tv Squawk on the Street CNBC February 3, 2010 9:00am-11:00am EST
that has some people upset. >> and i believe there's 237 employees at the unit that hypothetically would be impacted by this. how are futures, mark? >> they're looking not too hot. we're down 3.70 and we needed 2.67 to get to fair value so you got to add them together. more than six points below fair value, about minus 40 on the dow. >> and oil had a big gain yesterday. today it is down just a little bit, about a quarter right now. over the past week, though, still up about 4%, mark. >> let's hit the markets. bob pisani is all ready to go at the big board. >> good morning. that adp report was better than expect eld. bodes well for the nonfarm payroll report on friday. important thing today earnings and the guidance that we got today not as good as it was yesterday to be blunt about it. pfizer down 1.5%. their earnings were a bit disappointing and their guidance for 2010 also a bit disappointing. walgreens reported a drop in same store sales in january. that was well below
expectations. we expected a gain there. that stock is trading on the down side. black & decker remember being acquired by stanley works came out with earnings above expectations but sales were still poor. industrial products down 20%. double digit declines in consumer products, still no big uptick there. here is a piece of good news. not only did time warner beat they raised their quarterly dividend and increased their share, repurchase program. david will have more on time warner's earnings but the important thing in the next half hour, we'll talk about how many companies have been increasing their dividend lately and whether we're at the start of a trend or not. trader talk.cnbc.com. how we looking at the nasdaq? >> we're in a negative open at this hour. want to start with goldman sachs with a new price target of 550 and says there is a 70% chance google may have to bow of china. newscorp also out with earnings, beat on the top, beat on the bottom, boosted guidance and also as pisani mentioned it beeftd its dividend up 5%. gt solar, great earnings.
great guidance across the board for this massachusetts or new hampshire tech company up 10%. interesting, verisign, most of the stories have been a little light at the top beat on the bottom. it was the opposite. decent top line revenue but missed on the bottom line by three cents and is down 7.3%. amazon continues to drag down another 1% in premarket trade. let's go to bertha coombs at the nymex. >> reporter: we've got oil a little lower as the dollar index has found a little strength in the back of the adp number. we also got industry numbers yesterday. the american petroleum institute inventory numbers which preview the eias. they actually shot up bigger than expected, 4.5 million barrels when it came to crude. that is weighing a bit. there was a surprise on the positive side for gasoline which is why gasoline is out performing this morning. they actually saw a drawdown of over a million barrels. the expectation on the street is for a build of gasoline later this morning. i'll have those numbers coming up. take a look at gold though.
we dooz gold paring back on some gains after hitting two-week highs overnight and part of the reason is some of the gold miners are saying they're actually going to boost production this year now that we have gold prices at these heights. let's head over to chicago and rick santelli. >> thanks, bertha. treasury, 81 million of coupon supply next week starting on tuesday with three-year notes followed by longer maturities. you know, that amount is well within the glichbs expectations but underscores something else. we know there are plans by greece and the uk to get their houses in order and it always seems to coordinate not only with politics and elections but with tomorrow's meetings of both their central banks. but the issue is, is the uk has the equivalent of about 125 billion shortfall equivalent changing for pounds that they need to address. consider the numbers in the u.s. granted our gdp is bigger but the numbers are very large. and that's the point. interest rates today are
slightly elevated. a dollar reversed its slight two-day down trend and if you look at things like greek bonds, their yields are coming more in line but still well elevated against some of the other individual sovereign debt around europe like in germany. mark haines, back to you. >> rick santelli, thank you, sir. green arrows across the board as you can see. nice gains in some of those markets. europe down across the board. now, time for the faber report. >> this is an important one. does he understand the pressure? >> big media, big story. >> guys, excuse me. i'm listening to the comcast conference call. please. i need all of my concentration. why don't i just let brian talk? i mean -- we're just kidding. i just tease. you know, they don't even own us yet so we really don't have to be lap dogs. let's talk media. let's talk earnings.
you heard bob and brian also talk a bit about some of the media earnings, newscorp, time warner. let's start on newscorp. let me turn down the volume. sorry about that. because newscorp is going to be up. take a look at that. up rather nicely this morning. the numbers were quite good. ahead of expectations. it wasn't just avatar as much of that is coming of course in the current quarter. it was also just the continued strong performance of newscorp's cable networks. particularly the fox news channel. that helped power a number that was above expectations and hence is going to help power that stock price. can we take a look at newscorp's eps revenues and net? thank you. there is the earnings per share number. we have the revenue number. i believe as well. maybe we don't. we do. let's get through it. we got a lot to do here, guys. and on to net. all right, good. so you get a sense there as to what happened during the quarter. revenue again 8.68 billion versus 8.32 billion estimate tan's the performance again of
those cable net works as well as of course what will be the continued success of that -- of avatar. so here's something i wanted to point out though. take a look at that. do you want to go out there if you're interested in buying news a or news? one is the voting, one is not. take a look at the spread between the two right now in terms of the voting shares trading so much higher than the common. it's very odd. that spread has always been there but it has gotten much, much wider recently. and we'll see. don't orbit though because it just, i don't know. it's always a nightmare at the end of the day if you really think it's going to all come together. it doesn't but it's never been wider. just wanted to point that out. let's move on to time warner. look to be in line a little better, maybe. 55 cents, there is a look at the stock price as you see not doing too much here at least it would seem at the open in terms of up or down one way or the other. revenues 7.3 versus 7.142
billion dollar estimate so a bit better. they took $100 million charge in the turner networks part of the business for some licenses, programming. there's a look, though. no more aol of course at time warner. aol also reported, we don't have time to get to that but just filmed entertainment, cable networks, and the publishing business that you've really heard much about. there is a look at time warner stock price. they did provide us a 2010 full year business outlook. what is it, what was it, it was, you know, our -- we're out of toner. we're out of toner. so i actually don't remember the number. but they gave it to us. i'll give it to you later. they raised the difficult dent. newscorp also raising the difficult dent. finally we got in with comcast. sorry. before i send it over to steve liesman let's do it quickly. again, there, kind of a mixed bag, frankly, take a look at the stock price looking up a bit.
they lost 200,000 subscribers during the quarter but they also generated a decent amount of free cash flow. advertising actually ended up being a bit better than many anticipated. when you x out political, ads were up 10% year over year. advertising going to become a much more important component of this company's earnings into the future. and first on cnbc, i won't be doing the interview but i'm looking forward to it, jeff bewkes time warner ceo will be discussing his company's earnings. don't usually hear that much from mr. bewkes. let me end with this. a free cash flow chart of comcast. if i can. do we have it? thank you. there's a look at comcast free cash flow. '07, '08, '09, the key story for the company. they keep pushing it. you get a look at the growth. see what that looks like in a year or so once they own nbcu. over to you. >> the news out of adp this morning, positive amid the negative number actually.
most economists saying that what it means is that, well, go through the numbers. estimating that national employment in the private sector fell by 22,000, the smallest decline since january of '08. in addition, job losses in december, '09, revised up to a decline of 61,000 from the 84,000 loss. you can see economists surveyed by dow-jones look for total private and government employment to be unchanged in january so this is roughly in line with where economists think the friday report will be. macro economic advisers chairman who puts the data together for adp says the economy is ontrack for actual job growth. >> i do think that given today's number and the recent improving trend and the adp numbers that it ales very likely that employment as we estimated in the adp national employment report is going to turn positive next month. several slices of the data already have turned positive so we're on the verge of moving from job destruction to net job
creation. >> you can see one of those slices right here. small businesses lost workers as did large businesses but medium sized businesses for the first time in quite a while actually added 9,000 workers. moving on looking a ining at th differences between goods and services, services added goods for the first time producing down 60,000. service producing up 38,000, the second month in a row of job gains, manufacturing inside that number, down 25,000. inside the producing number a continued decline of 37,000 jobs in the construction business. that brings total job losses in that business to 1.8 million since peak employment there in january of '07 amounted to 30% of all job losses since that period of time has come from the construction business. mark? >> thank you, steve liesman. >> sure. >> time to get the word on the street. good morning. >> good morning, mark. how are you?
