in the last hour, one on health care, the white house saying that the bill, the bipartisan bill is a good step in the right direction, but that the president does not support it in it's current form. and needs some further improvement before he will go along. meantime, the senate gop whip says he thinks that the gop does have the votes to pass a budget resolution, which is the pass to tax reform >> thanks for watching power lunch. is this my job >> what are you doing? >> oh, this is the other big story -- mike knows. mike -- >> is that a character >> according to some it may as well be. >> i didn't know the band wagon went up your way >> when he hit the 50th and they had to bring him out of the dugout and man, it's been fun to watch this series, but i'm sorry, where were we? >> we're in the bronx,

obviously. waiting for yankees, the first pitch is in two hours. >> welcome to the closing bell everybody, we have exactly two hours to get through this whole show before that i'm kelly evans, i'm a big rally day here >> all right, all you folks in houston too by the way the dow on track for it's first close above 23,000 now ibm, interestingly is helping drive this nice rally today after those stronger than expected earnings that came out that you guys have last night. we will get more on that move coming up in a little bit here >> it's kind of astonishing to see ibm up 10% today >> clearly >> after the dell, more dow components american express is going to report along with ebay, we'll tell you what to expect as well. >> and so the breaking news today, microsoft and amazon are now embroiled in a new patent lawsuit. and i guarantee the plaintiff ll surprise you when you hear who it is. that's coming up but let's get straight to the one stock giving the dow it's biggest boost today that would be shares of ibm

jumping now 10%, roughly, cnbc's mike san toely here with more on that this takes me back to the 1980s when ibm was the belt weather of the stock market >> that's right. the largest company in the market and that 10% move bill in the stock because it's a high priced stock is by far the biggest driver of the dow. it's about -- good for about 100 points on the dow because of the way that works as a price index. so what are the ingredients for a big, kind of spring loaded move like this off of last night? for one thing, ibm has been a hated dow stock, in fact, only, i think, verizon in the dow has smaller percentage of analysts recommending this stock right now. you really had people leaning against a whole revival story for ibm, the whole big narrative about ares declining for 22 straight quarters. so you had low expectations and not too many people betting heavily on a recovery. cheap stock, but it's below 11 times earnings, if those can be seen to grow in coming years, it's going to look very starkly

cheap in this kind of a market almost a 4% dividend yield as well about 8% free cash yield however you want to slice it in, finally the big question is, was this the turn? was this the fundamental turn? sales being revived by the strategic initiatives that basically can carry them into the future, i don't know on a technical basis, people pointing out this pop today, gets the stock right back up to it's 200 day average that's sometimes a good sign, but it's only a first step because it really is pretty serious down trading with $180 stock in margin. got down to the 140s >> i'd say okay, that makes sense, but for a move like this. the company came out and said if we reported at great length how many times in a row the revenue's been down, 22 quarters now i think. they're saying now they think it's going to increase at the end of the year. is that enough to spark this kind of repricing? >> i think this repricing today is an indication that more people are thinking that that's feasible you know, the math starts to work in their favor after a

while you have to think with the declining dollar and factors now you had double digit growth in those businesses they now consider to be the strategic focus. double digit growth, you know, how long before that really is the entire story of the company because the legacy business still is in decline. >> also, we have american express reporting after -- if you back to a year and a half ago, american express, almost cut in half. down about 40% over the course of almost a year huge bounce, chopped around, and revived again and it's had a good comeback year i don't think the story are similar, but it's an interesting pat person. >> very interesting. >> thanks mike, see you next hour so the dow could close above 23,000 for the first time ever today, but treasure secretary mnuchin is sending a warning, he says failure to pass tax reform could derail this rally. here's what he had to say during a politico podcast >> there is no question that the rally and the stock market has

based into it reasonably high expectations of us getting tax cuts and tax reform done it also has based into it optimism on regulatory relief, which they've begunto see and there's expectations so, i think to the extent we get the tax deal done, the stock market will go up higher, but there's no question in my mind if we don't get it done, you're going to see a reversal of the signature amount of these gains. >> is he right and what might that look like joining the closing bell exchange today is rob morgen from sandy spring trust. thanks for the hat, guys and rick santelli is over at the cme. rob, first to you, are you guys drop in the markets and how big of one do you think? >> well, kelly, i disagree with the treasury secretary i think most of this move in stocks has been based on fundamentals you know, the forward pe isn't really out of whack for the high side, it's pretty much in line with the story norms and the

earnings growth has been there to support it. and that should continue going into next year i'm not even sure that the treasury secretary believes it himself. it sounds to me like it's an opening comment into the upcoming debate about this so i would disagree with that comment. >> and keith, you know, we've had these -- the leadership constantly changes in this stock market, this rotation that goes on, one day it's the oil market, then it's technology, then it's the financials and now we've got good old fashioned ibm leading this market higher what do you make of all of this? >> it goes back to what we were talking about for a couple weeks. it was a stock pickers market right now and people will nibble around the edges and get inside of names or come out of names based upon whether it's a good earnings season or bad news or bad press on a particular name we've seen this over and over again. what it also means is that the indexes will continue to melt up or grind higher along with some of those stock picks and that also speaks to the fact that money is continuing to flow into u.s. equity markets there's just no other place for

capital to go to get really rewarded right now maybe some places in europe which we're starting to see. but i think, you know, it's all system's go inside the equity market from now until the end of the year, and i do agree with rob, steve mnuchin is embellishing the fact of tax breaks have done to the market you saw that when we traded sideways throughout august when you didn't think we were going to get it at all we didn't have a massive sell off. they recalibrated their expectations and looked at the fundamentals and they got prepared and sectioned off and right sized their portfolios waiting for this earnings season all signs were pointing it was going to be a good one that's the way it is in the first two weeks. yeah, i think we move higher from here, even though we have the markets a little overbought at this time they may pull back, but we're getting into a seasonably strong time of the year in november and december and this earnings season is going to propel us right into there to get further gains >> and rick, on this dow 23 k, interesting things from the fed here this afternoon actually in

the book talk how they're seeing stronger wage pressures in certain sectors. even a growing use of sign-on bonuses to attract workers those are the comments you would anl hear later stage in this kind of expansion in bull market, right? >> well, yeah, and they probably actually looked at the data from the last job's report. hard to argue with that, month over month and year over year, popped rather dramatically when i talked off camera yesterday about that, he said he doesn't see any way that any of the weather factors would have done that. although it could still be a one off. i want to go back to that other conversation that is the cherry on the cake in terms of talking about a topic. and rob, i totally agree with rob, except for one thing, rob, something very by their happened on november 9th that can't be ignored. yes, tlths lots of fundamentals, yes, we're having good earnings, but we daent doubt that something radically different happens from november 8th on prior to that. and i think whatever those reasons are, secretary mnuchin

doesn't have his finger on that pulse of a and the thing, the thing after all the fumbles on the legislative side that have not seen any penalties called with regard to the progress of the market and then to actually include the market as a bargaining chip to try to arm wrestle and get this legislation through, i don't see the point i really don't and taking the market hostage, if tax registration passes, the market runs either way if there are fumbles, he is just drawing more taejs, almost drawing the people that programmed the platforms to put that in. that fumbles now you sell stocks, i just think it was a really bad strategy. >> i just think quite frankly that treasury secretary is trying to scare all the legislators. >> i do too. >> but this is a vote, we don't have the liquidity, it's a bad idea >> that comment -- >> all right >> intended to do exactly that, keith. smart money people here then,

rob, what's going to take us higher what would you put money into now as we head to perhaps 24,000 >> rick touched on the wage pressures we're going to continue to see higher rates there. and that's probably going to start maybe lifting the dollar a little bit although we haven't seen that recently so i think that helps small caps, small cap growth stocks that's going to help financials, those would be, i guess my soft two spots to put money in. >> keith, anything you'd add to that >> again, i agree with rob when you look at the russell 2000 index, the larger majority are financials, smaller financials that will benefit from some of the legislative agenda items that have yet to get there, and if they do, you'll see them propel interesting to note while we've had this run in the s&p and the dow over the last couple weeks, the russell has started to flag a little bit it's not even close to breaking below a level where we get nervous about it, but as we see those earnings coming in in the

