Transcripts For CNBC Power Lunch 20130307 : vimarsana.com

CNBC Power Lunch March 7, 2013

Its that time again. Time for final trades. Which pete, means youre on the hot seat. Kriet now i will go with crocs. Also trading extremely cheap valuation. I think this name will finally recover. Stephanie in. I like s p on pull back. I like the enterprise product and portfolio. Have you a nun Analyst Meeting coming up. Josh brown . I still think lowes will take out the 40 and get going. Hasnt happened yet. Mike murphy . Hertz, a great set up here. Announcing selling 60 million shares from one of the firms that open the company. The stock opened lower. Rallied off that news. And i think hertz is prime to move into the mid 20s here. Can you own the name here. Guy we guys, that does it fo. Follow me on twitter. Facebook headlines are coming momentarily. Power lunch will have them, right now. And scott wapner will be delivering those headlines when they break. We had that breaking news, as facebook announces something. Something. There are many reports it has do with a redesign of the program. To permit more advertising. Mark zuckerberg, boy wonder there, may be speaking during the event. If he does, we will take it live. There is the stock at 28. 29, up 3 alone. Another breaking story, another day, another record for the dow. Sue is at nyse. Hey, sue. Indeed, ty, youre right. Three days, three records. Banks and financials big factor in the move today. Stress tests are due out after the bell. And bob pisani is with me right here. I notice multiyear highs for j. P. Morgan chase and citigroup and better than 20 move in the financials overall. So this is there is some anticipation they will do some good announcements for the market. Capital increases, dividend, thats what the name is about. Take a look at major bank stocks and bottom line is very simple. 19 banks that are in this, anticipating. All 19 will pass them. Even more importantly, i put up a few where they are anticipating they will announce some kind ever dividend increases or buy backs. All of these banks you are looking at here have dividends, i mean like one sent most of them. There is anticipation they will start raising dividends and it is okay to do that. For those of you listening on satellite, thats bank of america up 2. 5 aun and sun trust up 2 today. The etf in which you can buy the bank stocks and there are spdrs. And there is a new high for the index. So it anticipates this is happening. Other than that you can see the financials are leading the market there. There is major sector financials. Once again, risk on. Helping. And of course helping with positive comments. Keeping rates low. The lagger groups, those of course are the defense of names. This has been going on now for basically the whole week. Right. Kenny, come in. All right, now s p Dividend Rate is moving to new highs basically about 300 million. Significant, not significant, is that something you watch . I think it is significant. Listen, the baby boomer generation, of which i am one, thats part of your portfolio now. Certainly younger people are not but as you look and allocate stock, you get back into the equity market. That whole dividend play and back to businessic investing, we have been talking about that for a while. And we have news with the banks raising dividends, it may be priced into the stocks. We may actually see that, settle news reaction. Which is what you intermated, that if you see them soft a little bit, no reason it panic at all. Good news on the dividend story, and a great story, there is plenty of room for more. Payout is 37 . Company is paying out 36 . Historically in 50 range. They could raise dividends out there and still be well below what ive been historically been playing out. We have highs in the Dow Jones Industrial average. You made the point in your morning note to watch the s p. He is still not there yet. We are still about a percent, maybe a percent and quarter away from the s p. My sense is they want to push this market until the s p breaks it too. Then what do you do . Then you get the sigh of relief and you see the market roll over a little bit and just kind of consolidate and rebalance. Not an opportunity for anyone to panic at all but actually an opportunity for people that, you know, want cheaper prices. I think you will get it. But youre not going to get it until you force the s p to that level. Bernanke, both reiterating within a week. Right. There is the bernanke showing some breath in the market today, ty. Over to you. Sue, thank you. Seven weeks after National Transportation safety board launching an investigation into the lithium ion batteries used in the boeing dream liners, the agency releasing an update about findings. On the roller coaster ride since the first fire problems with 787s reported. You see the stock at 81. 04 almost up two bucks. Phil lebeau covering the story forness chicago. Phil . Tyler, here is the report from ntsb. Basically a 5 factual update about the investigation and when we look into the fire back in january, in boston, here is the bottom line according to the ntsb. They are unable to find a root cause behind the 787 dreamliner battery fire. No recommendation from ntsb at this point. Investigation continues, by the way, ntsb holding a forum and hearing regarding lithium ion batteries and 787 certification process. That is happening next month. Meanwhile, beauing is waiting for the faa to approve the suggested fixes that it presented to the faa last week. The faa, im told, is expected to approve a condition yl approval of the fixes perhaps as early as next week. Might see the dreamliner groundings lifted by the end of april or beginning of may. And thats one reason why you look at shares of boeing up more than 2. 5 , sue. We havent seen shares of boeing trading at this level since may of 2011. Sue, back to you. Wow, phil, thank you very much. You know, four out of five dentist recommend it and now many analyst will probably as well. Coal cobalt gatepalmolive splitti splitti splitting. Up right now. The billionaire who accumulating a 6 stake in the Company Wants the pc maker to pay out nearly 16 billion in a special dividend, called leverage recapitalization. Stock trading above the 13. 