Against the dollar. Facebook. Obviously waiting for the announcement in a matter of moments. Wells to it to power lunch. What will they unveil. That begins now. We have, scott, actually two major breaking stories right now. Facebook about to make the aforementioned major announcement. Were inside the headquarters. Thats screen left for you. Screen right, ahman javers on the president s gun control plan. A few moments ago james carney told those in the meeting room the president and Vice President will hold their event tomorrow. Carney saying that the president and the Vice President will be joined by children from across the country who wrote letters in the wake of the shootings at sandy hook. Carney also saying hes not going to reveal details at this point over whats going to be in that legislation. So well have to wait and see what this package ask going to contain but it contains legislation that would need to be passed on capitol hill. Amon with the announcement. Lets go across the country to facebook at menlo park. Theyve been drumming it up, and were waiting and watching and waiting and watching and Julia Boorstin is inside facebook headquarters and scott wapner will be in the newsroom poring over the details. Stock up 16 in the past three months. Of course, it wasnt always that way. Since the ipo last may, facebook shares are still down 17 . Welcome, sue. Good to see you. Good to see you, too. And with us for the rest of the hour to break it all down is david kirkpatrick. Hes the author of the book the facebook effect. David, do you think they have to do something quite significant and as i understand you think it might have to do with mobile. Tell me. I think it could be one of several things. Every thing theyre doing has to do with mow bowl but theres another area that could be involved which is search. Search is pretty crummy on facebook. I would be watching for something to do with mobile or search and beyond that its pretty hard to say at this point because theyre keeping pretty tightlipped. A lot of people believe its going to be a phone. You disagree. First of all, theyre not committed to building a phone. Theyre so committed to their platform. Theyre going to continue with the way it works on ios and apple is and everybodys blackberry. It is possible down the road that they might improve the way Software Works on mobile devices in the developing world which is where their biggest Market Growth is right now. Well get back to you in a few minutes. Todd, back to you. Fantastic. Wall street compensation in the spotlight. Lets look at Morgan Stanley shares up a quarter. Mary thompson here with the fallout. Whats going on, mary . Well, this is going to impact Morgan Stanleys top earners. All employees both cash and stock will be deferred. If their total compensation is more than 350,000 and the portion of that boy news pay exceeds 50,000 dollar. The exception the managers who work for the brokerage been. Business. It has nothing do with the sentiments presented by the hedge fund. While it expressed confidence in management it said it was concerned about pay levels. Another 25 in 2014 and the last part in december of 2015. But the equity portion, the remaining 50 in 2015. Overall wall street bonuses seen up modestly this year, though increasingly mormon is going to be going to the far performers with the troops getting smaller payouts. Thats right. It depends if youre a top earning. The troop levels, rank and file is going see their pay cut somewhere. All right, mary. Thank you very much. Good to see you. All right. Some conflicting reports on retail this hour. Can commerce says retails did come in better than expected. Up a half a percent versus an upwardly rising 0. 4 in november. Holiday sales were weaker than expected says the nrf. Sales were up 3 . Lowest gain since 2009. Despite the conflict, Retail Stocks are up. Leading the pack up 20 and raw stores up 2 . Joseph a. Bank up. Vf corps about about half a and williams sin williams sin know ma. The Dow Jones Industrial africa is now on the downside but the transports is what everybody is watching because its up. It is on course to close as a historic high which would pass its july 2011. Well see if it can hold that. Its significant because everybody watches the transport. Are you watching that, mr. Pisani . Let me show you the components. Its the airlines that have been leading. Theyve been doing all sorts of things, theyve been paying down debt, merging, limiting expansion. Rail woods also strong today. Homebuilders, lennar pointed to numbers that were good. 32 in increases in orders. Thats a great. Can they do 32 in retails. I time. Thats helping some of the real as the as well. Thats a 22 increase. Thats hum. Remember, they temnd to go downhill. Theyre all on the upside. Thats a little encouraging. Back to you. Mark zuckerberg, we should point out, has begun to speak at the Facebook Event in menlo park, california. The finger pointing has long since started in washington as the debt ceiling key bait speaks up. President obama issued this warning to House Republicans during a News Conference yesterday. Take a listen. They will not collect a ransom in exchange for not crashing the american economy. The financial well being of the people is not eleven rafrmged to with used. It is not a bargaining chip. And theyd better choose quickly because time is running short. Representative lynn jenkins is a republican from kansas. She is also the House Republican vice chair. I guess basically i should ask you to respond to the president. Well, i wish the president would stop campaigns and come over to the hill and have a conversation with us. Republicans are willing to work with this situation which is our out of control wasest watt errand spending. Youd like to have him he sayed yesterday he has