more on ibm later. how about lockheed martin, they delivered a nice earnings beat, they didn't raise their forecast for 2016 enough. at one point it was down 4. my take, lockheed was never in a bear market to begin with, it doesn't share the characteristics of today's bull in a beaten down stocks. lockheed martin's a buy. of course, as usual, the industrials are going to rally, the money has to come from somewhere. today it came from the biotechs which got murdered and tesla, amazon, google, as well as chipotle. take valiant the political heavens remain too much for valiant it's cascading money. it's up ending its business model now to spend more money on new drugs. that potentially slowing growth that will cause that spilled over and everything -- most definitely what people think is its doppelganger, allergen which has been annihilated. we just can't seem to put together a decent streak where we are bear free, even for a single day. here's the bottom line, it's clear to me some industrials went down t

ibm does not have that. and instead you look at this older business and it's dropping off too fast and it kind of takes my breath away because i don't know what they can do. i mean, i've been thinking back and forth about what they can do, can they split it up, can they try to figure out -- and then i come across a company that came public not that long ago called pure storage, okay, pstg, and what they said was that flash with this kind of enterprise flash is really just -- they're getting killed. what's the size of the company, $3 billion. what do co-they have bought it for a few years ago? $1 billion. pure storage is killing them. no, they're reactive yet, not proactive. >> they are, again, another year away from making a turn if there's a turn. >> one thing, 1475 to 1575 is a long way from 20. remember the promise of 20? >> the old roadmap that was abandoned i guess last year or a year ago. >> it's a tough one. >> it's a tough run. now, that said the company still generates, what, 13$13.5 billio in cash

i will say this, this ibm quarter we will take a big deal of it, but ibm is about to say is ibm specific. >> ibm looks like it's beating the estimate of $3.30 for its earnings. by 4 cents, reporting earnings of about $3.34 a share. we will have more on this in just a moment. before that, though, charlie, guy brought up the financials and let's show you what's happening as ibm shares quality. morgan stanley was also hit today significantly. you have a lot of financials exposure, charlie. what did you make that have report? >> it was a lousy quarter for the fixed income commodities and currencies business. if you think about an investment bank, they tend to own a lot of corporates and short governments to hedge it. when you get widening spreads, a morgan stanley is going to have losses. they also lost, they've got private equity investments in asia where they had to give back some of the carried interest. the bottom line is that morgan stanley is trading just a hair above tangible book and it's a better company than that. it should be trading at 1.5, 1.7 times booked and yet it's right abo

that's what ibm just delivered to the street. big blue reporting earnings per share of 334 on revenue of $19.3 billion but that was a drop on the top line of 14%. look ago head, ibm lowered it's eps estimate to a range of 14.75 to 15.75 and expects free cash flow to be relatively flat. now moving through the major lines of business, one number that stood out to analysts, 5.1 billion. that's what ibm reported for its software revenue. a drop of 10% compared with the third quarter of last year. analysts had been looking there for 5.2 billion. dan ives says the bigger point here is that imb continues to have real challenges adapted to this new era of corporate computing. ibm is putting a lot of time and money to work in building out it's portfolio of higher value products and services. in fact, total cloud revenues jumped more than 45% year to date and 9.4 billion over 12 months but imb can move quickly enough the stock is on track for its third straight year of delines. for cnbc, i'm josh lipton in san francisco. >> as we were talk

this is ibm's new strategy. cory: agriculture. alex: agriculture. ibm bought a health care company.y want to transition away from an old legacy enterprise company and become a cognitive computing company using data and all of these different industries and sort of selling them back into the market and relying on things like watson to drive revenue for the next generation of technology. cory: it seems like a better use of capital than share buybacks and a hell of a lot cooler. alex: a better use of capital than some of these legacy to legacy deals we have seen. i will not name any exactly. it is a less risky use of capital that way. some of those deals may turn out to be good. but ibm is certainly looking ahead. they're still in trouble, though. they do not have high topline growth. cory: we don't have time for you to name names. alex sherman, thank you. thank you for watching "bloomberg west." tomorrow, earnings from linkedin and solar city. ♪ >> the following is a paid program in the minions -- the opinions do not reflect the employees. >> welcome to your medicare. >> there are man