60 buyout offer right now. Jon fortt is in San Francisco with more on the future of dell. Jon . Another billionaire battle with carl icahn battling, but this time taking on michael dell. Under michael dells plan it take the Company Private it would take on about 15 billion in debt. Under icahns plan i have to interrupt you. Sorry do it. But zuckerberg has come on stage. Can you believe the best newspaper should have a broad diversity of content. High quality public content from world renowned sources and socially and relevant updates from family, friends and people around you. It should also enable you to drill into any topic you want it discuss, that you want to go over. It should have a front page or top news section of the most important things going on across all topics and should let you drill down into any individual topic that you want. We also believe that the best personalized newspaper should be visual and rich and engaging. The stories around you are intricate and detailed and they deserve to be displayed with more than just text. So today were going to talk about a design we think reflects this evolving face in order to build a foundation for the best personalized newspaper. This is an early version of news feed. I think that this one is from 2007. And from the beginning, our goal with news feed was different from what any other social service was trying to provide. Our view is that if youre going to contribute to this personalized newspaper, you need to be able to share any kind of content that you want. Status updates. Photos, videos, links, location, pins from pinterest if you want. Not back then, but now. You also need to share with any audience you want. You should share publicly. Share with anyone in the world. With your friends. A Smaller Group or a few friends with a message. Types of stories that we tell when were communicating with a photo instead of text are completely different. And you want to be able to tell both. The types of stories that you tell when youre communicating publicly as opposed to just with a few people are completely different and you want to be able to tell both of those as well. So we think that theres a really important place for a personalized newspaper that can bring all of these things together. Now theres no other social service like this at scale. There are a lot of other great social apps that enable you to share one kind of content or with one audience. And i think these apps are great. But i think theres a special place in the world for this personalized newspaper, where it can really span the whole gamut and make it so you can see all of the types of content in one place. Now because news feed supports such a broad range of content types, as the way that we all share changes, the composition of news feed naturally changes as well. So you know, back when we were first getting started, news feed was primarily made up of text. But now that we have these cameras in our pocks with the phones, we can upload photos, news feed has become primarily about visual content. As can you see, since the end of 2011, now almost 50 of the content in the average news feed is photos and visual content. And similarly, a lot of us think about news feed as primarily about friends and what your friends are up to. But again, since the end of 2011, you can see the amount of content from pages and public figures who you are following publicly has increase sewed now in the average news feed it is more than 25, almost 30 of the content. So how we are all sharing is changing. The design of your news feed needs to reflect this evolving face of news feed. And who you are sharing with. Of course we want to share with friend and get updates from friends but we also want updates from publications and businesses that we care about and artist and world leaders. So this is the evolving face of news feed and that the folks that you are sharing with and want to get updates from and thats what we want to talk about today. Is the design that we think reflects this evolving face of news feed. So here is where we are today with news feed. On mobile and desktop. And here is the new design. This design reflects the evolving face of your news feed. It is designed for the way we are all sharing today and the trends that we see going forward. And now there are three things we will focus on today in this design. Rich stories, visual and engaging. Your choice of different feeds. Dig into any topic that you want. Aep a mobile inspired consistent ui. The same experience across your mobile devices and desktop as well. Now, we are really proud to show you this new design and we are excited to get it into all of your hands and into the hands of all of the people around the world who love facebook. And now, in order to get into more detail on this, i would like to hand it off to our director 6 design, julie zoo. Let me bring in julia boorstin. She is at that big Facebook Event in menlo park, california. Julia, first your reaction to this. We flew it would be something along those lines but what do you think of what mr. Zuckerberg unveiled so far . Well, sue, i think it is exciting. It is always nice to hear directly from Ceo Mark Zuckerberg and what he unveiled in the new news feed is a much cleaner design that puts emphasis on photos and videos. As can you see in his demo there, the photos and videos are front and center. It is interesting that mobile experience looks almost identical to the the desktop experience. This comes as facebook puts more emphasis an mobile app as zuckerberg said, this is a mobile first design. A phrase he used, he said this is like a personal newspaper. A newspaper is not a term that you associate very much with facebook but he says this is like a personalized newspaper and people should be able to customize their news feed to get information from friends and also public figures and things happening around the world. I think this is particularly interesting because it shows in some ways facebook is going head to head with twitter. We think of facebook of interacting with friends by allowing you to access with leaders and people from around the world are thinking, it basically says they also