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tv   Countdown to the Closing Bell  FOX Business  December 12, 2013 3:00pm-4:01pm EST

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charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. ♪ pleasure. ♪ ♪ >> good afternoon, everybody, i'm lori rothman sitting in for liz claman this afternoon. stocks, while they're mostly lower as investors digest a mixed bag of economic data, but we're seeing some buying into the last hour of the session. initial jobless claims surging to a two month high last week, 368,000. that followed a revised figure of 300,000 in the priest be week. retail sales jumping seven- seven-tenths of a percent in november, that is a biggest gain since june. investors also focused on the highly-anticipated return of hilton hotels as a publicly-traded company. shares of hilton spiked at $20
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apiece after the close yesterday. checking the shares at the moment, up nearly $2, $21.87. facebook will likely make a bunch of new investor friends, because it'll become a member of the s&p 500, also the s&p 100 next week, so this means facebook shares will automatically get snatched by some index and investment funds. let's have a look, a huge session for the social network, $2.58, that's 5.25%, that's a nice jump putting the price at $51.97. now, unlike facebook's rally, lululemon having a sour day after it warned about a sheer forty be quarter. -- fourth quarter. straight to nicole pet' lee d.c -- petallides. >> reporter: taking a look at lululemon, lori, looking you can see it's down about 11% to
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$60.78 a share. when lori says sheer, that was one of the many problems that lululemon has faced, they went back to the manufacturer, they had to recall some pants. that being said, they've had to lower their full-year numbers. they said quality control was an issue, getting the products back to the stores and on the shelves also challenging. and while they think things will go smoothly in 2015, they have to be realistic and say, well, all bad press has ultimately hit our stores and slower traffic. the amount of people walking through those stores as well. and don't forget, these are not cheap items. those yoga pants at lululemon are $100. in the meantime, you also have the ceo stepping down and the new ceo coming in who came from lbma, also thom's shoes and louis vuitton, so has a lot of obvious experience, but there is
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some transition going on in this particular company. back to you. lori: thank you so much, nicole. we'll see you soon. overall, markets are trading lower here, investors starting to lock in yearly gains. is the santa claus rally coming to an end? i don't know, because we are seeing some late session buying here. let's get to the bottom of it with our floor show, traders at the new york stock exchange, the cme group and the nymex. so jonathan corpina at the new york stock exchange, to you first. what are you seeing, there's some momentum building, correct? >> we had some economic data that rattled our market a little bit, normally not earth-shaking news, but it seems like in this market has been fragile lately, and investors have been looking for opportunities to take profits off the table. that's what we saw this morning. i think overall when you're going to look at the month and the end of this quarter as a whole, this market will continue to see the growth that we have seen over time. we talk about the santa claus rally, we're getting fewer and fewer days left to trade, we're going to start seeing some hedge
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funds that have been trailing the market so far have to up their performance, so more money will be coming in in the next few weeks. we're going to have a couple of short trading sessions that will affect things, but other than that, i don't think we're going to get too panic in i finish panicky over the news. lori: surprisingly strong retail sales, so what does that say about the fed's next move? >> you know what? i'm going to look more at the retail sales than i am jobless claims. that's one week it flipped up, it happens. we've got to look at this thing over trend. i think the biggest fear is fed taper. the market seems to think it might happen, i don't know that it will. even if it does, that should be a good thing. it means the economy can handle itself on its own, and that will lead to better corporate profits down the line. in the short term, maybe not. but i'm comfortable holding positions right now. record hover do you mean it will announced at the meeting?
