it is important to point out that the retailer did lower earnings guidance as well as next year but that's because it is baked into that number. otherwise things were the same and we did expect that to come >> all right the dow up 447 thanks for watching power lunch. thanks for being here. >> thanks for having us. >> the bell starts now it is time for the closing bell i is it a sign of more things to come or reckoning on the horizon? >> netflix could be an indicator. will they face a surge in competition or continue to outperform we'll find out when the earnings hit after the bell stocks were covering much of last week's losses we'll tell you which names investors brought on the tips. on watch ahead of tomorrow's legalization

look which pot companies stantd straight ahead closing bell starts right now. anchts big rally wall street is higher by 501 -- sorry, the high was 501. >> market posing wild swings over the last week here is a check on moves over the last five mostly to the downside today the come back continues and earnings are the big driver of this rally. we are wrapping up the results you goat sta you get to start it off. >> it was probably the best

parking lot of that. both trading nicely higher universal bank rivals. it rose to 1.5 billion they told for over 10% trading was up and large lay duh to equity. goldman sachs trading in line with expectations, flat year over year despite fixed income and bank of america had seen slight declines. they also had decent cost controls

the main reason they are outperforming is because they have underperformed so much year to date coming into this they were significantly behind in a way the others. >> we have mes of the bank earnings out, right? who is the big winner of the season so far? >> of the investment banks morgan stanley >> yes >> up 5.6% in terms of the broader banks, citi group kind of played from a low evaluation it's probably the key them from own v universal banks. they have more evaluations and struggled to come off of that and a question of peak earnings for them we are discussing more about an exclusive interview with the new interviewer.

daiftd solomon will be here. >> a lot of that is down 5% which we'll talk ability in a moment let's hit united health. shares of that getting a big boost as well. we have details. >> yietd health group setting a positive note for health insurance earnings they were up to 341 per share. it was 12 cents above the consensus estimate r revenues also in the optum pharmacy benefit unit sales are growing twice as fast. that unit made acquisitions in the specialty and mental health markets which should boost growth there further david was also bullish on the united medicare growth, up 15% from a year achlgt the company sees continued strong growth for

2019 he thinks it will continue to contain medical costs. this is to 1270 a year it topped the record close of 17290. -- or rather 27290 that was set on october 3rd. the bullish outlook providing a halo effect for competitors. the most interesting moment is hearing mow the head of the optum division talk about reigning in prices now playing after having been on arsenal really interesting seeing him on the different team now. >> when you started it was like gosh i'm not a person to talk to about this i know exactly what you mean >> thank you >> that was a good reference >> thank you

we have the details. >> details falling more than 5%. keep declining as the day goes on with earnings it comes down to flows whether capital is moving in or out of their various products in the third quarter they saw net out flows from institutions that owned equity indexes. the number to the tune of $30.9 billion. they are dumping equities. he said he is seeing asea

chain. >> it is into the products this -- he believes they could double to more than $12 trillion in the next five years he also raised the question of whether the market has reached its peak earnings. we are still a few quarters away though >> i wonder if larry has ever said not to stay in the market especially for a guy that is managing $12 million >> 12 trillion it would go against kind of their business model to urge investors to put all of their

money in cash, right we hear this a lot from investors at the end of the day it is difficult to tell. one thing is for sure. one thing he is noticing is that he is noticing constitutional investors derisking. they are dumping equities and that is one thing that i think a lot of analysts missed in terms of creating their consensus. shares down 5% joining our closing bell is chief market strategist. matthew is here and rick sis here is this because of the fact that we were oversold or are they

providing a real upbeat reason >> there were multiple reasons we are not seeing any reaction in the ten year. it has been pretty stable. those are reasons we saw the market sell off. we were in an oversold condition. we will see equities being bought it doesn't give us an indication of whether it will go higher or hit all time highs we held the 200 dpa moving average. we are right in the middle of the range. we are not out of the woods yet. >> it is tech and the likes of communication services what do you take from that, the initial selloff is done and dusted and those stocks can be off to the races again

>> people started to take a step back we had the financials come out it kind of set the tone probably for what we are going to see as we do that people start reevaluating it has been a huge component of the market growth this year. we are seeing a rebound there. i think earnings this afternoon may tell a story if they start to reverse again >> as matt mentioned not a ton of action. we did get a lot of economic data wra is your t overall take away after some of the other data points we got? >> i was very impressed. also hovering near extreme

levels it was quite astounding to think that we have had two numbers over 7 million the first 6 million was just the spring of last year. i some what disagree just because we have an active trade and a tight range in treasury doesn't mean it isn't speaking volumes whether stocks wen in a row we'll close with tight closing range. 315 to 316 that's telling us something. i think this market is really perched. it will take distribution. with respect to the dollar index i totally think today's trade was super enlightening a lot of traders like to trade the dollar index when it violated that you could see this the thing dumped down. it started to fight back as oci think the dollar index is

