ibm has a long history.t has gone through transitions before and i'm excited to be coming in at this phase to show upside from here. it's about transitioning to the next platform. cognitive is going to change computing again and ibm has a clear leadership position on that. emily: ibm watson's new general manager, david kenny. thank you for stopping by. james murdoch is back. he's returning as chairman of sky, four years after a high-profile hacking scandal drove him out of the pay-tv company. last year, james replaced rupert murdoch as ceo of 21st century fox, which owns 39% of sky. coming up, sick of all those wires tangling up your iphone? it sounds like tim cook is too. what he plans to do about it, next. ♪ emily: u.s. stocks close out january with a day of gains after the worst start to the year since 2009. ramy inocencio has the wrap of new york. ramy: for the week it was a nailbiter. in the last 15 minutes of the trade, closing well above 4600. the s&p and dow also ended at session highs, the dow seein

and ibm is lower, con seventient lower by almost 1%. >> and i think of those two, ibm might be a netn how it is traded on results. i want to see traction in how companies trade on their own news and goldman sachs tomorrow before the bell is a good sense. >> that is a good point. >> john. >> there was a lot of negativity on netflix and its ilk coming into this. it is after hours. now you have to look to amazon and to facebook and to google, alphabet as we call it now, name change, post-marriage, new cfo, and if so, how gloomy could it be. >> you're saying it with a smile so i'll feeling good about it. that does it for us. michael santoli and jon fortt on a big earning afternoon. we did manage to go out with small gains. the nasdaq couldn't join them yet. that does it for "closing bell." "fast money" starts right now. >> this is "fast money" starting right now. live from the merchandise market site overlooking times square. i'm simon hobbs in for melissa. good evening. our traders on the desk are tim, dan nathan, brian kelly and pete najarian. tonight on "fast," classic bear market beh

but that is why bulls say ibm is now a buy.hey argue it's a contrarian play given how negative wall street is about the company's prospects. only some 30% of analysts are at thing their clients to invest in big blue. bulls also argue that the stock is cheap and that company pays a dividend. in other words, investors are paid to wait. still, skeptics remain on the sidelines. saying they'll get more optimistic about ibm when those strategic imperatives approach 50% of sales or rametti does a big acquisition that boosts all the new business lines. for "nightly business report," i'm josh lipton in san francisco. >>> the nation's largest health insurer sees a drop in profit but still beats expectations. that's where we begin tonight's market focus. unitedhealth group says earnings in pits pharmacy benefit management unit rose 50% in the quart but the company's operating earnings from its main united health care insurance business were cut nearly in half. shares of united health ended the day up 3% to $112.58. bank of america posted

microsoft and ibm.h lipton looks at why each went their own way. >> reporter: microsoft ceo satya nadela and his shareholders have plenty of reasons to celebrate as we head into the new year. microsoft is the best-performing traditional tech stock in the dow in 2015. the stock has surged some 20%. when nadella first took the helm at microsoft in february of 2014, there was plenty of doubt about the company. skeptics wrote it off as an old software vendor that had missed every important tech trend, social, mobile, and the cloud. now that's no longer true. nadella has focused a lot of time and resources building out the company's cloud services, which will account for an estimated 17% of revenue in 2016. still, not everybody is a microsoft believer. >> we've been kind of waiting for basically a reset in the stock price here, which has kind of essentially run away from us. >> reporter: if nadella is celebrating 2015, then the year can't end soon enough for ibm ceo jeanie rametti. ibm is down nearly 10% thi

shares of ibm headed the other way.he stock sliding, despite a better than expected earnings report. a tough day for twitter yet again after system problems shut out millions of users. netflix reporting a huge win with better than expected subscriber growth in the fourth quarter. shares spiking over 9% in after-hours trading. the giant added more than 5.5 million subscriptions worldwide, beating analyst expectations. sales grew to $1.82 billion, just shy of projections of $1.83 billion. what is next for the world's largest paid online tv network? here with me is on trace wants and from new york, with a company that analyzes video streaming data. in l.a., our netflix reporter is here. let's dig into the numbers a little bit. is international subscriber growth going to be enough to offset domestic growth going forward? >> netflix says it is. last quarter we had a similar situation where they exceeded expectations overseas but underperformed in the united states. this time they missed a little bit in the u.s., but i think