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because it's going to happen sooner rather than later, right, dan? just to clarify. >> the big question -- right. the big question is will it happen next week. i think you've seen a lot of people say it will. i think more likely what you'll see is the fed giving some clarify i case as to when it will happen. probably not next week. probably not. lori: i do want to stay with you for a moment, dan, because a lot of people are raising their overall economic growth expectation on the back of this better than expected retail read. are you? >> absolutely. i think you're starting to see things come together not only here, but in europe and in china. europe is slowly working its way, china is coming back out of its problems. but our economy seems to be on solid footing. and despite this morning's payroll number, you're going to look at employment that's going to get better over the next six months. if it does, our economy is getting stronger. lori: okay, now. thank you, gentlemen. to jeff grossman at the nymex, and i know you keep a close eye on crude, but i'm wondering if you could comment on the trade in gold since we saw such a big
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move lower today. >> the gold is trading in what i still consider a normal range here. unfortunately, everyone has this idea that the market has to go back up here. they still remember the $1900 level or whatever. this market is working, in fact, i still think it could even work it way lower here. i think maybe we're even talking into, let's say, the 1100s which scares everyone to death here. i'm not really a real gold bull here, i never was, and i was a little surprised when we ever got where we did. again, you can't find it. now i think it's a reality check here. it is a one-third retracement from the highs, and that makes everyone a little concerned about where this market can go from here. i think that's where we're going to settle at the end of the year. next year maybe some fresh money will come in and could give it a bolstering up to let's say even i would say now your upside potential is maybe 1350, maybe 1375 on the upside, that would be ap optimistic look for good.
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lori: isn't that a message perhaps that people are feeling better about the pace of economic growth, and they're not necessarily looking for a safe haven if that's how you do play gold? one way, of course. >> again, i've never felt it was a safe haven. many people use it as a hedge. but again, i've never thought of it as a very good -- to me, it's a very speculative commodity, always has been. some people like to make it part of their portfolio which is a very good idea, but again, to consider anything strategic in the long run is really foolish, if you ask me. lori: all right. um, let's get your take on the price of oil today, pretty much little change. anything going to move that, jeff, before the end of the year? >> oh, no question about it. the inventory figures are going to be key here. again, we had a day where we were virtually unchanged, stayed in the mid to high 97 range. what was of note here was that the gasoline and heating oil against the crude got crushed today. each of them was in about a dollar, and that shook up a lot
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of -- everybody assumes with this coldwet right now that shouldn't happen. what happens is something like this will happen, flush out some of the weaker players and probably next week when you really see the effect of this cold weather we're having, you could have a reversal of this move today, and everyone will say, gee, i wish they didn't knock me out of the game, but that's how commodities trade. lori: you said it, sir. thank you so much. jeff, jonathan and dan, appreciate it. let's talk about the auto industry. speculation over whether ford's ceo alan mulally may jump ship. ford's board is anxious to know what his plans are. just last week liz claman asked mulally whether he had any idea why his name keeps coming up in question to microsoft. the question seemed to catch him off guard. take a listen. >> i think that people are looking for leadership, and i can understand that, but i love serving ford.
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lori: okay. elizabeth macdonald has the latest on the story, she joins us with e. mac's bottom line. >> reporter: yeah. that's a classic non-answer from an executive, right, lori? [laughter] so we talked to people at microsoft, and here's what's going on. here's the bottom line. alan mulally has a lot of question marks over his name. yes, he's got a great reputation. he's charismatic, he's a visionary, he's a team builder, he's a leader. but what we're hearing from insiders is this is what they're looking for with this ceo and, by the way, microsoft really is pushing, the board is pushing to name a ceo by the end of this year, so they'rlooking for a person that has a lot of technical experience. consumer devices, enterprise software, cloud computing, business software and business be development and strategy. i'll tell you this, the list is narrowing. microsoft started out with a list of 40 names. they've narrowed the list down. here are some of the guys who are still in the front running for this, enterprise software at
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microsoft, clo of microsoft, kevin turner, still in the running. nokia's former ceo still in the running. by the way, should be noted he ran microsoft's business software division. and then the other thing, too, about steven is, you know, microsoft bought nokia's mobile device, the phone be handset business. and the other name that keeps coming up is the former ceo of skype, tony bates. so i'm just looking at comments coming in over e-mails, basically what the names that are still in the running, the one that is really popping out is the business software development guy, steven. he is a real hot contender. again, he bought -- microsoft bought nokia's mobile division. but here's the thing, lori, there could still be a dark horse. it could be somebody else that we haven't seen the name coming in to be the ceo of microsoft named by the end of the year. we're going to be staying on this developing story as the information comes in and bringing it to you, lori.
