with apple. five million is the number. five million sold during the first weekend of sales but that was short of expectations. down about 15 bucks a share after retailers were given a handful of phones for launch day. >> another beat estimates and this time it is lennar. meanwhile, the earnings for k.b. homes was beat. >> some wonder whether it may be time to take the money off and sit out the are rest of the year. >> welcome aboard, united health care. make yourself at home. unh replaces kraft whose new name is really, really weird. >> yeah. >> mondalese. it's very unusual. meantime, apple announcing they sold more than five million iphones in just three days but that's less than the eight to ten million expected. apple expect the iphone 5 to be available in more than 100 koush countries by the end of the year. it's very for giving of this first quote/unquote miss on the sales number. >> when you can't find one, when you go to your verizon store and they don't have it, it tends for me to think, well, listen, i have to come back until i get one. i would be more concerned if it was one of those situations where people said, i can't get the iphone so i'll just go buy the samsung and i don't think that's going to happen. >> or if you went up to 14th street, which may be the closest apple store -- no, there's one closer down in soho and they had them and nobody was buying them. then you would be concerned. >> no. >> nobody has them. >> no. and i just find out that in the end that's more important than the number they did. obviously if they had another two million sitting around -- >> yeah. but if they had another two million, they would have sold it. they've got to ramp up production, don't they, melissa, half a million today now. >> one of the biggest product launches, they would have ramped up production prior to -- the question is, why didn't they have those phones? >> because they were supposed to start in january and they started in september. >> it takes a while to ramp things up. they had five million. that's nothing. >> and it's also difficult when there's a riot at your manufacturer. it's unclear whether this violence is the one where they make apple products. >> apple is secret about everything. we're beginning to find out some companies don't have enough inside apple, others don't. apple remains this core mystery to people, meaning that -- apple's one of those companies where, like where did this eight to ten million come from? i don't know. it came from guys whispering. did they want the stock lower? >> analysts saying six million phones, six to eight million phones over the first weekend, . it comes at five, they are not whispering in anyone's ear so you can buy the stock. these were based in some sort of fundamental analysis of what was going on. >> they didn't know. they didn't know what parts were in it, how many parts were built. they knew very little, like the quarter, that the analysts don't have good information. and then you get these big selloffs based on analysts that don't know anything but obviously still speak. it's incredible to have -- it's almost like a line in the nfl. it's like, geez, they were so wrong but so what? next sunday come up and we're going to trust them again. >> we don't have replacement refs working on it but down 2% since july 29th and also the journal says the components, the costs to apple of the components of $197 is only $9 more than the 4s when you've got to imagine it's going to sell for a lot more. >> a phone that average costs 650, 700, remember, the carriers are subsidizing almost all of that price and that will go down over time. months from now that will be even cheaper. the more components that are paid, the less they will be paying for. they simply say they didn't -- they made as many as they could, ramped up production, may be as high as half a million phones today coming out of china. they visited every store they could, these guy. they didn't find any for sale. the $9 that was talked about in overall cost is a very positive sign, they would claim. >> what's the likelihood that they are actually underdelivering on purpose to drive scarcity? >> everyone is trying to meet the demand. the stock ran up furiously ahead of this. they had said, if apple were a conventional company, they might have said, we had 12 million in demand. we met 5. apple doesn't play it like that. apple's not about the stock. and that's a long tradition with steve jobs. it's about the product. and if they wanted to manage expectations, they could have said, look, if you just call target and best buy, call all of the companies, we have 15 million. they don't do that. apple doesn't play it the way other companies play it. they don't have to. they are not like any other company. >> there's one other tid bit here. the ft says it's not unthinkable that apple gets added to the dow and people making those choices are different than s&ps involved in the index and that you split like a 3 to 1, maybe, 2 to 1, bring the price down. and also the idea that managers are not as closely tied to the index as they used to be. >> would you rule that out, apple being added to the dow? and i guess the key part of that is apple agreeing to a stock split because that in the past, steve jobs had made it clear that he was not in favor of a stock split and a lot of things, now that steve jobs is gone have happened, a dividend. >> i think i come back to the fact that tim cook is not sitting around thinking about how to get that stock up. >> it doesn't necessarily mean anything in terms of the stock moving up, as you've pointed out. >> so many people are next to apple. >> apple is the index in the s&p. it's an enormous percentage given $660 billion stock. it talks about a trillion dollars. >> okay. i can do math, too. thanks. >> that's a short-term top. we talked last week. remember, david, you said anybody who doesn't have it is not in apple stock. maybe