ibm reports its lowest quarterly revenue since 2002.nd its shares slide initially in afterhours trading. >>> securing your nest egg. how much retirement income will you need? it may not be the amount you think. >>> fighting the flu. it's big business for some very big companies. tonight begins the first of our three-part series. all that and more tonight on "nightly business report" for monday october 19th. >>> good evening, everyone and welcome. case of the blues for big blue. ibm's revenue fell for the 14th straight quarter, missing analyst estimates. the world's largest technology services company said it was hurt by a strong dollar and by the sale of low margin businesses as it shifts from making hardware into cloud computing. ibm reported earnings of $3.34 a share. that was four cents better than estimates. that's the good news. but revenue fell nearly 14% from a year ago, coming in at $19.28 billion. and that sent shares of the dow component initially lower in afterhours trading. in an interview after the results were released ibm

dan with us today. >> real quick on ibm, the fact that warren buffett buys ibm down is one of the problems right now with ibm, and i think there's many people out there that use that as an excuse and lose their sell discipline on it because warren buffett is in it, does not mean you have to be in it. remember that. >> all right. coming up after a rough few months, one of our traders sarat is feeling better over his bet on yum as the company splits in two. will he take a bite into the chinese business? find out next. we head into year end -- as we head into year end, our trade rerz feeling the heat and making moves. we break down their moves next. you are watching cnbc first in business worldwide. >> yum brands announce it will split off its business after naming keith meister to the board. cnbc contributor and yum shear holder sarat joins us now on the phone. hey, sarat. >> how are you? >> good. we talked about this on friday. i said i didn't think that this was going to take that long to happen. i don't know that any of us expected it would take a matter of a weekend. >> i agree. i though

we have seen ibm unloading things. could we see ibm spinning some more stuff off or doing some kind of big merger? tom: how can they do something that is really transformational? they have made these acquisitions throughout. they will continue to invest in those kinds of things. it is difficult even if you bought something really big. how transformational what it -- what it really be for them? how easily could they incorporate that and integrate that into what is already a very large is ms. -- very large business? is there an activist who wants to get into the stock and wants to pressure them for something specific? some kind of a spinoff. here is the challenge. if there was low hanging fruit, wouldn't they have already pursued that? they have embarked on restructuring. they have been upfront and straightforward about revised estimates. it did take a while. but they did come out of those. the problem is -- they have been buying back stock and issuing dividends. the investors we talked to, you can only rely on that for

i want to talk about ibm.dbine the weather company's beital assets, they will not buying the tv business itself. earlier today, the senior vice president of ibm joined bloomberg talk about why ibm wanted to do this deal. >> the weather company has a very high-volume platform underlying their capability that people are accessing through their mobile devices. it is cloud-based. platformting a high for the internet of things, specifically around weather. we will extend that. and we're going to bring watson to bear on this. and as you know, one the largest, most powerful cognitive systems. so this high-volume platform plus watson will be unmatched in the industry. cory: that was john kelly. deal actually makes a time of sense to me. the weather channel is a data business more than anything. alex: right, so the nuts and bolts of the deal are the weather company are selling the digital assets but not the tv channel. ibm will basically by the website, the data behind the website, the applications. the mobile app

and we at ibm have an agenda -- and we and ibm have an agenda to keep computing in the cloud.he third part is connecting the weather company with watson. today, we do predictive computing at the weather company. we predict the weather and what is good to happen. but that isn't complete. an airline pilot nation know whether to fly or delay his flight paid a truck driver needs to know what is good to happen. people need to know is good to happen and what decisions or actions they should take by being cognitive, by turning the prediction into an action, by connecting our dinner with all other data. it will make our forecast infinitely more useful to businesses and individuals. betty: can you put it down, how much more accurate the weather watson being crunched by and their cognitive services? david: we are measuring it by precision. i think it will measure accuracy. we are the most accurate but those are big areas, like counties or states. we want to measure the weather at the long combinations, for specific locations. that will really matter. at the conference this week, they ta