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lori: e. mac, always a pleasure talking about unexpected -- i mean, just look at the news of gm and mary barra. nobody expected her to be ceo. so it's interesting. >> reporter: yeah, exactly. lorii thanks so much, we'll see you soon, e. mac. now the closing bell rings in just about 49 minutes. billionaire steve cohen has paid more than $1 billion in penalties against his firm, but is cohen really out of the woods? charlie has an exclusive on that. and instagram comes out swinging against snapchat. in a moment, we'll tell you how this facebook business is trying to poach younger users from its competitors. ♪ ♪
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♪ ♪ lori: and some mixed data out today. the markets in flux, overall this year has been unbelievably strong for u.s. stocks. can the trend continue into the new year? let's ask those questions to bruno, global x fund's cofounder. where do we go from here? >> yeah, as you point out, incredible year in the u.s., and, you know, when you thi
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about in the context of valuations are in the u.s. versus international markets, we think we'll have a decent year next year, but probably high single digit. we actually like a lot of the international markets, better value and to some extent better fundamentals in some markets. lori: let's narrow that down. where across the globe do you see the best investment value right now? >> so you have to be somewhat picky. we like frontier markets as a whole and specific markets such as nigeria. we also like some markets in southern europe. obviously, it's been a very problematic market for many years, but you've had valuation increases. other markets in southern europe such as portugal which hasn't gone up in value very much and also china. china's a market where we see a lot of growth and really has underperformed the last couple of years. a lot of good value there. lori: you caught my attention with nigeria. what's going on with the economy
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that has you focused on the country's investment op? >> sure. nigeria has the benefit that it's a domestic economy, it's not really driven by the global capital markets. more diversification, and it's a market that's growing very nicely. again, you want to participate in some of those markets that are growing, that are not highly correlated with the u.s. that can give you performance, but also diversification. lori: most folks, most analysts, market wampers don't expect 2014 to be arepeat of the monstrous stock gains of 2013. why is that? are there other fundamentals going on? >> well, the fed, obviously, whether it is first quarter, second quarter, we're going to see taper next year. that's going to hold the markets to, you know, to some significant degree. and also valuations. the market has run up so much that the valuations are not as attractive as they were at the beginning of last year. both factors will make the u.s. equity markets still somewhat attractive, but clearly not a 2013 type of year.
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lori: it's frustrating in a way to fundamental bists, because if the fed tape efforts, it means -- tapers, it means the economy on the right track. the employment situation is moving in the right direction, perhaps a hiccup today with the initial jobless claims. >> right. lori: why is that? why can't we react, positive news with good news of late? >> yeah. i mean, obviously, that's really the whole objective with taper, right? they wanted to flood the economy with liquidity, create gains across asset classes. certainly, the u.s. equity market. and so as the economy recovers and we can actually survive a taper, that's when we're going to have it happen -- lori: survive the taper, sorry to cut you off, but wouldn't it be fantastic that we rallied because people are confident we're back on solid footing? what's the likelihood of that happening? [laughter] you're looking at me like i'm out of my mind. >> i think it will happen, it's already reasonably good footing, so to some extent you're going
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to have good effect, but clearly, liquidity is a negative for asset classes in general. lori: it's interesting to see the interest rates rising. do you think that the's the market taking matters into its own hands? again, there's your reaction of some better economic news. >> right. similar. it's all related, but clearly interest rate rising will happen and will accelerate as taper accelerates. and, again, it's correlated with the economy doing well, and we can survive higher interest rates. both factors will offset each other. but again, you want to have a good economy that carries everybody. lori: we were talking at the beginning of the conversation about international versus u.s. how would you weight that as we wrap up here? >> if you look at the weight of the market cap of the u.s. in the global markets, it's about a third, so that's about the kind of weight that you want to have. so, you know, you want to have a base weight to relatively underweight you whereas most people are significantly
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underweight in the u.s. lori: bruno, so nice to talk to you. thanks for coming in. >> thanks. lori: and the closing bell ringing in 40 minutes. wall street powerhouse jpmorgan may be getting ready to take on bitcoin in the virtual currency game. we'll ask dick bove whether we are on the brink of a payment revolution, if you will. and amazon gets down to earth after all the drone hype, trying to kick start a business that could take off during the christmas holidayings. tell you all about it when we come back. ♪ ♪ hi honey, did you get e toaster cozy?