want you to be able to sort of exist and interact with people in that sort of public bigger stage rather than just your friend group. This is, in a way, moving towards twitter and linkedin, that public conversation. But mobile first, very visual. I think the potential to insert video here should help grow facebooks revenue down the line. We are up 2 on the stock right now. You mentioned the fact that it looks like they are going after twitter. Buff other publicly traded companies, which one gets hurt the most from what facebook has Just Announced . Well look, facebook and google arent competing because google has google plus but google plus isnt really sharing with friends and going publicly. But facebook is news can you get from the world, news from your friends, news from leaders you choose to follow the way you choose to follow people on twitter. I think this is a good thing. Particularly from an advertising perspective. The reason this is boosting the stock because it means people will be more engaged and you can insert video ads which cost more to advertisers. Julia, thank you so much. Back it julia at various times throughout the Facebook Event. Shares of face book as can you see, are moving today. They are up better than 2 . Recovering quite a bit from their low. Lets bring the chart back up to opening day and you can see that may 18th of 2012 was down 27 . Right now, facebook is trading at 28. 02, up better than 2 . If you go back six months to september, however, you have to benchmark the stock from that point, that would put it up 44 . Ty . All right, sue, do business and friendship mix or is it a recipe for disaster . Courtney reagan and kayl Kayla Tausche covering the j th penny martha saga. Definitely disaster in this one. In the courtroom, no one is passing out friendship bracelets here. The question is, can ron johnson survive . Not unless the numbers start going in the other direction. Kayla and courtney, could be a sitcom. No, youre not broke. More in a minute when we come back. No two people have the same financial goals. Pnc works with you to understand yours and help plan for your retirement. Visit a branch or call now for your personal retirement review. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Very hot, up 29 today. Its been bought out by private equity firm sick more partners for 600 million. That equates to about 14 a share in cash, which is 30 premium to its wednesday close. Sick more partners acquired the womens retail talbots also last year. Briefly halted after february sales figures were released prematurely. Net sales rising to 966 million. Store sales rose 3 . A bit off highs after trading resumed. Right now trade up 3. 5 though at 35. 67. Ty . Sue, power rundown, all about one topic. J jc penney. They really are not two broke girls. Is it time for ron johnson to step down after just a year on the job . Can he turn the company around . You spent time with him. Hes had ambitious plans but a couple of missteps. True. At least from what ron johnson says, the board is still behind him. We know that can change quickly. We saw a lot of of the shares there. He is still a board member. I think we knew this would take some time. You cant shut the doors overnight and reinvent to the next day. At the same time these numbers are scary. What do you think . Can they live it out . I think it was innovation and turn the company around and make it into something that it only had dreams of being. But the fact is, that he hasnt really delivered on that. Numbers are going the wrong way and i this i a lot of investors fear he doesnt have any other arrows in his quiver if this one thesis didnt work. Moving on to the next topic. Lets take a closer look at shares of jc penney. Down since ceo ron johnson took over. But stock seeing a pop today. Up to 1477. Theres got to be value in here somewhere, kayla. The numbers would make it look like there is. Trading at about one times book, peers trading at 2 1 2 times. That multiple turns upside down quickly. There is a reason value stocks stay value stocks for a long time. I believe a 52week low is about 14. 20. We are close there. If you dont want to shop jc penney, but you want sales, maybe it is buying at the stock. Im not sure yet. So you have a struggling can company, you talk about arrows in the quiver, guys not having more arrows to shoot, a wounded company, wounded stock price, is this company a take over target . I think i would have probably said yes about six months ago. But after last week, debt downgraded to triple c. Private equity won invest in triple seat business that is performing the way it is because theres too much risk that it would go under. That more debt would be such a bad thing that it could crater the company. Im not sure a strategic court, you know better than i would, but i dont know if strategic values the brand enough at this point either. I think thats the problem. From the start they would have gone private to change the name and turn the whole thing inside out. From the way it operates to finance. Right now the market cap is 3. 2 billion. Not huge as far as financing comes in. But Richard Schultz wasnt able to do it with best buy. No. Im thinking of best buy, barnes noble. A lot of the big old style retailers. The opportunity, i believe, is missed. Maybe the right point there. Sue . Ty, if you yell barracuda, everybody says, what . But if you yell, shark, you may have panic on your hands. We will take to you a string of beaches here in the u. S. That are closed up tight because of all the sharks lurking just offshore. So before you leave for that late winter vacation, you better watch our next story. Dont become their lunch. Instead, stick with us on power lunch. Zap technology. Arrival. With hertz gold plus rewards, you skip the counters, the lines, and the paperwork. Zap. Its our fastest and easiest way to get you into your car. Its just another way youll be traveling at the speed of hertz. With fidelitys new options platform, weve completely integrated every step of the process, making it easier to try filters and strategies. To get a list of equity options. Evaluate them with our p l calculator. 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