hi, everybody. welcome to the wall street journal report. i'm maria bartiromo coming to you from the schaub impact conference in san francisco. i'll talk to c chuck schaub himself. what does all this volatility in stocks mean to you? should you still be in this market, and how to cope with the ups and d dunz downs. the feds speak turmoil in europe. where the economy may go next. the internet music service pandora. how they plan to drive profit and listen to the sweet sounds of s success. the wall street journal report begins right now. >> this is ameca's number one financial news program, the wall street journal report, now, maria bairomo. and i'll be back with all of that and a lot more in just a moment, but first let's check in with sueue herrera for some of e headnes this week. sue, over to you. >> thanks, maria. here's what's making news as we

head into a new week on wall street. the economy created 80,000 jobs in the month of october, a a little less than what economists d predicted. that is the fewest in four months but it is still nudging the unemployment rate down just slightly, to 9%. the report had some positive signs including an upward revision in the number of jobs created in august and september. the labor department now saying 102,000 more jobs were added than first thought. as usual, it was a roller coaster week on wall street, a drop of more than 2% on both monday and tuesday on worries about the greek bailout. but the markets recovered some of that later in the week. the federal reserve's open maet committee kept interest rates steady during the two-day meeting. it also slightly downgradeded i view on the economy but said it had more too available to help the economy y should the need arise. john corzine has resigned ms corzine has also said he won't

take any severance and has hed a criminal attorney. ms global collapsed after bad debt. the mamarkets are caught in giant three-way tug-of-war. watching what happens in europe, what the fed is oing, and ohoh, yes, earnings season as well. so where do we go from here and how do you want to invest in thisnvironment? along with mike cuccino. gentlemen, it's nice to have you on the pgram. welcome, good toto see you. let's talk about what is dictating investing right now. mike, what about you, do you look more at what's happening in europe as a sort of gauge to how to allocate money, or we had the fed meeting this week, we had the european central bank cutting interest rates, is that more of a drive for you?

>> we had to look at how it's imcting the eurean general market aswell. >> cash is on the balance sheet, and yet this volatility is beyond, 2 points up, 2 points down. >> it doesn't mean it can't go higher, but it will happen in a choppy fashion. we're in a worldld where politi are driving the markrket. it's very hard for investors used to looking at company fundamentals, used to looking at fifinances, to ignore what's happening in greece. this is adding to the uncertainty, and in a sense, it's ry hard to handicap these events. >> even ben bernanke said things worsen in europe, it will ultimately have an impact on the u.s. econom so mike, what about that? the federal reserve met this week and they took their expectations for growth down, they took their expectations for

unemployment up. did any of this surprise you? >> i think they're maintaining flexibility. there is a lot of talk of qe-3 or something like that, potential stimulus, we're coming into aelection year. there will be a lot of pressuru applied for stimulation in the ececonomy. no, i wasn't surprised at all. i think it maintains flexibility for t fed. my view is i don't think what the e fed is going to do will he any incremental impact. i think the law of diminishing returns comes into play here and it's more of a fiscal play here, and if anything, the fed is trying to coverer up for the lack of our fiscal leadedershipo get anything done with any real stimulus. >> you make a point, because one thing bernan said was we've done whahat we should be doing, now we need leadership, anand i think he was suggesting he wants government, he wants the administration to do something. let me ask you about europe for a moment, russ.. the ecb lowering interest rates once again and back and forth about ether the eeks will hold a national referendum

on cuts required in order to get that last loan installment. how do you see this playing out? >> first of all, is greece here even if we get past this period of instability, arguing the haircut is not enough. you probably have to go back somewhere in 2012. second of all, the banks, onenf the big risks forhe economy is thatat the european banking sysm goes into a crisis, so how the banks are capitalized is critical, and probabablbly most importantly, spain anditaly. these are countries largely insolvent. investors get panicky and drive up the cost of their borrowing, that's going to be a very hahar probleto solve. >> is it justified to have the u.s. market so focused on greeee and the eurozone the way we are? it's really dictating movement. >> i thihink no. the other report that maybe surprises is that u.s. corporate earnings in the third quarter were relatively healthy. i think the growth rates are dimishing, but y you still have corporations by and large in a variety of industries still making a lot of money, putting that cash on their balance sheet, still paying and covering

dividend yields very easily. equity prices, earnings of maybe $100 on the s&p 500, s&p trading at 150, volumes could increas once they're up and they come into the market, so i think the long-term chase for the stock market is very favorable. i don't think investors have been paying attention to it because of the day-to-day drping or the water dripping of news coming out of europe ery day. >> it seems like the federal reserve is pushing them into stocks because with rates where they arewho the heck wants to go into something that's yielding me nothining, i mights well go with t dividend payer. i might as well go with something that has a yie. >> we're used to getting a reasonable, nominal yield from a risk-free investment. that doesn't exist anymore, so you're exactly right, the fed is pushing you to the point of if i