they've got to rethink. normally you would have felt that apple rounds up and everyone has to and here maybe this break allows them to not show apple. >> i thought maybe this break allows them to go in and show that they own apple. >> i think that they are not in it. >> who are those people? >> people who follow sundance, who are those guys? >> meanwhile, shares of lennar up sharply. home builder reporting profits above 40 cents. a sixth consecutive quarterly increase. this comes after a 52-week high or multi-year highs on friday and this morning, the average 32-year mortgage is 3.48. is the sector anywhere near being done? >> lennar traded in the '60s before the housing electric because all of the homes on short sales, where your mortgage is underwater, bank have stalled and stalled and stalled those. it's really hard to buy those. the good thing about lennar, stewart miller has done a remarkable turn here with 500,000 houses being built rather than 1.3 million and these stocks remain the stocks that have the best possibility of doing better. we don't have a lot of new homes. we have homes for sales but they are not the kind of homes you can go in and say, listen, i want to bid x and get them because the bank owns it. and when a bank owns a home, it's a terrible sale. >> the san lifts said the point of concerns with these names is the increased price of materials and the usgs, they are getting their piece of the pie here, too. >> the average home price for toll brothers has gone up remarkably. they've been able to pass on these costs because there's a dirth of new homes. lennar managed to buy land cheaply, they've managed to build homes for less money. stewart miller obviously to the late leonard miller, he's done a remarkable job. it's a joy to behold. >> and it's important to know that average selling prices have gone up. kb homes, the average selling price has gone up. even though we see costs rising to build a home, the costs are going up. that was actually part of the jpmorgan price target increase on kb that came out this morning. they raised their estimates as well as the estimates saying the balance sheet supports growth well into 2013 and that makes it very unlikely that there will be an equity raise. >> it will be diluted when it does well. when you see the worst steel company do well, kb homes has been a company that made you think, well, maybe this housing rally is not for me. now they are on board. maybe there's a home builder that is not doing well that's hard to find. >> and a lot of positive language wij here in terms of mr. miller, in terms of not just bottoming but recovery well under way were his words. >> it's a bread spot. obviously things that go into a home. i had alex smith on. a lot of stocks are lower. it's not the fact that the market looks horrible. but i think the housing theory when the smoke clears will still be in tact. >> down sharply this morning on investigation. >> yeah. >> there's a stock that split. it split three ways. >> yes. >> what a bizarre week that was last week. >> people hate that stock. >> a lot of heavy shorts in that name. >> let's move on because it is the last week of third quarter so all of the major indices are posting their best quarter it two years. dow is up 5.4% and s&p is up 7.2%. the 11th monthly gain with the month of may being the only exception but "the wall street journal" says money managers are considering sitting on the sidelines for q4 because it may not be worth it to gamble the gains that you've had already when you can show a good year. >> but 90% of money managers have underperformed their benchmark. >> true. >> you have to hope that that article is true and buyers sit on the sidelines and you get dips and you can get in. articles that presume that they sit on the sidelines don't understand the money management business. it's getting assets in. it's not about preserving gains, it's about making money, doing better than the benchmark or else you will lose assets. sure, maybe they are sitting on the sidelines. maybe the 10% to beat the market, they should lock their money in. >> i understand if you want to take risk off as a manager because you ascertain that risks are higher and thereforeyou don you don't take as much. i'm up 20% and i'm going to go out into the year. >> you can't do that. they don't like that. the guys don't like that. they are looking and saying, wait a minute, germany is up 25%. you weren't german. you weren't short china. you missed apple. i'm wiring it to the guy that got it right. there's only a few guys that got it right. you may see articles that say that these money managers are going to cost. unless they poll thousands of money managers behind the averages, i find those stories to be not that useful. >> so you believe that the relative performance chase as a thesis will remain in tact as we move into the fourth quarter? >> most of the people whose money you're running are saying, how could you not have done better? did you really -- did you really hate this rally? because i'm not paying you to hate or like a rally. i'm paying you to beat the rally. >> hate the rally. what is there to hate? >> i really hate the fact that a lot of people are making money except for me. all right? that's a hate. >> that's called sour grapes. >> of course, this year we'll probably have another year of performance which will be interesting to see when we wrap up all of the numbers and we still have a fourth quarter to go. it's an amazing business. >> yes. it's an apple related -- look at all of these stocks related to apple. they are all going down. all of them. >> to clarify what is in the five million count, because the stock is trading so sharply in reaction to the five million number which came in below many analysts' ex pepectation, what sold into the apple store is counted as five million. if they ordered the phone online and it's being delivered for them and they have not signed