important. i think maybe it turned and potentially because of what is going on with the equity markets. at some point i do suspect that the long end just about six or seven basis points away from the close will be a lot more responsive >> we had economic number and it started the numbers on the right track in the morning people are anticipating being stronger the regional banks had a lot of work to do it may be a spot you might want to invest in going forward they have been beaten down so aggressively >> we'll get netflix earnings

after the bell today how much will it be the tell whether it is netflix of this overall market today it is leaving us higher. it feels like that's where the direction of the market goes >> there are so many factors going on right now i'm not sure it will be the tell for the market there will be an impact. yes they missed last quarter >> tlb have been strong downloads. i would anticipate you'll see numbers closer to what the company is expecting so maybe together as we continue to see strong earnings it will lead the market forward. >> thanks all very much.

still ahead here on the closing bell shares of ibm have struggled. will today's earnings turn things around? we'll speak exclusively with james kavanaugh as soon as numbers hit. stocks gaining a lot of ground after last week's losses. what names and sectors did investors buy on the dip we'll take a look next the meeting of the executive finance committee is now in session. and... adjourned. business loans for eligible card members up to fifty thousand dollars, decided in as little as 60 seconds. the powerful backing of american express. don't do business without it.

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...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to the closing bell the dow was up ability 500 poin points the winners on the dow goldman sachs and nike and intell as well ve visa topped the list

let's go to mike >> you had the big two-day decline. so since that point when we attempted that process if that's what this is the most hard hit groups in the downdrafts that proceeded this were the ones that have been taken up the most they were also the year to date winners. the leadership of the market going into the highs of september and have come back the most these are the sectors. this is since thursday's close up 2.5% and maybe more than that now. it's not necessarily showing you it has resulted in a hand off. >> it shows you that the leaders are still the leaders. >> so far, exactly

they got hurt the most in this how does earnings play into this are they also ones that have lead that or is that not really the factor >> i think we are a little too early to say it was all about an earnings driven move it's not really consistent it's real estate financials. those are the hardest hit groups going into october and they have also lacked. it doesn't seem as if it is necessarily the driver it is what stocks were oversold. >> isn't this of similar character to previous corrections we have had throughout this market it is the presumption again? >> pretty much the one real shift that we saw was right after the election

you had financials really lead the way for a few months it has been pull backs and the old favorites lead the way >> one final factor, that interest rate sensitivity given that it was that spike in rates that spooked the sell offinitially, is that not really broken down on the sort of sector lines >> it was a factor in terms of of what got hurt we are not putting it in and saying we have seen the lows or anything like that i do think the fact that bond yields have calmed down and have become a nonfactor for a couple days tells you that the market is free to decide what the stocks have been most oversold and should be due for a snap back it's not much more than that >> the dow up 475 points coming up shares of dominos

pizza getting burned we'll break down the numbers next and later netflix plunged double digits. we'll preview what analysts are expecting this quarter ahead

welcome back strong rally the dow is 262 points. we still have less than 40 minutes to go. s & p 500 sharply higher every sector within the s&p is green right now. the nasdaq, take a look at that. the best day since march up 2.5%. let's check out individual movers domino's is falling by about 4%, a little more than that. we'll be speaking with gym.

jim cramer tonight domino's has been such a strong winner in the market there was still a lot to like it missed the mark on expectations. >> we'll tune in to see that interview later. he said he secured funding and to take the company private. musk has to pay a $20 million fine and step down for at least three years. the terms were being finalized that's a sigh of relief. >> the short --

>> and you're seeing reaction? >> yes still ahead, we are counting you down to earnings with netflix, united and we'll break down the numbers and look at the reports as they hit. and after the break walmart trading higher today the company hosting today. we'll bring you highlights including what is behind the big update to the financial forecast

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welcome back the stock is up 2.4% a nice jump but nasdaq is up as well about that much we will be joined after the close and after the report by the cfo james kavanaugh on the numbers and future of the

company. time for a cnbc news update. >> here is what's happening at this hour. police searching the saudi it is according to high level turkish official it is to explain what happened to him senator lindsay graham says the u.s. should sanction the hell quote out of saudi arabia >> the figure is tokic >> so what does the president do >> it is up to the president what i would do, i know what i would do we will sanction the hell out of saudi arabia and has given birth to a

baby boy a spokesperson says the baby was born on monday he will be a cousin to william and kate's three children. the news makes kate an aunt for the first time i'll send it back downtown to you. >> so many royal weddings and babies >> it's wonderful. >> i love it >> congratulations to her. >> thank you very much >> thank you walmart updating the financial forecast for next year the main message is that the world's largest retailers will move faster to adapt to the changing environment walmart did update guidance. as expected it is a drag on earnings for the current fiscal year and next year u.s. online sales expected to grow next year it is a deceleration from the

forecast walmart plans to continue to add brands through acquisitions or partnerships like today's announcements. the aud toe parts seller will have a specialty store on walmart's web site it will start to roll out in early next year. tariffs are still a bit of an unknown factor when it come to pricing. they say walmart still intends to remain the low price leader >> there are certain environments we would raise prices because of those tariffs. we'll ahave to manage in a way that makes it for shareholders >> walmart finds other ways to save by changing to led lightbulbs and $20 million a year with a new floor wax. little changing can make a big birchs >> thank you very much for that.

