allegations. the stock dropped exponentially from $23 to 12. what will happen tomorrow? [closing bell ringing] david: health insurers are down as a result of the obamacare hearings for the second day in a row. generally speaking, liz, things are good. liz: indeed. here come the bells on wall street for a day where the dow was up more than 100 points. we still close up a pretty decent number here. up about 93. s&p up just under six points. look at that level, 1751. just about 3 1/2 points away from the all-time high, david. look at russell small caps. they continue their unbelievable effect. david: is there a sealing to the market? doesn't seem to be any today. time for the front page headlines. we have to start with carl icahn. he boosted his stake in apple to 4.7 million shares as part of his campaign for a 150 billion stock buyback. that is about all the cash they have on hand. unlikely they will use all of it

for that. fellow billionaire bill gross of pimco told icahn. leave apple alone. help other people instead like bill gates does ja latest weekly job countless claims fell less than forecast the labor department said the total dropped about 12,000 to the level of 350,000 last week. david: the commerce department saying that the u.s. trade gap increased slightly in august to 38.8 billion. the amount of goods imported from china was the highest since november last year. liz: ford's stock is higher after the automaker reported better than expected third quarter earnings. ford also boosted its third quarter operating profit forecast. david: parent of united airlines disappointed investors with its earnings. the carrier missed wall street estimates. the ceo says the airline is taking prompt action to boost revenue. liz: different story at southwest airlines. third quarter profit rose helped by lower fuel and mate nance costs. after the bell, ear, oh, yeah, here come microsoft and amazon

right now. david: and let's take a look at today's market action. we have scott shellady in the pits of the cme. stock, tell us what moved the market. we had triple-digit gains for much of the day. why is the market going higher? is it about interest rates or what? >> you saw the 10-year come back a little over the 2.50 mark. that gives us a feeling things are not as bad as possible. the truth is the 10-year. we've seen the 10-year give us more positive action. generally speaking which what we had come out as top line revenues the market still sees more quantitative easing. that is giving an automatic bid under the market. going forward i think next three months the market grinds higher in the equity world as we see the 10-year yield go lower. liz: that is the story we heard since quantitative easing was put into place by the federal reserve. therefore anybody who fought the

tape has really come out a loser. the fact these stocks are on a tear. whether there is headline risk, syria a couple months ago or most recently the debt ceiling that's out of the way. until we get the next one is it just a straight moon shot for equities? >> no, i'm not going to say straight moon shot because there are couple things creeping in not a lot of people look at. number one, we have the total market cap of all equities trade in the u.s. bigger than gdp, that doesn't happen very often well. need a correction. we would like direction of growth over take the market cap. you might see a little bit after selloff there. the moral to the story, liz, those selloffs have been few and far between and very fast. technology makes them a lot faster today than they did 25 years ago when i first started. you can't wait around thinking this will be a trend. i will catch this falling knife now, not later. david: talk to a bull. he is a selective bull. al lance lance. alan you're bullish but

selective. you say don't chase the high-risers. you're talking about tesla, solarcity, other companies that just skyrocketed recently. look for more steady gainers. like what? >> well, exactly david. i guess the best example, apple we talked this summer around 400. icahn got involved. now the stock is well over 500. and there's a couple icahn favorites that haven't moved yet. instead of getting involved in, netflix and apple that moved so well and so much money has been made already, i think -- liz: hold on one second, alan. sorry to interrupt you. we have microsoft numbers now. we can put up the bid and ask of the stock to see how it is reacting. meantime, adam shapiro. >> big turn around for microsoft, liz. earnings per share, 63 cents. street was expecting 54 cents. you heard at the program at 3:00. revenue, 18.53 billion. that is a beat. the street was expecting