emily: what does this mean for investors and ibm?pany has been trying to make a big transition. jing: for investors, it is another challenge that ibm has to face. ibm is looking at this multiyear transition where they are moving from one business will to an entire new business model. this is another signal that things may not be going as well. emily: there was something similar that happened a couple of years ago in a cloud revenue related rope that ended with no action. he will keep us updated on this story. thank you all for watching. it has been a big day. tomorrow, we have another round of tech earnings that you do not want to miss. ♪ buddy- nice place, nice car what happened? well, it all started with my free credit score from credit sesame.com. they gave me so much more than a free credit score. credit sesame's money management tools and personalized offers saved me tons of money and helped me reach my goals. i just signed up with their free app. what's my credit score? your credit score is 650. that's magic! no, that's credit

we have seen ibm unloading things. some we see ibm spinning more stuff off or doing some kind of big merger? tom: how can they do something that is really transformational? they will continue to invest in those kinds of things. it is difficult even if you bought something really big. how transformational what it really be for them? that into incorporate what is already a large business? is there an activist who wants to get into the stock and wants to pressure them for something specific? here is the challenge. if there was low hanging fruit, wouldn't they have already sued -- pursued that? they have been straightforward .bout revised estimates it did take a while. they have been buying back stock and issuing dividends. the investors we talked to, you can only rely on that for so long. emily: what about watson? take a listen to what he told me. rapidly,growing very fastest-growing segments. as we look at applying watson to other areas, we will grow those businesses as well. emily: he says watson is already incremental

emily: what does this mean for investors and ibm?pany has been trying to make a big transition. >> for investors, it is another challenge that ibm has to face. they are looking at this multiyear transition where they are moving from one business model to an entire new business model. this is another signal that things may not be going as well. emily: there was something somewhere that happened a couple of years ago in a cloud revenue related probe that ended with no action. you will keep us updated on this story. thank you all for watching. it has been a big day. tomorrow, we have another round of tech earnings that you do not want to miss. ♪ >> from our studios in new york city, this is "charlie rose." charlie: senator bernie sanders is a democrat in for the democratic nomination for president. he is down for his advocacy of greater economic equality for all americans. he refers to himself as a democratic socialist. he continues to draw huge crowds. he and secretary clinton spoke at the jefferson jackson dinner in iowa. senator sand

it has been to the detriment of ibm. ibm cannot get any traction, especially going into the cloud.e cloud player that they have to compete against. they have gotten everybody to adhere to their new ecosystem. julie: there is no shortage of cloud players either in this environment. kevin: not at all. what is interesting is that amazon's consumer discretionary stuff is not a tech option for people looking for tech earnings to help the s&p 500 this year when it comes to earnings. what amazon is doing is that they are low-cost player and the number of the cloud space. that is why you have into it and nike and netflix is even a customer in their consumer discretionary stocks are the trade here is going just till friday. there is the amazon weekly options and just buying at the money call right here because they have done so well and the calls this time are cheaper than the average. the average stock moves at 10.7%. the options are implying about 8.7% moves. we have seen over the last two quarters that it has outperformed and that volatility has beaten those average numbers. julie: just

>> in hindsight, we did not see enough from ibm. doing the right stuff from the strategic imperatives business the business is lower but it is lower margin and cash flow. so not only are the revenues and the cash flow gets worse and it is hard to call a value when you don't know when the end point is going to be when the mix optimizes for them. >> is it fair to say things would have been mucher if it were not for fx? are they trying to make an excuse for what are deep declines in the core business? >> i think fx is part of the issue but they have, to your point, deeper challenges in the legacy assets. this head wind they have is part of a transition from legacy to strategic assets. i would say that fx is a small challenge. the underlying business transaction is the bigger head wind. >> this is karen. i'm thinking they should be out of the guidance business. it would be a hit in the short-term. but they haven't been able to meet it. how would you look at that if they were to say, beginning in 2016, we're no longer going to give annua