next few weeks, if they are good like the stocks are and there is positive momentum on the tax reform and other legislative items, you're going to see the russell propel the rest of the market forward i'm actually very bullish on the equity markets until the end of year >> with all of this agreement, too bad you aren't in congress, we could get a lot of things passed >> it is too bad >> anybody other than the people there could do better, i think that's just me >> good to see you guys, thank you. >> see you later. >> thanks, bill. we are heading to the close about 49 minutes left in the trading day. looks like it will be with closing above 23,000 for the first time, the dow up 155 points and the s&p also in record territory right now coming up, new data out today pointing to a major red flag for the u.s. housing market, and it has to do in part with hurricane harvey of course. we'll bring you that story when we come back later american express reports it's third quarter earnings and even after a 536%

jump last year in the stock, we've got an analyst who says it still has more room to run we'll tell you about his reason for that and we to want hear from you contact a show on twitter, facebook, or send us an e-mail you're watching cnbc first in baseball worldwide >> there you go. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders

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welcome back, dow purging higher by 163 points putting is comfortably above if,000 23,100 with a three quarter one percent gain by far the best performer the s&p and nasdaq up just about 10%. the ruszle up about two-thirds >> new data out this morning shows that u.s. home building fell to a one year low in september, and it's partially due to the maeszive hurricanes that hit both florida and texas. cnbc's diana olich has more on the story, diana >> reporter: well bill, they fell in the south but also here in the northeast and the midwest. the only gains were in the west and that was before the fires really hit the problem behind this with construction is just no labor. and natural disasters are only

making it worse. >> all the resources are being drained to the rebuilding effort, that's going to increase the cost of housing and renovation across the nation housing market can't take the shock of a natural event it can't take any shock. it's because we are so tightly wound with inventory >> reporter: now the number of houston homes destroyed by hurricane shaar have i surpassed the building permits estimated for all of 2017. just after the storm, are the chairman of the national association of home builders implored the trump administration to ease up on immigration, saying a successful guest worker program will help alleviate the current labor shortage in the residential construction sector. quicken the rebuilding efforts in texas, now the fires in northern california have already destroyed even more homes than harvey and they're not done yet. that will have massive repercussions for the housing market, not just in california,

but beyond as workers leave sites like this one here in the northeast and head to areas where they can command much higher wages back to you guys >> all right, diana, thank you now if you haven't heard yesterday on the show, we had chip and joanne in a gaines. they are helping out in texas with the rebuild they're the stars of the fixer up show and we asked chip for his take on the housing market, especially with prices moving higher >> i think the market's hot. waco, texas, has never been hotter literally the state of texas in general has never been hotter in general. i think the market still has from a housing perspective, a few years left in it as far as this amazing, you know, immediate youric uptick. >> prices aren't too high? your premise is buy low, fix it up and sell better, what happens if it's harder >> that's a great point. for guys like me literally, market's getting really tight. you go out and try to buy a flip house and you've got ten guys competing against you four of

which have never done this before in their entire lives >> yeah. that is a very good point. it's got to be tough for them to find those fixer uppers right now. >> those are the people coming into the market are saying we want to do thattoo to tahoe, but they don't have the discipline yet sometimes the margin on these properties is religionly as i have, we're talking 20, $30,000, but from watching others you pay a little too much off the top, that makes a huge difference in terms of turning a profit >> all real estate's local, parts of texas are red hot right now, but there are going to be other parts where you're going to find difficulty -- it'll billion easier to find the fixer uppers i don't know and diana, such a good point to be made, the unfortunate fires that are going on in california are taking out even more homes -- >> yeah, that's true >> than harvey did -- >> which is shocking caused the fires yet -- >> they're looking into it still. they believe that at least one of them was arson, but they

don't know about the rest of them >> crazy >> unfortunate about 40 minutes to go until the close here dow is up 166 points today s&p's up four, nasdaq up nine, russell up about nine too. native american tribe behind a patent agreement with alogan is suing microsoft and amazon in federal court. >> what? >> we will bring you the details on this interesting patent battle plus shares of chipotle taking a hit on the analyst downgrades we'll tell you what's behind that call when closing bell returns. today, smart planning is helping the new new york rise higher than ever. as the world leader in unmanned aerial systems, we're attracting the world's best talent to central new york. and turning the airport into a first-class transportation hub. all while growing urban areas

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( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you. ( ♪ ) thank you. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

shares of chipotle down almost 3% right now after receiving a downgrade from bank of america meryl lynch to underperform from neutral, the analyst there says that the restaurant chain has done a good job of managing labor costs, but it's going to have trouble cutting back those costs any further in the future. what was i reading that each dish, used to take six labor minutes to prepare now they've got it down to 4.5 labor minutes. >> not at my chipotle. double or triple that. >> there's room to grow there. >> that's true

give them a few locations to focus on there >> we'll see >> shares down about 30% >> and they report earnings next week >> that's right. >> the native american tribe involved in a patent deal is now suing the two major tech giants over a separate patent issue meg terrell has been following the story and is here to explain it, meg. >> reporter: despite a lot of backlash, the tribe is not backing down on the strategy today it filed patent infringement suits against microsoft and amazon they transferred from small tech company src labs which claims they've been infringing the ip for years. they're seeking damages and royalties. the mohawks are involved because of sovereign immunity held by tribes the patent challenges to a relatively new system. ipr. it's become a battleground in the tech and pharma world and the supreme court is due to hear a case soon on whether the system is constitutional now the system was created just six years ago through the

america invents acts proponents argue it's a way to more quickly dismantle bad patents. the critics say it's enables companies to legal limbo by filing suit after suit that's the context in which they are partners with the tribe. effort from generic companies while if it fought on the same patents. of course monday afternoon a federal judge ruled those are invalid. for the tech cases, the involvement protects the potential against a potential for counterchallenges. the lawsuits today were filed in federal district court in virginia, microsoft and amazon didn't immediately comment it's an ongoing story. >> yeah, i mean, let me make sure i have this right >> yeah. >> so before the deal, it was lawyers in the first place who went to the tribe and cooked up this tech deal with a company who because of that tech ip is now suing microsoft and amazon and i'm wondering if all that

scrutiny was brought to braer once the story kind of exploded all over the place >> yeah, so the tribe actually did start this deal before it did the deal the patent situation was closer to a decision. and so that really kind of leapfrogged the tribe's tech dials. it was this lawmaker down in texas that figured out this sovereign immunity idea with native american tribes it's something they observed in the university system. they're trying to transfer that over to another entity that has the sovereign immunity, guys >> did you mention what the patents are they that they claim and have violated? >> data processing technology that says was developed. sent letters to microsoft going back seven years talking about the technology so it'll be interesting to see this play out. >> and see what the supreme court does, if anything, on this matter thank you. >> thank you >> meg terrell. >> and while we've been talking,

the dow has been hitting highs for this day and we're going further into record intraday territory. right now up 174 points on the industrial average the s&p also in record territory up four points and decent gains for the nasdaq and the russell as well today. coming up, wells fargo ceo jim sloan, hopefully you saw it earlier, sat down exclusively with our frost in the last hour after facing lawmakers on capitol hill earlier this month. we'll bring you some of his comments when we come back plus the popularity of voice-enabled devices is exploding. pad now amazon is looking to exnd to everything from voice-powered cars to books and even toys. we'll have the details after the break. of thmarkets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65.

having someone coach you through it is really the value of a financial advisor.