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tdd# 1-800-345-2550 get support and ta through your ideas with our tdd#-800-345-2550 trading spialists. tdd# 1-8-345-2550 all with no trade minimum. and only $8.95 a trade. tdd# 1-800-345-2550 open an account anrn 300 commission-free online trades. call 1-88828-7118 to learn more. so you can take charge of ur tradg. lori: well, you might think that sac capital founder steve cohen is off the hook after paying more than $1 billion to settle that huge insider trading case against be his firm. well, that may not be so. charlie gasparino's here with the latest. >> the feds are still trying to make a case against him personally for being involved in some of these insider trading allegations that are affecting two of his former portfolio managers, michael steinberg who's on trial for a suspicious dell trade, and march "the view"
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mar toe mow -- matthew mar toe mow who's on trial i believe it's in february. here's what the fed, what we understand the latest game plan for the feds in addressing steve cohen and attempting to at some point they would like to bring charges against him. what they're hoping is this: both steinberg and martoma, they win cases against them, okay? they're both being tried in the southern district of new york. the u.s. attorney wins the case, they both face long prison term, and then at that point that long prison term gets them to cooperate. that is the current game plan. they basically, they don't think they're going to cooperate now, but they do believe that if they're facing the sort of specter of 5-10 years in jail, both of them at some point are going to say, okay, enough's enough. what does this really mean in the end? number one, i should point out that the steinberg trial is going on right now. it is, you know, even government
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officials will concede it's not going perfectly for the government, you know? i'm getting my information, i haven't gob to the courtroom to -- gone to the courtroom to watch it and, you know, there's always a danger of speculating on the outcome of what the jury thinks based on press reports, but from inside the government, they are somewhat worried about this case. barry burke, who's the lawyer for steinberg, he's a pretty experienced litigator, and he's poked holes in the government's case. there was a cree of, you know -- degree of, you know, evidence that was a little fishy in this thing. it was not as concrete as some of the other stuff involving raj rajaratnam which included wiretaps. this was a little bit of he said/she said, particularly with the main witness. but it's very circumstantial, and they're worried about this. so you remember, this is not a lay-up case. i think martoma's a little tighter, but still both of them have pled not guilty, both of them have very good lawyers,
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richard strauss berg, but the game plan for the fed is both of them do -- if it works out right, they both get convicted, they both go to jail, and at some point they both point the finger at cohen, and this means that the government still thinks cohen is guilty. that's is or sort of upshot her. lori: isn't there a statute of limitations on this thing? >> it's a great question. lori: when will this end in. >> i don't know. the statute of limitations depends on who you talk to. it's kind of squishy. there is a statute of limitations -- lori: if we have to wait for prison sentences for these other two -- >> well, at some point, it's not going to matter, it's not good, they still have to go to jail. the theory is they deliver fresh information that allows them to pursue a case against steve cohen. so the bottom line is i'm not saying they are going to pursue a case, i'm not saying he deserved, guilty. we should point out that mr. cohen says he's not guilty, he's done nothing wrong.