>> thank you let's bring this in. what's your take on the big announcements today? >> so i think that it really demonstrates that walmart is continuing to execute very well on all fronts. they are investing in the business and still managing to deliver operating profit growth. >> we were talking to the former head of the u.s. he raised some caution flags around margins and whether they can keep growing operating margins where wages are rising we got 7 million job openings. it is pressure to raise wages not to mention amazon's moves and other factors that are coming together. as an investor are you worried about the margin picture in. >> i'm not for walmart walmart is the low price leader. they have the ability to have

less pricing than anyone else in the market i think one thing that people haven't been paying attention to is amazon is raising wages that is something they will have to pass onto investors walmart said they will have to raise prices if costs continue to go up i think what could end up being a surprise on that front is if the whole industry follows which i think they would have to if walmart has to raise prices everyone will. you could lead to this but i would also say that walmart on the top line is in a much better position than anyone else because of their ability to grow the e commerce business into upper scale homes while maintaining the low price.

>> has it not already been done >> i think it is getting started. you seen the impact of the revamp of walmart.com recently they are only starting to really bring on significant increase in inventory and have people familiar with what they are doing. they are two day delivery and same day delivery. i think it is only the beginning. >> what are they going with getting into content and investing around production to compete with amazon prime and others >> yes >> so it will all depend on the execution there. i think it is a tougher part of the business certainly netflix is certainly quite a force. amazon struggles on that front so i don't know if they are going to have the talent to be a strong force experimenting there is fine. if they don't do that i would want them to pull back >> good to check in with you

>> you own -- >> yes >> with 25 minutes to go before the closing bell let's take a look at the major averages in rally mode pretty much all day long right now you have a 482 point gain on the dow nearly 2% near session high 2% highs on the s&p. nasdaq charging ahead. we are cutting you down to big earnings after the bell. united airlines and csx all reporting. we'll bring you numbers coming up >> a new proposal could force companies to reveal prices in tv ads. we have details when closing bell returns

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welcome back to the closing bell every sector in the s&p is green right now. leaders are technology health care consumer discretionary all with at least 2% gains and 1% gains for utilities. strength in industrials as well.

best day for stocks with this afternoon surge since back in march. >> indeed. as part of the trump administration's plan last night the secretary introduced a rule that would require drug kbacomp to include the list price in tv drug ads we know these ads where we see people frolicking in fields for some drugs it could mean tens of thousands of dollars for year. yesterday pharma said yes, we want more transparency we'll include a link where consumers can find out more information about the price of

their drugs they say some the list price includes pharma also argues it could deter people from taking their medicines or deter them from going to the doctor to get more nfg information about their condition. it could be on their freedom of speech it is a legal battle whose relationship had been pretty friendly we are seeing a potential battle brewing here. >> yeah. i mean i would think it is good politics for the trump administration to ask drug

companies to be more transparent. how is it going to be more forthcoming when it comes to pricing with consumers i guess they don't want to go this far >> it would be misleading and it could deter people from take thain their drugs. how they will fight it will be interesting. we'll see it unfold. some think it will get lost in the fineprint the same way we don't listen to the side effects because there's so many. >> the side effect list on u.s. pharma drug is longer than the main ad. >> yes that's required for them to disclose in those commercials because these are medicines.

they can effect your health. they have to include that. this is another thing being mandated to put into tv ads. >> thank you very much for that. we are at session highs as we approach the close we have 17 minutes left. we are up 524 points on the dow. nasdaq leads up about 2.7% >> csx reporting earnings after the bell reporters will be telling us to watch. keep it right here this is the closing bell on cnbc

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which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back we have a big rally. dow up 541 points. there are no losers in the dow we can mention some of the laggards in the dow. it is resuming that kind of

trade for the markets. the president making new comments in an interview here is what he said my biggest threat is the fed the fed is raising rates too fast it is independent. i don't speak to him but i'm not happy with what he is doing because it's fast. you look at the last inflation numbers. they are very low. nothing he hasn't said before. he is right about what we said before the key thing for investors is he says they rain dependent. they are moving too fast with higher interest rates. >> and some of those caveats as you said on inflation numbers, i think that it is clearly since we had this market selloff, since he has more involved on this topic, again, it has not been short term it is longer

term clearly it is recently >> and this president has said we are look at our best economy in decades, maybe ever with that you would usually see higher interest rates. >> it will be interesting when we get to the next meeting if it is inkind of influence in this but no doubt. >> yes >> and we are moments away from a big round of earnings. reporters are standing by with key things josh is here julia let's start with you >> the most important number to watch is earnings report is subscriber number. it projected it would add some 5 million subscribers. the vast majority of those overseas it is important to watch fourth quarter subscriber growth. analysts project it will add