>> pretty good. we've rebounded rather nicely from that down draft that took us almost to 10,000. is that downdraft over? >> well, you know, we're going to take two steps forward one step backwards probably all year it seems like. you know, today i'm watching a couple things. in transports i'm watching ch robinsons down five points already. that's going to put pressure on the transports. apple pretrade down a buck. that's going to put pressure on the techs. i think it's going to be a tough day today but overall yeah the trend is your friend. we are going in the right direction. >> what about the dollar? is that still a factor? >> yeah, you can see the dollar up, commodities down, oil down. we had oil down to $72, a nice run back here to 77 but i think that may take a little break here and gold is down today, also. so that still in play right now. people still making money. that play is going to stay in play. >> all right. alan valdes, thank you very much, sir. >> thanks, mark. >> more earnings up next including dow component pfizer. >> and our morning street poll.
making change. now costs two cents to make a penny. and apparently it costs a dime to make a nickel. that means something is off. the value of the currency or the value of the commodity. let us know if you think we should dump the penny and the nickel. and also your thoughts on the broader question. >> i would say dump the penny. >> you want to take the one more valuable. but it's volatile.
hey, we are here in earnings central. joe and i are going to start with pfizer. we're going to scroll through the numbers on the screen. you'll be able to see that. the really big story is the fact that they gave guidance for 2012, joe, right? >> we had an analyst on that said the revenue guide was higher than previous but i'm reading in most of the analysis that the revenue is actually below it. you'd immediately ask yourself did i miss a couple years? it's -- >> why would you be talking about 2012 in 2010? >> because of lipitor going off patent in november of 2011. one of the reasons the company acquired wyatt was to try to fill the hole when they lose patent protection on the biggest drug of all time. >> you can already see in this particular quarter the revenue was up 34% on the wyatt acquisition.
>> lipitor sales over $3 billion. multiply it by four. you see it's a $12 billion or $13 billion a year drug, i think up 1%. but the company was faced with that expiration and how do you, when you have a $13 billion a year drug on a company that does 16. >> right. >> it's going down 80%, so they gave some numbers for -- for whatever reason the stock is indicated lower. it missed by a penny in the current quarter and then revenue was actually above expectations. we'll stick with, i was going to talk about health care reform and the drug companies and how it's actually probably not a positive for these guys that it got bogged down. they would have gotten all these new members and also had a deal to maintain most of their profits. >> a deal with the devil that down the road would have meant maybe price controls. >> that would mean less innovation and nobody needs that. >> but we digress. international paper. let's show the bid and ask. profit of $101 million versus $1.79 billion a year ago. i wonder if there isn't some
changes there as a result of the -- >> it was a penny ahead on when you take everything out. although revenue was down 7.7% so that may be, you know, you're looking for some revenue gains and a company like this, maybe the industrials are finally coming back a little bit but ip still unable to increase revenues. from what probably wasn't a great year last year either so even with weak comps. >> western union coming out with 32 cents versus 32 cents right in line, revenues right in line. the problem is the headlines moving the stock probably lower and sharply lower is the fact that they had to guide lower for 2010. remember, they are heavily exposed to immigration, which is down because of the economy. >> right. >> and remember mexican immigrants heavily, heavily over indexed when it comes to employees in construction and housing. >> right. >> those are some of the folks -- >> demands for money transfer is lower. >> right. >> a lot of people decided, hey, i might as well stay down here the job picture is so bad in the united states, right? >> it has slowed the pace of
immigration to the north. absolutely. good to see you, joe. >> good to see you. >> back to you guys. >> all right. thanks, guys. here are the s&p minis. down three. actually they're in a little bit better shape than the s&p biggies i guess call the regular s&ps. but still pointing to a lower open of maybe 50, 60 points on the dow. >> they make me think of a box of little donuts. >> that's right. it does me, too. >> and coming up, a stock you may want to paint into your portfolio. this is a good story. it may not be too late to get into the action. we'll have it for you in a couple moments.
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now let's get more premarket buzz just ahead of the opening bells. we have the president and ceo, good to have you with us this morning, cliff. >> good morning, erin and mark. >> we're trying not to sneeze. what are you looking at today sir. >> you've got the jobs number is a little better than everybody expected. still we're fighting the head wind of unemployment. it's not turned positive. i think you also had the earnings from pfizer, a big item this morning. disappointing but we're going to get a health care bill whether we like it or not. and to me if you look at this health care package and what's coming down we'll have 330 million new payors in the health care system. to me that's going to be a windfall for the pharmaceuticals and the health care industry. we like big pharma. we like quality in the stocks, the earnings and the dividends, and this little setback at pfizer doesn't bother us at all. >> you think you're going to get that bill with full coverage for
everybody? >> you're going to get a bill. i'm not going to say it's going to be full coverage but you're definitely going to get a bill one way or the other. >> earnings really haven't made much of a splash this quarter. i guess because of everything else going on. >> well, you still have this deflationary, i should say deleveraging process going on. the consumer still not back to where he was. he's still fighting the balance, still fighting declining home prices. i think you're coming up in may and june with a whole new series of ar.m. resets and when that occurs it's going to be a head wind to the recovery because the deleveraging of the balance sheets in the banking industry is just not over yet. >> we're going to wait for the consumer, that could be quite a long wait. >> two to three years in my opinion. >> all right. thanks a lot. >> thank you, mark. >> great to see you, cliff. >> final countdown to the bell coming right up. later, a stock that's not on your radar. we guarantee it.
>> we do? >> guarantee it. but it's starting to turn a lot of heads. >> plus the man in charge of turning around chrysler's dodge brand here exclusively. toyota's problem is getting even more problematic this morning because of the prius and mark it's not the accelerator but the brake. >> oh. >> talk about a chicken and egg situation. which is worse? an accelerator problem or a brake problem? >> i think i'd rather have the accelerator problem. >> yes. >> it costs two cents to make one penny. it costs ten cents to make a nickel. should we dump the penny and the nickel? i wish we could give you a choice here. you know, should we dump the penny? should we dump the nickel? i'd vote for dump the penny keep the nickel but i'm cheap. go to squawk on the street.com. beg your pardon. squawk on the street.cnbc.com. wh i've been growing algae for 35 years.