boy, major averages in record territory, but look at shares of free soaring by 18% today. seeing their best day since january 2013 after comments from the company's new ceo saying that he is undertaking a full evaluation of the led lighting company and working on developing a strategic plan to right it's trajectory for that stock. and that certainly has been the case today up 17.5% right now,

kelly. >> thank you, bill i'm over here on the floor with virtue financials. i mean, you think there'd be fire works and confetti and, you know -- i mean, as you say, i think this kind of sums up, this is one of the quietest 150-point rallies we've had. not to mention, it's a record reaching one so what does that all say to you? >> yeah the record, you know, i think is getting a lot of play it's only 23,000 it's not 25,000. we could get there tomorrow. >> yeah. >> but this is the most uninspiring rally. you're seeing the volume is almost 1-1 up versus down. most of the indexes are flat, and we're going to credit this to ibm this is a story that's been nine quarters in the making and finally now we're chasing this return. >> right the passive investing going. the momentum, these sectors, pile in all the at the same time on the same news and this is what you get >> where does that leave us then >> again, ride the trend you know, look at united health care yesterday, right.

it was up 12, it was up again today. it's got legs to the story ibm will have legs people understatemented what they were going to come out with for the earnings while they didn't blow it away, they were good the story now is developing. and now there's a story so people were passively investing in this because there's nothing else to do >> there's bitcoin >> i don't understand bitcoin. nor do i want to but i guess my point is, that's where the retail excitement truly is we hear it every day it is not people ask, is it single stock selection we talked a, little while about how that's making a comeback, but you're talking again about the passive of health care >> it's still sector-related you're going to be buying some of the names in the sector because ibm is doing well. you don't want to miss the other ones if in fact they start moving and that's what we're seeing and now you're going to start talking about the end of the year where the laggards come into play because there's so much reward to the upside. >> yeah. >> and so little risk. so why not invest in all of

them so you make all of them? >> all right matt, thank you. we'll let you get back to work bill it's time far cnbc news update with sue herrara. >> hello, here's what's happening that the hour everybody. nfl commissioner roger goodell addressing the league's national anthem controversy today saying he believes everyone should stand for the anthem, but he symptomed short of making a rule requiring it. a top facebook executive admitting today that russian agents used facebook messenger to interfere in the presidential election the head of that unit saying it's a very small number and the way messenger was used is still being investigated tens of thousands of people flooding the people of barcelona last night to demand the release of two activists being jailed by spanish authorities in connection with the fight for independence from spain. and here's one, it's a puzzler, former employee in the south texas justice department has been arrested for stealing more than a million dollars of

fa highway as the. over nine years he would allegedly intersect and redirect county-founded shipments and resell them. here's how he got caught though. he took a day off. 800 pounds of fa highway as the showed up which which said we don't serve them at the justice department so he got caught >> oh my goodness. >> that's insane >> 800 pounds of fa highway as the. oe lay there you go >> i heard that chill lease created this word. leftovers? >> it would be a small version of that. >> yeah. >> you've got it >> i'm serious sue, thank you very much >> you got it guys see you next hour. amazon is making a big beth on voice-powered technology. we have a look at some of the new products coming to market that the tech giant is funding more of them, dooerd ra? >> plenty more, more on the way. we are here in the alexa lab which you can see behind me is a mock-up department in the middle of amazon's campus is where the

company tests new devices and skills last night though, we got an even earlier glance with a company creating the next generation of alexa functions. like this smart phone. >> can broadcast the action. and we can share these highlights any time. so we're speaking the same language that kids are used to with mobile gaming >> reporter: that encourages kids to get off the couch. we got to try an alexa-enabled storybook. >> taking one last carrot when the mouth opened wide. i knew it, cried dot on guard but wolfy wasn't looking at dot. now that was a really fun one, it plays sound effects of course as you read the book to say your kids at bedtime, there was another company that was building alexa for the office. now guys, these companies are all part of amazon's first alexa accelerator backed by the 100 million dollars alexa fund, but

as you know and as kelly eluded to, amazon is constantly building new skills. now at 25,000 skills, so most people use their devices mostly for basic things like streaming music and timers so what is the next mainstream function have a listen. >> with calling and video calls on an echo shore, you should try it because that is a revolutionary thing where you can even drop him into people who have given you access. >> reporter: now also made the point that his kids don't have smart phones, so this is how he calls up guys. this is all part of amazon strategy to free you from your device in the home and in the car, especially as a company doesn't have it's own smart phone. >> i did hear you say you're in a laboratory right there you look like you're in a loft apartment, do they have employees living there just to

see how they interact with them? how does that work >> reporter: no, bill, we have to turn everything off or it'd be chaos with the a. times we just said alexa. behind me, a living room, dining room, kitchen, the devices you see from the fridge to the tv to the stovetop, they're alexa-enabled. so you can come in here, turn everything on and say something like alexa, good morning, and lift the blinds and turn on the lights >> this is interesting because also there's that sonar speaker that's out today what happens if you have more alexa in your house. do all of them turn on >> change your name then >> it's a very good question because there are now a host of alexa devices. you've also got the standard echo over there, it's supposed to pick up the one is the one closest to you so we worked out it and it is intuitive in that sense. >> you can change the name on

those, can't you >> you have one, i don't know. >> my daughter changed the name on hers. >> really? >> i think you can do that >> i don't remember what it is may believe. >> echo. imagine you had a daughter named alexa or someone in your family named alexa. >> my cousin's name is alexa >> she must be so proud. >> her parents are probably like, if we ever saw this coming >> thanks. we'll change it to that. see you later. yes, if you're tuning in, record day, pretty good rally here with the dow up now 170 points right now just off the highs of the session looks like we will close above 23,000 for the first time ever and s&p in record territory as well seemed like a bipartisan agreement was at hand to stabilize obamacare exchanges. well then president trump took to twitter and coming up, we'll find out where obamacare stands and what it means for health insurance companies. eo> but first, wells fargo c just sat down with rick ross

about the bank's performance and criticism from congress. we'll bring you the highlights when we come right back. alerts -- wouldn't you like one from the market

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falling on a downgrade by piper. the firm lowered it's rating to neutral to overweight because listen to this, it's 2017 team survey showed a decline in beauty spending. how is that possible piper jeffrey also cited increased competition from sephora. ulta beauty is down 1.7% shares of electronic down today after announcing late last night that it is closing the california-based studio that currently makes it's star wars video games. it will transition the development of that game to a new team in vancouver. the latest edition of the star wars game was set for release in 2019, now the company is looking at a new timetable that is yet to be announced. interestingly, and that stock is down almost 2.5%, kelly. >> on the flip side, financials in one of the best performing s&p sectors today and wells fargo is contributing to that. that's up about two-thirds of #

%. sat down with tim sloan and joins us in some of those highlights, will >> hey, yes indeed it's a positive forward-looking statement from tim sloan most notably that they can reach past highs and the worst is behind them from the cross selling scandal. however i engaged on the topic of whether he misled investors in the past when we talked about cross selling and not mentioning the fraudulent nature of it. here's an exchange from them >> has come under scrutiny, is there any sense the bank has pushed that to the limit >> no. was your response. >> uh-huh. >> is that not misleading investors before this dame out >> i don't think it's misleading at all i think the issue -- >> any sense that the bank has pushed the strategy to the limit. your answer was no >> yeah, again, we're talking about the bank we had an issue within our retail banking business and we've dealt with that since i've become ceo >> okay, but i beg to differ

i feel that investors watching now who bought the stock then and endured underperformance since then because of an issue that you denied about will be feeling hard done by based on that >> you and i agree on a lot of things, we're going to disagree on that. >> overall he made a strong case for why he should remain as the ceo -- of wells fargo, excuse me, and the stock is up three quarters of a percent today, kelly. >> you and i talked about this yesterday before you left. this company -- you'll wonder whether they can continue to weather this as long as they still have the same management and board members in place there. and it doesn't appear like there's anybody looking to leave there, does it >> no, i think that's bad, bill. two sides to this, i've spoken extensively to all of the analysts on the topic and many do commend and applaud the changes that tim sloan has made

since he has become ceo that it really is a sense of turning things around. they believe that the worst is behind and the earnings impact has been relatively small and is showing signs of improvement the questions that remain in many media guys, not just us of course but in politician eyes for certain is whether there should have been more responsibility taken for actions before this became public and that's clearly where tim and i clash the most today and we'll have to see whether that drags on we're a year passed issue and it's still front and center. >> i mean, you traded a premium for the entire time that we now know these issues were going on, and since they've been revealed. it has yet to regain that status on wall street it's been underperform pg what do investors want? >> i think that's absolutely crucial because even if we take away q4 when tim sloan had become ceo and sort of set that aside with the underperformance that came in q4.