17.79 billion. a reversal from the surprise in the previous quarter where they missed on both lines. they're reorganizing. they report devices, consumer revenue just from that, 7.68 billion. we'll get more. here is one of the statements from the report. robust sales drive consumer demand and broad based growth. liz: not bad. maybe steve ballmer should stay, david. david: not bad for the entire economy. microsoft is big enough that it can be viewed as a bellwether. if they're thinking demand will increase, let me throw this whack to scott. this is great news that the demand for microsoft products is growing. >> that is fantastic news. i would like to see also they will do with steve balmer. they separated devices and consumers from the commercial. they have done very well there. they have made a lost changes there that think the market's going to shrug off. this will be a very good beat for the market tomorrow. i look forward to see a lot of other things in the space go up as well. liz: folks, we have more

breaking news. this time it is on twitter. jo ling in the chair. jo? >> that's right. twitter has breaking news. they plan to set the ipo terms, 70 million shares, priced between 17 and $20 a share. we do expect the first listing to be on november 15th. the ipo november 15th. we're looking 70 million shares between 17 and $20. liz: november 15th, put it on the calendar, the ipo of twitter which is expected to be highly, highly watched. needless to say 17 to $20 a share, that band, alan, when you look at is completely different. a lot of people critted facebook when it went public, in the 30s. what do you think? >> yeah, facebook, they kept on increasing liz, as far as the price and they got to a point, you know, where insiders were selling more and more. it became a poor deal, overpriced. i think, looks like twitter is doing it differently and, you know hopefully will get a

following and won't have the drop facebook did and had to turn around. microsoft news is real good because a lot of the earnings so far. we're halfway through earnings season, liz. and a lot of earnings -- david: we're tired of interrupting you alan, i'm so sorry. but we do have other earnings to talk about. looks like a beat for amazon as well. we're looking at numbers after-hours. jo, this stock is really hitting it after-hours. adam shapiro, go ahead. >> david, earnings per share was loss of nine cents, what the street expected. revenue is a big beat, 17.09 billion. amazon estimate on the street was 17.06 billion. guidance for the fourth quarter, we've seen fedex say they will see increased shipping in the holiday quarter, amazon is big in holiday quarter. what is interesting that midpoint of their guidance is little below what the street was expecting of 25.89 billion for fourth quarter revenue guidance.

we have to keep watching this. right now bottom line headline it's a beat on revenue. david: once again, this is a report, this is not an earnings statement because it is a loss despite the huge revenue beat which is why the stock is moving so high after-hours. again, remember how much they squeezed their profit margin at amazon as a result of getting market share. jeff bezos committed to that policy, liz, of really kind of going short on a profit. in fact, expecting more losses and they did lose nine cents per share. liz: you know what, david? in part that is because worldwide shipping costs have gone up. and again, when you talk about what they really want to do, that is grab market share. so they don't care about the door busters in that walmart speak where you lose money on certain things just to get people in the door. they want to own it, scott shellady. and amazon is just one of these stocks, we've got tom ford, with telsey advisors, he is saying a 400-dollars price target.

in blink of an eye he got $20 close to that. >> have to be careful. already up 36% on the year, against s&p up at 22%. i think it is fantastic news. remember why they're posting earnings per share as minus. they have been spending money in other places to build and diversify. they have been going avnet flicks. they have amazon fresh. they're attacking other markets. that is fantastic they beat on the revenue side with minus earnings per share. they're spending money in the right places and competing against the right people. liz: adam, you have more about amazon? >> when you talk about the nine cent loss, it was 60-cent loss in the same quarter. liz: good point. >> in the guidance they announced on october 1st, they will hire 40% more holiday workers last year. they're sending a message despite the revenue guidance, they're sending a message they expect holiday sales better than some out of brick-and-mortar retailers. david: alan, we're seeing stock