a five year low on ibm.s this a story of ibm trying to change strategy and its business model more than the economy? >> yes, it starts off as an ibm story and ends up being the way the markets are falling on top of ibm. the stock, if you look at it from the graphic point of view, it looks like the model should be this is the company that fell out of bed and can't get up. it hasn't woken up to the realities and it's tried with cloud computing and it hasn't captured any meaningful market share. >> the realities of the new market. the market was one you had the inflated easy money. central banks and you had belief that the brics, and brazil and russia. look at brazil, the economy is in a shambles, will that come back? >> a lot will come back, but it's going to take time. it's capital flight especially out of the emerging markets and another thing weighing on the markets globally, we saw in 1998. if china continues to fall, i believe it will. emerging markets will crumble and we'll see this go around the world.

there is a lot of promise here in ibm. watson, i think, is the future of the company, if they could turn that into something. but i don't think you could buy ibm at these levels. 4% dividend. and now you are through the 1999 highs which is 139.19 and i think there is more room to go here. i would stay away from it. >> and we have that conversation on this show. that is what we do. we look at all names. 130 to 132 is a level it has bounced at and the old pre-crisis highs. i tend to agree. it is a mult-year turn-around story in year two of possibly four years. but i think you're in a place with a company not terribly cheap but not expensive. and i think there is reasonable success. i'm more sang win on ibm. >> hopeful? >> it means i'm calm. i'm more moderate. >> in the management direct ory as well. >> why is that a takedown, by the way. >> they are just sitting along during this whole thing and it is not working. >> so what is likely going to happen is a break-up. we've seen it with hewlett and other pretty complicated comp

we mentioned ibm before the bell, looking at it now. down about 6.5%, shares of ibm.ffett can't be particularly happy with his large investment there. >> they're buying back stock. >> currency will impact full year '16 by 1.3 billion. and last year the big investment shifting about $5 billion to her key areas of cloud, cognitive, analytics, watson, they have done aggressive advertising on security and mobile. >> weather channel. >> they have to get that moving. that's the key thing. will the growth there to be enough to offset. >> they grew business at 35%, strategic business. >> they did. >> that was much bigger than people thought. then software. watch goldman. goldman was a good quarter. you want to start looking at benchmarks. what is the book value? the company has a lot of cash. they can come in and buy the stock. it would be additive. watch mcdonald's. >> chocolate french fries in japan. you saw that. >> i'm not -- new product. french fries drizzled with chocolate. >> i like the current fries. chocolate never hurt anymore. numura, a japanese box, is talking abo

well, ibm -- ibm has been a difficult stock over the past several years, but it valuation compressed. i'm always looking for the best combination of growth and value in a portfolio. while ibm is not a growth company yet, it has become a value stock. and we're hopeful that management can execute it to be a growth company. >> a full quarter of your portfolio is dedicated to visa and mastercard. so you're a huge believer in those companies. tell us why. >> sure. the fact is that those companies have grown into that position simply by growing their earnings and their free cash flow over time. they started out smaller positions in the fund. but each company is in the middle of a multidecade secular trend from cash to electronic payments sitting in the middle and collectsing a little bit of money each time you swipe a card. so those are really continue to be good stories and they remain core holdings in the fund today. >> stephanie link is here with me. >> on visa, i'm curious when you think you'll see the synergies from visa europe, is it going to be this year and will that be a catalyst

out, watson.tch ibm takes the crown for the most u.s. patents for the 23rd year in a row.ll take a look at the next big ideas in technology. ♪ emily: ibm has received the most u.s. patents in 2015 for the 23rd consecutive year. coming in first in front of samsung, google, and sony. does quantity translate into quality? joining me from new york is bernie myers. how are you using these patents? instance, we have , we used tow era talk about memory, the reality is, information technology is an assistant technology and these patents support that. we have patents that look at the issue of can i help somebody who has alzheimer's complete a phrase when they get lost? this is an issue. we get results out of taking watson even further into the future. when it speaks, it has to be emotive. if a building is on fire, you do not want it to say, run for the exits. you wanted to say, run! we started working on them many years ago. now they are seeing the light of day as a product. emily: there is a quantity versus quality question here. bernie: the truth of the matter is, i would debate