just year to date, wells fargo shares are down 3%, the banks index is up 9%, and some of it's really competitors, the big cap banks are up 15 to 20% it's been huge as you say, that almost solely comes on multiple issues as opposed to earnings issues and i think you have to put that squarely at the feet of ceo in charge year to date, but silver lining he said clearly in the interview just there that they can get back to historic growth rates, and it was those historic growth rates that led to the earnings multiple premium so perhaps some of that people yum is recoverable again >> well right, at the time they were selling quite a lot of product. if that's not the model anymore, i think there's questions about what replaces it >> especially when housing is not as strong as it was. >> absolutely true, i guess if mr. sloan was saying there, he's confident the same growth rates are achievable i am certain he is saying at that time that it'll be through totally legitimate means we'll have to see if he can

deliver that growth or not >> on his knees hoping that the fed is raising rates some time soon >> great job as usual, will, thank you. >> see you later >> thanks. >> 15 minutes to go into the close. dow's up 166 right now, s&p's up 3. interestingly the russell is the only average not in record levels at the moment and the nasdaq is up 4.5%. we have more earnings. more to report after the bell. up next, we'll debate whether you should be buying am ex, this rallies more than 50% over the past year. plus, hey kids, it's almost time for halloween and after the bell, we'll talk to one short seller who says this candy company is more of a trick than a treat. look at the traders. they're wondering what the heck's going on here we're coming back. way to go. ♪fly me to the moon

♪ ♪and let me play amon-- (ding) (bell mnemonic)

art cash stopped by to tell us that the market on close orders he said that it'll essentially be a nonevent.

it's a bias to the sell side of $100 million with the kinds of gains we've seen today probably right we won't probably see much, maybe a little bit of an edge taken off the rally here we already have, up 178 i think at the peak, but now up 165 points here. >> not too shabby. >> well done. >> and more earnings on the way, american express reports we're going to wait on those in just a few minute's time as a run-up to the numbers. about 50% and a bull and a bear are here to square off on the company. >> said bull is bob, he's managing director of behr is the u.s. banks and specialty finance at credit sweets good to see you both what is that it that you don't like about american express right now? >> it's more expensive than other companies that sort of do the same thing and i think there are going to be pressurers on their earnings as they have to bring their rewards costs up and

the division >> and what about you, bob, what would you say in response to that first of all? >> i think, i look at am medical examiner as is payment's company, there are multi 14-times earnings, historically it's been s&p multiples. i do think there's several turns. i think they have proven over the last year that this is still a really good company and they have a multi-decade secular growth opportunity globally in consumer and commercial carts. >> bob, what about the supreme court ruling is that a risk for them? >> i don't think so, i think when you go into a store, you're using your american express cards, merchants aren't real quick to to want switch you to another card also the gap between am medical examiner and visa and discover on the interchange rate or discount rate is closer than it's ever been historically. >> what's the biggest question you're going to have for the company during the conference call what are you most interested in

hear kpg. >> most interested in how they're going to get their growth up closer to the industry level without kind of raising rewards costs too high >> and how do you think they might do that? >> well, that's been the challenge. i would say, you know, as you get into the back part of a year, travel becomes a bigger element than they have started to raise what they were giving people for travel rewards. i think it's going to be a challenge for the company. >> bob, have they recovered from the costco loss? >> this will be the first quarter they record year over year without costco. so it is an important quarter, but the metrics they've given suggest they have. revenue growth has accelerated five quarters in a row at 8% revenue growth, that's a very healthy revenue growth rate. i think it'll pull back a little bit from there they have raised the rewards substantially, they're very competitive, but they've offset the higher rewards cost with much lower operating expenses. they really have massively

improved operating deficiency at the company. >> who are your favorites in this base if it's not american express? >> so we do like both syncny and discover they've got better growth in revenues and is buying back about 7% of the stock discover about 8% to the american express. >> is this a pricing physical they fall, would you like it then or are ju i don't justworried about him growing the company overall. >> we've had questions about the business model particularly in the u.s., but certainly lower prices that would relative to other companies that do the same thing. would be better. >> and you mentioned discovery, those are the two companies where people have concerns about their credit quality would american express be a better name to ride out the late stages of this expansion >> i think it's interesting if you look back at history when am medical examiner tried to grow loans faster, they've often had some issues. i don't think that's going on right now, but i do think that investors haven't yet factored

in enough loan loss provision growth charge-ups have been good, i think they're going to have to add more to their reserves because they're growing their loans double digits right now. >> quickly before we go, bob, same question, what's the biggest questions you have for the company in their conference call tonight and you're looking for it >> well, i'm looking for -- i mean, i think they have the ability to accelerate growth, you know, quite a bit over the long-term from their target of 6% and i'd like to hear a little more on the international growth strategy which, you know, it's about a third of their revenue today. i think it has a lot of room for growth i want to hear a little more on the growth side of the business, a little longer term >> all right gentlemen, thank you. bob knapply, thank you both for joining us today and we have the earnings from am medical examiner coming up in a little bit. in the meantime with the dow, s&p, and nasdaq in record territory. we have the closing countdown coming up in a moment here >> i'm doing my part of the tease, i'm just going to s, ay after the bell, am medical examiner united

ebay >> right to the point. >> stay with us. ♪

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about two and a half minutes left here as we head to the close, record territory as we've already established. and this has been an usual rally because lately, when you mention bob, he said that from 22,000 to 23,000 of the dow, it took ten weeks to cover that thousand points that's an average of 100 points a week, 20 points a day. we've been doing this incrementally. not today, it was from the get go look at today's chart, you know, at the low of the day, we were still up 89 points, at the peak up about 178 very good rally. quick look inside the dow, where was the strength clearly ibm. that was about 100 points of the gain today with this earnings powered 10% gain that we saw today. so ibm and goldman sachs also was higher so those two were among the company's powering those -- the dow higher then on the other side, how would you like to own chevron or pfizer

they were lower today on a day when the dow is up 156 points. mixture today, not everybody was in the water we're seeing a flattening of the yield curve and some of the shorter trim yields are moving higher and the longer terms are holding or maybe even going a little bit lower, we're at 233 right now on the tenure. and oil came back a little bit we're at around $52 a barrel holding with opec talking about trying to maintain their cuts. and bob, earnings out after the bill tonight we'll see if we get more fireworks like on ibm. >> you were talking on amex, i want to hear from united rentals, here's the equipment rental around the country, construction is big, i think they're going to have a lot to say. i think their numbers are going to be very strong and that's a good insight into how the reconstruction visit's going down in florida, as well as of course as texas. we had the dow industrial's new highs. i'm waiting for the transports, didn't quite make it been lagging a little bit.

