacking left and donald trump out there saying medicare should argue and be a bedating and trying to get lower prices. that is by far the furthest left of the positions. i don't know if the democratic -- shoot, he's republican. >> yes, he is. >> that oil trade we talked about this morning, best performing dow component. exxon and chevron are not far behind. >> royal dutch is down 25%. the capital budgets are down. i think that remember, when you see these kinds of runs in oil, it has been often refuted, russia is pumping more than

anyone in the world right now. even more than the saudis. russia needs that capital. the saudi article saying they have about $1.50 cost. our average cost for much of these shales is $45. >> is that really their cost? >> yeah. >> i'm saying the saudis is that low? >> it's amazing. saudis are doing some fracking work. so let's not say saudis are going to blink. they are not going to blink until u.s. production is down dramatically. kinder morgan got an upgrade today. people are saying, you know what? rich kinder cut that subscription down to where they can grow the company again. talk about a growth company. atp, that's been a focus for

you. you are getting a double digit return there. the national limited partnerships are challenged. >> without a doubt. when it comes to ete and williams, very quiet. williams board came out a couple of weeks back and said we unanimously support the deal. that was very important. it sent a message to the ete camp that said you are not going to be able to divide us by coming back and trying to get us to take up some sort of a change in the terms. the contract there, very tight. very tight. you have seen both stocks react positive. narrow over the last few trading sessions. you come back to the basics of it. adding $6 billion in debt for the ete balance sheet for that $8 a share payment.

it was much smaller percentagewise in terms of the dollar value of the deal. >> that's mostly in natural gas pipe. natural gas yeas up dramatically year over year. coal is down dramatically. under a hillary clinton president, you will see more need for pipe. natural gas needs more pipe. oil does not need more pipe. you are going to see a bifurcation in who needs pipe. >> ete is a house of pain. >> we covered under armour in the last half hour. almost a 20% move. above 82 settling back a touch. that was blazing start out of the gate. >> some people are going to say gross margin wasn't as good in

the foot wear. this is a connected fitness story. the fellow who did the piece didn't have a line for what connected businesses. this is a health and wellness play growing 200%. i look forward to having kevin plank on next week. i just think kevin wants to talk about this quarter a little bit more detail. a connected fitness. connected fitness was supposed to be a thing for fitbit. i've been completely wrong. nike is not the play. nike more performance. don't rule out the nike. there is room for both. >> the move up in facebook is incredible really. 14% now. amongst fang, it is up for the year as owed to all the other three components. it's up almost 3% with that 14% move up on this session after

that monumental quarter. you can run out of adjectives trying to describe it in a positive matter. maybe you couldn't because your vocabulary it deep. >> i have to turn to my nephew who is my writer. we are looking for adjectives we are kind of out of them. 100 million hours of video per day. a lot of people by the way, the groups, in this call, zuckerberg is the guy from 30,000 feet saying user experience. it's going to be terrific. sandberg says advertisers have to catch up with users. they lay out numbers that you know it is rapidly becoming the cheapest if fang giving google a run for the money in terms of inexpensive. analysts are going to have to play ketchup. >> a lot of names, we are not

going to get to them all. how about a 10% move in hog? >> after the polaris disaster, i thought hog would be weaker. congratulations. i did not see that coming. hog's like coach. these companies everyone gave up on. coach had a good quarter. i got hog wrong. i extrapolated polaris. obviously snowmobile is driving that one. caterpillar stays in there. united rentals which is largely domestic, take a look at that stock. down $8. that is a little shocking. >> another name we haven't mentioned this morning is qualcomm which is down again almost 6%. after a quarter less than stellar. jana's well under water.

>> yeah. this has been one thing after another. big capital return plan. they decide not to split the businesses after a long and serious review done by the company. the fundamental business in terms of selling chips into things like mobile phones -- >> made a lot of enemies, qualcomm in china. china is a funny place to do business. >> it is but they patched things up. >> cell phones are saturated. i think apple, i've been coming out with a new theory. $31 billion in servicing. i preserve my pictures and one of my family members lost my pictures. i preserve it in a clouchltd i get a bill, i pay it. i get my music bill. i pay it. you just pay it. i don't know about you. >> price is immaterial. >> a billion devices, service is

a lot of revenue. tim cook and his team did not explain the service number well enough, often leaving it to me. that's fine. let me check my watch. are they chipped in there? no. tom mcgrath wants dinner with me. my daughter weighed in. >> i checked mine, too it's 20 of 10:00. >> is that a timex? >> this flashes when the wife calls. 9:00 and 6:00, lisa. maybe i shouldn't say -- wife. >> it's definitely time to check in with mary thompson on the floor. >> dow jones industrial average off 30 points from its best levels of the day. up 86 points, losing a little bit of ground as we speak. it's driving the early action. there's better than expected results and guidance for marquee