a nice pick imevery year. He said this in the wall street toufrpd. Its wrong to think of it as ooh long stamp. Those days are onner. That debt limbet is one of the last steps toing tagt tachlkts there are a lot of americans who would fwree with that analysis. Senatorial obama afwleeed with those comments. Claiming it was a lack of leadership. I think that is true today. And you have to review how we find ourselves in this situation today. The senate hasnt passed a buchlkt in close to four years. The president sends budges up to capitol hill. The last couple of years they got zero votes. Zero votes because they never get to balance. House republicans the with ones that get us to balance. We ned need a direction to go. We need so scott to putz ow on that path. One. Would what would it take for you to vote to invisa the debt crilling. We have to tang the blank chegs away from washington and demonstrate to the American People that we can prepare our finances the way they do around a kitchen table. They prepare a bunt and dont take more money than they their i lawed to take in. Hoom gou it would render support to people who are victims of hurricane sandy. The prior version you opposed. The current verse ll you vote for it . Fooet not erms why not. The first bell i voted on bus a flood snurnsz program. That was bankrupt. I live in the state of kansas where it could be flood. Thats why we worked really hard to pass programs to save it. Up fortunately they were opposed. That was the reason for that. Im sorry. Were following this breaking news out of facebike time. Sorry to inrupp occipital. Lets go to scat wafrter on facebo facebook. The holdlines moving from oto noon, gran, what allegedly allows you to share contact wlg you. You can see facebook shares are down on this news and you have to know that with the anticipation on this, who is ooh inside, right now mr. Zukserburg is making these remarks. Does this measure the 60 hrd yard gush . Indeed, scott. And were going to ask that very question to our guest david kirkpatrick. What do you make of the announce and issed servet if you thifrp of facebook as a giant reoppose torrey of information and to now u weve face lick had the nighsly feed or you d get information about it on their time bun they want wanted thend. Search has been crummy on fast bike, considering the vast amount of information they have that, thanlt to source and delight it with all diepd of contact ters is what theyve gone going. He cede what distinguishes from regular search is filter. You think thats a sigs cant move. Major. It could be a big deal. Very overdue and important. And the stock is moving on those comments from mr. Drugs and its turned into the green by 22 centis. Meanwhile itll be a sfootd rof small caps. Plus, it ooh its a lieu lu of lae ochbd when pewer lunch returns. [ male announcer ] you are a business pro. Omnipotent of opportunity. You know how to mix business. With business. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above. And still pay the midsize price. I could get used to this. [ male announcer ] yes, you could business pro. Yes, you could. Go national. Go like a pro. All right. Welcome back to power lunch. Im scott wapner as we continue to wait for the fallout. Mark zuckerberg the ceo unveiling just a few moments ago what he calls Knowledge Graph search. The reason why were showing you google shares is you can see the obvious spike higher in shares of google, up more than 1 . Why would this be happening . Its social search. Perhaps its a britd of a relief rally today. Its fallen behind google. Not moving tremendously. A little bit volatile, but nonetheless on the move. Let me point out shares of google trading a tremendous amount of vacuum. It just blew through its tenday average vacuum of 78. 5 million shares. Worth keeping in mind, the strong has trade up 60 . Much more to come throughout power lunch. Sue, ill send it back to you. All right. Scott. As a matter of fact, davids sitting right next to me and he says, weve got to talk about this. To scotts point this is a different type of search. Do you buy it or not . I think google is Great Company but i dont think you should get excited from anything weve heard so from on facebook. Facebook has such a macive amount of useful information that they have never made easily available to people in this kind of a way. Also youve got to wonder how it affects facebooks partnership with microsoft. With we put that up . We see google Still Holding on to about a 10 gain. David is going to be my copilot for the hour. Meantime should investors think small in order to reap big returns. . The answer might be yes. Chris rets ler is bullish on what he calls small tap trail blazers right now. Good to see you. Welcome to power lunch. Thank you for having me. Chris, what are your benchmarks in terms of investing in a stock. What sectors of tech do you like right now in small cap . Weve been focusing on the addition of ipads into the system need to be onboarded onto campuses and other networks. One way is to do it quickly through wireless technology. We also are focused a lot on the recovery and enterprise hard disk drive space which after the floods in thailand last year caused a lot of disruptions in 2012. That would help a company like super microcomputers. One think theyre going to need a lot more of is processing. Thats a good place to leave it. Scott wapner, back to you. I figured id give you some color on exactly what this whole thing is going to look like. Zuckerberg saying in their Early Development of graph search, so presumably theres a lot more to come, its only available in english today and you can onto search for a subset of context of facebook or other open apps. Heres how its going to look. It says graph search is going to appear as a search bar at the top of