want income, if i want yield, what kind of risk am i willing to take? in many cases, i agree with michael that the best t way to t that income is from a high-paying stock or index. typically when this happens, t e recovery is slow and anemic, and while that's happening, there is probably not a lot either the deral government or the fed is able to do to make it much better. >> your favorite sector right now. >>nergy is t favorite sector. it's cheap and iholding up better than the overall econy, and i think you'll see some strengths in the overa economy. >> anythg else? >> energy, commodities, and financls, if you have a strong financials, if you have a strong stomach and you're willing to it for that story to play t. >> you do o need a strong stoma. we appreciate your time todaday. up next on "the wall street journal report," charles schaub.

how to ensure your money is in the market ups and downs. music to our ears, free internet service, pandora. how to find the songs you did not know you love and how it's shaking up the market. back in a moment. hey, it's sandra -.

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at the end of a wee that saw market volatility and a global economy, you can't help but wonder what impact the market will have on your portfolio. i talked to chuck schaub about the road ahead for investors. here's what mr. schaub told me. >> the good thing about a little age, maria, is you have a little perspective on this. i've gone through periods where we had setbacks, and somimes longer than you might think. in our particular case here, it's been four, going o five years, frankly, of a depressed kind of economy and no growth and so forth, but you know that equity, great equities, great companies with brand names who can live through this and adjust to the future environment, whatever itight be, if it's

more inflation, they' adjust to that, ifif it's more difficulty, they all have lots of cash now, they're all in great shape, t the great americ companies, so that seems to me a highlynatural place. >> so you wake up tomorrow, the market is down 500 points, t next day it's down 300 points, that's not going to faze you? >> yes, it does. it does get my heart pitter-pattering, but you have to learn how to ride through these things. it's an adjustinpart of volatility. >> you have seen so much change since the days you started schw in 1975, the early '70s, when you had the idea. how do you expect the industry to change and how es schwab stay in the lead? >>t's all about adoption of technology, frankly. our clients want more and more, we want to give them more and more, and whehether it's social

media kinds of capabilities, which, clearly, that is going to be a growth area, i think, in the future and we have to adopt at within our capabilities, i think other services will unfold that will give people more oices. what we're finding, and that's what's so important here with the registered investment adviser, many people are getting to the point in their careers or their wealth creation that they need someo else to help them because they want to go play golf a little more. >> enjoy life. there are so many sort of upsetting stories out there, you know, negative stories in terms of firms. will schwab look at some of these situations as an opportunity? for example, is schwab interested in acquiring assets of ms global? >> well, to be specific, no. we would certainly look at anything that would make some sense. so certainly no of the company. we would look at really any avenue that would expand our services, so anything that makes

sense on behalf of our clients we will look at. >> what about international? i mean, you've got the banks in eueurope obviously plummetting, valuations dropping considerably. would that be an opportunity for schwab? >> we have looked at that. we will have international capabilities at schwab itself, so you can buy any kind of mpany in common, in the common stock and in the currency,t schwab. and that will be unfolding soon. but i don't think we're really anxious to go international just yet. there are so many uncertainties going on out there, and frankly, there is also a thing called the regulatory schemes of each country. in america we're actually in pretty good shape. some of the new laws are really still confusing to many of us who look at this ing, but there are difficulties in, for instance, of the separation from banking to brokerage. in america we've been able to integrate all these things. frankly, that's why we've done so well at schwab is integrate

these services. so i have a little difficulty looking at some of the companies that are still old-fashioned in their regulation. >> that's a very good point, and it's sort of tough to put our ways aside, the european ways. let me ask you, broay speaking, about the economy. we talked earlier about ben bernanke because interest rates are going to stay at lower levels beyond 2013. you made a comment to me earlier saying, at some point inflation is going to be an issue. how do you jibe what's going on righght now? gi give me a look at the economy and what you think will happen. >> how do you -- nobody knows for sure when it's going to jump out of the cake, but i know for sure with the balanc sheet of the fed, expanding to the degree that it has, the deleveraging we've all gone through, i think when demand starts back in again