two areas ibm counts on as well.are is the big moneymaker for ibm and the long-time software chief, steve mills, announced his retirement a couple of weeks ago. to mark the time it's been more than a year since ibm and apple said they would deliver the first wave of apps under their partnership, ios and enterprise. so far not too much to show for it on ibm's end, except for some increased costs. >> it's going to be a focus as usual. how much are companies signing up to have ibm do that work? >> yeah, and the capital return program is going to be in focus too. so many people buy the stock as a dividend play because it's dividend yield is pretty healthy, but you balance that against a stock that loses 20% in the last year, and you wonder if that can hold up. we'll see. that's after the bell? >> it is. probably around 4:15. the call is later than usual, though. >> china did report slowest growth in more than two decades. the data in retail sales and industrial output came overnight, and seema has more on that. >> kayla,

please start. >> hello, and welcome to the ibm demonstration.e will demonstrate -- [inaudible conversations] capabilities in generating arguments for or against specific -- >> [inaudible] >> please select a topic. >> okay. let's go ahead and do wikipedia is reliable pro speech. >> scanned approximately four million wikipedia articles. scanned all 3,000 sentences in top ten articles. assessed pro and con -- [inaudible] ready to deliver. thank you for the opportunity to share my view about this interesting topic. it is the always good to start with some background. the reliability of wikipedia compared to other encyclopedias and more specialized sources has been assessed in many ways including statistically, through comparative review, analysis of the historical patterns and strengths and weaknesses inherent in the process unique to wikipedia. my opinion is that wikipedia is reliable, and i would like to state a few simple reasons for that. its editors and contributors provide identification. another reason is that wikipedia provided better covera

we want your thoughts, ibm and the details. >> mark beelz has been name to ibm's board. chairman in the press release said they are polileasee will join the board of directors. in an industry where technology has driven innovation. ibm shares seem to be unchanged after hours for now. >> guy, what do you make of this one? >> i don't make a lot. maybe it's a first step in the right direction. i'll say this, i'm come on with you for a long time and tried to explain how ibm has become a simple math problem. what's the right multiple for a company with decelerating growth, 8.5 and 9.5. you talk about 14.5, earnings and get the stock price we subsequently traded down to. i think they need to do something, and need to do something bold. think about ibm and mike can speak to this. this if they didn't spend the money buying back stock and put it towards something like a sales force.com for example, think about the return they would be getting there. ibm old technology, is it a level that's interesting now? maybe, but until they prove themselves the next quarter, which is a couple

ibm wants the strong u.s. dollar, and it will continue to weigh heavily on them as they compete in a growing cloud business base against the likes of amazon's aws service. we'll have a better sense of that when amazon reports. hey, shares of square also joining the list of tech stocks now below their ipo price. it's not looking so great out there. coming up, we're going to ask one early square backer and venture investor whether jack dorsey is still the right man for the job and why tech seems to be having an ipo malaise. don't go away. >>> another tough day in terms of both square and twitter, falling sharply with square dropping below the november ipo price of $9 a share for the first time. is dorsey able to effectively run both companies. joining us this morning to talk about it, square investor and managing partner at jgp capital. it's good to have you back. >> whether the stock is at nine or where it was a few weeks ago, he is still doing a great job. i think as a square shareholder we're excited and happ

ibm sells fell more than 8%.s 15 straight quarterly decline as the strong dollar weighed on results. shares tumbling on 2016 earnings. on closing bell ibm cfo expects volatile currencies to lower pretax profit by $1.3 billion. >> for us for the full year, currency last year was about a $7 billion impact to our revenue. now our focus in currency always to make sure that we maintain our competitiveness in those countries which we actually are. but there will be a translation impact on that strong dollar again. 7 billion for us last year and we see that head wind continuing with the dollar still stronger than it was at this time. we'll see what happens with the dollar. it has been a head wind to profit for us. >> advanced microdevices is issuing a warning. it's current revenue forecast will not meet wall street expectations. they're blaming the china slow down and gaming consoles off 6% in premarket trade. >> on the flip side, netflix provided a lot of drama for investors this year but although the streaming service

service of tomorrow made possible today by ibm. >> ibm was an anonymous organization.they probably had no idea the ibm logo looked like it was carved out of roman marble. you know, it was just this monolithic kind of thing, and we took just the opposite which was let's make steve very high-profile, let's tell our story. >> working in this garage, jobs and a high school classmate quit their positions at large electronic companies and using tiny silicone chips built this small computer board. >> funny the garage story was less of a feature in those early days. it later on became more of a lookback when people started doing stories on the background and so forth. >> you know, i told steve this, most of my clients, in fact, there's a song in "fiddler on the roof," if i were a rich man, he said i'd sit in a temple and i'd lecture to the wise men all day long, and it wouldn't matter if you're right or wrong, when you're rich, they think you know. so in a technology business, you have to show that you are successful in order to have a platform. >> it led to a quarter-billion-