come down a little bit. not quite as pricey after-hours. is. still it's a big beat after-hours. you said beware of stocks that reach the stratosphere were you including am son in that list? >> well amazon's a little different, david, in that they have been a leader for decades. i'm thinking more like a tesla, you know, they haven't really proved themselves decade after decade. amazon, they are spending in a lot of different areas. it does worry me on the guidance side side it is pricey but not one that we would short and investors with a real long-term outlook i think bezos has been great so. liz: well, listen, people believe in this guy. alan lancsz, scott shellady, thank you very much. david: they're both still knocking out of the park. liz: both still list on, the nasdaq. david: why coming up we have a very important interview you don't want to miss. liz: the nasdaq taking on the world and its critics. the exchange's ceo bob greifeld

is live, is here, is exclusive to tell us and you how he plans to come out swinging and put the setback over losing the twitter listing behind me and what is going on with the company. david, they beat on both top and bottom line, david. david: good news. we'll watch the interview coming up. a clash of tech titans for bragging rights this earnings season. steve ballmer versus jeff bezos we'll break down two company's results coming next. liz: in our facebook we want to know, do you think ford's ceo alan mulally will leave the automaker early to take the top job at microsoft he says he loves ford. staying at ford but what do you think? log on to facebook.com/afterthebell. let us know. ♪ [ male announcer ] once, there was a man

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get live squawks right in your trading platform trust your instincts to make the call. to treat my low testosterone, my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications.

serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased d blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron. liz: this is a little go. we have a shares of microsoft microsoft jumping after-hours. nicole, they look very healthy, nice beat. >> pretty amazings because they have different segments within microsoft. we're seeing the stock right now moving higher. earnings per share, revenue beat. let's break down the numbers. earnings per share at 63 cents versus estimate of 54 cents. as a result you're seeing winner there. revenue for the quarter,

18.53 billion versus a estimate of 17.79 billion. certainly looking good, liz and david. the other thing we should note when looking at the numbers, they talk about the surface debacle and now microsoft is recovering from that. you can see the bid ask looking good. closing 33 and change. looking higher, closer to 36. in addition to that devices an consumer hardware revenue looking good and seeing a pop as well. 1.94 billion. overall we see growth for microsoft. dow component, one to watch tomorrow. looking good. liz: nicole, indeed, thank you very much. david: we have more on amazon and microsoft quarterly results. let's break down the results with tom ford, forte price group analyst. you have a 400 price target for amazon. it is up to 345, 350 right now, after hours. we're closer to your price

target. why is amazon your top pick in the tech field? >> sure. if you look at, you know, over short periods of time the stock trades on sales growth or unit growth or things like that. we're confident over long period of time, it trades on market share. we have high degree of confidence they take market share in e-commerce landscape and retail. liz: you were right on this one. i literally spoke to you seven minutes at the top of the hour. you were very confident. at what point do investors say i'm taking profits and running? this stock has done extraordinarily well, but still posting losses. it is an old story. but at some point investors might start to get itchy feet? >> sure. i would argue that investors will sell shares of amazon when they lose confidence in the company's ability to take market share. if you look at amazon very long-term, at some point they're going to have to figure out a way to further penetrate india, china, brazil and russia. that will not be easy. india will be very difficult

logistically. amazon fresh is an exciting entry in the grocery and great way for them to deliver product to you in a fast manner but that is not exactly a high margin business. at some point amazon will run into challenges it may take them longer to overcome. at that point i think investors might be less excited about the stock. david: tom, we had microsoft earnings. good news for both microsoft and amazon that consumer demand appears to be picking up. microsoft made special note of that. that is the only hesitation that you have about amazon. in if in fact the consumer market showed signs of weakening but according to microsoft it is strengthening. >> look at microsoft's results, operating results were surprisingly good. i think that the, what got us excited about amazon, was that, october 1st announcement that they're increasing seasonal hires by 40% on year-over-year basis. that went against the grain what ebay was saying. what other retailers said on softening trend that suggested great confidence in strong