7.6 million. whether the company tops or misses those numbers could send the stocks flying. the stocks fell about 5% the prior two quarters 5% and 10%. it dropped 1.6%. we'll be back with numbers after the bell over to you. >> thank you josh is watching ibm this afternoon. what can you tell us $3.40 on $19.1 billion it includes watson and services

growth back to you. >> thanks very much fur that phil is watching united for us, phil >> when united reports third quarter earnings how much was the airline able to grow last quarter? it is the first quarter since expanded capacity adding more flights particularly from smaller cities to mid-continent hubs the wild card, jet fuel costs. how much was united able to offset the cost increases last quarter? let's get a preview. >> aggressive cost cutting they will look for any signs of

a slow down in rail traffic as mur companies complain of raw material inflation >> thank you for that. we'll seal you after the bell. we have nine minutes left of trade and we are up near the session highs. 536 points nasdaq leading the charge up just shy of 3% we'll be back with the close after the break. >> at least 2% gains across the board. best day for stocks since march. james kavanaugh will be joining us in an cnbc exclusive. that's coming up on the closing bell every call is different, so the only thing that we can do to make sure that we get there safely, and that we leave that scene safely and go home at night,

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open an e*trade premium savings account and earn 1.9% apy on your money. that's over 15 times the national average! welcome back is sell off last week very much in the rear-view mirror for the moment this has gone down it was technical in nature at this point you have to be looking out for

volatility i think it will be the comments accompanying the earnings. particularly in those sectors where the elections might have some doubt to the outcome. you might see a swing. i think through election day we have to keep our eyes particularly focused >>. >> we'll have to see how it pans out. what are the effects that the tariffs and these types of circumstances that don't show up they will have to allow for. one of the things you see there these types of markets is they punish you if you disappoint i think we'll see more volatility than we were seeing

today. it's really all about earnings that's what traders are keeping an eye on. >> thanks very much. we'll bet you get back to the close. let's have a look at the s&p it's great looking charts. it only has gotten better and better we are near the session highs as we approach for you. it does lead the charge higher over 2% of gains in a round about 3% it is pretty strong performance there. best day since march don't forget the big selloffs that we had last week on wednesday and thursday in particular second broad and significant only energy up less than 1%.

in general communications services some had suffered most last week. some of the names are reporting after the close we'll have all of the numbers when they come out. you could save the selling is largely exhausted. number one the volume is much lighter than normal. we have had a 500 point rally on sub normal volume. we had a selloff on very very heavy volume some of them buying treasury bonds were the main factor today's rally was very very light. it tells you the sellers are not there. prices go up to attract

everybody else the other thing to look at, it collapsed we were at 28 last week on a wednesday. we are now at 17 and change. if you look at the fixed futures you can see how they are all flattened out. last week it was 28 on the vix this tells you that the market has calmed down. >> the volatility. >> under traditional analysis volume is con certain vags he has been saying that for 20 years. the jolts number which is normally not a market number but record job creation.

>> numbers are way above expectations 41 companies have reported so far. 88% are higher we are getting 25% earnings. these are all numbers above the expectations >> and rates outlook and on top of that the dollar not looking too scary at the moment. >> the dollar has calmed down dramatically so the dollar is calmed down rates have calmed down largely flat today right across the yield firm on treasures. so everything is essentially calmed down. you can see that action there. >> and a day where the u.s. is for the rest of the world. europe not as high as the ugs is shaping up to be

highs 2.2% there goes the bell. the nasdaq up a ealthy 3% or so cyber security alliance. that does it for the first hour of the closing bell. back to you. >> welcome we'll be back in just a moment i'm here with mike cnbc senior market commentator let's show you how it all shook out. the dow closing up more than 2%, 543 points the rebound continues after last week's big selloff all 30 stocks in the dow did

finish the day higher. s&p went up a little more than 2% on its part as well all sectors finished higher. it is the best day for the nasdaq since march the russell 2000 came out of its correction and surged 2.8% s&p back above the 2,800 level we are getting ready for a barrageover big earnings reports. julia is watching earnings reports. let's talk about the market action leading the dow half positive earnings finishing up this was the decliner.

so much strength across the board today. what does it tell you? >> it is a stronger bounce than you might have expected. it is given how it really did fizzle we have regained to dial it back a little bit we have recovered about 40% of those losses so this was -- i don't want too say it was the easy part it was an air pocket on the way down sellers want to -- when the bond market stays out of the way. there was nothing to get in the way from a very oversold market. that's what we saw right now also i think the last couple of days showed you there was nobody forced to sell none of these weird mechanical effects. that went away at the end of last week. we have all of these bounces don't end up in a full recovery.