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he's not been charged criminally. the firm was charged criminally. both of these gentlemen that are on trial have pled not guilty. but i can tell you from inside the government, they believe there's a case here if they can get these two guys, they're still trying to get these guys to cooperate. lori: meantime, what's going on with the conversion to a family office? is that happening? >> yeah, it is happening. when you talk to people, they're still out there actively investing in certain stocks. you know, it's going to be a shelf of its former self. it's going to have to close down offices. it's not going to have the same type of -- now, they're going to have $9 billion, but what gave sac its edge, people should understand this. what made it a great firm, take out the insider trading and inside information, sac was able to charge more fees than anybody else. 3% management fees -- lori: well, that might have been related to, you know, the reputation they built with -- >> but think about it. if you could charge 3% on management fee instead of 2% and you can take back 50% of the profits instead of 20% of the
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profits as most hedge funds do, you can pay analysts to do a lot of stuff. lori: right. but it's built on reputation and performance, and how did they get there, that's the issue. >> well, yeah, but without that, being able to charge that stuff, right? you can only charge that stuff if you're running other people's money, it's going to be a different firm. it's not going to be as big or powerful. lori: what a story. charlie gasparino. okay, we're just about 31 minutes away from the closing bell. dow still down, off about 58 points, well off the worst levels of the session, worth a mention. and this, forget the drones. amazon getting serious about its holiday business. come up with a promotion that many of you might find hard to resist as we enjoy the fetestivities. and could bitcoin face a rival from one of wall street's most powerful banks? we're asking analyst dick bove about that. ♪ ♪ you make a great team.
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buck ♪ ♪ lori: and we're seeing a slew of tech stocks trading lower today following a number of analyst downgrades and less than stellar earnings. back to nicole to break down the tech losers today. >> reporter: right x. the he -- and the tech-heavy nasdaq, we do have some losers among the bunch including sienna, cisco systems and also oracle. let me break it down here. sienna, the company reported a quarterly loss of a million dollars, that stock is down about 6.5%. and then it took down some of the sector along with it, cisco systems, for example, and don't forget citigroup this week
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started cisco systems with a sell rating. that never helps any company, for that matter. now we'll take a look at oracle. oracle, morgan stanley, the analysts there put it to an equal weighting and it's up about 4.5% or so. it looked fairly valued. there were some concerns about the growth potential for oracle and in particular based in california, of course, so basically fairly valued at these levels. so we're watching oracle as well which is down about 2.7%. but look, there's plenty of names that have green arrows, we talk about twitter, netflix, tesla, and those aren't all tech names, but there's a lot of winners here today. the dow's down 58. lori: and well off the worst with levels of the session. that's what makes a market. how you consider it. thank you, nicole. see you soon. now this, move over bitcoin. jpmorgan could soon launch a rival to the popular virtual currency after filing a patent
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for a style-payment system. will we all be using electronic currencieses in future? joining us to talk about that and his new book, dick bove, vice president of equity research. dick, such a pleasure to have you joining us this afternoon. >> thank you very much, lori. lori: okay, bitcoin rival, is jpmorgan seriously considering putting forth a digital currency rival to bitcoin? >> yeah, i think they are. lori: yeah? >> i think if you think about bitcoin, it's, you know, it's a method of transaction, right? it's moving cash from one individual or one company b to another. and banks very jealously try to protect that area. so whether it's credit cards, debit cards, just handling cash or checks, if there's a new method of moving money from one individual to another, the banks are going to get in it. and i'm certain jpmorgan will do it. lori: but they're so volatile,
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we've seen bitcoin prices soar up and down, i mean, scary volatile. what are the opportunities, pitfalls? is it likely to be regulated? >> well, i think if jpmorgan does it, they'll definitely be regulated. [laughter] what you're dealing with, you know, is there are 7,000 reasons to believe that bitcoin will never succeed, never get off the ground. i mean, you and i can sit here and talk for hours about the things that are wrong with it. but the fact is it gets bigger, it gets stronger, it gets used by more people. and i think that that takes, that's what jpmorgan's attention, and that's why jpmorgan will be in this area. lori: all right, let's pivot a little bit here. what's the status of jpmorgan kleining up its legal woes? -- cleaning up its legal woes, what it did or did not know to bernie madoff and, obviously, many ore legal issues. >> i think three to five years, maybe five to seven years away. lori: really? >> yeah. because there are, you know,