holiday period. liz: yeah, that is, you know, i'm hearing people say ebay over amazon, precisely because ebay has this opportunity that some people perceive to be just a bit stronger but what about the kindle? as we look forward to the sales of that, we know amazon might be developing a phone or a stablet of some sort. -- tablet. what are you hearing? >> the way i look at hardware for amazon, it is about advancing their ecosystem, not unlike it is for apple. the other advantage for amazon when they have a consumer armed with a smartphone or their device they make it that much more easy to buy merchandise from amazon. i think smartphone is something in the future. there is talk maybe more near term of a set-top box. they tried to differentiate this lineup of kindle fires of service. hit a but ton. you get a customer service person to help with you tech support. i think opportunity, apple on high-end tablet market, kindle on low end. david: maybe they do health care

exchanges if they get into that kind of consumer service. thanks, tom forte, kelsey advisory group. good to talk to. >> thanks, tom. we've had this global war of the stock exchanges. nasdaq versus nyse. but guess what? nasdaq is making money for its investors. nasdaq ceo bob greifeld battling back hard after losing high-stakes battle for the lucrative twitter listing. he tells us what he has got for the pipeline now. they're luring huge names from the new york stock exchange like kraft and marriott. not high-tech but gigantic companies. it is a fox business exclusive. david: also the fast-food giant duncan brands is on a tear. it is expanding all over the world. incredible earnings. we'll talk earnings and growth with the company's chairman and ceo, nigel travis. that is coming up here on "after the bell." liz: munchkin. ♪ [ woman ] if you have the audacity to believe

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david: what's your favorite? liz: oh my gosh, pumpkin. david: she likes the pumpkin. liz: i'm having a momentmoment with the munchkin. david: you can get regular or small. it all. dunkin' donuts and baskin-robbins saw 36% rise in quarterly profits. they saw earnings miss on international shares and lagging results. >> 22 new locations last quarter where are they seeing the most opportunities? how are lower coffee prices impacting store prices?

joining us with the answers duncan brands chairman and ceo, nigel travis. welcome, nigel, once again. we like the story because we watched you over the past year step it up. first get to the numbers. why the miss on the level where people are wondering is it margins? is it costs? what happened there? >> no, i think it es have simple. we had a great quarter. the u.s. was on fire literal lift we were delighted with the u.s. results and i think actually your, you eating all those doughnuts, liz, helped a little bit. but, the miss is simply, we took impayment in spain. we made investment last year. we saw this as long-term investment. we feel good about the investment. it is something i would do again today. we see europe with the high gdp, high average weekly opportunities, high weekly average weekly sales opportunity, we think it's a great opportunity for the future some that's why we missed.

but we feel excellent, really excellent about our overall business. david: with a 36% growth in income you should feel excellent about it but your expansion plans are enormous. you have about 7500 stores now. you're going to try to double that in what time frame are you going to try to double that and where does the money come from? >> okay, well the money is simple. we're very much a franchise business. it is a beautiful business model. we have franchisees. we have to support our franchisees, encourage them, make sure they're getting good margins, which they are. the number you refer to is, in the u.s. where dunkin' donuts, we currently have over 7500 stores. we intend to double that. that will happen in the next 15, 20 years. it will involve 5000 stores west of the mississippi and 3,000 extra stores east of the mississippi because no way we're built out east of the mississippi. so that is the u.s. we're also excited about some international

markets. i mentioned europe, the middle east, where saudi arabia in particular we're very focused. liz: okay. >> you're right, we have growth just about everywhere and we have the business model to sustain it and franchising through our franchisees. liz: that is what matters. thank you for opening one on 48th street, 10 steps from fox business, we're thrilled about that. more in los angeles please because we go there a lot. let's get to the k cut business. that seems to be a growth opportunity. not only are you in the k-cup business but where do you assistant coming out with your own coffeemaker? is that reality, possibility, a dream? >> i can tell you very clearly, liz, it is not going to happen. k-cups have been a big business for us. k-cups i think will be around for a long time. we have a fabulous partnership with green mountain who make the current machine. we're going to build on that relationship in the future. so, i have to say that is the first time i heard that idea, so