shy 150 points and just shy of new highs. and i would be remiss if we didn't mention the ipo should pricing at 24 opening at 34 and closing here, just below $30 right now. certainly impressive the first day. more chinese ipos coming later in the week. >> so a trio of records for the dow, s&p, and nasdaq today, what a day, more earnings coming your way. see you tomorrow, kelly. thank you, bill, welcome to the closing bell everybody, i'm kelly evans. a decisive close above 23,000 for the dow today. and it didn't take that long for us to do it. only about 50 trading days we close higher by 160 points there, paced bay huge move higher we'll talk about that in just a moment the s&p 500 also closing at a record high of 2561, much

smaller move, just about two points nasdaq deposit looks like the same story with a tiny move higher that eked out a new high just by the rounding points. the russell 2000 did go up half a percent today. it's still below the october 5th trading high closing high i should say of 1512, but again, just one day after touching intraday, dow closed above 23,000 today for the first time investors are ready for a trio of big earnings and we have reporters bringing us those results covering ebay and phil is watching for united. we'll sue you guys in just a couple minutes joining me, michael san toely.santulli legts start with the market moves. closing above 23 k for the first time 51st record close of the year. one out of every four sessions this year has been a record

close. the big winner in the dow was ibm today with a huge move higher, nearly 10% we're talking. the biggest loser was chevron, ibm also the biggest winner and decliner there, michael. >> yeah, i mean, ibm obviously the story with the dow, over 23,000, i think it's all those numbers that you've recited went up about four days it's a bull market acting like a bull market. i think this week, it's familiar based on last earnings season where the market gets held in place. near the high, as all the earnings kind of offset one another. not a bearish thing, butjust something that often leads to a cause. >> do you think people will put an asterisk on it because of the ibm move >> it's old school that the dow that which we don't really follow it closely, right, was, you know, driven by the ibm. so, i don't even know how, how -- i don't know if that ibm point has been hit or not. i'm not even really sure, but it was enough clearly to get the

market excited >> and that stock by the way up about 9% in terms of ibm we're talking about it's strongest performance in quite some time in the best day since january 2009 traded above the 200 day moving average for the first time since april and despite that, only one of five dow components that's negative for the year, jason >> listen, i think this is a cliche, but it seems an awful lot like goldy locks i think you were talking about the dow, kelly, which is 51, 51 record high. i think the s&p is 62 record highs this year. >> wow. >> and goldy locks just to the extent to which growth is picking up, inflation still seems largely kwee yes, sir sent and we have a largely accommodated debt. and you're also going into a seasonal part of the year where it gets very hard to fade the market so, you know, of course correction could happen at any time, but the fundamentals -- >> reminded 30 years ago >> right

>> mike, i was just going to bring up something that matt said last hour, caught my attention, he said maybe with ibm, people are starting to look at the only names that haven't been powering us forward and go gee, i better pick up the bargaining while i have them >> it gets very stretched when off stock that's down 180 to 140 over the time they're marching to new highs there was tension there. also for the billion dollar market, it's relatively heavily shortage it's like six days worth of average trading. that's more than tesla >> wow >> you have to trade somebody. >> keep in mind, people were leaning against the stock and it becomes dangerous to do that now look, you saw ge was about to make that turn here there's nothing guaranteed, yes, it's very tough to lean too hard negative >> is it a company you're scrambling to invest in here at this point >> not really, i guess i'd probably rather buy it higher with more confidence than a turn around has actually happened than buy it right here and hopes

that's the case. >> the revenue inflection point is coming. so they have a couple of quarters to show us if that's going to be the case health care and tax reform on top of washington's agenda today. tennessee senator lamar alexander saying he will work with the president to improve a bipartisan health care deal to fund obamacare payments. this after he tweeted he couldn't support bailing out insurance companies. tricky to follow since the last 24 hours in terms of health care there is the tweet from the president where he said quote, i can never support bailing out insurance companies who have made a fortune with obamacare. meantime, treasury secretary steve mnuchin telling politico they've been tied to tax reform kpexs so that we'll see a significant reversal if congress doesn't get that done. jason, do you buy that >> i do to a certain extent. although, i'm not sure -- i think he's protesting too much i think the market, you know, by the end of august most of the questions we were getting from clients were largely along the lines of, you know, when donald trump finish out his first term.

so the expectations have changed a lot in five or six weeks i don't think the expectations really for the administration have been all that aggressive. i think the president has had and the administration has a good five or six weeks i think again the fundamentals are quite strong regardless of what you have -- >> labor day >> the whole thing >> had a good five or six days. >> had a good five or six weeks. we were expecting you to get some sort of tax relief by the end of the first quarter i think that would help economic growth the irony if that happens though kelly, the economy might do better, but the asset markets might do a bit worse because interest rates will start to go up, people start to worry about all the rest >> jason, to that point, it was suggested that maybe that was mnuchin's intent today you know, should policy makers think about leaning against this rally at all >> well, listen, i personally -- i don't know that i would lead with the stock market. i think it could be a very

demanding mistress i think it could work out okay when it's going higher, but you could also get hung with it when it's not doing so well i would focus more on the fact that the economic growth is better and that business confidence has picked up meaningfully i think the administration can take a lot of credit for that. >> all right we also had an ipo down here today, it was shooting, anyway, the chinese company up more than 20% on it's debut here at the new york stock exchange. leading provider of online small consumer credit in china, it's a ipo listing at nike. >> it's a great kicker absolutely look, i think i would try -- >> quarter deck. you remember quarter deck? >> i was trying to think of the buzz phrases, spintech, chines consumer, it's mobile, and it's microfinance >> that's good for 20% >> also the ipo market in general has acted a little bit

better, you know, including the high profile slots if you look at pirks rks o index and etf, it's been outperforming. it's a risk appetite at the companies. >> what do you read from it karen, if anything >> i agree, it's always interesting to see what's been savored? what's in fashion? what can get done? when lending club had all of it's issues, i think the ceo wouldn't have flown at all i don't think they would have brought it, but good job for them for getting it done >> today is a chinese congress kicks off -- >> the what? >> lucky number. >> the 18th. >> yes >> yes because eight's the lucky number, right? anything with an eight in it is this evidence that no matter what the politics of that may be and the struggles to kind of -- people still have a huge appetite for this part of that economy? i mean, they like -- >> no doubt about that and in particular, the chinese consumer this idea that you have mobile internet in over a billion sets of hands, yes, that's a shock.

and they're leapfrogging different parts of our industry, right? they're going right to mobile everything, how much data they can basically mind because of that >> all right we mentioned some big earnings are headed our way this hour, american express earnings are out, leslie picker has the numbers out. >> we're looking at a beat on the top and bottom line for american express on the bottom line we're seeing eps of 1.50, that was versus estimates of $1.48 on the revenue side, the company posted $8.44 billion in revenue versus estimates of $8.29 billion. they also raised their guidance to $5.80 to $5.90 versus $5.74 estimates. you can see the stock's up just a little bit, about 1% american express shares have gained about 53% over the last year or so they really had to knock things out of the park to get a decent

pop on today's earnings. certainly nothing to cry over there, kell. >> leslie, thank you mike, any thoughts >> it's had a great run. seems like there are skeptics to be one over if you look at basically the street is not loving the stock right now, and so i do think that you have more of a positive note in people like you i think it's also had a halo effect from the mastercard, some of the great growth stocks right now just because it gets kind of, you know, lumped in with the payments where they have their own payments network >> it's true though, when people talk about the visa and mastercard amex is the afterthought, it's there -- karen, what do you think? >> it's a different animal you do take credit risks so there's that. we might want to look at their credit losses which have been very, very low either they take up a little still very, very low to me, it's challenging, you know -- it's very competitive now. you saw the chase sapphire how competitive was this to sign up people american express i think it's an expensive product that they offer. millennials aren't quite as