emily: what does this mean for investors and ibm?ompany has been trying to make a big transition. investors, it is another challenge that ibm has to face. they are looking at this multiyear transition where they are moving from one business will to an entire new business model. this is another signal that things may not be going as well. emily: there was something somewhere that happened a couple of years ago in a cloud revenue related rope that ended with no action. he will keep us updated on this story. she lives someone. thank you all for watching. big day.en a tomorrow we have another round of tech earnings that you do not want to miss. ♪ ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store. our studios in new york city, this is charlie rose. charlie: senator bernie sanders is a democrat in for the democra

about ibm.rd quarter revenue that missed analyst estimates. 14 quarters of falling sales. joining us is the senior analyst of technology at fbr capital markets and everybody saying the same thing dan and that is the migration of big companies away from expensive servers and software to the cloud and to much cheaper vendors is happening faster than anyone thought and faster than ibm can ramp up whatever it's going to have. i see bob dylan talking to watson. revenues that watson is bringing in right now -- anything. >> watson is not even bread at the restaurant. >> that's all i see them advertising. that's what you're going to pass the baton to? watson? >> companies like ibm are in a quick sand situation as large cap is falling behind you're seeing the move. they're trying to sell gas guzzlers where everyone wants teslas. there's a lot of rose colored glasses on the ceo and board situation. you see it with oracle, cisco and ibm. >> both oracle and cisco will have larger market caps than ibm after

we'll get ibm after the close. you know the problems for ibm. it's a basic long-term decline in their core franchises of services and software and the growth initiatives, the clouds and data analytics like watson and the security have been slow to ramp. the big issue is where guinea rometty can ramp these up fast enough. look at ibm versus the s&p 500. ibm down 17% since the close of 2011. that's the white line. and there's the s&p 500 on top. that's up almost 60%. look at that divergence. that's all you need to know about the inability to really grow from ibm. by the way, on a side note, the strong dollar is really hurting multinational companies. ibm gets 50% of revenues outside the united states. they came out and said revenues would be lower by 7% to 8% this quarter because of the strong dollar and earnings would be lower by 5% in 2015. that's about an 80 cent hit, tyler. important decline there and very big influence from the dollar. back to you. >> bob, thank you very much. let's go to nasdaq and check in with courtney reagan. court? >> i

ibm is off $4.72 to $138.97. headline, just one line, we're making calls and certainly we'll have more in the next hour, ibm sail the sec is looking at it for the way they recognized revenue in certain transactions. we have this potential rite aid stuff and apple after the bell. going get busy. >> it is already a busy day. some days are hot, some days not. this is a hot one. brian, thank you. we'll be back in just a second. let's go to dominick chu who i believe has more on the story brian just mentioned. >> what we have now, again, the headline crossing that the sec -- first of all, ibm learned in august that the sec was looking at certain aspects of how revenue recognition happened at the company related to transactions in the u.s., uk and ireland. we do now have a statement officially from an ibm spokesperson again from this particular transaction. they do say, again that, in august of 2015 ibm learned that sec is conducting an investigation relating to revenue recognition with respect to the accounting treatm

betty: he was saying ibm is too late. david: i'm sorry. ibm. betty: not amazon.: ibm is too late into the game because amazon is already there. yellow thing he was explicit on -- you cannot want to work for amazon. he said people left ibm for amazon and came back. betty: we will have to say about that. thank you, david weston. much more ahead in the next hour of the bloomberg market day. more talk on china and the news that likely the chinese currency included in the sdr back, the special drawing rights. we will ask economist alan blinder what he thinks about that. we will be right back. ♪ it is 11:00 a.m. in new york, 4:00 p.m. in london, and 11:00 p.m. in hong kong. welcome to the bloomberg market day. ♪ betty: from bloomberg world headquarters here in new york, good morning. i am betty liu. here is what we are watching this hour -- china tries to cushion the fall as central banks cut interest rates again to keep the slowdown from getting worse. it has been a wild week for the pharmaceutical industry with claims of everything from dangerous drugs to shady accou