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january. pfizer misses expectations and with a disappointing forecast shares are lower. an upgrade for mcdonald's getting added to the goldman sachs' conviction buy list. as in buy it or get convicted i guess. >> hum. clearly. we always were looking for a translation of that one. as we count you down to the opening bells let's bring in the global asset strategist with empower global funds. michael, good to have you with us this morning. on your radar, front and center, is? >> well, actually one of the things that really helped me out here was in the euro there was a 200-day moving average that came in at 138.68 and we bounced. there's a lot of things people look at over the last couple weeks in europe in particular. what happened in greece. but when you start looking at a two-year chart that gets to those type of levels, and we cannot exceed but bounce, it shows us that everything kind of reined itself in.
for the same reasons if you look at charts that happened in the equities markets, in china, clearly in japan and taiwan, it's the same chart you're seeing in crude oil. 10% pullbacks on a weekly and daily scenario and then somewhat of a bounce so the anticipation that crude oil will hold in on its highs and at the same time in the far east we'll see equity markets kind of hold in that spilling effort of giving away everything from last year, it shows us with the stability of inflation scenarios and of course jobs here in the states, looks like there is some fabric here to hold up the markets. >> all right. michael, thank you very much. mark, who's doing the honors? >> here we go with the bells. at the big board, actor ty borl from the comedy series "modern family." at the nasdaqed in the prime minister of lithuania. >> makes me think of a roman emperor. >> i think i got that right. >> i think you did. our market reporters are standing by and we are open down
about 24. bob? >> the earnings in the commentary today isn't quite as boyant as yesterday. that's the big one. and that's why the futures are frankly to the down side a little bit. the adp report was better than expected but isn't really helping the futures. one piece of good news, not only did time warner beat but they increased their quarterly dividend and they also changed their share repurchase program. this is very important because there are a lot of people that care about dividends. since december, 2009, 37 companies in the s&p 500 have increased their dividend. the good news here is february is traditionally the month where you get the most dividend increases. remember they've been cutting them like crazy. you'll see positive numbers in the next few weeks and i'll talk about that very soon. pfizer, which is right over here just opened to the down side here. we talked about it this morning. not only have the earnings been below expectations, 2010 guidance was below expectations. 2012, now they did give revenue and earnings guidance but it was
revised downward and that was another reason why there was some disappointment on the street. walgreens had a drop in january same store sales and again that was kind of unexpected. black & deck derr do a little bit better but remember the sales were really poor here. industrial products and consumer products both saw double digit declines. trader talk.cnbc.com. brian, how we looking at the nasdaq. >> we are opening to the down side, bob. 0.3%, good for about eight points. i want to start with apple because basically the way they got traction with the mac back in the day was get the college kids to use it. now they're working with a company called scroll motion with text book makers to get text books on the i-pad and sell it to colleges. could be less expensive for students and get them hooked on the i-pad down 0.2%. look at the competition. amazon down 0.6%. a quick look at big cap names, research in motion up 0.5% so far. bucking the trend. dell down, and manufacture 0.6% to the downside. goldman sachs comes out, reit rates its buy rating with a
price target of 5.50e. it is now 4.39. bai handicaps google getting out of china, says a 70% chance that might happen. google around the flat line. ubs upgrades gensen to buy from neutral. to bertha coombs at the nymex. >> thank you very much. we're seeing energy prices find their footing getting back into the green ahead of the weekly inventory numbers. obviously the headline today. the api numbers, american petroleum institute numbers which come out tuesday in preview showed a larger than expected build in crude. largely on the back of imports that came and people are surprised because there was an oil spill in one of the major channels down in texas. as far as this morning, an hour from now we're expecting to see an 800,000 barrel draw as far as crude, build in distallates and a build in gasoline of 1.5 million barrels. that might be the wild card because api numbers did show a larger than expected drawdown. as far as natural gas we are seeing it continue to move above
technical resistance levels and finding some momentum. let's head over to rick santelli now in chicago. >> thank you, bertha. we went over last time that the treasury had a bunch of announcements today regarding the kickoff of the refunding season next week with the fed refunding. what's really interesting and i advise all viewers to get a copy is the minutes of the treasury advisory committee meeting. not only does it point to all the issues regarding first quarter issuance and the estimates learned at the beginning of the week or 18% smaller, 392 billion for the quarter january through march, and the reasons why, but also because of two things. first of all, they explain that the average maturity or duration of the u.s. portfolios extending. it wasn't an historic short 48 months four years. it's now 55 months on its way to 60 months. what does all that mean in
english? that all of the debt we issue has a sensitivity not too long ago of basically a four-year security, now it's extending. why is that important? because we've all learned at a young age never borrow short term and lend long term. it hurt in the credit crisis from companies. might hurt in the long run for the treasury. they're trying to do something about it. mark haines back to unchts i remember my second grade teacher teaching me that. thank you, rick santelli. quick check on the markets. the news is not good. we've had a great couple days here. up about 200 points to begin the week so losing 33 on the dow not that big a deal. the nasdaq is down six. the s&p is down five and change. we'll bring in the edge in a second but first here is cramerica on the financials last night on "mad money." >> today's second consecutive rally in the big investment banks, signifies a true bottom. which ones am i releasing from
the presidential dog pound? are you ready skedaddy? goldman sachs and jp morgan. >> i get such a kick out of him. your cnbc edge now with our guests. i really think it ought to be haynes and bowen. good morning, guys. >> good morning. >> you guys, jack, you first. you agree with cramer? >> yeah. i think we do have a little runway here to go. probably between now and the mid year, you know, still a lot of momentum, cash on the sidelines, and, you know, zero percent interest rates going to continue to push that money in jay, what do you think? >> well, i think that the last two weeks demonstrate that structural issues really particularly concerning the legacy of the credit boom can
overwhelm positive news on the economic and earnings fronts and i think that's going to be the story this year where we have a pretty decent earnings recovery driven by cost cutting and some modest top line growth but lurking in the background continues to be the structural issues particularly regarding monetary policy and fiscal policy. i think that's going to somewhat temper the increase. i think we can grind our way higher this year and end positive but i think it's going to be in somewhat of a saw-tooth fashion and i think the returns historical standards are going to be somewhat modest. >> jack, you heard mr. cramer. he's letting goldman sachs out of the presidential dog pound. when you say you like financials do you like the big ones, like the goldman sachs, or i guess there could even be more of an investment banking or a henley fund sort of type of play or do you like the regionals? >> actually we like them both. what we do is really just waeigt the s&p sector so since it's cap
weighted we'll prefer the larger over the smaller. not with standing this proposal, the volcker rule or whatever you want to call it maybe there will be a shuffling. maybe these companies can actually readjust and still maintain a holding company with perhaps a regulated sub and unregulated sub but nonetheless the s&p composition of finances probably going to remain unchanged and, you know, ultimately will be unleashed so to speak on the unregulated side. so i would say all in all i tend to agree with jay somewhat on this. i think we'll find that the year is going to be front loaded. we're going to see almost a mirror image of last year and we're going to get a nice runup for the first half of the year and then realize, hey, state and local governments are raising taxes. the federal government is raising taxes. we're going to see a pullback toward the end of the year i believe. >> got to go, guys. jack and jay, thank you both
very much. >> breaking news. u.s. transportation secretary ray lahood says he wants to talk to toyota directly. now, this comes as problems pop up with the prius. after last week's mass recall for pedal problems. the mass recall he said had to do with the ak sell raltor. the prius problem appears to be linked to the brakes. toyota shares are down another 3.3%. phil lebeau is live at hq with the latest and the significance of mr. lahood's request for a personal meeting. >> he wants to meet with the chairman and ceo of toyota. he is somebody who rarely talks publicly but now you have ray lahood two days in a row coming out and has made very strong comments about his concern regarding the safety of toyota, the comments today saying i want to meet directly with the head of toyota show him just how serious this is and how concerned the united states is. the prius issue is one that has popped up in part because
japan's transportation ministry overnight ordered the company to look into complaints about the prius brakes. here in the united states there have been 102 complaints regarding the prius. now, we've heard anecdotal reports around the country from people who have said we've had unintended acceleration with the prius. it isn't responding as we expect when we drive it down the street. a couple things to keep in mind. all of the recalls involving toyotas at this point involving sticking accelerator pedals involve vehicles built in north america. the prius is built in japan and shipped to the united states. if there is an issue regarding the safety of the prius that takes the whole thing with toyota and the controversy regarding the safety of toyota to a whole new level. the transportation department, national traffic highway safety administration as you look at shares of toyota, it has been investigating what's going on with all toyota models. there is no indication at this point that there is a problem with priuses aside from these
complaints. nobody has found a definitive issue. erin, and mark, that is the latest regarding toyota. it's a story that seems like we're seeing new developments almost every hour. >> all right. thank you very much. we appreciate it. mark, i'm just curious. on that whole issue as phil is going through it you have an issue where because it's so public people are maybe a little skittish and nervous. so something that may be a problem and will get reported but maybe some things that aren't that are just normal little glitches are getting reported because people are skittish and it builds the whole thing bigger. >> i find it interesting there's a lot of skepticism about whether toyota has actually found the problem. >> yeah. >> you know, because -- and i've got to put myself in the skeptic end. not that i -- i don't know anything about designing cars but this explanation that somehow the pedal is not formed correctly or carpet mats can stick against it, that doesn't sound right. >> right. especially this pedal company is cts and also provides pedals to
many other automobiles. >> i find that hard to believe. soet government is going to continue looking into it. they want to investigate the electronics. it's not a physical connection anymore. it's all done by wires like planes are flown by wire. what's next? >> a new kind of currency conundrum which would take some common sense to solve. we know common sense is hard to come by. on this show thank god you have the king of it mark haines. >> would that be a dollar dilemma? >> it might be. >> all right. frank confusion. and at chrysler, owes the government billions in bailout bucks. how they going to pay it back? the man in charge of putting creativity back on the road for one critical part of the company has some ideas and is with us exclusively this morning. we're back in a flash.