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there are literally thousands of lawsuits against jpmorgan at the present time. and each time it loses one, for example, this madoff thing is likely to set off all sorts of individual lawsuits against jpmorgan. so i think much as jpmorgan would like to just pay a be there -- a billion there, two billion there, they just can't do it. asbestos or tobacco company, they're going to be in court for a lot of time. lori: so no blanket settlement with all of these. >> it's unlikely. too many suits on too many issues from too many different sources. plus the government really hasn't gotten what it wants from q jpmorgan. remember, the government is doing this because it doesn't believe that too big to fail is acceptable. jpmorgan is the biggest bank in the united states, they want it smaller. and jpmorgan is not getting smaller. so the government's going to keep going after them, not to mention states, individuals,
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companies, etc. so they'll be in this thing for a long, long time. lori: and, of course, five agencies approved the volcker rule this week. how will jpmorgan fare under that, and really the banking industry in and of itself. i suppose this is the best place to bring in your new book called "guardians of prosperity." how will the volcker rule affect the profit centers of these major institutions? >> well, i think it depends how rigorously the fed or other agencies want to pursue the volcker rule. if they choose to take very narrow definitions of what is, you know, market-making activities, narrow definitions of how the balance sheet will be used to invest and most importantly narrow definitions of hedging, then basically if they do that, they can hurt the banks quite a bit. but there's no indication that they want to do that. so the net effect is i don't think the volcker rule is going to be terribly harmful to the industry, and i think that you really start to have to -- you really have to start thinking
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about how does it affect the people who do business the banks. in other words, how does it affect the price of bread? in essence, you take liquidity out of the market and you widen the spread between the bid and the ask, well, then the price of wheat goes up, the price of gasoline goes up, the price of money on a mortgage goes up. so individuals get hurt much more than the banks, i think, from the volcker rule. lori: interesting. thank you so much, dick bove, always a pleasure. >> a thank you, lori. lori: see you soon. amazon is getting aggressive about its wine business just in time for christmas. today it launched a one-cent shipping program for select orders placed on amazon wine. at first, about 100 wine sellers were participating offering more than 1,000 labels of wine. amazon says its wine star offers the largest domestic wine selection online with delivery to 22 states and the district of columbia. the online retailing giant is also expanding its grocery
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deliverly business launching in san francisco for the first time. the service is already operating in los angeles and seattle. now, some might be wondering if amazon's proposed drone delivery service could be used for food and wine. however, so far the test drone used by amazon only appears to be capable of carrying small packages. let's have a look at amazon's stock as we close out the session, it is up 21 cents, $382.40 a share. all right, we are just about 19 minutes away now from the closing well. it's been a real choppy session today. instagram has come up with a bold new plan to try and stop teenagers from defecting to rival services. our jo ling kent was at instagram's big reveal today, she'll bring us the details next. and facebook's sure on a roll, the stock has just gotten another boost. is it too late to jump in, or is there still time to profit from facebook's rally? we'll ask an all-star panel next. ♪ muck. ♪ ♪ every day we're working to be an even better company -
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lori: and the fcc has voted 3-2 to continue talking about whether or not to lift the ban on using your cell phone b on airlines. we'll continue to follow the story. the ban itself has not been lifted, that's not what this vote was for. this vote was simply 3-2 in favor of continuing to discuss whether or not the ban should ultimately be lifted. continue to follow that for you. in the meantime, instagram has unveiled a new feature that lets users send images privately to up to 15 friinds. the company's ceo was in new york today to launch this new application which is called instagram direct, and jo ling kent was there at the launch, and she joins us with this.