it starts with a bounce like this >> i was going to ask, to the downside do the index funds go into play but not when we bounce back >> i wouldn't say it is purely index funds. it is whatever strategies were lever r leveraged and when the volatility levels get high the risk management programs go in so without getting too much in the weeds with it it seemed like people were on edge. it didn't show up. the rubber band was stretched. we snapped half way back >> if we look at the winners on the overall winning market it was an earnings story. do you expect earnings will continue to provide assurance? >> that is absolutely what's going on here. people have continued to under estimateearnings

people have been overstating -- >> one second. we are going to interrupt. we want to get to netflix numbers. julia has them for us. >> the reason we see the stock shooting higher is because of the addition of far more sub viebe vi scribers than expected if you look at the forecast for the fourth quarter the company is guiding to additions of

9.4 million new subscribers. because the subscriber numbers are so important just to break it down. u.s. 1.09 million. analysts expecting about 670,000. international streaming 5.87 million it is more than a million than expected if you look at the earnings number it is 23 cents which is lighter than expected but it looks like some of that may have moved in with that 89 cents per share. it will be represented and it

was due to greater than expected with strong growth broadly across all of our markets including asia the company announcing in this letter to shareholders they will start breaking out total net additions making clear how many are people using free trials we'll be back with more. >> thank you very much for that. it is up about 13.5% mike, clearly the sub snurm has positively surprised >> they needed to do this. >> the eps, even the revenues in line have come through >> it did. a lot of that is how they account for their content costs in an ongoing basis. there slef raj to it leveraget

it everyone scolded the company for not having a handle on their own marketing plan here they way exceeded their own estimates. maybe they still have a planning problem or projection problem. in this case it is in the positive >> yeah. >> they are growing so fast they will have accelerations along the way. >> i guess it shows how good they are to those sorts of new shows or series of new shows >>right.

>> so this will go a long way. comments on the competition and the crowded space they are seeing apple and others give a new shout out to the new fox saying they appear to have a great strategy which is to focus on sports and news and they are not transformed on personalization so they are more resistant to the rise of the internet clearly when it comes to the competition netflix continues to lead which is always in the back of investorsminds. it will also emphasize they have such head start. >> and they will spend a lot of money doing it

>> and what's the value of that vast head start that they have >> what's your take on these numbers? it's not just on netflix it is off the back of these earnings do you think it's a sign of a very strong technology earnings season to come >> yeah. i think netflix is a special case he has done a spectacular job. it is about content. i will direct you to a value name which has speck tatacular content. it is because of short term merger discussion. by think it will matter and even read eventually will have to produce earnings >> i think we have a little more detail on that netflix report. what can you tell us >> it is interesting they are talking about how to shift to produce more content internally they mentioned launching the new

hub and saying that they are already the single largest supplier there is a lot of concern who could be pulling back on that content. also they are talking about launching saying they support simultaneous release on netflix. they want to put it on netflix in the same day. it sort of speaks to if strategy and also on netflix at the same time there are new rules to devote 30% of their catalog they will be investing more to meet requirements. and then just a last thought here about competition

it more companies seize the large opportunity pointing to warner media and self-distributing their one and no longer licensing. they mention apple, amazon and others saying their job is to make netflix stand out they praise for having a great strategy back to you. >> all right shares jumping almost 4% 14% higher after hours we have an earnings report josh has those results >> ibm reporting $3.42 these were at $3.40. it is there on the bottom line it does come in a bit lighter than expected here

$18.8 billion. this was at 19.1 billion looking quickly cognitive solutions. technology services and cloud platforms 8.3 billion. systems 1.7 billion. looking ahead here the company saying they do continue to see an eps here of at least 1380 they expect free cash flow of about $3 billion back to you. >> thanks very much for that it is slipping 3.7%. ibm was up giving up the gains it had during the session we will be speaking to james kavanaugh in just a few minutes time he will be joining us exclusively to break down the numbers which have disappointed the market down 3.5% >> and it will be that revenue

declined after three consecutive quarterly gains for revenues which broke the multi-year streak they are back at itself currency is a problem. >> i think how much of the older business can't quite be replaced by a new business. it seemed like there wasn't one particular business line >> it is the year over year as opposed to quarter over quarter. we will be discussing that with the cfo coming up. we have details now. >> no signs of a slowdown. an 11 cent beat. revenue increasing 14% over the prior year to 3.1 billion. the company references two specific areas broad based volume growth and

increases in fuel recovery it is wofrt noting expenses decline year over year cost cutting has been a big trend. third quarter record of 58.7 compared with 68.4 in the prior year shares up another 2.5% numbers up about 30% in 2018 we will be on the conference call back to you. >> thank you strong numbers from csx. stock is moving up >> and just as a general matter, the unusual thing about this earnings season is most of these stocks took some kind of cut going in and you're able to see a lot of stocks concluding the ones during the day today.

bringing back to things for you. >> i would say never ever ever but no not at that evaluation it is really all about content i have to point out amazon has the series to have there is a big battle for content. the political, the sports, the fox and cbs is what you want to have right now that's real competition which will increase costs. >> to tie it back to the overall theme is -- we had to cut you off earlier but what were you saying you could build on it as to whether it will lead to a bounce back in highs. >> yes one of the most well established concepts is anchoring. people are slow to adjust their estimates to new information that's been happening all year as people have been slow to

adjust their estimates in light of the tax cuts. we are continuing to see great surprise levels. people will be taking up estimates for 2019 this market has never been as expensive as people thought it was. we have real pockets in great companies trading at less than ten times earnings lots of stocks with earnings that will be growing >> thanks very much, charlie netflix is soaring we'll discuss that coming up we'll dig deeper into ibm's earnings that's coming up here on the closing bell x1 is here to help.