pricey? it now costs, mark, about 1.8 cents to produce a penny and nine cents to produce a nickel. this is due to the skyrocketing costs of copper and zinc. those costs may be down, you know, from their peak but this is very relevant right now because you got the budget coming out and in the budget you've got coin printing costs so it's all linked together and is back on the front burner and the question is if it costs nearly double to produce these coins, and the value of the coin, itself, should we just get rid of the coins? what about the quarter? we've been here before. there was a period of i don't know -- >> it was even worse then. >> exactly. the disparity at least in the penny. copper went berserk and the penny became ridiculously inefficient. >> yep. so that's our street poll. should we dump the penny and the nickel? we've put them both in there. cost cutting suggestion from the office of management and budget, mark, has said they want to change the way they're made to make them cheaper. by the way, we do not make our pennies i believe, and if i'm wrong i know i will get ripped
apart here. i don't believe the penny is a hundred percent copper even now. >> no it's not. >> it's a blend. >> it would be too soft. >> but i think they've increase today to try to reduce copper costs already. >> we've outsourced the penny to china, haven't we? >> wouldn't that be a great story. >> just kidding. they'd come back with god knows what inside them. >> oh, woo. >> we want to bring your attention to stocks on the move matt nesto. >> mark you're on to something with chooiina. we have to find out what percentage of the costs is labor versus raw materials on the penny and nickel. talk about western union, talk about plunging worst stock in the russell 1000 this morning down 9%. 37 versus 32 in the trailing quarter but the full year forecast eps and revenues both light of expectations. ch robinson, the trucking logistics outfit out after the close down 8% here today. hitting a seven-month low prompting multiple downgrades today.
what a disappointment. erin? see you soon. >> we'll see you again very soon on this show, mr. nesto. >> what's next? >> there was a lot of whoosh going on in front of us. american car makers under more pressure than ever to bring buyers back into show rooms. chrysler's dodge unit is trying to do that by revitalizing its brand to lure new customers into the lots. here now is the man in charge of the rebranding effort, the president and ceo of the dodge van happens to be one of grio.com's 100 history make ners the making. good to have you with us. we appreciate it. let me just start i suppose with what i have to start with of course the news of the day with toyota. have you seen any difference in terms of customer demand and i mean not just who's visiting show rooms or lots but actual buying that is favoring your cars as opposed to toyota? are we not far in this process yet? >> it's pretty -- the whole issue is fairly young. we've talked to our dealers last night about it.
they've seen minor shopping mostly in the minivan area but not so much. those customers are definitely loyal to the asian markets but the conquest eventually will come. >> the conquest. i like that. that's a man ready for a fight. what are you doing to win that conquest? what are the specific changes happening at dodge to make it sexy again? >> well, there's many steps. we just started bicep rating the brands. you know, the ram brand and dodge brand have separated. our truck side of the brand is expanding into commercial markets and into super heavy duty areas so we want to kind of get out of the shadow, from under the shadow of the truck brand and now position the dodge car brand and that's step one and we'll do that with a new agency where we have awesome creative coming, a more fun loving way, and over time every one of our products is undergoing nothing short of open heart surgery to basically redefine the brand and get the
perceived quality and actual quality back to tier one levels. >> i am told you are, quote, more of a design guy. what does that mean? >> well, my education is actually in design. >> okay. >> do you actually design cars? >> yes. i do. i actually have designers, i have a great staff of artists. i don't pen cars anymore but i sit there and put tape on them and direct which cars get made and pick design a versus design b. it's a lot of fun. >> okay. this might be a mid life crisis question. is there any chance you could bring back tail fins? >> funny you mention that. you'll see the next generation 300, but there is a modern way to imply a tail fin without actually have a seven-inch tail fin on a car. >> mark, an implied tail fin. >> i miss those tail fins. >> he's going to give you an implied tail fin which will be just as good. >> i'll just go out and buy my own and stick them on my car.
>> thank you very much. and he will. president obama getting ready to try to untangle the cats or wrangle the cats or whatever he is going to do. he is speaking to 59 pretty nervous democratic senators. >> but first is it time to add a bit of color to your portfolio? sherwin williams has truly been an amazing run. should you paint it into your portfolio? whwhwhwhwhwhwhwhwhwhwh
we are under the radar this morning to take a look at sherwin williams. which is trading this week at levels not seen since november of '07. so what's behind the stock's stellar performance? is it a sign for investors to jump into the space and paint the town red? here with more insight on sherwin williams and the home improvement sector the equity analyst of morgan stanley, greg, thanks. >> good morning. >> what's going on with sherwin williams? >> they started to see an improvement in some of the lead indicators like we've seen and gave guidance last week that suggests volume should turn
positive at some point this year. sherwin has always been a great business, great free cash flow and if we start to get a cyclical recovery investors are excited about earnings that might start to grow again. >> in the past can you tell me has this stock followed housing trends or has it followed employment trends or what? i mean, i would imagine if your house needs a coat of paint it needs a coat of paint. >> ironically, you hit a good point, we actually downgraded the stock last summer because ironically if things get better paint is a more defensive category within the home improvement space. so we did well with the stock from 2008 into mid '09. we felt sort of in the mid, low to mid 60s it was fully valued. still a great business longer term but we think to play a home improvement recovery which we think is going to happen this year, there are better names to play. >> is sherwin williams -- where is their paint priced relative to some of the competitors that are carried in home depot? >> they are higher priced in the sense that they have focused on the pro contractors so the high quality paint and their
controlled distribution is what gives them a very strong market share with that pro contractor. they do have entry level paints that get down to that sort of $30 price point which is typical where di wires will tend to want to spend so they have a paint and they have a line that works for that customer. >> right. >> but 85%, 90% is pro. >> i'm curious. when it says the stock is trading at levels not seen since november of 2007, before really the entire housing crisis which would seem to indicate at least that the market thinks people spend money on paint, even when they're not doing broader home improvement projects or buying homes, is this the one thing people do is repaint the bathroom or something? >> no. the reality is there's a lot of repair remodel that goes down so if you look at their volumes the last couple years as we went through the housing turmoil, their volumes are running down double digit for a good, you know, couple years. so it might be a little less cyclical than other parts of home improvement that were down 30%. but it's still a cyclical business. and if people trade homes, they're going to fix them up more and therefore they'll change the color of the red
walls in the dining room if they buy a new house. >> thank you very much. greg. appreciate it. sherwin williams highest level since november of '07. >> breaking data after the break. january ism, nonmanufacturing, and oil inventories. >> and here is a live picture. wow. quite a few flags there. that's the newseum in washington where president obama will be speaking live to democratic members of the senate. there's a lot to talk about. we'll have that live for you in two minutes.