i can say, categorically we're in the, in the machine business. we're about selling coffee, we're about selling doughnuts but not machines. liz: okay, there is your news. david: nigel, what about consumers? we got some great reports just moments ago, earnings from microsoft saying demand was increasing. do you see demand increasing, decreasing, staying the same, what? >> i think the consumer has been in a reasonably strong place this year. when you think what happened this year, we had sequester, tax increases, whole debacle the other week about debt ceiling, the consumer has done pretty well. unemployment is steadily going down. we had a little blip with the numbers yesterday but it is steadily going down. what we need is a solution in the washington. we need to stop the stop-go approach we're seeing. i think if we had consistency and a plan for the future which both parties could agree to, you could see the consumer really moving to a very positive mode. and i think that will be great for the u.s. economy.

david: well if it was run like a business that probably would happen. unfortunately it is not being run like a business. nigel travis, wonderful to see you. congrats on the earnings. that is terrific news. >> thank you very much. good to see you guys. liz: benany, our floor director was all -- he wanted one. david: got plenty. liz: take a shot. david: no, don't. >> oh! >> superstar! liz: munchkin. we didn't even rehearse. david: stuck in his throat. liz: nasdaq ceo, bob greifeld, big earnings beat for the third quarter results to how the nasdaq is shaking off disappointment losing out in twitter battle. they beat on top and bottom line. >> the debt ceiling dilemma. nigel was talking about it. it was bothering a lot of business people. has it been papered over with more money for temporarily, very temporarily? what about the fed's paper also, when does that begin to taper?

what paper will it get rid of? we've got all the answers coming up as we look at these wonderful dunkin' donuts. benny, try again. one more. oh. ♪

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stocks chiming into the green as the s&p closed higher for the sixth time in seven trading sessions. consumer discretionary and industrials were the top performing sectors. the number of americans filing for first time unemployment benefits fell less than expected last week. initial claims dropped 12,000. shares of zynga are soaring more than 14% in after-hours trading. the company's third quarter results beating the street's estimates. reporting revenue of 203 million bucks. liz? liz: david, earnings revenge, is very sweet for the nasdaq. the nasdaq omx reported third quarter profits that beat expectations on both the top and bottom line, helped by acquisitions but in this tough economic environment how does the exchange plan to continue to achieve success, especially after losing out on the twitter listing? by the way twitter announced it will probably end up going public on november 7th, because they will price on the 6th. joining us in a fox business exclusive is bob greifeld. he is nasdaq omx ceo.

stock was moving higher. you beat on top and bottom line by a wide margin. >> yes, and the stock responded postively. so we're happy about that. liz: nice to get get news and not beaten up about that. >> it is. liz: what is the driver? >> our business model completely changed over last three years. cash equity is 7% of the our revenue. i don't think people realize that. diversification strategy paid off in a material way. you look at our revenue you can break it down into transaction revenue which is right now about 27% and recurring revenue which is 73%. that recurring revenue really helped us carry the day. liz: all we hear lately from the echo chamber that is business network news was that you guyed missed out on the twitter ipo here you can prove, listen, there's a business being run here and not just a popularity contest as well but it was a hit nonetheless. there was a perception out there, there may still be because you missed it on twitter because of the fumbled facebook

ipo, which is more than a year in the rear view mirror. >> first i will say twitter is a great company. we wish them well as a public company but what is really important we had a phenomenal year for ipos. so far our win rate is 59%, which is multiyear high for us. tomorrow we have two ipos scheduled to go. one will raise close to a billion dollars, commscope and endurance f those two come off tomorrow, liz, that will be exactly 100 ipos for us this year. we is haven't had that many since 2007. late october, we hope to have a good ipo season in november and december. ipo calendar is strong. our competitive position in many respects is stronger than ever. liz: part of this game is luring. nyse lured people from you you m nyse. >> yes. liz: marriott, kraft, a bunch of other names too. frankly news corporation, the paint of what -- >> great company. liz: a great company. we left the new york stock exchange.