names as well as oil, wti up $1.42. also take a look at the dollar. dollar weakness helps to drive oil prices higher. dollar pulling back in the wake of the disappointing durable goods numbers we had out today. nevertheless, s&p rallying, still off its best levels of the day. earlier closing or moving above the 1900 mark pulling back a little. still holding on to a 13-point gain. facebook with those strong results. amazon up, as well despite mixed numbers. caterpillar, good guidance. under armour, foot wear helped by their association with nba stefan curry and his shoes. this company missed on billings. stock getting hammered in early trading. up 20%. $16.20. the group we are watching is

tech. news from facebook with billion dollar earnings helping to lift the third worst performing sector this year and energy which is the worst performing sector getting a lift through the strength we are seeing in oil prices, up just about 3% in early trading. quick check of baker hughes. this company came out with a wider than expected loss. also on the call saying the rig count in the u.s. could decline by another 30% this year after being halved last year. paypal. there was a lot of expectations apple pay would have a negative impact. didn't in the last quarter where processing or payments processing volumes increased. company buying back stock. stock up just about 2%. dow holding on to an 81-point game. back to you. >> thank you very much. it has not been a notable year for m&a. we did get a large deal that was an inversion. i thought it was an opportunity

to mention we are expecting to see more inversions. a number of people who work on advising on transactions indicate there are more inversions in the works. worth noting in part because the idea of more inversions coming. perhaps some that are also highlighted with names that are at least somewhat well known could put pressure on treasury to revisit its rules on inversions. it is worrying some who are playing the allergan/pfizer deal. the idea being there could be some change that would make that deal less desirable or more difficult to conclude. will that happen? very hard to say. it was last august that treasury came back yet again right before we saw this deal and came with new regulations, if you will, or new recommendations for how to treat these deals. but they did not deal with those

deals in which the acquired companies shareholders represent at least 40% of the shareholder base of the full company. that is where allergan pfizer fits. that is where tyco and johnson controls fits. as for deals, you know so many of them we've seen over the last couple of years, whether it's mylan and abbott or medtronic and convidian. endo ended up incorporating in a third market. it goes on and on the number of companies that have inverted over these last couple of years. it picked up dramatically in pace. 4% global m&a volume for 2014 and '15, doubling what had been the pace previous to that. the question still becomes if we continue to see more inversions as does seem likely, will it put

pressure on treasury or perhaps other politicians as well. it might put pressure on those in congress to get something done. frankly, they still need congress to weigh in on all these things. it's the threat of it doing so that will keep companies from attempting. we did put a decent amount of attention on johnson controls and tyco. not the strategic benefits of the deal as might have been the case if it were not an inversion since that got so much of the attention itself. there are more coming. >> i thought they had to do that deal, the johnson controls tyco because of the power of united

technologies. hayes did a good quarter. boeing was down badly. united technologies was up. that's because it is agnostic to what aerospace played. they're in with their new incredible gear turbine fan. i've got to tell you, they are everywhere. that makes me feel johnson controls because they've got -- they are a great fire suppressant. tyco had been shopped a while. >> there is a benefit to the tax rate. so often in these inversions, it's the access to overseas cash that drives them. that is the case in the pfizer deal. if we don't do something about the overall tax landscape for corporations in this country or we really limit inversions, the ultimate inversion will continue to take place which is a foreign company has advantage buying u.s. companies continuing what has been a trend.

something important to keep a close eye on. >> congress couldn't stop it. >> you've got to pass corporate tax reform. >> that's not going to happen. just not. >> carl laughed. >> i laughed at that. >> and that's the unfortunate place where we are right now. you can't stop companies doing what they feel is right for shareholders. >> you think they are not going to get in under the deadline? charitable trust owns allergan. that's why the stock has been weak. >> there is continued concern. let's get to rick santelli from cme in chicago. >> good morning, david. everybody pretty much now realizes, yes, we had a bit of a drop in claims from july levels, but durables, preliminary december was not good, finishing off the year on such a weak note does demonstrate that much of the slowdown was really apparent around thanksgiving. maybe the surprise is that it continued. look at a two-day of twos.

yes, there is a lot of volatility. if you look at the close on monday, it was $ 0.85%. two day of tens, the right side is different. notice scaling. what are the settlements in 10s? 2% monday, 2% yesterday. where are we know? 2.01%. you get what i'm saying. 30-year, obviously down the curve. different flavor to it because of the fed looking at two day of 30s. when it comes to interest rates, maybe the only one you should be looking at today are bund deals. look at a two-day. unbelievable. the low yield today was back in the 0.30s. extra day we traded as low as four basis points. europe, italian banks, you could extend and pretend.

it shouldn't be shocking holding all those ultrasafe sovereigns of europe, the italian banks are still in trouble. how safe are are they? what are their yields? nonperforming loans? italian and chinese could have a conference on the topic. look at the dollar index. this sums up the statement. you could pars through it any day you want. at the end of the day, the dollar index is weaker. lost the $98 handle. if you show any traders on the floor, i don't think they are going to say that is a bullish-looking chart. back to you. >> thank you very much. we'll talk to you later on. still to come, google capital partner gene frantz who is trying to protect your voice. the dow is up almost 100 points.