for the device, gotten physical delivery of the phone, his point that he's making is that those phones could total in the millions. that number could get ratcheted higher. that is important to keep in mind. this is, again, brian marshal of isi. >> i always felt -- i bought phones from verizon and when you look up -- when you hook up an iphone, unless you've ordered verizon, it doesn't go just like that. there are a lot of things involved with buying an iphone that are not like going to buy a toy and it's just -- it isn't recorded immediately. now, i think that that's an interesting defense. i think that there's an overall a belief -- that's going to take time to disseminate. >> we'll see. we'll see. it's an important point to make. a lot of people have not yet signed. there was a sunday involved. so we don't know when these are going to be -- >> i hear people are using the phone is how fast it is. >> yeah. >> 4glt. >> that's a revelation. >> it takes so long to have all of these sites that have great games when you're in that 3g, you just want to kick yourself. 3g is now what non-hdtv is. what are you doing with that? i can't even see. >> it's a great way to watch highlights of the eagles game. oh, wait. >> oh, that was rough. >> did i do something? >> when we come back, going for the gold. we're seeing a pull back today. are we at the right entry point or should you stay away? one more look at futures. a little bit of negative action. we've not seen a 1% decline on the dow in 62 trading days. a lot more "squawk on the street" in a moment. the new york times reporting that apple could be the first company ever to be valued at $1 trillion. that brings us to the squawk on the tweet. fill in the following sentence. only then will apple be able to do blank. tweet us @cnbcsquawkst. that would be a whole lot of cash. apple has a lot of cash now. >> it's funny, the first thing i said was, listen, they have enough money to solve the maps problem. whatever is the maps problem -- >> they could bail out europe. >> yes. >> so many things. i think that's why they are not able to reach the $8. >> do you think merkel will go to apple and say, listen, this is a problem that we all have to share? >> i would love to hear that. >> well, maybe everybody should get a check from apple and solve this problem. >> it would be a real stimulus. >> yes. >> who was it today that said it was going to add point to the gdp? if they are going to add points to gdp, have all of this passion, it's only fair that they pay a public policy role and solve the world issues. maybe growth from japan. >> that's right. >> $100 billion to make up for t. >> redistribution. >> isn't it time? isn't it time? >> it's time to listen up. all right. it is the first day of the trading week. let's look at futures. we're looking at an open. apple is looking to open down $15 a share. we'll see how it does when "squawk on the street" comes right back. at optionsxpress we're all about options trading. we create easy-to-use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! we knew you needed a platform that could really help you elevate your trading. so we built it. chances of making this? 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>> there's always been a link a linkable. they are talking about putting up a lot more restaurants. i like darden. >> you're looking at container stocks. >> suddenly you're getting all of these credit suisse saying we've got this one wrong. when you see this pattern in an environment where there are not a lot of good stock patterns, people say it's a well-run company, it's been fabulous, they've got more container boards than after. i like i.p. it goes higher. >> here's what is so weird. everybody is betting that macro is going to be so week that there's so weak that the container board could happen. so much weakness it may not able to jive with this piece of data. >> nice work. >> thank you. >> we'll get the opening bell when "squawk on the street" comes right back. we don't call this our company, we call this our mission. green toys teaches children that if i have a milk jug and i stick it in the recycling bin it can turn into something new. chase allows us to buy capital equipment to be able to manufacture in the states to the scale we need to be a global company. with a little luck green toys could be the next great american brand. find what's next for your business at chase.com/mainstreet governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. this is awesome. 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's. we kick off the final week of the third quarter. a lot going on involving economic data. we get earnings even from the likes of r.i.m.m. and nike. we're at the podium of the big board where i guess they put it on the platform. the maker of knives, scissors, and first aid kits. you often need a first aid kit if you do something wrong with a knife. sandvik, a high-tech engineering group. over the weekend, barrons saying it's worth 15 bucks. >> i don't read barron's. >> religion? >> no, not a secular religion. but i've read the news clips. management, if you're management, saying, listen, we've been getting a much better results of facebook in the last few weeks. the mobile strategy is really paying off. i think it would be -- i do not like the tone of the piece and just when i think that it's working for them. >> it does seem a little backward looking. they do say surprising the degree in which they misjudge when they were working on the desktop. keep in mind one big reason that the stock is down today. meanwhile, an employee meeting will be held tomorrow in which they focus on the user experience but we're told that even at the expense of profitability in the short term. >> they are returning most of the proceeds from the sales of the stake to shareholders where they without there might be a possibility that she would use more of that cash to pursue the str