>> yes you did. liz: came to the nasdaq. listen there are all kinds of reasons people do that but, let's spin it forward to the big one everybody is wondering about and that is alibaba, the chinese internet company. have you spoken with those people or the alibaba team? >> we're certainly engaged with alibaba but it is important our value proposition is same for all listed companies whether you're large, small, high-profile, low profile. we come to that decision with our listed companies, how can be the best partner for them. that will be our message for alibaba and all others. >> on top of the technological glitches which is come for everybody, but the one in august is bad enough you had regulators come in and say fix this now. sec breathing down your back and frankly other exchanges to, put down your swords, work together. where does that stand? >> i think it is making great progress. we're due to respond back to the commission on september the

12th. liz: next year? >> this year. october the 12th. give credit to mary joe. she provided leadership. we're working together i think quite productively i think we'll have some interesting information an plans to present on november the 12thth. liz: the issue with the sip, the securities information prosever which gets all of the trades on other people's tickers, et cetera, how, you've been there 10 years now as ceo. explain how exponentially the technology has grown? how many trades go you there the nasdaq in a single day? got to be -- >> we did a lot more volume back obviously in 2006-2007. i think with respect to the sip we have an increased sensitivity to making sure the markets are fair for all. the technical problem was relatively straightforward. it was resolved very quickly i. the recovery of that took a while but we had to make sure we didn't have retail investors with less information than professional investors.

it was run being successfully. small segment didn't get data. liz: you shut it down. >> purposely shut it down and brought it back up. it was sort after planned outage, not planned with respect to technical problems, but with respect to response we went through our playbook. that is kind of the message if there is technical problem, information asymmetry for market, for the greater good we'll take the cautious road, bring the market down and come back in an organized fashion. liz: i know every new ipo matters to you, small big. rolled out solarcity. >> that was a great one. liz: points to be made by certain companies that go public on the nasdaq, list on the nasdaq they have a very nice first day pop they tend to hold on to it solarcity has been a good example of that, but, getting rid of that negative perception and leftover residue losing out on twitter ipo and what happened at facebook, what step did you take do you think most effective to correct the perception that nasdaq somehow

can't hand ale huge tech ipo? >> answer are in the numbers. we have 59% win rate, higher than a number of years. so we're proud about that tomorrow you have probably a billion dollar capital raise. one of the biggest capital raises of the year many coulding to nasdaq. earlier this year we had hd supply. when you look at the large capital raises done so far this year we've been dominant. so we're happy with that. the listed companies look at us holistically. when you look at our track record for technology over the years is outstanding. we have 70 exchanges around the world running on our technology every day. and they rely on us an we do a tremendous job with that so i think the fundamental long-term track record of our technology stand and that is why we have 59% win rate. liz: you have 21st century fox. >> that we do. one of the best companies out there. liz: bob greifeld, nasdaq ceo. >> thank you very much. liz: we'll check back in with you november 15th. >> good, thank you. david: best of luck, bob. even when the fed does begin to taper, probably will not

change its policies towards one particular bond that just might be your best bet. blackrock's chief investment strategist will be here to tell you which one that is coming next. liz: halloween just around the corner. we have some pretty spooky facts about candy spending this year, live from a candy production line. you like candy corn? get ready. ♪

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david: when the fed does finally begin to taper in some ways it will probably not fiddle a lot with its mortgage bonds. that is because the housing market is still too jittery for that. now be a good time to stock up on mortgage-backed securities? joining us for a fox business exclusive, russ koesterich, blackrock chief investment strategist. russ, great to see you.