enamored with it i mean, clearly, look at trades for a big discount >> with halloween coming up, we had the millennium dressed up for halloween because they were so excited about some of these offers now american express did try to come back and get that >> that was right. they're trying to fight back, but it's expensive to do it. >> millennial's the halloween, give you free stuff. >> michael you have to leave the couch. you have to go around and do it. >> no bashing is allowed anything to add there? >> millennials or amex no, i have a lot on millennials -- i have a lot of material on millennials. >> all right, all right. >> i have to say though as far as the financials generally speaking though, it's our strongest conviction idea, and i know, you know, i'm not a stock picker like karen or michael, but financials in my opinion -- >> is amex a financial for you maybe that's a dumb question >> no, in my opinion it is, i

mean, this is the extend where it's probably pretty levered to interest rates and really just the economy in general i put it in the replacing trade at the very least. and in my opinion, you're setting up for probably what is likely to be a very good holiday season we had a chart earlier this week where we showed or we showed wages versus the place and you are starting to see wages are starting to pick up. you're starting to get some people are starting to get some wages through and you do that in a context of low placing, and that's as fwhel my opinion for amex and the financials. >> yeah, the line that caught my attention from the beige book today was the growing use of sign-on bonuses to attract workers. that is not the kind of line you typically see. amex is lower by half a percent. also circling back to the moves with rates today despite the record high for the market overall, some of the bond sectors like utilities and telecom were lagging in the

market especially telecom just down about half a percent. >> even though bond yields are not raising higher, they're sticky at the low levels to me it's more about whether the street wants to be more defensive or offensive right now i think it's where the money is flowing right now and probably the reason that these guys are suffering >> and how does that fit in, jason, with what you're saying a moment ago about the financial kps. >> listen, i think yeah, i think it's very well to the extent to which i think a year from now, interest rates will be meaningfully higher, short rates and long rates -- >> what if you're wrong? >> well, you know -- >> wrong rate. >> and that happens. that happens more frequently than i care to admit but in my opinion, a lot of this, of course, goes back to what we were talking about before a lot of it hinges on the administration getting a good part of it, it's economic agenda through. i think as far as deregulation in the financials and the energy sectors, i think that's already happening. that's not on the -- that's

already very evident, and i think it's going to show up in the earnings as far as taxes are concerned, obviously that's very much up in the air and it's going -- it rirs some political capitol to get that through we remain optimistic and again, in my opinion, that goes well for economic growth next year. the irony might be that it might not lead to as strong a market as we've had this year just because we'd start competing with the east. >> let me ask you a question, do you think that the market was sort of rather have the hope of a tax plan, but not quite there yet as opposed to a very, very watered down one that doesn't have as much punches to the administration or originally hoped. >> well, i think yeah, karen, it's a great question. i think in some ways it might be better to just have the hope of the tax plan without any versus no tax plan at all and that's because again, if you're at the verge of adding a lot of stimulus to an economy that's already in my opinion

getting tighter. certainly the unemployment rate is 4.2%, not sure, so sure if you look at the work there's as much slack in the labor market as some people might think there is so that becomes, you know, inflation is something, six months ago, we were worried about deflation and we were for about eight years. now i'm starting to just try to look further ahead and again, you're going to have perhaps some competition correctly where you didn't have any before so -- >> yeah. >> the administration is going to go for it regardless. it'll be a good time, it just might speed up the time of which you actually start to get worry about a recession. >> i want to circle back to this old world theme today with the dow leading the way. ibm, you know, contributing to that and bitcoin was lower that's the trifecta. >> yeah, right. >> it's the triumph of the '90s or something like that >> right >> but it was down there were some talks karen about stepping in and regulating it, but at the same time, this was hardly a blip in what has been a huge move higher and you

think there's real potential with something in that >> i actually do i'm a valued investor, so it's very, it's a very different kind of investment. it's really the idea of i believe that currencies have a place and i feel like it is early in the internet. i don't know which of these currencies is going to be a google and which is going to be petsmart, but i don't know pets.com maybe, sorry, sorry pets.com >> have you been drinking the kool aid >> he's done a masterful job i know which one, but somewhere in there, there is going to be huge value creation, already it's happened, but we are far from the end >> at what point do you just keep hanging on to this thing? i'm up 500% for the year when you balance it out for the other coins. >> first thing is to take all the money back and play with the houses money, but at some point you have to be disciplined and take more money off the table. but it's horrifying to watch on a day-to-day basis really should just not look at all.

>> a bit of volatility today >> we did. and a lot of people have said, look, early days of the internet, there was a net scape which changed the entire world as a company that didn't work that great, but you had to invest in the concept, not the company. >> let's move on to an old world type of story. earnings are out, let's get to phil with the numbers, phil. >> kelly, united shares are fled after the company reported third quarter earnings better than expected in terms of bottom line coming in at earning $2.22 a share. expecting them to earn 2.14. revenue just a smidge above estimates coming in at $9.88 billion, but the two metrics that will get them the most attention, passenger revenue as well as cost per available seat mile, passenger revenue fell 3.7%, that was in range with the estimate of the guidance that the company had put out not long ago where they said it'd be down 3.5% in the quarter and cost per available seat mile up 3%, and that's largely due to fuel and

labor costs. don't forget, tomorrow morning, cnbc exclusive on "squawk box" we'll talk with oscar munoz, not only about the third quarter, but the outlook for united airlines, kelly, back to you >> all right, phil, thank you very much. mike, they've gotten over the high profile issue with dr. dough. i think i just saw a couple guards responsible for that were fired. what do you think about the thing? >> i think it's good to go with the group. to be honest i'm not that conversant with what's going on here, it's very, very cheap, it's about whether people think that the revenue per mile can go higher from here that's the whole story they're off their highs, they've bounced, and i think it's a matter of a show me from here. >> karen >> they're all very cheap on a pe basis really the question is are they going to reign in the capacity they had shown good job of doing that, and then it started to get a little more, just a little more competitive, a little more capacity adds, hopefully that is under control and long united, delta, american, they all

traded >> we have breaking news back on american express leslie, what's happening there >> american express announcing a management change here with tim stepping down as chairman and ceo. he is retiring after 37 years at company. he is being replaced by steven squary as ceo and chairman that'll be effective february 1st. you can see american express taking -- losing some of those gains it made earlier after it reported earnings. we are digging through ret lease and let you know what else we learn, kell. >> thank you, yeah the stock is now down about 1%. you know, there's a lot here joint statement that includes remarks by robert walter who's the lead director of the company's board of directors they even have a comment from warren buffett who sighs that ken has been the gold standard for corporate leadership and the benchmark they measure others against. he says he led the company through 9/11, the financial crisis, the challenges of the

last couple years, am exalways came out stronger, never went for easy short term answers. no one does a better job when it really counts and he's always done it with the highest integrity. and it goes on those are the comments that are quite supportive of the ceo that's now leaving american express. >> i don't think it's that shocking people wondered, probably is not going to be in the not too distance future, timing a little unusual. i think they've been planning this for a while >> it's interesting because a couple years ago there was an active in american express, they weren't just saying that made the case that smgt maybe tired, should be revived. other changes they advocated they shed the activist pressure, i don't want to read the market's minds here, but it does seem maybe a little bit and preparing -- i mean certainly, it's going to be sooner than later between how long he's been on the job maybe it's just a question of they didn't necessarily kind of lay the ground work for the move >> and the incoming ceo comments

in the press release that he feels good about what's been accomplished and it's a fast-moving marketplace. we're in a strong position for the years ahead he says. of course mentioned digital conversions and payments and commerce, so many of the other stories we're covering today jason, last word before we let you go, american express it is down less than 1% now on the news that ken is leaving >> listen, i would view it largely as buying opportunity for many of the reasons i, you know, i said before, and again, i'm more of a macro guy, i know there are significant challenges, competitive challenges, and visa and mastercard, by the same time, i think, you know, from my perspective, given where we are in the economic cycle, which in some ways, i think were very much in the middle of it, now towards the end, and i think we're probably in the very early stages, relatively early stages of the interest rates in inflation cycle. i'm a buyer. >> all right guys, thank you for joining us a lot of news, fast moving at this hour.

karen and jason, very much appreciate it. we're going to continue to cover these earnings results a z they come in also up next, what kind of investor shorts a candy company ahead of halloween our next guest joins us to explain why he's predicting trouble and as much as a 50% slide for tootsie roll industries insurances are tintoryg maintain customers what that means for the future of this industry which is facing so much uncertainty. stay with us [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.