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penny. earning 306 per share. a penny shy. reven revenue coming in at just over $11 billion. a couple of key metrics. it is up 6.1%. a little better than expected. this is down fractionally. three key things to focus on quarterly revenue up 11.1% that is the biggest quarterly revenue jump since 2010. at the same time the company was able to recover increased fuel costs. finally improved guidance. it is guiding between $8 and $8.75 for the full year. it used to be $7.75. that means the midpoint coming

in at about 835. you'll see analysts move the estimates higher we'll have instant analysis and don't miss tomorrow morning the cnbc exclusive with united ceo oscar munoz. we'll talk about the guidance and a couple of other things as well back to you. >> thank you with the united shares up 2.6% after hours. netflix is soaring after reporting quarterly results. the stock up almost 12% here after hours. a little bit off of what we saw a few moments ago. joining us now is john joining us is ed lee who is up on the new york stock exchange breaking down the numbers in the earnings release we'll start with you what can you tell us beyond the big subscriber numbers

>> the big subscriber numbers was a huge beat way past what they had forecasted and what d analysts were forecasting. they have saying going forward they only want to give forecasts for the paid ads and not just the total you can see the stocks going up and down they are hoping they will give you a more accurate number you'll see fewer swings even though of course today's swing looks pretty good for that >> what do you make of the fact that they are able to miss their own subscriber growth so significantly? is that a good thing or a bad thing? >> i think the point that he just brought up is really key. how much of that beat is coming

from nonpaid subscribers i think that's why the stock is off a little bit from the high the big key on the number here in terms of the blowout is really on the u.s. side because the u.s. subscriber came in at over 1 million forecasting 650,000 and presumably the u.s. subscriber is higher average per user let's get more detail on the conference call. >> you're a fan and shareholder. you like it? >> it is validating our premise that we have had that the world has so many potential tv viewers and netflix has the best overall content of any company and entertainment. he is getting a big benefit from doing that i think the most important thing is they have amazing content

coming out so we are very excited. they did a wonderful john. >> you know, just in the lead up to these numbers you had a lot of analysts reducing price targets or reevaluating how fast netflix can grow with regard to the content. they can stay on this as long as wall street allows them to that's what everyone is buying into all of the fluxuation will sort of effect the stock. aside from paying for the content, i don't know if you want to take a quick look here, they talk about they have a new thing in there showing instagram followers for their stars before and after their shows launch

you'll be discovered on instagram and you'll have a much bigger career path going forward. >> right i think there's more to it too you know, one of the things people have to start preparing for is netflix add an advertiser and putting advertising in the platform somewhere maybe that's why they are showing the instagram metrics >> is it about to get a lot tougher? >> yeah. when the stock is trading at 77 times and 70 times earnings and

ten times price the sales and has a market cap that's close to disney but has a fraction of total sales guess what a lot of good news is priced in. getting to 300 million is there. the idea that new competition is coming on is not going to disrupt this great eco system. it is about one story and the bold case for netflix becomes a house of cards >> so one question how do you justify the evaluation when people ask you if they should buy it? >> add dollars what we think is happening with the sort of demise of facebook and sort of pressure on google and social media is that eyeballs have moved to video games and netflix. video games already have a certain ad business that's growing very rapidly as well as consumer products. netflix doesn't have one ad any

where in the platform. we think they have a business not in the shows because people won't want that but in the feed. i think if they put ads in the feed i think amazon and netflix could be huge advertising vehicles for various different properties >> okay. guys we'll leave it there. great debate ed lee is up there on our cnbc >> news desk >> yes >> the platform. >> yes >> checking out shares of ibm are trading lower of reporting earnings moments ago

joining us now is ibm who is member of the castle thanks for joining us after your earnings report. great to have you with us. >> thank you very much for havingme >> when you take a look at where we are at through three quarters of the year we are growing at 2% overall. actual rates and we are up at constant currency. we have been saying all yearlong

that as we repositioned our business entering this year and transformed we will grow and we'll continue to say that tonight on our conference call that our current spot rates we will grow the ibm company for fiscal year 2018. are you looking forward to that going up and quarters ahead? >> i'm very glad you asked that question it has been at the heart of many of our investors and many of the analysts that have been on your show we are by definition a high value based business if you look at our third quarter we grew earnings per share 5%. we grew operating profit and