we know the fed will cut back. it will probably not be before march but because it is worried about the housing market as well it should be, it will probably not get rid of mbss, mortgage-backed securities, correct? >> i think that is the case. i qualify this a little bit. i be careful the word stock up. david: okay. >> within the entire fixed income space we don't see that many bargains. as you know, bond are generally expensive. really become as matter where do you find relative value. we see good relative value in u.s. high yield and parts of any market. i also add mortgage-backed securities. the reason is exactly what you laid out. we think that the mortgage-backed market will remain bid by the fed for a while longer because central bank is very worried about what would happen to the housing market if mortgage rates rise too far too fast. david: you say don't stock up. but on the other hand you changed rating on mbs's from neutral to overweight, correct? >> yep, we have. again i want to put things in

context with your viewers. we like mortgage-backed within the context of the fixed income market. we think they represent good values but both bonds you're looking mid single digit returns at best. it will be hard to really hit a home run given rates as low as they are at this point in time. david: today we saw the rates kind of find what looked like a bottom. i will ask for your expertise on this whereas a year ago we were looking 1.5 for a 10-year rate about the norm. it seems to be about 2.5. does that concern you, that the bottom, the floor, if you will of interest rates seems to be much higher than it was a year ago? >> well, i think there is a simple reason for that. investors are starting to anticipate the end of quantitative easing. and whether it ends in december or march, june, the reality, a year from now it is very likely the fed will begin tapering. the reason rates were so low year ago, artificially low, investors were not thinking about the end of that program. and if we get into 2014, in a

world where the fed is no longer such a dominant part of that market, then it is reasonable to expect that raising the stocks to normalize and go back to the level set by the market, rather than one set by the central bank. david: the question is, we've been in artificial world so long, what is normal? we're not sure what it is. just a month ago rates were back up to 3%. looked like they were going higher from there. where do you think, once they begin to pull back, where is the new norm for rates? >> this is a great question. i think the short answer is rates are going to go higher but they will not melt-up. a couple reasons for that. first of all we still have a dearth of supply from the private sector. the private sector is still deleveraging. the government is bore less -- borrowing less as deficit comes down, and as population age, fair value for rates tend to be a bit lower. our best guess rates go up to 3%, 2014. maybe end the year between 3.25

and 3.50 on the 10-year. >> other thing weighing on rates, what is going on in d.c. with the debt ceiling and budget and all that. were you ever worried that the u.s. was going to default? >> i wasn't worried that i thought it was the most likely scenario but it was something, it would be something you could potentially tripped into. certainly no one would have intended it. the problem is no one expected it. it was not one of those things well-discounted in the market. had it occurred you would have seen a violent reaction. my guess we'll get another bit after scare in early 2014. i think washington will pull back at the last minute. right now a bigger problem, rather than sort of armageddon scenario, does this lingering uncertainty undermined the recovery by hurting business and consumer confidence. david: right. >> to me that is the bigger risk. david: the confidence of investors in bonds is important, the worldwide confidence in es investors and if the treasury was forced to choose, wouldn't

it pay off the bondholders first,lous eliminating the concern for default? >> look, absolutely. this is a critical thing. the u.s., we have a multicentury record of paying our obligations. anything that violates that, even for a couple of days is going to do damage to the u.s.'s reputation, damage to the dollar. you don't want to see that happen under any circumstances. david: russ koesterich, blackrock chief investment strategist, always a pleasure to see you. thanks a million, russ. >> thanks again, dave. liz: it is one of the largest pieces of land art on the planet and it can probably be seen all the way from space. david: wow. liz: we'll tell you about it when we take you "off the desk." it may not be willy wonka and the chocolate factory but it might be candy central for halloween. we'll have details next. ♪ this is the quicksilver cash back card from capital one.