if it was not for ibm, the dow would be positive. ibm is a dow stock. down sharply 5%.ke it out, we are on the up side. blackrock global chief strategist. your scenario is we have weak profits. it is not a strong market. you do not like south going forward. you are not a big enthusiast. >> right now our view has been whatever you are in, stocks or bonds, given where valuations are today, you have to expect more modest returns. most of those employees is like europe and japan. valuations less challenge. stuart: you say most of our viewers, not all of them, most of them, trying to invest in china and japan. they will not by foreign stocks. you are telling them if they stick with the american market it will be tough to find a 5% return or a 10% return. >> it will certainly be tough to find a 10% return. i speak with a lot of the advisors. it may be harder to hold on going forward given where we are in the economic cycle. it is hard, but maybe something to consider. stuart: where do i go? if i want to keep pace with inflation and maybe make a little money as well, i want at

ibm came out with earnings and they were definitely not pretty.for the 14th consecutive quarter there was a revenue decrease, something that they have never, ever seen before. the stronger dollar is one reason. current customers are not necessarily looking for the old servers and they are not jumping to the new servers that ibm offers, when they look for products surrounding artificial intelligence, for instance. ibm is struggling and the stock price lost almost 6% in value just on tuesday. ben: and yet it is still around. ibm is still around. it has not disappeared totally, has it? >> [laughter] that is true. ben: still alive and kicking. thank you very much from new york. experts say the haze that has hit southeast asia could be there to stay for the rest of the year. el niÑo has hit crops in indonesia and burning is choking the island in endless smoke. we have this from the island of java. reporter: relentlessly, the sun scorches the earth in the indonesian province of west joppa. it has been months since they have seen a drop of rain. the rive

will it be enough for ibm? here to break it down for us, ginni rometty, the ceo of ibm. joins us from orlando, florida. very nice to have you. what do i get if i hire your cognitive business solutions unit to come in and advise my company? >> david, let me back up a second from there. in the end, what you get is differentiation. but just to back up and to many conversations you and i have had, this builds on a foundation that we have been building for quite some time. and as we talked about the strategic comparatives that form the base for any company becoming a digital business. you know we built big franchises around analytics, cloud, around mobility. in such that they are 25 billion and 27% of ibm at the end of last year, grew 20%, 30% again in the first half. that's the foundation. that is about becoming a digital business. but, when everyone is digital, what's differentiating? to your question what do you get when you think of cognitive? think about digital business, married with digital intelligence, you get cognitive. what i was here to talk about, in addition to

specifically, what you think about ibm? chris: i do not have an opinion on ibm, sorry.-party strategy. cloud, digital, analytics. they are going to incorporate watson, really go after weather. i am making this up. stephanie: they have so much in terms of data and analytics. they have not been able to convert it to dollars. david: but they do not have the company. has the content. the board authorizes an additional $4 billion for buybacks. &d.backs are not r chris: and again, it is increasing shareholder value. you are reducing your shipment. you should be increasing your pe. david: in fairness to ibm -- i feel like the apologist -- i do not know if this is a good acquisition or bad acquisition, but it makes some sense as they are trying to move with computer capabilities, watson and things, and data on the weather does not seem implausible to me. erik: we need to go back to aig because there is a statement from the chairman, peter hancock in response to the letter carl icahn wrote calling for a breakup. has anancock says "aig open dialogue with shareholders. we have tak

we see something in the 20s for ibm.has been growing its cloud business in the 80 plus% range. we can see the gross margin on that. we have a vm wear report. it probably has a little more to play into this. they will try to get done. what vm wear says about how the growth is playing. enterprise traditional versus cloud growth. this ibm to amazon dynamic is going to be a really interesting one to watch. particularly on the growth rate now because we're starting to get those numbers on the infrastructure side from amazon, which is on so important. >> stock 141. man, continues to test these levels that it's been at a couple of the times. tony with bernstein earlier this morning. >> the apple partnership sent doing them favors. you talk about services coming underweight. they had hoped to come to the enterprise. >> including the ipad and the 6 s and 6 s plus flows through the enterprise. >> trying ho told the 50 day. >> new data. we're going to dig into that. >> on a morning when yum brands -- we dug into their business on t