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welcome back, we have the earnings adidi has the numbers. >> shares are slipping even though it was a fight on the top line revenues coming in at 2.4 billion versus estimates of 2.37 billion on the bottom line, it came in inlin, exceptions up 48 cents a share. one possible miss could be the active buyers nap number are 168 million of 171 million analysts have been bullish

considering they've invested in a lot of website redesign and driving more traffic to their site on the color on that. as well as the company's holiday sales strategy and how they plan on taking on amazon. again, shares are down about 5% right now, kelly, back to you. >> thank you mike, just because it's such a big downward movement. paypal has been having a banter week should ebay have kept it >> well, you can't do the counterfactual basically paypal is getting that because it's a stand alone thing. you often see that where you have an older, today issier part of the business. we think of mostly as very old economy as the victim, ebay is kind of a digital economy potential amazon victim, that's why the market is sensitive to things like fewer actions. >> great point and ebay is down 6% after hours now initiated a short on tootsie roll industries. not just that, also the blow pop and junior mints over fears, this is my dad's favorite movie

theater snack of all time. stock is down more than 6% it could fall as much as 50% citing change in consumer tastes and industry regulations we reached out for comment, but the company has yet to respond here with us now shares down about 2% today what would make this stock fall 50% though >> well, we think there's an inherent takeover premium in the brand that's long been the bull case here, but what we find when we do our channel checks is that the worst product place on the shelf at the bomb, all the way at the back of the store the brand is not resinating with the health conscience consumer that is wanting more nuts and fruits here. >> something that pretends to be healthy instead of just presenting itself as a candy can we talk about kind bars. that is not a health snack candy bar in kind closing. >> yeah, well this is even worse. the new labeling will illustrate that tremendous amount of added sugar here the junior mints, 160% of your daily value of sugar just from a

box there. >> all right >> head start on tomorrow. >> michael, what do you think about this >> well, there's no doubt about it that forever tootsie roll has been considered a takeover candy. you did have a very long ceo, passed away at the age of 95, i think, a couple of years ago, everyone says that would be the catalyst, his widow i think is still the biggest shareholder, i think. >> that's correct. and so the question is, at some point going to be the trade and at what price if that ever happens? obviously that's again what you're saying about the attraction of the business itself. >> you're right. her husband passed away two years ago. >> yeah. >> they've made no changes or any suggestions or given investors the succession plan of why this company -- >> it's run like a family business in a sense. >> exactly it really shouldn't be public. they don't communicate well with investors. don't hold conference calls, don't give disclosure, and it's priced already as if it's been taken over we just don't see any upside there at the current level >> just, i love andy's mints,

and i didn't know that they owned ande's mints they wouldn't let me eat them last hour. the other thing i'm wondering about though, back to warren buffett and what they did with these candies. they took a company that would seem to catch nobody's attention and they said, you know, we can wake up and raise the price on it, and it's contributed a bunch of capital over the years that they've turned into a whole other thing. is it declining that rapidly that they can't raise prices and have a decent business going >> well here's the big problem with that. the largest customer is walmart. walmart is notorious for squeezing margins, getting the best prices, we think it's going to be very difficult to get more margin and on the topic of margins, we think tootsie roll is overstating. they're not including costs, warehousing distribution we think the gross margins are overflated by 8 percentage points >> that's a lot. do you think the shares would drop substantially >> i think the bigger issue is the cash flow. we think it's overstated by $50

million. they've been using cookie jar counting to take back premiums >> i'm going to hand this out for halloween. the kids these days are about dots >> this is a point, but i always associate things like junior mints and other candies like that with movie-going. is that a big channel for them >> these junior mints cost $6 in the movie theater. they've got to be doing decent business ben, thank you for joining us. appreciate it. >> thank you it is time now for a cnbc news update, let's get over to sue herrara. >> hi kelly, thank you so much here's what's happening that the hour everyone. the florida representative who accused the president of making an insensitive remark to the

widow of a fallen soldier is standing by her account. fredricka wilson is not the only one that heard the president denied it saying quote, i did not say what she said, end quote. iran's supreme leader is calling on the european union to do more to ensure the success of the international nuclear accord after prumpb decertified it. european companies have rushed in since that agreement and iran wants to use that economic leverage to protect that deal. the chicago bulls have suspended bobby portis for eight games. portis punched his teammate in the face in a fight, it was a big fight during practice. he suffered broken bones in his face and a concussion. and the campaign to save l le cirque is on. the restaurant skrejed to serve the last on new year's eve a long time customer is making a last ditch effort to keep it

open we'll keep track of that one for you. that's the news update this hour kelly, back downtown to you. >> all right thank you very much, sue >> yep sue herrara. amazon customers can now officially go to kohl's and return items they don't want look at the new partnership and see whether it could help drive traffic at kohl's even as amazon is increasing the clothing business ambition. netflix doesn't reveal how many people are actually watching it's shs.ow now they can determine what netflix viewership is really like our fast take when we come right back ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.

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welcome back, shares of a adobe are on the move. >> reporter: the company is relesion preliminary financial targets for fiscal year 2018 that pleased investors in the stock. they've reported non-gap eps of approximately $5.50 sper share, that was above $5.21 per share they also projected revenue to be about $8.7 billion which would be about a 20% year over year growth in fiscal year 2018. there are three investored today in this week back over to you. >> leslie, thank you, big move higher for adobe systems, nearly 6% this afternoon. i'll keep an eye on that one it's time for today's fast take.

let's begin with remember how jpmorgan was interested in buying that payment company world pay? the one that bought $10 billion back in august now jp morgan is buying we pay instead. it's a fraction the size of the we pay but it's software is used by business sites like go fund me michael and we know this space is so hot. >> absolutely. people to want spend differently. i think every calculation of big huge market that are still kind of using archaic means brings you the payment. so many cashes and checks being used and swipes and cards. anything that leads there is going to be appealing to a jpmorgan also because you're watching the baseball playoffs. how many times have you seen the ads? >> yes, exactly. but it is, we talked to tom brown about this as soon as they throw their way behind it. that's why they're going to the store -- anyway. >> other things to do. >> it does feel like the beginning of what's going to happen for the sector. next, aha, ratings are

coming for netflix new service for the platforms, it'll track the number of people watching and more details. things like their gender and ages netflix is the first streaming service to be tracked. amazon prime and hulu are likely to be added next year according to tech crunch what does this tell you about netflix? doesn't sell advertising now, that's kind of the point -- >> yes that's one of the main things. obviously it means that netflix is dominating eyeball hours. incremental watching is happening largely on streaming and so neilson wants to essentially be able to track that for whatever customers want and i can think of a couple potential customers. >> yeah. >> well, like -- >> interested, exactly, the size of the media, if you have a show that you want to sell into syndication or sell to netflix, you want to have an idea about that viewer profile and what's the value of it might be and what works and what doesn't. netflix thinks it's proprietary. >> i still hope that at some

point we all get the numbers finally today, richard branson lashed out against alaska airlines on squawk box this morning, listen. >> the sad thing is america has been voted best airline in the state, 12 years in a row by the traveler and it's a great airline. and i think people love it and i think alaska is very foolish to just absorb it. big companies often do this. they buy something because it's doing so well, and then they get frustrated >> so the thing to me about this is i kind of see where he's coming from. i mean, what is the point from alaska's point of view of buying virgin airlines then getting rid of the brand when it's done so well >> obviously they hope it can work -- the brand halo can go toward their other business. it is a little bit odd, especially considering alaska air, the name of the company is not very descriptive of the whole business >> if anything, i would have taken the virgin >> yeah, virgin is also very much identified with richard

branson, with his other businesses he has started. i can see maybe not going with that i can see why he is in particular sensitive to the idea so, it's an odd judgment a lot of politics involved in the grading. >> and that's what he was saying also know virgin will be on the hyperloop now. we have that going ending subsidies to help insurance companies meaning to keep costs down. now the insurance companies are scrambling to keep customers from fleeing ahead of big rate hikes. up next, we'll look at how the insurance market is being impacted by all of these changes. state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first 50-mile unmanned flight corridor. and allows us to attract the world's top drone talent. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov.