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david: well halloween may be a little less sweet this year because most americans plan to spend less on candy than they did last year. liz: jeff, come on, you're at the candy production line in chicago with more on this story.

what's happening? >> hey, you know this had been a steadily growing holiday. and by the way, if those looks like bunny rabbits because they're already making the easter candy here at jelly belly. i got bill kelly, member of the candy hall of fame. this is a year-round pursuit, isn't it? >> we don't make seasonal candies year-round but -- >> that is not too far off, yeah. we've got to make them way ahead of time. >> walk me over to the halloween line. i want to put the numbers up, because fewer people participating participating in halloween this year. more people spending less this year than they spent last year. this had been a steadily growing holiday and you like that because you're in the candy business. >> halloween has been a very strong season for us and the candy industry. if people are spending less money, i don't know if they're spending money on candy but spending less on other things i think. >> look at one of the things they are spending on. this is candy corn.

you make what you the cadillac of candy corn. it is not like the waxy stuff that breaks your teeth, right? >> we've been making candy corn over 100 years and by now i think we have it pat. i think our candy corn is the most tender and creamiest you can buy in the market, so. >> cream corn. take a look at this. this a latest, newest machine. this actually bags the candy up and maybe i will grab one of these off of here and take a look at it. see what we can find one. maybe we can't find one. well, anyway -- >> we have a mechanical problem here. >> did i tell you every time we come on live television, for some reason the machine breaks down. but that jelly belly candy corn, in a nice, gold wrapper. >> we think it is the best, jeff. >> okay. you heard it here. david: cream corn looks good. looks good. liz: liz: no. david: liz didn't like it.

i did. liz: butter popcorn jellybeans. >> i sent you those last time. >> i need them again. david: we'll take it. liz: it runs out. >> i will send you candy corn. david: we'll take it, jeff. if she doesn't, i will. >> bourbon flavored jellybeans, david. liz: that is for david. david: that is for me. thanks, jeff. liz: here is a question, why use a canoe when you can paddle in a pumpkin? the daredevil on your screen set a new world record! we'll tell you details when we go "off the desk." yes, he is in a pumpkin. david: unbelievable. we asked on facebook and twitter do you think alan mulally leave ford to take the microsoft top job? your comments coming next. ♪

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liz: let's go off the desk. a cuban-american artist is displaying a 11-acre piece of land art. david: unbelievable. liz: that is in northern ireland, david, near belfast. it is largest land artwork in united kingdom and ireland. it uses 2,000 tons of sand, 2,000 tons of soil and 30,000 wooden pegs to create face of anonymous 6-year-old belfast girl. >> never seen that done. s if nating stuff. also "off the desk", a artist setting world record, two

minutes, fastest 100-meter paddle in a giant pumpkin. he is known for his giant vegetable sculptures, known somewhere. turned into a second pumpkin into a motorized boat which had a top speed of more than two knots. not the fastest boat in the water, still. liz: to what end? david: to what end? you have to ask? if you have to ask there is no answer. liz: we asked you something on facebook we think is to what end. if you think ford ceo alan mulally will leave the automaker early to jump over to take the top job at microsoft. jim said, i think alan mulally found his niche as ceo of ford and will stay there. david: gus says, he will leave because it is all about the money. liz: the number two thing to watch tomorrow will be september durable goods orders. they're expected to rise 2% up from the august reading of .1 of a percent.

david: the number one thing to watch tomorrow will be the final reading of october consumer sentiment. economists expect the final reading to be 75. liz: "money" with melissa francis is next. we'll go eat our doughnuts. david: we'll see you tomorrow. >> i'm dennis kneale in for melissa francis and here's what is money tonight. the i.t. company behind the whole obamacare exchange fiasco was fired from a tech project in ontario for its incompetence. that epic fail, is now known as the billion dollar boondoggle to our neighbors in the north. after that, same firm was fired from another project, building a health care registration network, yet this is the very outfit our government hired with your tax dollars. we have the details, you won't hear them anywhere else. plus a big boost to crowd funders today. can companies can use websites to raise money for stock offerings. how much will this change the game? we have exclusive interview of film funding