ibm also cutting its forecast. ibm saying the stronger dollar reduces sales by nine percentage points. scarlet: mixed messages from the federal reserve as to when they should raise red -- raise interest rates. others say 2016 or 2017 is a better bet. jpmorgan ceo jamie dimon spoke to bloomberg about the impact. jamie: normalization is a good thing. it will actually reduce uncertainty. timel let them take the when they do it. i think it will be a good thing, not a bad thing. scarlet: will china like it? will japan like it? steven: right now they would prefer a weaker dollar to a stronger dollar. the weaker dollar with the higher commodity prices would be associated with less pressure on emerging comedies that emerging economies. it has been associate with stronger equity markets. in a time of inflation, you might like a strong dollar, in a time when you are concerned about global disinflation. caseld argue it is not the or the u.s.. alix: what does that even mean, what would it normally even look like? we actually t

>>> ibm has a new activist investor taken a stake in the name. we did reach out to ibm. they officially said no comment. >> i think we've done a decent job on this stock. we said given the fact they are declining business for the last couple of years, the right multiple is somewhere between 8 and 9. you do that math, 139, the stock bottomed out at $140. it had a nice bounce since. they will report earnings in a week. they are not going to be good, in my opinion. people pouring in, including warren buffett. it's a mistake. i get the fact the stock can continue to rally. you have to admit this has been a declining business the last couple of years. that continues. >> any buyers of ibm on this desk? >> no. i'm not a seller. if you think about what's going on here, whether it's activism or a transition well priced into this stock or not a material valuation, we act like this company doesn't contain some of the smarter people in the business in terms of programming. ibm is still ibm, to say they are not in a position to reinvent themselves is a matter of time. >> i look at ib

i think with ibm patience is going to ultimately be a virtue. you know, they're not a small company, they're making billions of dollars, they have new management, i think if you've been in ibm over the past year and a half, i'm sorry, you're going to have to wait longer but right now with the stock down 30% in 18 months, this is an incredible value. that's really my verdict. melissa: wow. holy catch the falling knights, kevin, do you agree with that assessment that jason's making? >> couldn't disagree anymore. you know, if you're a tech investor and sales haven't risen, especially 14 quarters, then what are you doing in the stock? and they haven't been able to transition, they keep making these investments, go back to 2013 when they bought soft layer, a cloud computing company that was supposed to deliver results. hasn't done really anything to move the needle. their legacy investments are dragging on the stock, they haven't been able to grow through the cloud, which they're trying to do. i mean. melissa: yeah. >> why would you catch this fallin

. >> cheryl: ibm exchanges in after hour-trading.urteenth quarter in a row that ibm posted a drop. 5% and after-hour straying. certainly to watch, nicole. >> nicole: housing starts have been on the rise and expected to continue that tend. congress is expected to report 1.4% in september, solid job and income growth are helping many americans to buy houses for the very first time or upgrade, economists expect the association of realtors to announce that homes edged up 1% in september. >> cheryl: ferrari expected to be today. probably it's going to be after the bell, it would start trading tomorrow on the new york stock exchange, under the ticker, we love this. investors start your engines. i'm working on it. >> nicole: sexy car. i love it. kicking off with apple ceo, live with wall street journal, ipo chill, sky-vie hall yaciÓns that are trying to raise money or go public. they are trying to change the way they raise customers. >> cheryl: well, coming up the new star wars trailer debut during monday night football. >> there were stori

ibm down 3.6%. it dropped 2% on this news and their investigation on revenue recognition issues at the sec, ibm says they are cooperating with them. they are investigating how they account for certain revenues that they get from transactions in the u.s., in the u.k. and irela ireland. you would think does that sound that serious? i think the issue here is that revenue recognition is sort -- in the software services particularly is sort of the heart of their growth that they're having and anything that interrupts that or calls into question how they're getting that growth is a big issue for the company. so right now we're moving on the down side here. ibm said that it learned of the investigation back in august, that's very interesting, the news was disclosed in the quarterly report. you might ask yourself could they have told us this when we had the conference call that might have been a little helpful. they chose not to do that. and remember something, they did open up this morning, they had some n