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jo? >> reporter: hey, lori. if you can't buy it, then challenge it, right? after snapchat spurned facebook's $3 billion offer last month, facebook-owned instagram introduced a messaging service the ceo is calling revolutionary, but really it was a feature many apps already have. you can only get direct messages from people you follow on instagram, for everyone else, a photo message will send up if in your inbox. the ceo said instagram does not actively monitor what users send back and forth, but users can report disturbing images or block them altogether. now, here's where the money is coming in. brands that advertise on instagram like macy's and michael kors and nike will be able to send direct photos to users who follow them. the ceo said it's too early to talk about any other features of advertising that may happen on instagram direct. now, when asked about sharing
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photos that self-destruct like snapchat, for example, he said they could create ephemeral messaging in the future be, he left that door wide open. taking a look at facebook's stock right now, it's up more than 5% after the launch this morning, although he told me the system wasn't created with a specific age group in mind, facebook badly needs this to improve its appeal to teens, and instagram messaging is seen as one way to do that. hoverly, by the way, i asked the instagram ceo who he really wants to see join the service, and right off, immediately he said without missing a beat his top choice is former vice president al gore, and he's already asked him once to join, and he said he's got to do it again. lori: that's an interesting choice. >> yeah. lori: thanks for that report. >> reporter: thanks. lori: sticking with social media, what a year it's been for facebook, what a day. shares of the social media darling are up more than 85% so far this year, another 5% just today, and that's not all. facebook is the latest addition to the s&p 500 index.
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so as was just said, the news sent shares soaring post-closed trading yesterday. what does this latest vote of confidence mean for facebook, and what will facebook's next big con we think so be? joining me now is jason men wits and victor anthony, toe pia managing -- toe pia analysts. this is a perfect set up here. jason, to you first, you own 3.9 million -- 1.9 million shares of facebook. will you add or subtract to your shares? where we're going to continue to hold at the current price. we're very excited about the company's prospects for the future. if you look at the key variable, it's helped the pace that they grow revenue. so we believe the expectation generally for the market in the stock today is that pace will decelerate throughout 2014, and we think that facebook can do better than expectations.
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we think that in general instagram is one way in which facebook can grow revenue. that's one way, a second would be video advertising, and third i would just point to currently the holiday season that we're experiencing right now, retailers know that shoppers are shopping online using their smartphones and tablets, and we think that facebook is way for retailers to reach shoppers in a way they didn't a year ago. lori: victor, we know it's a big vote of confidence among wall street or many times it's viewed that way when a company, a darling, if you will, is added to an index fund or mutual funds. does that alone, let's stick with this point first, make you more bullish or bearish on facebook? >> it definitely increases my confidence in the company itself going forward. i think addition to the s&p 500 essentially validates facebook's model and its fundamentals going forward. so, yes, it definitely gets me a
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lot more bullish. but fundamentally, going forward i think this is a solid platform. it's still early, and there's a lot of opportunities for facebook going forward, much of what you've discussed in 2014 i see as catalyst. lori: 85% growth in stock price year to date. there have got to be some risks there. i know you pointed to a few, jason, but i'll let you follow up and tell me what concerns you about facebook. >> number one, the teen issue. what it does, it calls into question, i think, the value of the business. if you make the assumption that teens fall off facebook and they never come back, ultimately, it goes to zero over time. but i think that's a faulty assumption. from what identify seen, the teenagers who have gone away to college after they come out of college, they actually jump back onto facebook as a means to reconnect with their friends from college. so i think investors were making that assumption, and they're making a faulty assumption going forward. lori: you mentioned instagram, do you think this is the right move with instagram and it'll