we are minutes away from a meeting between president obama and senate democrats. some want the commander in chief to get tough with members of his own party in order to pass health care reform and overhaul the financial system. this promises to be an interesting meeting and we will bring you there when it starts. but first, breaking economic news, rick santelli. >> january ism nonmanufacturing service sector 50.5. and that takes out 50.1 which we've reached a couple times which makes this the best number
obviously since the lows were established on this series. that was in november of '08. but it looks to me a quick down and dirty here that 50.5 is the best level since may of '08. so this is a pretty good number. now, granted it's only a nick above 50 but it's a move in the right direction and it underscores that manufacturing with inventory issues might be much stronger for a while but many more eyes are watching this metric and of course throughout the rest of the hour, we'll break down all the indices like what the employment index in particular did beneath the headline number. erin, back to you. >> thank you, rick. i'm here with bob pisani. the market sort of went, woo, what are we going to do on this one and now just kind of -- >> it's good news. the ism manufacturing number was good, too. >> expansion not contraction. >> and here is the thing about the nonmanufacturing number. it's 90% of the economy. we were traditionally raised and
brought up manufacturing but it's the ism nonmanufacturing, the services that really matter. >> job additions in services this morning on the adp. >> right. and heaven knows there is some point in the bright, shiny future, i hope friday, when we'll actually see job growth. who knows? that would be the first time in two years we've seen a month of print positive. >> it would have to be yes. >> i know we're expecting modest job losses on friday you about number today bodes well for some kind of increase in the near future. in the meantime today a little disappointing if you sit around like i do with no life and read all the earnings reports. it's the opposite of yesterday because yesterday they were really great comments. today they're just not there. it may be the news flow but fromride tower pfizer, doesn't matter. ryder this morning came out and i did mention, ryder's numbers were disappointing. >> ryder was wrong? >> all the trucking names that are sort of to the downside here. not only that the guidance was a bit disappointing as well. we talked about pfizer a lot this morning. you know what the problem is, it's pretty simple. lipitor is off patent in 2011.
they did give guidance for 2012 but revised it downward and still don't have a big drug out there despite the wyatt that's really going to replace those lost revenues at this point. the only other thing that's positive here is time warner raising that dividend and i've been keeping track of this. these are really good numbers. 37 companies have increased their dividend since december and february is a big dividend month. >> that's good. remember, there is one other company that was really great today, begins with a c, ends with a t. >> yeah. >> comcast. >> yes. and the good news here -- >> yes. >> newscorp, slowly but surely seeing an increase in advertising. >> right. the supreme court i guess could really help out on that, too. all right. let's get to the nasdaq and brian shactman who is there. >> wanted to talk about comcast and newscorp really quickly. comcast actually down 1%. good numbers. not necessarily hit it out of the park numbers but if you look
inside the one real bullish thing you can take is they add ed subscribe ners about every segment except voice. newscorp up 6%. they beat on the top line. they beat on the bottom line. they boosted guidance. they upped their dividend. all bullish. the only head winds according to the reports, properties in italy and digital stuff not going particularly well but up more than 6%, erin. so right now we're going to track these stocks all day. a negative story on the short-term stock plays and positive but again just one day blip. back to you. >> thanks very much. we talked earlier about how even though it was up about 4% for the week we had seen a bit of a drop in crude. we're now higher again. let's find out why. >> reporter: the focus of course is going to be on the weekly inventory numbers. tim evans at citi futures says this cob a tipping point day for oil in the sense we've had that move that hasn't been based on fundamentals and now have to get back to the real numbers. api numbers showed a bigger than expected build. tim says the range of draw that we're looking for or build that
we are looking for is 1 million, either up 1 million to down 1 million in terms of crude. the api number was 4.7 million. the big surprise in the api was the drawdown in gasoline. >> i have to interrupt. the president is beginning to -- has come out there and we're going now to washington where the president is meeting with democratic senators. >> -- about where we were. privatizing social security, a couple wars are unpaid for, trillions of dollars of tax cuts unpaid for. let's talk about not where we were but where we are. i want to talk about with each of you some of the things we've done to establish where we are. the first thing we passed with this new president was a lands bill. not very sexy sounding. but we had reviews, editorials
all over the country, significant legislation, the most significant environmental legislation in more than a quarter century. more than 2 million acres of wilderness, a thousand miles of wild and scenic rivers, 5,000 miles of trails, and many other things affecting all 50 states without exception. willy ledbetter came to see me this week with a great smile and a tremendous energy. we passed the ledbetter legislation, equalizing pay. we advanced a children's health insurance program now covering more than 14 million children that can go to the doctor. something that people don't focus on very much but is one of my favorite things that i've ever been involved in is a national service legislation allowing people to be involved in their community, receive a small stipend for doing that,
and then have help to go to college. we did that. we did something relating to mortgage fraud. there are so many problems in housing but they would just be so exacerbated had we not moved in and pass ed the laws to stop people from manipulating people in big, big trouble. credit cards, we talked a lot about what was happening with credit cards but we did something about it. now there's exorbitant fees that cannot be charged and the hidden costs no longer exist. and it's something that as we go home people may not realize the things we did but it's so important as it relates to credit in america today. tobacco -- tobacco, both my parents smoked. all my family smoked. all started when they were kids. no longer. now the federal drug administration regulates tobacco. pretty good. we've been trying to do that for
60 years. economic recovery. job preservation. job creation. the story is yet to be told in that because about 60% of the money is still not out among the people of our country. health care -- we did remarkable things on health care and we have so much more to do. i want to say to each of you senators, you democratic senators from maine to new hampshire to minnesota to louisiana and middle of this country, the dakotas, nebraska, how hard we worked together. there have been some good teams in the history of this country. most of them are noted for being athletic teams. but one of the greatest teams in the history of this country is this democratic team that you're part of and i appreciate it very much. so now where are we going? well, we got a lot to do. the economy, we got jobs,
energy, financial reform, health care, and we're going to move forward. why? because it's good politics and good for the country. behind all of this that i've talked about, is the man from hawaii, the president of the united states, barack obama. >> thank you. thank you guys. thank you. thank you very much. everybody please have a seat. thank you. listen, you guys had to listen to me at the state of the union or at least pretend to listen to me, so i'll try to keep it relatively brief. some opening remarks and then open it up for questions. first of all, i just want to thank harry reid. i recently said he's got one of the toughest jobs in washington
managing an institution that by its very nature is let's face it, you guys are a little difficult to manage. i've been a part of this caucus. i really don't think anybody could have done a better job under more trying circumstances than harry reid. i think he deserves a huge round of applause. now, let me start by saying we always knew this was going to be a difficult year to govern, an extraordinarily difficult year to govern. we began 2009 with a financial system on the brink of collapse, an economy bleeding nearly 700,000 jobs per month, a $1.3 trillion deficit, and two wars that were costly in every sense of the word. we knew that solutions wouldn't come easily or come quickly. we knew that the right decisions would be tough and sometimes they would be unpopular. and we knew that we might have to make them sometimes without
any help from our friends on the other side of the aisle. but we made those decisions. we led. those actions prevented another great depression. they broke the back of a severe recession. the economy that was shrinking by 6% a year ago is now growing at nearly 6% one year later. that's because of the work that you did. harry listed some of the work that you did on behalf of the american people even under these difficult circumstances. extending health insurance to 4 million children, protecting consumers from getting ripped off by their credit card companies and kids being targeted by big tobacco. some things that weren't noted or didn't get a lot of attention, you reformed defense spending by eliminating waste and saved taxpayers billions while keeping us safe at the same time. you gave billions of dollars of
tax relief to small businesses and 95% of working family is here in america. you did all this despite facing enormous procedural obstacles that are unprecedented. you may have looked at these statistics. you had to cast more votes to break filibusters last year than in the entire 1950s and 1960s combined. that's 20 years of obstruction packed into just one. but you didn't let it stop you. as harry mentioned, though, our mission is far from accomplished. because while the worst of the storm has passed, far too many americans are still hurting in its wake. i know you've seen it back home in the shuttered businesses, the foreclosed homes, you've heard it from constituents who are desperate for work, and we've seen it in the burdens that families have been grappling with long since this recession hit. issues that we've been talking about now for years.