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blockbuster quarter from

facebook and a 13% gain for the stock over the nasdaq. we are watching that trade closely. we'll get stop trading with jim in a minute. checking out the listing on zillow i sent you?

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time for cramer and stop trading. >> people said russians said saudis would cut 5,000. core labs said rbn eyeballing the amount of capital expenditure cut. the u.s. companies $93 billion last year, $58 billion this year. going to talk about a capital expenditure cut of 50% year over year. that's a lot of jobs. because of the technology like core labs, they are still producing a lot. may not be enough for the saudis to break it. the capital expenditures are shockingly down. that's a lot of equipment. that's the u.s. steel. that's people working. that's caterpillar. oil could go up just on our own capex coming down. you need the saudis to blink. i've got to confirm the russian

story. i would rather hear it from the saudis than the russians who need oil up. saudis have been very closed mouth. american electrical company and rick hamada. they don't do cell phone. they do everything else. they are a great read on the economy. we need more on the economy from technology. auto is down a little bit. is that peak? aircraft engine? it's exciting time. >> we got through a lot today. see you tonight. it was good working with you. when we come back, rbc on facebook.

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. simon hobbs is off today. a lot of things working for the moment, whether it's facebook

results, oil higher on rumors about an opec meeting, even caterpillar guidance has the dow up 109 points. you can see 4.40% gain on crude. >> let's get to diana olick. pending home sales up just 0.1% in december, but that's from a downwardly revised november reading. it basically comes out to flat in the wash. that is a miss. the street was expecting a bigger gain than that. sales up 4.2% year over year. pending home sales are the measure of signed contracts in december not closings. it's a forward-looking indicator of closing. why the flat pending home sales? realtors say it is no homes for sale. the ability to find homes in affordable price ranges is difficult for buyers in many job-creating areas. home building is grossly inadequate. again, sounds like a broken record, but lack of supply

hurting home sales. we heard it from pulte group ceo this morning in their quarterly earnings release which was better than expected. he said builders are benefitting from such tight supply. regionally it was the northeast was the only region seeing gains up 6.1% month-to-month. that is probably due to warmer than average temperatures in december. the rest of the country saw pending home sales fall across the board. up just 0.1% in december. back to you. >> thank you very much. diana olick. shares of facebook are the story of the morning up 13% after smashing estimates on just about every metric with its fourth quarter results. social network cashing in on digital advertising. mobile accounting for 80% of their total ad sales. here is what sheryl sandberg told julia boorstin about their ad strategy. >> we are pleased with the options on instagram. 98 of our top 100 top facebook

marketers are marketing on instagram. facebook is really strong. we are seeing strength in both platforms. what matters with facebook and instagram we have the two most important ad platforms out there. we have this common ads infrastructure that enables us to serve the right ad to the right person. >> joining us from one market in san francisco, rbc's lead analyst mark mahaney. good morning to you. >> good morning, carl. >> stocks had dhistoric gains. how much of this is deserved? >> we'll say fully deserved. there is one number you need to know about the facebook print. 66%. that was advertising growth year over year. if you take out foreign exchange. that was the ebitda margin the company printed. both were records we had not seen in at least two years. when the size of the business was half what it is today. this was a breakout quarter for

the company. both because of its core business and because of this ramp up of modernization on instagram. the pop in the market we think is well deserved. we think shares go higher. >> there were fireworks on the call last night. your reflections on that? >> i don't know if they were fireworks on the call. one of the things i tried to drag out from the company or ask the company to comment about was the ability to start tapping in two large platforms. facebook messenger and they are completely unmonetized to date. we think this is part of that forward revenue growth story for facebook. it's not a 16 event. it may not be 2017. there are large platforms, great opportunities. the company is conceding that. they will be careful about how they roll it out. >> after we saw facebook report, it lifted alphabet stock or google up 3%. does this bode well for those earnings on monday?