ibm is the weak link in the dow. we had the same problem with ibm on the earns in july. we had another decline of disappointing numbers for them. meantime, you heard -- i hope you heard kate kelly talking about ferrari. a lot of excitement down here. they're going to bring sports cars down. i understand vintage ferrari brands will be out. maybe pricing above the range. ferrari is not tip calf the ipo market. it is very unusual. you want to see what the ipo market is doing. look at the farm read. it priced 6 million shares at $8. now look where it's trading now. $6 and change. ferrari is a bit of an anomaly. we'll talk about that tomorrow and what is motivating all that interest in ferrari. back to you. >> all right. thank you very much. mid cap stocks have been outperforming most small and large cappers so far this year. dominick chu with the names that led the way. >> if you take a look at this the dow jones industrial average, bluest of blue chip. the small cap index is all down over 3%. then all of a sudden the mid caps hoeding up relatively low. they're down but only

stephanie: ibm has been under quite a bit of pressure.ompany has seen 14 straight quarters of shrieking sales. also with us -- arms crossed, so you know what, i need you to open your heart and your mind. go second -- we will let you go second. most analysts are pretty positive. >> i think the concerns remain of reporting the company. ,he three issues that come out first of the public cloud, it's a negative for many of the traditional enterprise companies. i.t. spending is not growing and increment a dollar --. ibm is just so far behind the public cloud and has taken many years to catch up. they are very attached to hardware which has been tricking. they are paying the consequences the cost of everything else and that's resulted in the company to be underinvested and is -- has week employee stock. multi-three to five-year transition. stephanie: gary you are trolling, why -- drooling, why? gary: because he's 100% right. you have everybody choate -- chipping away at them, the media search is amazon, amazon, amazon, these service products, th

i don't know what's left in the cupboard for ibm to financially engineer. what areasfigure out are surrounded by services. these technologies like containers and that's going to list a bunch of i.t. services. i don't think they are going to buy a large company like dell emc. we are really in the consulting business. emily: do you think they could take on aws? jerry: i don't see it. it takes aliens of dollars and lots of know how to retool your business and be a public crowd divider. i was at amazon's conference last week and they's -- they are so far ahead, i don't see them catching up. emc have on premise software and they are not used to selling per container transaction deals. to point outeful is that what has save them is the $625 million acquisition of vmware, not a fifth the billion dollar deal. emily: it will be interesting to watch how they treat vm going forward. i will be in austin speaking about all of this next week at dell world. -- the socialwork network is trying to look more like the shopping network. they are adding a shopping section for i

ibm says it is cooperating fully with the regulators. the disclosure sent shares of big blue down 4%, didn't need that. separately the company's board has approved a $4 billion share buyback. >>> ibm shares weighed on the blue chip index along with disappointing economic data just one day ahead of a policy statement from the federal reserve. the dow jones industrial average fell 41 points to 17,581. the nasdaq dropped 4 and the s&p 500 was off 5 points. >>> walgreen boots alliance will bite rite aid. the deal confirmed after the closing bell is valued at around $17 billion, a huge premium for that stock. it will combine two of the nation's largest drug chains. there was speculation an agreement was close during the day sending shares of rite aid up 42%, but that's before the deal was consume mayed. walgreen up 6. as bob pisani explains there are reasons why is this tie-up makes sense. >> this is all about cost savings. the affordable care october is putting pressure on pharmaceutical companies and the retail drugstore chains to keep drug

again, we point out ibm is the biggest drag there. if it were not for ibm the dow would be up about 50 points right now is bu that disappointing earnings report has taken a toll on ibm stock yet again. >> still you have apple, travelers, a couple -- travelers with earnings doing a little better, that's bolstering the blue chips there. coming up we will preview yahoo's results due out after the close. that could set the tone for trading tomorrow. >> up next here he comes, emmy award winner jeff daniels is in the house to talk about his latest role-playing former apple ceo john scully yes, will mack he will voi is coming up to the anchor desk where he belongs. on "closing bell" after this. >>> need we introduce this man? his credits include wide ranging titles, the marshall that's just been out, the newsroom that we all watched because it was like a documentary and the legendary dumb and dumber as well. >> one of my favorites, by the way. by and dumber i could probably quote that movie from memory. >> we are not worthy. >> his latest ro