operating pretax margins it is both the re knew and margin for 160 basis points. we will now make progress as we move forward and we will approach our long-term financial model there in the first quarter. software is hot right now. why am i missing the mark there? does it say anything about watson >> it's a composition of multiple components. we have been talking about two

major headwinds. one around our transaction processing system which is high value, strategically important software that our clients run. we ran into a buying cycle here in the third quarter i will tell you right now we see a great opportunity pipeline coming in forward in the fourth quarter and we will return that component back to growth in the fourth quarter when you look at it we have a couple of apps we have been talking about the last couple of quarters here specifically around talent and commerce they are going through secular shifts as a service and while we are making progress it will play over a longer period of time i'll finally wrap up we do have strong demand and executing very well in our industry verticals in security and in immerging areas where we

are imbedding technologies we have great growth for instance watson health had a great quarter and we grew across all of our segments and we are scaling that business going forward. and block chain, a new immerging technology, we are the number one block chain provider we have over 75 active networks and over 500 client engagements. we are seeing the growth out of those areas. you put all of that together and we see in the fourth quarter with that great pipeline we see our overall software returning to growth here in the fourth quarter. >> james, also wanted to get your take on the u.s. china trade war skirmish are you effected from a supply clan perspective or exposure to doing business over there?

>> well, friirst and foremost we do business at 170 countries around the world we have always been a supporter of free trade. we are always focused on driving value to our clients we have always looked at how we can hospitoptimize our supply t. it is in a particular run of tariffs. it is an impact on the ibm company. we are prepared to make the right choices for our clients in the long run >> okay. we will leave it there thank you very much james for joining us time now for cnbc news update >> here is what's happening at this hour. beginning tomorrow dan will be the world's largest country with a legal marijuana marketplace. they say a regulated market for

marijuana will keep pot away from kids and combat the growing black market m cdc increst gaiting 127 cases of what's called afm the condition causes parol sis and usually followed a virus infection. 90% have been in children under the age of 18. >> transthe rapper flown for spending billions to help schools in chicago and is now endorsing for may yofrmt he says she has to move forward. a shocking study out of y europe 47% of the 81 female lawmakers

interviewed reported having received death threats, rape or derogatory kmenlts on their physical appearance during their time in office you're up to date. i'll send it back downtown to you. >> thank you very much for that. still ahead, we'll take a look at the similarities between this market and a similar pattern in 2014 and what it could tell us about where the market is heading next and we awill look at the u.s company of cashing in on recreational marijuana tomorrow.

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and future generations. together, we're building a better california. coming up we'll have much more on netflix results and how you should be trading the stock. it could show the path ahead for stocks through the rest of the year >> yes we'll look at a year in the recent past that might rhyme

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dow finishing higher best one day gain since back in march. is today's move the beginning of something bigger we have more on whether the rally can continue >> i am looking for a hint about this starting at about march i start

today look at the year 2014 as a potential model. not because every four years the years repeat 2013 and 2017 were very low volatility and very low volatility let's look at 2014 first we have already been similar to this year as well. big pull back in february to start. not as big as the one we had we didn't have as good a january. you did finally rekcover right here it was from about 9% year to date a very quick dump into mid-october. it is something like what we have seen right now. by the way, one of the proximate causes that was blamed was the ebola scare. it was a fed tightening and also a bit of a slow down situation around october 15th we shot higher in the end the year finished with about 11 or 12% gain. that's why starting around here

it seemed like there were similarlies. let's look at 2018 year to date. the year is not finished right now. you'll see a few similarlies here you have that big drop into february, similar kind of grind higher into this september high. third week of september up about 9% year to date. all of it roughly fit if you look at things naturally we have had this big drop right here for about 7% or 7 or 8% for an all time high if we were to follow that path people saying it would be fed tightening and slow down and you would recover. this is the hopeful signal i don't think you can necessarily pencil in a huge straight line rebound from here. stocks were cheaper. all of those things. >> and the other thing is we have three more gains if it were

a comparison >> yes it's true. at the end of 2014 you got about 2,100. that's about all of the upside you got before august of that year before you actually had steep declined and the oil crash and all of the rest of it. the end of 2014 was about as good as you had gotten until early 2016 when we resumed so it's not as if it was up and away from there but you did book gains before the tough stuff happened >> yes as you know also world cup years. >> and midterm election years. >> and midterm election years. it is outstanding comparisons. similar soccer related years >> we have details for us. >> new data shows china reduced the holdings by nearly $6 billion to the lowest level since june of 2017

the chinese still own about 1.16 trillion worth of u.s. treasures. it is still the biggest foreign owner of u.s. treasuries we have seen about three straight months of declines. no reaction in the u.s. bond market but we are monitoring it closely. our attention will turn on currencies which could come out as soon as tomorrow. we'll be closely watching to see if they designate. it doesn't seem like it will happen we'll be watching. >> it would be a big sfrieurpri. you always read into it and you wonder if it is political or what they are doing. the fact is it also came am amid volatility. it was to -- to do that they have to sell treasuries or dollars. >> it is not outright in order to punish the u.s. but

purchasing at their own. >> it is always a little bit of a mystery. netflix shares following the earnings release it is crushing expectations on subscribers. 'ldideerntthe numbers next your company is constantly evolving.