in a big way, which may not be this year, may not even be next year, but soon, like within a year and a half, that will create the demand for these products and so much cash chasing, you know what happens, inflation picks up. so as an investor, you have to look at that potential. you have to look at one, two, or even three years. you never know ift happens, but it happens very quickly when it does happen. >> so y want to be positioned. >> i think so. >> chuck, it's always nice to have you on the program. we've enjoyed meeting advisers and getting their take onon whe things a going. charles schwab. up next, pandora's hope for the future of internet radio o the go and in t

in greek mythology, pandora received many gifts from t the

gods, including music. today's pandora, the free internet radio service, promises to give the gift of radio that only plays the songs you like. what's next for the technology company that went public earlier this year? jois ad of the media, and joe joins me right here. good to see you. >> good to see you. >> walk us through how tit work. >> pandora is all about personalizing radio for you. we have this extraordinary intellectual property. for 11 years we've had peoplple analyzing music, every aspect of music, its dna, so we can match songs with each other just based on their music characteristic. soso if you tell usou like one song, wewe can match it to all sorts of other songs that are like it. >> that's really interesting. so what are the measurable atry beau -- attributes to doing this.

let's say i like sade. >> there are 20 attributes that just characterize the voice alone. sade has a very characteristic voice. we're going to anyze how breathy, how much bravado, every aspect of thatocal performance will be analyzed and we'll do it for anybody else. >> so pandora is expanding its mobile businesses, ca, you have 3% of total rao listening audience today. tell me how you plan to grow by bringing pandora into these new areas where people are listening to radio. >> if you think aut it, the internet is just reaching the places where radio has historically been consumed. almost half of all radio listening takes place in the car and another third in the home, the living room. so the internet is reaching there with connected cars,

connected blu-ray players. already 70% of our lirstening i on those new devices. >> so you want to be where people want to listen to their music. that makes sense. in a day of more social media, are you trying to be more interactive? >> absolutely. that's one way we e can become more interactive. you can get feedback and shape your station. thumbs up, thumbs down, make it a true personalized experience. use your friends, using twitter, using facebook, and even on pandora, you can follow what your friends are listening to, have your friends follow what yore listeninging to. hey, i found this great station and this great band, i want to share with my friends.. > a lot of people ask you -- know you get a lot of question about the business model. advertising llars, tell us about this balancing the revenue of ad dollars with fees that the

company has to pay to get the music. >> we're like radio has always been. we're predominantly ad supported. we've seen terrific growth in our ad revenue. wii had eight consecutive quarters of triple growth and ad revenues. and that's really buding the business and allowing us to cover the content cost and the other costs of the business as we grow. >> what are your expectations in terms of profitability? how does this business model work. we know it's free. will it always be free? are you expecting profitability and when? >> radio has been free for the consumer for almost a century. yes, we do offer subscription as well, but it's going to be the pre no, ma'am anato predominant pa of our business. >> of course, your investors agree. you raised, what, $235 million

in that initial public offering back in june. this has been a big yeafor new internet stocks,groupon this week,ricing and going public. how do you see this environment right now? l of a sudden new excitement around internet-related companies again. >> i think in some ways it's just servicing a lot of innovation that's been develoloping. i think companies are maturing and hitting the stage where it's the right thing to do to become public. we don't coordinate with eac other or anything, so in many ways pandora is a more civil experience. it's a way to try and go public as we create a more endurg. >> what music do you listen to? >> i'm one of the people that have 100 stations on pandora, that's the limit, and i delete station and see add more. i have everything from old classical music to coldplay enjoying the new album they just released, and pretty much in between.

i grew up a new jersey kid. i love springsteen. that's always going to be home for me. >>oe kennedy joining us from pandora. up next we take a look at the news this upcoming week that will have an impact on your money. also ahead, so angry they're not flying south this nter, they're flying right into the record books. "angry birds" fliehigh. stay with . pe. - the gulf. - and i saw things. - incrcredible things. - and people you never forget. - i did my job. - for my country. - my budes. - for total strangers. - and i was oud. - so grateful. - for my family. - my freedom. for all who served and all who serve, we c never thank them enough. or creates another laptop bag it's not just good for business.

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outs our web ite. and on twitter, look for me at maria bartiromo. the week ahead, dow company cisco and disneney will rept their earnings this week. they typically can be market moov movers. we'll also hear from macy's, ralph lauren and kohl's. initiatives will be on ballots across the country. and thursday we'll find out if the u.s. is importing or exporting more goods with the release of more ade. friday is veteran's day. markets will be open but banks will be closed in observance of our veterans. like a slingshot, "angry birds" have really taken off. 5 billion have downloaded the "angry birds" mobile game. it's available on apple and android devices and costs 90 cents per download.

collectively, americans have spent 290 million on "angry birds." next week, look with me at the race for president and the debatete, which i will be