>> probably fundamentally. the read through is that online advertising is robust. we are not seeing in a real negative inflection point. there is something else. this is the first tell for us how this market would react to a high quality print. we had cases where high quality prints were traded off. that's not happening. if you've got good numbers, market will take you up. netflix was a push quarter. this was a clear positive quarter. if amazon tonight and google monday night can show good positive results, the market will take that up. that's the anticipation trade you saw last night with google. >> as somebody who follows the media company broadly speaking, we have to wonder, are they taking of an existing ad budget out there broadly speaking or are they creating new avenues for advertisers? where do you come down on that? >> it's i got to be both. we had a thesis for a couple of years. only the data is starting to

come in now that tv ad budgets would start to migrate online. video advertising, 100 million video views a day on facebook. with that has got to be coming over that cpg advertising that is strongly entrenched on the tv channels today. part of that's got to be coming over to facebook. we are seeing a shift come over and most of that is facebook. >> we are thinking of another company accelerating revenue at this scale. can you think of one? >> yes. google back in 2006 and 2007 when jim cramer wrote "goog" on his hand. that's the analogy. there is no other internet company with this growth profile

and this margin profitability profile. you have to go back to that point which is one of the reasons at a high level you could see the market cap of facebook getting higher and bigger. over time probably reaching google levels. >> what is the multiple then? if that is a comparison, i don't remember what google's multiple. what is the right multiple to apply to a company you just described? >> i want to be careful. i don't want to look at the comp. i look at intrinsic growth rates. facebook is generating close to 40% earnings growth. if you have a story like that, then the market will generally pay up to that kind of growth level. call it 30 to 40 pe multiple for this name. if it's high quality earnings and high quality revenue and earnings are driven by the top line. that is the multiple we put on facebook and think it's worth a 35 pe multiple on 17 earnings

that gets you to $160, our price target. >> it sort of buried baba today. >> numbers came in better than expected. they were asked constantly on the earnings call about china macro. the answers weren't definitive. they talked about weather issues. that may have impacted negative apparel. i think the key here is mobile monetization levels are gapping up. that is the new growth engine. we like the stock and we think the stock should be appreciating. it wasn't the inflection point quarter you had out of facebook but results were better than expected. >> it reversed. i'm not sure why. to your point, they did spend time on the call talking about this new world where they want to be judged on revenue growth versus overall ge growth.

the value add to the brands. they came back to that time and again. any idea why the stock was reversed dramatically? >> good question. pie guess is even with better than expected numbers, people may not want to make an aggressive bet on china right now. this is purely a china play, whether it's retail or cloud computing. maybe that's the pause. it's hard to get too bulled up on anything going into china right now. this is one of the best ways to do it. >> mark good to see you. thank you for covering a lot of ground with us today. >> thanks, guys. look at the broader market. stocks are in the green. strong earnings helping push the markets higher. investors are digesting the fed's comments on the pace of future interest rate hikes. how will this impact market volatility? joining us is dwayne. we've got a spike in oil. blowout earnings from facebook

and under armour and big stock moves there. and fed uncertainty. which do you think will take center stage? >> i think at the moment we are going through the earning season we would expect to see corporate results be the key driver of individual stock volatilities. you're focusing on facebook. some of the real world companies like united rentals are down significantly on not seeing much economic growth in 2016. i think during this period we have to navigate that. we would say when we look inside the federal reserve comments, i thought the most interesting comment was the comment about cpi and inflation. we could see the fed force to raise rates. they will pop out at the top end of the expected range here. with the u.s. presidential election, timing when the fed moves might become more in the first half. equities will have to navigate that volatility and a stronger dollar before we get to the election in the second half.

>> we are seeing more than 4% move higher on the price of oil. are russia and saudi arabia seriously thinking of cutting production. do you buy into the rumor? >> i would say in the conversations i've had with our clients in the middle east, that feels unlikely at this moment in time. however, we have been increasingly constructive on oil simply because we don't buy the oversupply story. we think the data is very fuzzy. therefore, we don't think the world is awash with oil. we also feel with the markets limit short oil maybe the path of least resistance is for oil to rally than fall to 20. we are quite constructive on oil. >> at the same time, we've got disappointing news on the economy this morning. durable goods, the highlight. that was a weak number. what accounted for that drop in capital spending? >> it was another very disappointing report for the

u.s. economy showing this time the businesses are now pulling back even further than we had anticipated going into the end of 2015. what is more disappointing if you look into the detail, capital goods orders excluding aircraft into feds which is a proxy we use for business investment, this was down 7%. certainly a recognition. the businesses continue to exacerbate this long-standing trend of being uncertain and sitting on the sidelines amid really a perfect storm. a strong u.s. dollar, tepid demand globally and domestically, as well as a very sizable inventory overhang. it's interesting that the fed got out ahead of this disappointing report. in yesterday's statement, downgrading that language in household and business spending from solid to a more moderate language. >> how high is the bar for the fed then? what do you think it will take to get the fed to actually pause in march and not raise interest