netflix and ibm.s not been kind to the streaming media company, down after investors saw a stop race more than double in 2015. double in 2015. the spring and cory johnson -- let's bring in cory johnson. they are both worried about amazon in a way, right? cory: absolutely. netflix is also worried about his streaming service. cory: you're absolutely right. that is the biggest competitive pressure from both of them. netflix might also feel pressure from hbo, showtime, you name it. that is what we will be listening for on the conference call. the most important number for me is the commitment to contingency ve for the future. i have promises of payments, but they do not see how th -- say how big. they have cash flow growth, they should be able to pay those bills. but they all over $10 million to these commitments. the reason that the costs are going up so much because of amazon, showtime, hbo, all of that original programming all theseng on platforms. the reason that they are most ofd now is because their

stocks led by ibm are among the company's owing in trading.erg . ♪ matt: we're watching amid the global equities route, shares in netflix and ibm after earnings netflix here it investors clearly liked what they saw and international users sort, but a different story and ibm. after% in early trading the forecast earnings for the 2016 profit far less than what they estimated. of other tech stocks selling off today. you can see twitter down 3.i percent. down oneand google point i percent as well as amazon and apple. big move the index is moving. let's bring in cory johnson. kick it off with netflix. scriber growth around the world seems better than what they were looking for. cory: international subscriber growth is strong. subscriber growth doing better. lotaw the content costs a higher. continuing costs in a very competitive world. and showtime, a lot of companies spending a lot of money on content that netflix is after. now that they are in the geographies they will get to, international content will be tough. spain, netflix is not present

how about companies unlike ibm have increasing earnings and robust sales. outsized dividends that companies can afford to pay and boost those dividends and give you yield protection that we need from this market. what would you feel protected by if the averages were to go down let's say it just dropped 8%, okay? after falling that much already this year. a good solid yield would help you preserve capital. remember we're in preservation of capital mode ever since the fed raised rates. we switched to preservation capital and this will protect you against the down side. i can tell you after this decline and yield more than 5%. but many of them with the oil patch and we're going to avoid every single one of them. that's right. every single one because they are in a ridiculous market. there isn't aan oil company in the world that doesn't wish it had more capital. i think all would love to do a big fat equity offering right here with oil $28 and change and going lower. then there's others like caterpillar that choose 5% and earns more than enough to pay it. what

when apple was taking on ibm, it was david versus goliath, but when apple became goliath, to whom was jobs giving the finger? >> the fact is that, how many months left after that? this was a guy who knew -- who knew at the time he was dying. and he didn't get ten minutes of his life to talk about these guys in a bar and post a story about it. isn't that a little bit strange? >> my third story is about death. about a year ago, i was diagnosed with cancer. i had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. i didn't even know what a pancreas was. the doctors told me this was almost certainly a type of cancer that is incurable and that i should expect to live no longer than three to six months. my doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. it means to try and tell your kids everything you thought you'd have the next ten years to tell them in just a few months. later that evening, i had a biopsy. it turned out to be a very rare form of pancreatic cancer that is curable with surgery. i had the surgery,

go talk to your doctor. >>> netflix jumping ibm slumping. i like to say there's always a bull market somewhere. i promise to find it for you here on mad money.

we look at ibm, it's a transition story.ill have a long way to go in this transition, you know? hopefully they can give us more indications that they're going in the right direction. especially with their strategic imperative initiative up 27% in the third quarter. everybody looking for that. on netflix, like you said, it's 1.3 million domestic subscribers. 3.1 million international. those are the numbers that i see flying around on the street in terms of where they've got a hit. everyone is really looking from netflix to see if they can be profitable in their international group. that's an area that they need to grow to continue with the u.s. being very mature, getting more mature in terms of penetration raids so, you're right. is the barlow enough now that they can come in and beat the lower numbers so to speak and add positive momentum to technology? we'll have to see. >> i'm glad you said the word momentum dan because this has been called the mother of all momentum stocks, that being netflix at a time when momentum is fa