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it is from direction if i start with you what's your take on this clearly volatility exists but this quarter in the correct direction. i didn't think they would miss twice. you had earnings estimates they matched on revenues i think it's been an awesome growth story the stock has tripled in the last three years it is up 70% by the close this year i think it's just been an awesome growth story and continue to be an awesome growth story into some of the international markets. >> what did wall street get wrong? goldman sachs lowered their target on friday was this a big surprise? >> well, i suppose you know, fear of the unknown for anybody in any context

you know, the strongest store rirs end up being those most expensive stocks this is case in point. >> are you worried how much they will have to spend on this subscriber growth >> i'm sorry opinion you cut out a little bit -- do they need to spend aggressivively to keep up the growth. >> basically. >> but they are president spending intelligently but they never miss subscriber growth two quarters in a row. it shows you they can turn the dials to adjust different vashls as they go i've said this before, most of your viewers, you know, love watching a show like narc os and can't get enough of ozacrye because it's the dark side of finance and that's thrilling

these folks are scientific about what they do and they are aggressive about what they do as well that's why people complaint about how much money they spend. >> silvia, you know, it gets to a point where i come back to which everyone agrees internet tv is the future streaming is the future. apps but how valuable is the head star netflix has? and how much runway do nef on a timery basis growing subscribership overseas. >> if you look at the growth in subscribership overseas it's over 5.8 and you see the great shows picking up interest and domestically you have made in mexico, saerkd gains is a big show in india. they have a lot of success with new content abroad and the numbers keep growing i would expect them to sort of have a head start, first mover advantage in the space they have some competition with amazon jack wrien ryan was the big show this time around but we will see what amazon

bring was content. but netflix has produced content with the 8 million in spending >> if there is a big scare about treasury yields or macro does this insulate netflix because that led the way down for a lot of the hot techs in the past week. >> i think it remains to be seen as rates continue to rise if they continue to be highly leveraged and add additional debt to grow it will impact the bottom line. but it's sort of a fine line between raising prices for the subscriber and rate hikes and tax tariffs how that impacts everything we have to see how it balances out. >> kevin, silvia thank you for joining us up next look at the u.s. gazi cnas set to profit from lelinganbis in canada. alerts -- wouldn't you like one from the market

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cannabis investors are watching a key law set to take effect in canada tomorrow. adidi roy has all the details. >> that's right seeing everyone from beverage companies to weed evangelists snoop dog weighing in with marijuana being federally illegal in the u.s domestic cannabis companies can't kbrt or export the products they have to form partnerships broad. the biggest u.s. winner earn could be constellation brands which acquired a stake earlier this year. also mosum cores is forming a joint veteran to develop cannabis drinks in canada. and l.a. based med men which has a distribution partnership with canada based cronos group can cash in even snoop dog's business leased by snoop is budding in canada with a budding partnership with cannabis

growth a lot of insiders remind us the market in canada is projected to be smaller than california alone. a lot of u.s. companies are worried will losing out. terra tech is a california base cannabis urging president trump to make marijuana federally legal. the letter points out that u.s. kpts are listing on canadian exchanges to raise cash and cash and revenue are going across the border >> adidi thank you very much big day tomorrow i think snoop dog wants to move to canada. up next, the bgeigst names moving after hours on the busy earnings afternoon when we come right back.

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>> announcer: the big rebound, strong earnings send the market soaring. the sectors to watch, the move to make, the risk to avoid welcome back to "closing bell." mike, clearly great numbers from netflix, up intraday as was all of tech and they really justified that. >> well netflix justified it for sure a dramatic example of the pattern which is docks down heading into earnings if they confirm the fundamental stories are good they can pop. i do think it's a little bit of a tailwind for the nasdaq tomorrow i was going to mention, the two weakest stocks in the s&p also earning stories though, ww granger and blackrock.

it shows that there is going to be a give and take the earnings season even if it's positive. >> if it's positive you get rewarded a bad setup. >> more than prior quarters seems to be rewarded absolutely. >> we should mention morgan stanley had a great session. >> on an earnings front. >> that does it for "closing bell" today. >> "fast money" begins right now. have a great evening "fast money" starts right now live from the nasdaq market site over new york city time squares. the traders tim seymour. karen finerman steve grasso guy adamy tonight it's the final countdown hours away from legal weed in canada the dean of valuation will be here to explain why it's getting crushed. netflix be ibm united cs approximate reporting earnings moments ago we have the reactions as well as instant analysis on the after hours moves throughout the hour. but first stock going wild th iri