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allow facebook -- which, obviously, was spurned by snapchat -- to go head to head in that market, and will it solve the teen problem, if you will? >> i wouldn't point to today's announcement as being overly senate. what i think is the instagram platform has tremendous growth. 150 million users today, so growing tremendously with young people. and one way or another they'll keep experimenting and figure out a way to keep that growth going and to monetize it, and it'll be more initiative like the one we're seeing today. this is what mark zuckerberg's talent is, there's a billion users on facebook, and instagram is well on its way. lori: is there a company you can compare facebook too? a lot of people are looking at google, obviously, a long way to go, but is it on a similar trajectory? a lot of people say google started out this way. >> we agree that the company that is most similar to facebook we would say is google. when we think about what facebook might earn in the future, we actually use the ratios of expenses to sales that
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google has been able to achieve and apply that to facebook to value the company, and really it's, you know, it's the advertising platform that is most competitive with google today. lori: as i said, you have a 63, but where do you see it in 2014? >> that $63 price target is for year end 2013, but i think, quite honestly, that's conservative because i have not factored into my estimates the autoplay ads which i expect facebook to launch in 2014 into my estimates. so i see a lot more upside for the stock. lori: serious guys with hard core analysis on what's really just a lot of fun for -- i know i'm not in the demo, but i'm part of the teen problem, i think. of great to have you both. thank you so much. okay, the closing bell ringing in about seven minutes, and it has been a banner year for the stock market despite the selloff over the last couple days, of course. so where do you find bargains next year? we've got barron's list of favorite stocks of 2014. that'll be fun. also, lady gaga, one of the
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highest-paid entertainers on the planet, so how is the revolution in online music affecting her and other superstars? talks with industry insiders on "after the bell." ♪ ♪ [ male announcer ] e new new york is open.
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orheir new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. lori: this breaking news. right now "wall street journal" reporting that jones group is nearing a deal to sell itself to private equity for sycamore partners. it would value footwear and apparel maker roughly $1.2 billion. would value jones at $15 per share. there cintra day. 14.63 is the stock price right now as we cruise towards the closing bell.
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david: about did you her what happened? all hell broke through and things were a mess and falling from the ceiling. this is pullback, whether the heralded pull back we heard so much about. whether this was a temporary moment of people trying to get cash for the christmas shopping. let's go to nicole petallides. she is at the new york stock exchange. and we can't start with anything other than hilton. hilton of course their ipo today. 9%, what is it, down to seven 1/2% gain now, which is great but when you think of the ip offs up 20, 30, 40% i'm wondering if those guys are a little disappointed? >> hard to tell whether or not if they're disappointed. it priced at the high-end of the range. it priced early because of that. it is the biggest ipo in history for a hotel company and second largest this year so i'm sure they can't be too disappointed. lori: nicole, facebook posting gains after it announced it will
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join the s&p 500. >> that's right. portfolio managers want to mimic the s&p 500. they must buy all 500 stocks equally. they will be buying facebook and today we saw that evidence. david: american airlines, the newly-merged american airlines didn't do too well today but all the other airline stocks getting a nice pop. what is up with that? >> southwest airlines got an upgrade over at bank of america merrill lynch. that was a great performer, as you noted united continental, delta, plenty of them, jetblue had a great performance as well. oil of course pulled back a little i think. david: actually, a couple of pennies ahead. just a little bit. >> i will take that back. go ahead. lori: i think we have time to talk homebuilders. hovnanian particularly leading the industry higher after reporting earnings today, nicole. >> we've been watching homebuilders. the hope trade going into the spring season. hovanian came out with numbers. profit increased and delivery.
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[closing bell ringing] david: just in time for the closing bell. there we see it. it is not a pretty day on wall street although those dogs were pretty. we love the st. bernards. don't have the little kegs around the neck. lori: sure did? david: it did? good. lori saw it. have the eagle eyes. russell 2000. we had one gainer. all the others doing, not so bad. kind of an inverted pyramid. biggest loss at the top. at the end you end up with a gain in the russell 2000. dow jones taking it on the chain, a triple-digit loss for the dow. lori: s&p flat, generous. david: we can do that. emphasize the positive with the russell 2000. time now for the front page headlines a critical day for the ryan-murray budget plan on capitol hill with the house of representatives expected to vote on the deal, the final vote later today. supporters believe it will pass with bipartisan support. lori: the labor department said initial jobless claims, surged, oh, no, mh


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