he was a very successful, groundbreaking computer programmer at ibm but not a billionaire by any stretchthe imagination. the technology -- a very unique and very mathematically oriented hedge fund recruited him and basically his entire team at ibm, these guys who had a background in speech recognition. they knew how to translate human language, and for some reason, whatever allowed them to spot patterns, teach computers to spot patterns in language, it has allowed them to spot patterns in the market, and became very, very successful. recently, he only joined the funds in 1993, and much more recently, citizens united -- this was 2010, a decision by the supreme court, that kind of opened the door for independent spending on elections. in other words, if you are not coordinating with the campaign, you can pretty much spend as much as you want to support a particular individual's election. david: you mentioned that he seems to support a lot of conservative causes. he did not grant you an interview and does not talk to many. someone who prefers to keep the stuff under wraps, keep it secret. z

how about companies unlike ibm have incg rnings and bust sales outsized didends that companies can ford to y and boost those dividends and ve you yield otection that we nerom this market. what would you feel prected by if the arages were to down another 5%? s say it jt drop8% okay? after fainth much already this year. a go sol yld would help you preserve capital. remember we're in preservation of capal mode ever since the fed ised rat. we switcheto preservat pitaanthis wl prot you againsthe downide. i can te you after this decline and yid moren 5%. but nyf them with the oil patch d we're gointo avoid every sing of them. every silene because ty e in a ridiculous mark.ere ist oil company in e world that dsn't wish it had re capital. think all would love to do a g fat equity offering right he with oi$2and change and going lower. th there's oer caterpillar that choose 5% and earns more than enough to pay it. at happen ifs ina doesn't turn around? keep slisliding aw. my goaisot to stock i'going worry if th eld spes to 7% because of problems in china. i want a dividend stock where i can buy m

. >> ibm became the apparent visible threat. >> ibm wants it all and is aiming its guns on its last obstaclethe entire computer industry, the entire information age? was george orwell right? >> the first glorious anniversary of the information -- >> that ad was, again, a juxtaposition with ibm. >> that's what it was about. >> yeah. >> people in the audience were the mindless ibm users. >> yes. you know, for steve it was great because he had this bad guy/good guy and he loved playing that role. >> we shall prevail. >> on january 24th, apple computer will introduce macintosh, and you'll see why 1984 won't be like 1984. ♪ >> looking back behind the scenes, it's easy to see the irony in the ad. today, apple is goliath. but even in 1984 when apple cast itself as the counterculture company, working at apple was a lot tougher than ibm. >> i think if you talk to a lot of people on the mac team, they will tell you it was the hardest they've ever worked in their life. some of them will tell you it was the happiest they've ever been in their life. but i think all of them will tell you that it is certai

america's best and ibm has done very little rhetoric. i have a policy going on thestreet.com about whether young people even know what it is. i bet we get more of the same from a company that i'm a prprd member since 1982 and my kids have never heard of. schlumberger is a good stock in a bad neighborhood. some peoeoe can't handle the truth. i'm going to be on the call to much oililran will be pumping in the not too distant future. they know iran cold. final, starbucks reports. here is one i'm itching to buy on any hammering. does anyone care about the long term anymore? starbucks is a travevetrust position. i've been waiting for it to get hammered so we can buy more. sometimes when you're going down, it's positive. finally on friday we'll hear from another company i can't wait to buy, one in the bullpen of stocks. my travel trust wants to purchase. ge, general electric. today we learned it sold its supplies business s a supplier who is willing to pay much more, a chinese buyer, than electrolux was before that deal was nixed by the regula

of course ibm's business has been in free fall for ages. they had to slash that forecast down to $15 and now it's looking like even that number may not be attainable. the stock turned out to be very expensive, particularly those who have watched the $70 slide in the stock. here's one that might seem counterintuitive. the airlines. united continental is trading at 5.5 times earnings. you would think these stocks would be bargains, especially since jet fuel is in free fall. but it may not be the case. why don't people believe that united and american can make those numbers? right now the airlines are caught in many different markets with a vicious price war, reminiscent of how this industry used to be for decades before the new-found era of good feelings a few years ago. after unfortunate terrorism fears, a global economic slowdown, and it's easy to see how the real earnings may be a lot lower than the estimates, which means the stocks could have a downside, although i'm more inclined to be positive on southwest and delta. scx has an ultralow