rates? >> that's so interesting. we continue to see a divide between what the fed should do which is continue to coddle the u.s. economy which is on unstable footing, and what the fed will do. that is continue along this gradual pace of rate increases regardless of the lack of realized improvement. we know the committee is focused on longer-term expectations. even if we don't see marked improvement or a continued decline in fundamentals, it's likely the committee will not be dissuade every other meeting. the market should be gearing up for a second rate hike, potentially early as march. >> that is a broad read today, this analysis the fed or yellen issuing statements they are done propping up stocks. do you agree? >> we do. we believe they want investment risks to return to portfolios

and the markets than sit on their balance sheets. although this is a slow process, we think they have started and metaphorically they will continue. i would agree with the prior commentator. we think there are more rate rid rises coming. because of the presidential election, they will want to get rate rises faster. they are off the table during the real election era campaign. >> the question is whether the economy can handle it. we'll have to leave it there. thank you for joining us. when we come back, under armour, another big story getting a boost after a few months of losses thanks to big growth in foot wear. details on what helped the company during that fourth quarter. tonight is the last gop debate before the iowa caucus. trump not participating, he says. live to iowa.

under armour is roaring back. the stock plunged 40% from last year's highs and came out this morning crushing earnings estimates. 31% sales growth versus wall street expectations about 25%. foot wear was a standout with 95% growth. they had new launches of steph curry shoes running and in training.

margins lower on currencies and higher impact of lower margins sneaker sales. according to analysts. there are with steep discounts over the quarter. importantly though, wall street says guidance did come in for under armour higher than expectations. the bottom line, hopes were low. morgan stanley took the company down to sell. other analysts were worried about the impact of warmer winter weather on the fleeces and outer wear and tough retail environment in general. this morning, coming out saying the sell-off has proven overdone. that is according to kate mcshane at citigroup. this was a highly valued growth stock. some analysts were questioning that double digit growth. under armour delivered the message to wall street today. we are still firmly in growth

mode. the other take away, i would suggest is sports apparel remains a standout with under armour and nike both outperforming a lot of retail peers and competitors in recent months and year. >> we know how steady the stocks have been relative to the overall market. under armour erased its losses for the year which was something. it settled back down 2% year-to-date. >> still having its best day since january '14 with a double-digit gain. republican presidential candidates set to battle it out in the last debate before the iowa caucuses except for donald trump. john harwood live in des moines, iowa, with the latest. >> the iowans are amazed by this spectacle. we've got crazy races by both parties here. on the democratic side, hillary clinton has a narrow lead over bernie sanders.

donald trump has a seven-point lead over ted cruz who was leading him. donald trump acted to protect that lead by backing out of this republican debate tonight on fox news, creating the extraordinary spectacle of fox news, an immensely important player in republican politics having one of its anchors last night pleading with donald trump to reconsider his position. >> you have the upper hand. you have 60 seconds off the top. here is why, here is what i want to say. by walking away it from, you lose an opportunity to persuade people that you are a strong leader. that's in my opinion. >> well, i understand your opinion, bill. tomorrow night at 9:00 at drake university, we are going to have a tremendous event. i'll have much more than 60

seconds, frankly. >> by doing that, donald trump of course is going to cut into the ratings of the fox debate and make rival networks cover him. he is going to dominate the headlines and prevent his opponents, including ted cruz from getting any traction. they don't like that circumstance. of course both ted cruz and carly fiorina offered donald trump they would donate more than $1 million to veterans, donald trump's preferred charity if they would debate him one-on-one. i talked to a top trump advisor today who said the chances of that happening are exactly zero. >> anything can happen. john harwood. >> and will. >> and will. when we come back on "squawk on the street," ford posting record earnings today as demand for suvs soars. stock down 5%.

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today. phil lebeau live in chicago with more on ford. >> ford's conference call wrapped up. they talked about making investments to continue to be ready for the next change in the market. that might be why shares are under pressure today. take a look at ford's fourth quarter earnings. they beat the street. $10.8 billion is how much the company made. beat the street with 58 cents a share. revenue much stronger than many were expecting, coming in at $37.9 billion in the automotive business. if you look at ford, a couple of things to keep in mind. north america is clearly driving profitability. when we talked to the cfo this morning, he told us inventories and incentives, they remain in check for the industry. the truck and suv market which has been red hot in north america, ford does not see that slowing down. ford's average profitability per vehicle in north america last year, 3,026 compared to 2008

when they were losing $2,300 per vehicle. let's switch to the airline industry. jetblue out with earnings this morning. it beat the street earning 56 cents per share. better than street estimates at 51 cents per share. what is going on with jetblue is similar to what we are seeing with the other airline stocks. don't tell us what you did last year. what do we expect for 2016? they are expecting their costs to be flat per available seat mile flat to down 2%. when you look at shares of jetblue today, shares are getting hammered. one factor here is the fact jetblue is out today saying we will refund your tickets if you are going to a destination in central america or south america and worried about the zika virus, we'll refund your tickets. none of the airlines are seeing a drop in demand. this uncertainty continues to

grow with zika. >> definitely a big story to watch. transports not doing well today. thank you very much. when we come back, caterpillar was the biggest gainer on the dow. close to the top but lost that top position after an earnings beat. what the ceo had to say about the quarter. e*trade is all about seizing opportunity. so i'm going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart. papa! you're no son of mine! or perhaps it's time to seize the day.