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welcome back we closed above 23,000 for the first time today on the dow and decisively so with a 160-point rally paid by ibm, nearly 10% higher today meanwhile the s&p 500 and the nasdaq saw smaller gains, but record highs the ruszle 2000 is still about seven points off it's all-time high now president trump is no longer supporting the bipartisan agreement reached late yesterday on obamacare saying continuing federal subsidies will only benefit insurance companies. here's what the president said earlier today. >> if something can happen, that's fine, but i won't do anything to enrich the insurance

companies because right now the insurance companies have being enriched they've been enriched by obamacare like nothing anybody's ever seen before i am not going to do anything to enrich the insurance companies >> joining us now is managing director and health care analyst. pita, welcome back >> thank you >> it's been kind of hard to follow what's happening were this health care reform over the last 24 hours or so. where do you think things stand currently on the alexander plan that might fix some of the, you know, subsidies, you might call them, to these insurance companies. >> so the stabilization bill, there was a deal announced yesterday, but really that deal was just between two senators, maria and alexander and trump at the time praised the deal. it's far from certain as far as whether it gets passed if it does get passed, it might not be for several weeks anyway, at which point it might just be too little too late.

open enrollment starts november 1st. it's a condensed open enrollment, it only goes until about december 15th, so part of that package includes money for markets, advertising, so right now, i think insurers are bracing themselves they've got this all hands on deck mentality and they're sweating it out. they know enrollment will be lower next year in 2018 versus this year 2017 for many reasons, and so i think while the stabilization bill is a step in the right direction, it really might be too little too late >> yeah, because november 1st as you said is when this will begin. so the rates that people will see, are they set already? and do they include these payments or not? >> some of the big national insurers, they essentially for 2018 assume that the government would to the provide those so it's co-payments, csrs are

cost sharing subsidies they included them in their rates which of course may sway about 20% higher, at least they realize that they would be okay in '18 if they did that. >> when people go to look at their -- when they look at the available plans come november 1, they're going to see that a gold or a silver or bronze plan probably going to cost them at least 20% more next year than it did this year? >> exactly there'll be sticker shock no doubt. and again, insurers are not expecting next year to be a banter year. we've had about 9.8 million in the individual market, in the marketplace, the number will be vastly lower because of three things, number one, this condensed open enrollment season, number two, there's no marketing, there's no advertising dollars. and then number three, there's a mandate penalty that is the requirement that all americans have insurance and that's really just not being enforced.

now you may not have csrs, so it's really the perfect storm and i think insure verse an all hands on deck mentality and they'll be sweating it out >> and yet they are trading basically all time highs we'll see what happens in the next days and weeks. thank you very much. >> thank you traffic driver, business killer the new partnership between amazon and kohl's could go either way for kohl's. we're going to break down the il a between the new school e taernd the old school retailer right after this.

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welcome back alexa is heading for kohl's. the department chain is hoping that ai products and other services will create an experience and drive consumers to the retail chain. courtney reagan joins with us more >> do you have an amazon return? curious how alexa can help you collect your home? head to kohl's today ten stores in those cities can help you with both, 72 more stores or add those features in coming months. kohl's employees will actually pack up and ship back your returnable amazon orders for free it happens just inside the front door there's even dedicated parking spots for those making amazon returns. the returns is located inside the amazon connected home experience there, amazon employees will demonstrate how an alexa-enabled device can do thing likes turn on the lights. michelle goss is spearheading the strategies >> we challenged ourselves to

think really differently about what type of customer experiences we can bring to our customers. and i think this is a phenomenal example of just that it's courageous, it's unexpected and we're really excited to introduceis, will this actually bring kohl's traffic that converts into sales there's no obvious downside for amazon that i can think of but kohl's is risking consumers using returns or home demonstrations but not actually buy anything from the kohl's store. kelly? >> we desperately need faster easy returns in all the stores and the mall i'm going to go check this out, courtney, as soon as i get out that way >> reporter: awesome >> i'll let you know what i think. thank you, courtney reagan telecom is one of the worst performing sectors we'll look at whether verizon can turn things around tonight on "fast money," one strategist will tell what you

they think is really driving the rally. oh, tony dwyer stay tuned what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter.

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welcome back verizon is slightly higher today in advance of tomorrow's earnings release if it's anything like at&t the other day with those subscriber numbers, well, maybe the market is a little nervous. julia boorstin joins us from l.a. with a preview. >> reporter: cord cutting, cost cutting, and content deals, those are the c's to watch in verizon's earnings tomorrow. revenue is expected to decline 3.5% while revenue is projected to grow to $31.5 billion verizon shares have been down

about 10% year to date it's been facing growing competition with comcast and charter recently entering the wireless space the company is expected to report roughly the same net subscriber number as the year ago quarter. there will be likely a big focus on cord cutting in its earnings call tomorrow. and verizon's tv customer base after rival at&t pre-announced video subscriber losses despite growth of its streaming service. when it comes to cost and content, tomorrow look for elaboration that verizon will cut $10 billion in costs over the next four years. he said last month the company was working on content deals he said he would announce something by the end of last month so we're overdue for an update on verizon's content plan >> julia, thank you very much, julia boorstin after the break, our longest closing word ever. it's quinquennial.

it barely fits

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welcome back it is time for our closing word today, and it is a pretty long

one. "quinquennial," an event that happens every five years today chinese president xi jinping gave a marathon three-plus hour speech in beijing to thousands of delegates and millions of television viewers it's the super bowl of chinese politics and is expected to last about a week as the president works to shore up power and the party points its leaders president xi jinping used the speech to chart what he called a new era for the nation he focused heavily on china's economy. xi discussed a more open world economy and a liberalization of china's market but also called for bigger and better state firms. "the wall street journal" reported xi is considering taking government states and companies and exert more control over tech boardrooms his government is also exploring the use of technology tools like

big data and artificial intelligence in order to keep tabs on its citizens the party congress comes as china's communist party grapples with a new class of billionaire entrepreneurs and powerful corporations quote, entrepreneurs are the rising power destined to battle the established power of the party and the state. what will china look like? investors are watching closely in the near term for signs that beijing is tightening or weakening influence on the market >> it's amazing, not many things happen every five years, this is one of those things. it's just certainly for a domestic audience in china, but you have to kind of read the tea leaves from the outside and say, it really is about commanding more of the vast economy that continues to grow at 7% a year >> as people say, the last 20 years might have been successful in terms of growth, that's not the next 20 years. that's why we're talking about the consumer companies going public today, but concerned on

crackdowns on citizens with surveillance >> and they're able to thread the needle, throttling back on capital flight and credit creation i think the big question is how much longer. >> we'll get more details in terms of the economy i think in november but for now we still have a week to go to find out what more is said in terms of china's quinquennial plans for its future thank you, michael, as always. that does it for "closing bell" today. "fast money" begins right now. "fast money" starts right now with the dow closing above 23,000 for the first time ever, soaring more than 150 points today. you guessed it, that's a record high for the markets that move thanks to big blue, ibm up nearly 10% following its earnings call last night, the biggest move for the stock in eight years. while still early in the season, 81% of companies have beaten earnings estimates, and overall earnings are up 13% from a year ago. now we've got strong earnings to go along with stro