the burden of working harder and longer for less, being unable to save enough to retire or to help a kid with college expenses, the extraordinarily constant rising costs of health care. these problems haven't gone away. it's still our responsibility to address them. all that's changed in the last two weeks is that our party has gone from having the largest senate majority in a generation to the second largest senate majority in a generation. we've got to remember that. there was apparently a headline after the massachusetts election, the village voice announced that republicans win a 41/59 majority. it's worth thinking about. we still have to lead. saving and creating jobs have to continue to be our focus in 2010. last year we gave small business
the engines of job creation, tax relief, and expanded lending through the sba. i don't know if you are aware that sba loans have gone up 70%, 80%, which, by the way, indicates the degree to which there is still huge demand among small businesses. some of the banks are saying, well, we're not lending because there's not as much demand out there. there are a lot of small businesses that are hungry for loans out there right now and we've made progress but they're still struggling so i've proposed additional adi aalal i help small businesses start up and hire to raise wages and expand and get credit they need to stay afloat. you've made some of the same proposals as well. we should put them into action without delay. we've invest ed in america's infrastructure, rebuilding roads and bridges and ports and railways and putting people to work strengthening our communities and our country and
as you know, the recovery act was designed so that a lot of that work is going to be taking place this year, not just last year. many of the projects you funded come online in the next six months but we can do more. we should do so without delay. through the investments you made in clean energy startups, we've not only helped put americans to work, we're ontrack to double our nation's capacity to generate renewable energy over the next few years. i proposed additional tax credits that will promote private sector hiring and energy conservation. we should do that without delay. i think like -- ideas like this should be pretty palatable to the other party. they seem pretty common sense, pretty centrist. we should be able to hear their ideas as well. that's why i spoke to the republican caucus last friday. i think it was to the country's benefit that we had an open and frank discussion about the challenges facing the american people. and our ideas to solve them.
i got to admit i had a little fun at that caucus. now, obviously on some issues we didn't agree. but on some we did. and i'm reminded that when it came to health insurance reform in particular i sought out and supported republican ideas from the start. so did you. max baucus, i think he can testify to spending a little time listening to republican ideas. so can chris dodd and tom harkin. you considered hundreds of republican amendments and incorporated many of their ideas into the legislation that passed the senate. so when i start hearing that we should accept the republican ideas, let's be clear, we have. what hasn't happened is the other side accepting our ideas. and i told them i want to work together when we can and i meant it. i believe that's the best way to get things done for the american people. but i also made it clear that
we'll call them out when they say they want to work with us and we extend a hand and get a fist in return. last week, for example, you put up for a vote a bill i suppor d supported, conrad, greg fiscal commission. we were assured this was going to be bipartisan. only to see seven republicans who cosponsored the idea in the first place suddenly decide to vote against it. now, i'm open to honest differences of opinion, but what i'm not open to is changing positions solely because it's good short-term politics. what i'm not open to is a decision to stay on the sidelines and then assign blame. i have little patience for the kinds of political calculations that say the cost of blocking everything is less than the cost of passing nothing.
it basically says, if you lose, i win. that's been the politics in washington for too long and the problem is it leaves the american people out of the equation. so i would just suggest to this caucus if anybody is searching for a lesson from massachusetts, i promise you the answer is not to do nothing. the american people are out of patience with business as usual. they're fed up with the washington that has become so absorbed with who's up and who's down that we've lost sight of how they're doing. they want us to start worrying less about keeping our jobs and more about helping them keep their jobs. they want to see their business done in an open and transparent way. when we took back the senate in 2007 we did so in part because we made a case that we'd be better on ethics and transparency. we backed thaup bypat up bypass most sweeping reform since watergate and beginning to
address earmark abuse. we should be proud of those accomplishments but if we're going to erase that deficit of trust that i mentioned at the state of the union we're still going to have to do more. that's why i proposed that we work together to make all earmark requests public on one central website before they come up for a vote and to require lobbyists to discuss details of their contacts on behalf of their clients with the administration or with congress. that's why working with people like dick durbin who's been vocal on this for a long time we've got to confront the gaping loop hole that the supreme court recently opened in our campaign finance laws that allowed special interests to spend without limit to influence american elections. we've also got to get back to fiscal responsibility and i spoke about this at the state of the union. just ten years ago america had a budget surplus of over $200 billion. remember? people were worried about what might happen with all these surpluses and whether it would create problems in the financial
markets. that was just a decade ago. after two wars, two tax cuts, prescription drug program, none of which were paid for, we faced a deficit of over a trillion dollars, a debt over the next decade of $8 trillion before my administration spent a single dollar. we can't change the past but we can change the future. that's why i'm asking you to adopt a freeze in nonsecurity discretionary spending for the next three years starting next year. we're still having a tough time right now given the economy is just starting to pick up steam. but starting next year. that's why i'm grateful all of you restored the pay-go rules that worked so well in the 1990s. i already mentioned the fiscal commission. we may not have been able to get the votes for a statutory commission but we're going to -- i am going to appoint a commission by executive order because it's important for us to take these issues seriously.