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good morning. i'm sue herera. the world health organization says the zika virus is spreading explosively in the americas and it will convene an emergency meeting on monday to decide whether to declare a public health emergency. the virus may affect 3-4 million people. iranian president meeting with the foreign m. later today he will address a business forum and meet with president francois hollande. three turned themselves in last night at a checkpoint outside the oregon site. seven people remain inside the refuge. warren buffett boardroom advisors signed on for the eighth season of "celebrity apprentice." tyra banks, steve palmer and jessica alba will be advisors on the long-running reality show,

hosted by arnold schwarzenegger who steps in for donald trump. back to you. the department of energy out with its natural gas weekly storage report. we have a drawdown of 211 billion cubic feet. it's a bullish number. trading 211 before it came out. slightly higher at this point. it's about twice the drawdown we saw last year. it's over the five-year average. makes sense prices are going a little bit higher here. we did have a streak of cold weather. these numbers backward-looking. traders always looking forward. ten-day forecast coming up is more mild. it's also about the total stocks. remember we've been watching this number. we are down closer to 3 trillion cubic feet. we've come down from that four peak we saw a couple of months ago. slowly drawing down. total stocks roughly 20% higher than this he were last week. roughly 15% higher than the five-year average. nat gas stocks in good shape, trading just a little bit over this $2 mark.

back to you. >> i'll pick it up on the floor of the new york stock exchange. caterpillar shares are up, a little over 1% off the highs of the session after reporting earnings this morning. the company did lower its sales guidance. it missed on the top line. the ceo was on "squawk box" earlier to talk about the year ahead. >> '16 is going to be rough and challenging. i'm happy with our performance in '15. we started out in 2015 looking for $50 billion in sales and $4.75 before we get to restructuring. we ended up 11 cents short of that with all the puts and takes and currency issues and ups and downs of about $47 billion. that is a lot of hard work by our team here and around the world. >> let's bring in jpmorgan. you cover machinery stocks like caterpillar. stock is trading up. is wall street expecting worse?

>> the expectation was 2016 was going to be weak indeed. the expectation was for revenues to be down about 10%. that's about where they came in. i think there was a sigh of relief more than anything going into '16. >> does that mean you give doug credit when it comes to conservative guidance for the year? >> there's a bull case and bear case on that. you reward a ceo when they do whatever it takes to deliver the results they've committed to. how he gets there can be called into question. 2016 includes 50 cents of pension accounting changes and additional 20 cents of further accounting changes. the bears will say well, that's 70 cents he shouldn't get credit for. my opinion is that's what you pay a ceo and cfo to do in a down turn. do whatever it takes to manage your earnings. >> it gets to an important point we asked many times about this stock. as we continue to see

commodities trading volume till and emerging markets getting hit, the question for caterpillar, how much of its stock and performance is in its own control right now? >> that's why we look at how much of the down turn in revenues which you can't control can you control on the operating side? in fairness to doug and his team they delivered healthry profits for high picks cost company. control what you can control going onto '16 and beyond. >> people were looking at this report trying to gauge how slow is china slowing down? what did we learn? >> it's less than 5% of sales directly. it has a big impact on its

mining business. that business continues to decline quarter after quarter after quarter. it is impacting its overall business but directly, it's not a huge impact. >> doug was asked this morning about the u.s., what he saw there. he said no inflation, anemic growth, 1%, maybe 2% growth. how much can the u.s. offset some of the weakness they are experiencing globally? >> for caterpillar, the real question around the u.s. is maybe not necessarily the macro, although that is important, it's the strength of the dollar. competition comes from europe and japan. the longer the dollar strengthens, the worse that will be from an export standpoint. that will have as much of an impact on cat's performance going forward. it did note in q-4 its own negative pricing of about 1%. it's going to continue to see

negative pricing into 2016. that is never a good thing for a cyclical stock going into a down turn. i think that's going to have the bigger up packet on its performance. >> finally, we saw that durable goods number this morning coming out. capital spending is down. give us a sense covering your industry right now. what is business like relative to other weak periods of history? the crisis when we saw weak demand and weak recessionary periods. how bad is it? >> great question. for the first time in my long career doing this job, i have no overweight ratings in my sector. i'm not recommending investors buy into machinery stocks at this point. that is a first for me through the course of my career. you raise the right point. what is different is sort of sliding decline in isf.