each page. Heres how it may work. My friends in new york who like jayz. And then to get that set of people, places and photos on facebook, you get those only from your users. He goes out of his way to say its not web search. Again, you only search subjects that have been sharet with you. The stocks are down 3 4 of 1 . A lot more to come. So its a search of a closed loop basically, right . Exactly. The best example is if youre lair one of them, it turns out its a closed social search only. Its not open web search which would be a direct attack at the business that google makes its living at. Its perhaps why facebook is moving a lis lower. If this the is successful they wont then go to open web sefrp, correct. The real question is hoult matly how does facebook monetize oh peel. Is this the first step to adequately doing that if woe know oumt of 1 billion users, yu that zsh how can facebook mon tees that to take its missile to the very ending. Let me throw it out there real quick. Mel said on cbbc im not sure you can. Thats going to be the key question for facebook. Would you agree, kevin. Its to keep them on facebook. Th what this sing go to do is keep people on face boobook lon. Its designed to work better on your mobile than your rng. Does it worry you that its in development . Actually these kinds of things take a few users. Its not going to have a near term effect on revenue i dont see anything different. Hey, guys. Sue if i could just eninterweb. You see they even suv erped as a sindh cant drop. This is about you, right . A restaurant, a bhaur, Something Like that. Maybe they give you the information ran than goir to a jell p sfwloo say you go to the server. Youre going to be able to do things like where d suffers in la gu bach go to coffee. Even in even on a service liej y yep. They go to a wonderful little place off the pacific hie coast highway. At night they go to place called the blue roon. They have a great band. Ite wu68. Were going to take a quick break. We ooh have more on fwas dwak and kn facebook and dell and more after this. Tdd 18003452550 you shouldve seen me today. Tdd 18003452550 when the spx crossed above its 50day moving average, tdd 18003452550 i saw the trend. Tdd 18003452550 it looked really strong. Tdd 18003452550 and i jumped right on it. Tdd 18003452550 tdd 18003452550 since ive switched to charles schwab. Tdd 18003452550. Ive been finding opportunities like this tdd 18003452550 a lot more easily. 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[ male announcer ] how do you make 70,000 trades a second. Reach one customer at a time . Or help doctors turn billions of bytes of shared information. Into a fifth anniversary of remission . Whatever your business challenge, dell has the technology and services to help you solve it. All right. Welcome back to power lunch. Continuing to follow the facebook story. Want to show you some video just leased here. These are the first pictures coming out of Mark Zuckerberg making the big reveal at facebook headquarters. We understand hes since left the stage. With dont know if its going to be a one more thing moment when we grew accustomed to with steve jobs. But mr. Zuckerberg has left the stage with what he calls graft search, only available in english today. Much more work to be done on that. Weve seen facebook sell off in the wake of the news. Its interesting in the context of the conversation youer having sue gives moto the very well respected text blog. They have a headline out that says facebook just declared war on google. Meet your new search engine. Thats how at least that influential blog is spinning the story and it plays to what david was mentioned. Yeah. You keep stressing this could be good for microsoft as well. Why . You were explaining there was a default. Microsoft has been a source of it. They have a very Close Partnership which continues to improve, by the way. So, you know, they havent described all the details of how this is going to work, but if youre going to go to the search box on facebook looking for what your friends like in laguna beach or what surfers like and you dont get what youre looking for, youre going to want to go to the web, but youre already going to be affected to bing default traffic on facebook is bing. Those who want to go to the web is going to build traffic for bing. That is good for microsoft and probably a negative for google h. Thats why we see microsoft stock up perhaps a third of a percent. You know, you have been very enthusiastic about this. Yelp is now down 5. 3 . Are there ore companies that you think are going to get hurt by this particular announcement . Some of them are not public, but foursquare is a company thats built itself on this kind of recommendation and if facebook gets this right, it could be bad for a number of private Internet Companies like foursqua foursquare. I think foursquare will do well in the long run, but, you know, its something i can tell you in their office right now theyre like really wondering. Fascinating. Scott, do you want to comment . I apologize. I didnt realize my mike row phone was open. This puts the instagram a little more into perspective. Facebook does say today that the first version of graph search focuses on four air yas. That being people, photos, places, and interest. Absolutely. Very good point. Great to have david here as well as hes one of the resident persons on facebook as well. Lets go to rick chantellely. If we look at it, what were really after, theres been a lot of talk about a big selloff in treasuries. Hovering right now at twoweeklow yields. If its 181. 5 or lower, that would be the case. If we look overseas, we can see a lot of things from some of our neighbors. Again, we share something. We all have programs to basically liquefy and we all buy programs. It plays havoc wi