not just for us but for our children and our grandchildren. let me just wrap up by saying this. i know these are tough times to hold public office. i'm there in the arena with you. the need is great. the anger and the anguish are intense. the economy is massive and so as a consequence no matter what lef levers and buttons we press sometimes it doesn't move as quickly as is needed to provide relief to so many of our constituents. in that kind of circumstance, i think the natural political instinct is to tread lightly. keep your head down. play it safe. i said this before to this caucus. i just want to say it again. for me, it is constantly important to remind myself why i got into this business in the first place. why i'm willing to be away from my family for big stretches at a
time, the financial sacrifices that so many of you have made, being subject to criticism constantly. you don't get in this for the fame. you don't get in it for the title. you get in it because somewhere in your background at some point in time you decided there was an issue that was so important that you were willing to stand up and be counted. you were going to fight for something. and you decided you were going to run as a democrat because there was a core set of values within the democratic party about making sure that everybody had a fair shot, making sure that middle class folks were treated fairly in our economy, making sure that those who were on the outside had a way in that led you to get involved in public service. and that's what we have to
remind ourselves. especially when it's hard. especially when it's hard. you look at an issue right now like health care, so many of us campaigned on the idea that we were going to change this health care system. so many of us looked people in the eye who had been denied because of a preexisting condition or just didn't have health insurance at all or small business owners in our communities who told us that their premiums had gone up 25% or 30% and we said, we were going to change it. well, here we are with a chance to change it. and all of you put extraordinary work last year into making serious changes that would not only reform the insurance industry, not only cover 30 million americans, but would also bend the cost curve and
save a trillion dollars on our deficits according to the congressional budget office. there's a direct link between the work that you guys did on that and the reason that you got into public office in the first place. and so as we think about moving forward, i hope we don't lose sight of why we're here. we've got to finish the job on health care. we've got to finish the job on financial regulatory reform. we've got to finish the job even though it's hard. and i'm absolutely confident that if we do so in an open way, in a transparent way, in a spirit that says to our political opponents that we welcome their ideas, we are open to compromise but what we're not willing to do is give up on the
basic notion that this government can be responsive to ordinary people and help give them a hand up so they can achieve their american dreams. we will not give up that ideal. if that's where we go, i'm confident that politics in 2010 will take care of themselves. harry, thank you very much. let me take questions. thank you. thank you. >> the first question, arlen specter, let me tell everyone, people have come to me and indicated they wanted to ask questions. i've taken a list of those. arlen specter is first. >> mr. president, i begin by applauding your decision to place the economy at the top of the agenda, to put america back to work and provide jobs.
i have a two-part question and just a brief statement of the issue. we have lost 2,300,000 jobs as a result of the trade imbalance with china between 2001 and 2007. the remedies to save those jobs are very ineffective -- long delays, proceedings before the international trade commission subject to being overruled by the president. we have china violating international law with subsidies and dumping, really a form of international banditry. they take our money and then they lend it back to us and own now a big part of the united states. the first part of my question is, would you support more effective remedies to allow
injured parties, unions which lose jobs, companies which lose profits, by endorsing a judicial remedy if not in u.s. courts perhaps in an international court and eliminate the aspect of having the itc decisions overruled by the president, done four times in 2003 to 2005 at a cost of a tremendous number of jobs on the basis of the national interests and if we have an issue on the national interest let the nation pay for it as opposed to the steel industry or the united steel workers. and the second part of the question related is when china got into the world trade organization, a matter that 15 of us in this body opposed,
there were bilateral treaties and china has not lived up to its obligations to have its markets opened to us but take our markets and take our jobs. would you support an effort to revise perhaps even revoke those -- that bilateral trading which gives china such an unfair trade advantage? thank you. >> arlen, i would not be in favor of revoking the trade relationships that we've established with china. i have shown myself during the course of this year more than willing to enforce our trade agreements in a much more serious way. and at times i've been criticized for it. there was a case involving foreign tires that were being sent in here and i said this was an example of where we've got to put our foot down and show that
we're serious about enforcement. and it caused the usual fuss at the international level but it was the right thing to do. having said that, i also believe that our future is going to be tied up with our ability to sell products all around the world and china is going to be one of our biggest markets. and asia is going to be one of our biggest markets. and for us to close ourselves off from that market would be a mistake. now, the point you're making, arlen, which is the right one, is it's got to be reciprocal. so if we have established agreements in which both sides are supposed to open up their markets, we do so and then the other side is imposing a whole set of nontariff barriers in place, that's a problem and it has to be squarely confronted. so the approach that we're
taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on china and other countries to open up their markets in reciprocal ways. one of the challenges that we've got to address internationally is currency rates and how they match up to make sure that our goods are not artificially inflated in price and their goods are artificially deflated in price. that puts us at a huge competitive disadvantage. but what i don't want to do is for us as a country or as a party to shy away from the prospects of international competition. because i think we've got the best workers on earth. we've got the most innovative products on earth. and if we are able to compete on an even playing field, nobody can beat us. and by the way, that will create jobs here in the united states.
you know, if we just increased our exports to asia, by a percentage point, by a fraction, it would mean hundreds of thousands, maybe millions of jobs here in the united states. and it's easily do-able. that's why we are going to be putting a much bigger emphasis on export promotion over the next several years. and that includes by the way export promotion not just for large companies but also for medium sized and small companies because one of the challenges -- i was up in new hampshire yesterday. and you saw this terrific new company that had just been started up. it's only got 13, 14 employees at this point. but it has a new manufacturing technique for the component parts in l.e.d. light bulbs, potentially could lower the price of l.e.d. light bulbs, cut
them in half. and these folks, they potentially could market not just here in the united states but this is a technology that could end up being sent all around the world. but they don't have the money to set up their own foreign office in beijing to navigate through the bureaucracy. they've got to have some help being over there. that's one of the things we really want to focus on in this coming year. >> okay. we're going to keep monitoring this the president obviously speaking to democratic senators in washington. let's go to phil beblebeau with breaking news. >> strong comments from the secretary of transportation ray lahood appearing on capitol hill. he has been asked about toyota. a few mints ago he said, quote, we need to fix the problem and not have people put the car in neutral if you own one of these affected cars i say stop driving it right now. return it right now.
strong comments from transportation secretary ray lahood essentially telling the american public if you have one of the models affected you should not continue driving it. we're going to be monitoring the hearing where he is speaking as you look at shares of toyota now down more than 5% on the day. back to you. >> phil lebeau, thank you very much. let's bring in john harwood. the president obviously is speaking and taking questions. what sticks out to you? i guess in particular, john, when you compare this meeting with democrats to last week's with republicans, what's the difference? >> reporter: well, this is much more in the nature of a pep rally, erin. you saw, interestingly, the president, though, batting back that question from arlen specter, the former republican now democrat who faces a democratic primary challenge and he asked the president, are you willing to disrupt our trading relationships with china to help american workers and american union workers and the president said, no. so the president trying to take a stand for free trade there. what i was also struck by in the end, erin, was the president prodding the democratic caucus
to keep pushing on health care, financial regulation, energy. he said if we do the right things the politics will take care of themselves. the politics definitely will take care of themselves. the question is for the democrats are they going to take care of themselves for us or for the other side? because it is not certain at all whether or not democrats are going to get a big payoff from doing, enacting the president's agenda. they hope so but nobody is sure of that. >> thank you, john. all right. what's coming up? >> coming up we've got the money this morning in the transportation sector, obviously a lot going on as we've been talking about. we're continuing to monitor the question and answer session in washington as the president talks about the economy. we will go in there and you'll be able to hear it. what he said on exports was very interesting. >> later investment advice from the man at the helm of the number one rated mutual fund family, the ceo of putnam. and should we dump the penny and the nickel?
you can vote at -- i always have trouble with this -- vote at squawk on the street.cnbc.com. it's a web poll not an e-mail poll. 144 years of financial stability. and still no one knows the sun life financial name. that changes today. i hear you're the clown in charge. so, cirque du soleil becomes... ...cirque du sun life. because soleil means sun.... (gibberish) i'll take that as a yes. (announcer) sooner or later, you'll know our name. sun life financial.