expect ibm to post earnings down from same quarter last year. earnings per share to come in at $3, excluding one time items. that would be down 10%. that would be the 14th quarter in a row that ibm's revenue has declined from the previous year. >> cheryl: coming up the winners at the weekend box office. >> no. maybe they're friendly. >> not friendly. >> cheryl: goosebumps, the movie. a chilly night in new york. sources confirm we are fox business. the patriots beat the indianapolis colts, we are going to have the highlights for you. index futures, negative open but barely for the monday morning dow down 22 points and s&p about down and three quarters, we are watching fbn:am, first look at morning markets and breaking news. ♪ ♪ ♪ the great beauty of owning a property is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations. this is an opportunity to right that wrong. the idea was to bring capital into the affordable housing space in south africa, with a fund that offers families o

taking note of the new partnerships with ibm. and also a big focus on apple, opening up seven new stores in the quarter. now more than 460 in total. they are saying they'll have 40 stores in greater china but the middle of next year. the q&a portion just starting and i'll hop back on and bring you more headlines as they come. back to you. >> thank you very much. and $206 billion in the bank. and dan ives is plugged into the call. what do you think is important at this stage? >> i think right now, the big focus is they just confirmed year-over-year growth for q1. that was a line in the sand. guys were focused on if they would ad conservatively. that is the battleground. and now the big focus is what is next if terms of the streaming and watch and wearables and also ipad, you start to see that turn now with the focus on the enterprise. you're going to start to see negative growth reverse and now start to show year-over-year. so it feels like it was a white-knuckle period going into this call and i would definitely call it better th

services for ibm's customers. ibm will try again. i don't think they are going to buy a large company like dell emc. they have already said we are , really in the consulting business. emily: do you think they could take on aws? if that is the goal. jerry: i don't see it. of dollars andns lots of know how to retool your business to be a public provider. i was in a conference last week, amazon is so far ahead of dell and emc come i don't see them catching up. dell and emc have on premise software and they are not used to selling per container , per transaction deals. alex: it's useful to point out is that what has save them is the $625 million acquisition of the m where, not a mega $50 billion deal. emily: it will be interesting to watch how they treat vm going forward. alex, jerry, thank you. i will be in austin speaking about this next week. we will get more to the story. the social network, the social network is trying to look more like the shopping network. facebook is adding a shopping section to its mobile app. facebook is making

you, former chairman and ceo of ibm.t rate cut in a year, will it sparked the growth? we will ask investors in china, a two-time utah governor. stay here. ♪ stephanie: welcome back. an extraordinary 30 minutes. an iconic businessman. we have a special, maybe not iconic, but a special friends joining us. brendan greeley, also a superstar but maybe not an icon. extraordinary. lady gaga is kind of an icon. coming up in a moment, the former ambassador to china jon huntsman will be joining us. let's first go to matt miller with breaking news on a deal. a deal that represents about a hundred $35 million in aggregate at what he value according to bridgestone, a 23% premium. friday as his closing price, we're at 22%. that is really booming in the country, not only automakers, but anyone who takes care of your auto or allows you to do it yourself. futures on the other hand are little bit down this morning. .e are down about two points the dow jones down about seven points. a little improvement from bigger losses earlier. i want t

emily: you do not see apple and ibm as a competitor? meg: ibm, yes, in many cases.le a little bit different. apple is more about the devices and they would very much like to go into enterprise, and we obviously need to defend. more on the hp inc. side, but we need to defend. as you migrate, say you are a cio. as you migrate infrastructure into the next generation that will be required for you to be cheaper and faster and more nimble, the ability to write applications in a new environment, cloud native and mobile, it is going to be important for you to have orchestration, monitoring software. everything has to be automated today. and so we have those kinds of opportunities in our software portfolio. we play in quite specific areas of software that is a little different than erp systems, like an oracle or s.a.p. or salesforce. this is not really our market. emily: what about the cloud? what is the hp strategy for the public cloud? are you going to be a cloud, or sell to the cloud? and do you plan to take on amazon and google? emily: so our public cloud offering is rea