it was easier to upgrade everything. this is a unique period of time for investors, particularly in cyclical stocks. >> that is telling. we'll wait to see from you when you decide to upgrade. that might be the inflection point. thank you. thank you very much. meanwhile, facebook shares trading sharply higher this morning after the company's better than expected results on the top and bottom line. julia boorstin joins us with a look at what drove those numbers higher. >> facebook revenue earnings soared past the most optimistic analyst expectations as the company continues to bring in more ad revenue from 1.6 billion users. half a dozen wall street analysts today including goldman sachs and jpmorgan raising their price targets on the stock and facebook seeing no signs of macro pressure. driving facebook's growth, its mobile ad platform is targeting tools, ability to buy ads across facebook and instagram and the

explosion of video views and ads. >> now 100 million hours of video are watched daily on facebook. we've been testing new experiences like suggested videos, which enables people to discover more videos they might be interested in. we are exploring ways to give people a dedicated place on facebook for when they just want to watch videos. >> facebook is second only to google in its mobile ad network and its video platform which seems to be making headway against youtube. facebook is investing in other areas where google is, including virtual reality, as well as artificial intelligence. another area which zuckerberg and sheryl sandberg say they are investing is what's app and messenger. they are not making money on them just want to focus growing their user basis. sound from my exclusive interview with sheryl sandberg coming up in "squawk alley."

>> thank you. big tech names out with quarterly results. qualcomm and samsung trading lower on their results. seam zon a samsung and microsoft out after the bell today. you can see we have lost earlier gains. shot out of the gate up 160 or more. now in negative territory. ...reimagined. style... ...reinvented. sophistication... ...redefined. introducing the all-new lexus rx and rx hybrid. agile handling. available 12.3-inch navigation screen and panorama glass roof. never has luxury been this expressive. this is the pursuit of perfection. [martha and mildred are good to. go. here's your invoice, ladies.

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welcome back to "squawk on the street." health care sector, the worst performing sector today, amidst five up sectors and five down ones. biotechnology weighing on the overall market. among the names dragging the

sector down, vertex, regeneron and celgene. these stocks along with smaller biotech names are hurting the nasdaq biotech etf. remember that ticker ibb, about 3% lower on the day. health care a focus despite the fact energy continues to move higher on oil prices. back to you. >> dom, thank you very much. welcome back. qualcomm, samsung both giving weak guidance going forward as the company's reported weaker than expected earnings. what we might expect from amazon and microsoft which report tonight after the bell. john ford joins us post nine. big day. >> it is. qualcomm down after beating on top and bottom lines. guidance underwhelmed the street. the problem? similar to what we see at samsung which was down about 2.5% in asia. high-end phones not selling like

they used to. that put pressure on samsung's chip business and phone business, its two profit centers led the company to report 40% drop in net profit. i spoke to qualcomm ceo. he told me he feels like people are reading too much negativity into apple's report on china. he said he is feeling apple is feeling the slowdown qualcomm has been talking about and adjusting to for months now. there is continuing strength at the low end of the smart phone market where people are trading up from future phones and there is opportunity later in the year as the availability of faster lte wireless networks expands globally beyond where it is now and customers buy handsets to take advantage of that. themes starting to emerge. if your business relies on pc or smart phone sales, it's been a rough season. see intel, apple or samsung. if you sell a service or product winning on mobile, chances are you are doing fine which brings us to amazon and microsoft.

microsoft, analysts looking for $25.3 billion in sales. trends cut both ways on this one. enterprise spending looks weak based on intel and ibm result. pc sales are to the so hot. cloud momentum has been driving valuation. if those look good, the other stuff might matter less. for amazon, $35.9 billion in sales around $1.86 is what the street wants to see. core business should be strong. the cloud business could turn in close to $2.4 billion in sales. that would be a nice result, especially if amazon comes in above that. >> secret weapon amazon web services. not so secret now that they give us some of the numbers. are we getting a better sense of how many people are prime customers? >> it's all a guessing game now. the guess is a high percentage

when talking about households. amazon not giving that number. but we do see their ecosystem growing. there is not much read-through to the median number. that's how they talk it up. how prime grows, so will media. it's that repeat buying. >> so do their ambitions. the reports it might get into streaming music and shipping. do they talk about that on the conference call? >> they tend not to talk about unannounced products. they do talk up the stickiness of their existing services. sometimes it's something you can read into that. they are likely to get questions how much they plan to spend on expanding cloud. more data centers are in the cards for the coming year as they build out their international capability. there is plenty of growth there as customers in those locations look to cut down i.t. costs. >> we'll do a deeper dive on them and others in about 15 minutes. >> absolutely.

>> good plug. let's get over to the cme group with rick santelli. the santelli exchange. very important. >> thank you, sara. yesterday's fed meeting made me think of times when i used to trade on the trading floors and there were more people up than they are. everybody you were rubbing shoulders with were other traders and they had positions. you would see your buddy. he would say i think this market is going to go down. why? he would give you a reason. the real question, do you have a position? many times they do. it didn't mean the advice of the dynamics or the thoughts that the trader was telling you or discussing with you weren't accurate. what i learned now doing this versus trading is when you have an emotion involved in anything in the market, no matter how hard you try to be objective, it's absolutely next to impossible. that's why many traders hold on to their losers too long, hold on to their winners and blow them out much quicker.

the point today is downsizing the wealth effect. it isn't going to be easy. first thing we want to get out of the way is distribution. we used to have a whole distribution center of small brokers, inventories at various brokerages which shock absorbers for the market, but gave competitive, highly distributed opinions out there in many ways and also remember a lot of the brokers, the commissions aren't necessarily part of or include incentives with the marketplace. current times. the fed's liquidity. how do they get the liquid 2ity and get the wealth effect? this would be the market. especially when distribution isn't what it was. big funds in banks. you need the big banks and you need the big funds. okay? big banks and big funds are the machine. liquidity goes in. wealth effect goes out. something else happens when the machine is running and humming along. of course they make some money.

of course they should. they are doing a service to the market. they should profit. the money comes. what happens when the fed decides their strategies of liquidities and quantitative easing have run their course? the positive effects aren't working. this he tighten it up. what do you think happens to the machine? it runs at a slower pace. much fewer dollars come into the system. of course, the wealth effect and the market change. the point of the matter is if you are talking to people instrumental and brilliant in terms of strategy many times about what the fed should do for the economy, they have a lot of emotion in this. remember, your answer as unbiased as it may be have the same dynamics as two traders talking, one has a position, the other doesn't. >> thank you very much. with he we come back, how the big pharma names fared in the fourth quarter.

why a biotech is being punished yet again.

after a strong start strong open stocks are giving back their gains. the dow is at the unchanged line. american express weighing it down with pfizer and merk at the bottom of the dow. s&p still positive along with the nasdaq thanks in part to strong earnings from facebook. big move higher there. let's go over to dominic with a market flash on another mover. >> on the flip side of that you have juniper networks sinking by 16%. that's the worst performing stock in the s&p 500 and posting a fourth quarter earnings beat but did issue weak current quarter guidance and prompted a slew of rating downgrades all over the place. now the reason among other things an uncertain global market environment. that's why juniper thinks it could be robust but the company announced the cfo plans to step

down after the next regulatory report. shares are down about 20% this year. back to you. >> thank you. some of the biggest names in pharma out with results again today. we're seaing weakness in health care again. >> even the companies that beat expectations can't keep it in the green today. let's start with abbot labs. eps did beat by 1 cent for the quarter. and the 2012 guidance is weighing on the share. they're down as much as 9% now. coming in from estimates hit by exchange rates and significantly lower contributions from venezuela and challenges going on there. 4% comes from venezuela and it's interesting to watch and that forecast is driving down the stock. now bristol myers had a good one and it's given those back and it too has been in the red this

morning. eps beat by 10 cents. revenue also beat and 2016 eps guidance came in ahead of forecast. the story is their immunooncology drugs and a report falling with the rest of the health care sector. celgene mixed with guidance. the company just presented at the conference earlier this year and didn't present any changing but even that one getting weighed down as well so tough across the board. eli lily. the same story there. we already heard 2016 guidance. eps in line. revenue slight beat. all eyes will be on the big alzheimer's data coming up later this year but people are saying right now for bio tech and pharma people are not buying and you can see that in how the sector is trading in the red today. >> down 9% so far this year. it's at the bottom in terms of s&p sectors this year. what are you hearing around

weakness? is there some rotation? such a strong performer over the last few years. >> it has been. folks are saying it's a risk off environment that does not bode well for these companies that depend on these risky trials. they have earnings potential so the analysts are arguing they should be rewarded for that. people should be buying. all of the concerns of election and drug piesing, none of that is good for biotech and pharma. >> meg thank you. the earnings parade continues. coming up on squawk alley, everything you need to know about the huge tech earnings report that have stocks on the move today. facebook shares up 13%. weakness in ebay and alibaba. that's back in a moment on cnbc.

>> dow was up 143 at session highs but up about 3 points seeing a bit of a sell off mid at a. it's 8:00 a.m. at facebook headquaters in california. 11:00 a.m. on wall street and squawk alley is live. ♪

>> welcome to squawk alley. here at post 9 and joining us this morning is business insider founder and ceo back from davos. good to see you again. >> glad to be here. >> facebook is our lead. soaring after revenue top estimates. it generated 13 billion in mobile ads in 2015. julia spoke to sheyrl sandberg yesterday and joins us with more. >> 80% came from mobile last quarter. user engagement is up especially on mobile and businesses are following and also said the company is benefitting from