programming, "squawk on the street." right at the top, borders group 45 cents, a 45% move. on fast money last night it was said, brnts ankruptcy is a low probability. this is a tiny market cap and has been battered down but he is the largest share holder and guess he would probably know. csx and five other railroads are upgraded to short-term buy at ubs. nothing is working in a weak marketplace today but if you're down a dime you're actually a winner. union pacific, norfolk southern, canadian national, canadian pacific and kansas city southern all in that short-term buy list now. another transport, another day of troubles, ryder is tumbling. their fourth quarter results as well as their first quarter and full-year forecast all dismal. the market pounding this one down about 6%. interestingly, ryder's in the transport index, the s&p 500, the russell 1000 and the morgan stanley cyclical, so lots of avenues to give ryder a good old kick today. then lastly a big volume here
today. or big trades in the intraday turn-around. you can see the stock was low. citrix systems continues to draw some buyers at low level so it's gone back to even today and the calls i understand are also very active. over to david faber now for the very latest faber report. thank you, matt nesto. interesting tale of two media companies playing out in the stock market today. newscorp up sharply and actually much of the group also up. not nearly as much as newscorp. time warner, though, perhaps the lone exception after both those companies reported earnings in the last 24 hours. there's a look at news. up over 5.5% right now. the stock as you see above or right around $13.50 a share. why? well, the company reported estimates that were well ahead of expectations and also gave a very positive outlook. it is generating a good deal more in revenues and profits than had been anticipated from its cable networks namely the fox news channel, certainly an
incredible powerhouse at that company. and you're talking about a company by the way that's taking it on the chin in a lot of its other businesses that rupert murdock loves, namely newspapers. of course that $60 a share purchase of dow-jones, lord only knows where dow-jones stock would be right now if it still was traded, a publicly traded company. the fact is when it comes to cable nets and filmed entertainment the company is doing quite well. the results from avatar actually will show up in this quarter, hence why newscorp raised its outlook. also raised its dividend and it is benefiting today. not the case with time warner. the numbers there, more or less in line. investors though reacting negatively. again, not that bad. it's down a little over 2% as you see. and it gave a growth rate in terms of outlook for 2010 that was more or less what people again anticipated saying it sees its adjusted eps rate in the mid teens off an adjusted earnings per share number for 2009 of
$1.83. there you see the stock of course. this company has changed dramatically over the last year shedding time warner cable and aol. it is filmed entertainment, cable net works, and it is publishing. cable networks here, not quite the bright spot that they are at newscorp. it's like a $100 million charge. the growth rate not quite what perhaps some would hope for from a company like this. so we'll see. i wouldn't say struggling but not nearly the same show as newscorp. let's send it over to phil lebeau now who's got breaking news. >> we want to look at shares of toyota which are falling hard in the last five minutes ever since comments from transportation secretary ray lahood in washington. he was asked this morning about what people should do if they own one of the toyotas that have been recalled. here's what he has to say. listen to what his advice is to consumers. this is the reason toyota shares are falling right now. >> my advice is if anybody owns
one of these vehicles, stop driving it. take it to the toyota dealer because they believe they have the fix for it. >> this coming one day after he said toyota officials were, quote, a little safety deaf. so it is clear the pressure is ratcheting up in washington for toyota to move even quicker in terms of addressing the issues surrounding these 2.3 million vehicles that have already been recalled because of sticking accelerator pedals. ray lahood also indicated that they are investigating at the department of transportation whether or not there is an issue with the electronics in certain toyota models. we should point out toyota has said emfat cli, in fact they sent a response today, saying they have tested their electronics, time and again. they have had outside agencies test the electronics in these vehicles, and they are confident the electronics are not a problem in toyota models. so that is the latest, guys. we'll send it back you to. >> phil, one quick followup. it's interesting that this could potentially become more than just an issue with toyota. this could become a fault line on the u.s. japanese trade relationship. there's also been some comments
this morning from the u.s. trade representative ron kirk who is saying japan's cash for clunkers program, they had one like everyone else, was way too ownerous and did not allow american cars to be part of it. and so they're now using, it looks like, this weakness over toyota, to try to open up what we all know has been a long standing dispute over american cars in japan and the broader trade issue. so those comments coming out of the u.s. trade representative on the sidelines here. >> all right. the 2010 survey, out earlier this week, ranked 61 fund families based on their 2009 performance across a whole variety of asset types, foreign and domestic. putnam investments came out numero uno. here to talk with us is bob reynolds. good morning. thanks for being with us. >> good morning. thank you very much. >> is this something did you as managers or, you know, was it
just the turn of the wheel as it is? >> well, we did it making changes, especially in the equity group. we went out and approximately last november of 2008 and hired seven managers that have 15 to 25 years experience and then we rebuilt our fundamental research group. we hired over 20 new equity analysts on the equity side. on the fixed income side we had a great team, so that carrot is through, but all that together plus changing all compensation for portfolio managers and research analysts, that their compensation was totally based upon performance so we want the funds that we manage for our share holders to be in the top core of the pier group of the three years and i think all that together really worked. >> i mean, you can't -- here's my point. the putnam voyager fund at one-year returns at 64%.
all of your u.s. large cap equity funds out performed the category averages in 2009. that, you know, that kind of ad mirable record is almost impossible to maintain if you believe at all in the law of averages. >> well, that type of excessive return is outstanding but i think when you analyze a return across all our equity funds and something we're very, very pleased with, if you risk adjust it, there were no big bets, no one big stock industry bet and if you risk adjust it our performance actually gets better. as i was talking with you six months ago and made a comment how, what a great market it is for active managers and that year proved out to be and i think you're going to see the same thing in 2010. >> all right. thank you very much. we appreciate it. >> my pleasure. thank you. and now let's talk about the overall state of the economy. there was a drop in global chip sales in 2009. we're talking about
semiconductors. obviously you can't make anything without them. so it could be one of the best indicators for the economy so what are we seeing for 2010? let's talk about it. semiconductor shares in the meantime have certainly anticipated a recovery at 55% over the past year they are down, though, about 10% just for the month of january. the president of the semiconductor industry association is with us. here now with the forecast and the forecast or the verdict is? >> well, the verdict is good. we're looking at a very solid growth for 2010. current forecast puts us at about 10.2% for the year. assuming we accomplish that, and based on the sales of 226 billion last year that'll put us pretty dloes 250 billion which would be a new record. now, what's pretty incredible about that is the fact that we'd be hitting a new record one year after a downturn. that's quite unusual to recover that quickly. i think what that reflects is the response of the industry, the whole supply chain, to the downturn when it began to unfold
and then manage its way through it very effectively last year. >> but i guess it's just interesting when you look at the u.s. i know a lot of this growth isn't coming from the u.s. but it's smart phones. >> right. >> and your monthly bill on a smart phone is as high as your cable bill. >> right. >> in many cases a credit card bill. and people have so many issues there now. it's almost as if what you're saying is the thing that sticks out that's not like all the others. people are buying these expensive phones and making payments on the monthly bills. so is that the way we're going where things are really getting better or are you worried about it? >> well, that's one aspect of the demand. the high end phones. but the pc, remember, is the largest demand driver. but then you have a lot of other things. the automotive industry is beginning to come back. that's 10% of the demand for semiconductors. there's a lot of electronics there that are going to be continued to be added to that demand as we go forward. so overall when you look at it the gee ogg raffies are solid. china grew by nearly 11% last year. huge market. india is now adding more
subscribers to the mobile phones than anyone else. so i think that when you look at the geographys and you look at the products, we expect pcs to be up about 15% this year. netbooks are nearly 20% of the overall demand. >> incredible. >> they're adding too. not really replacing anything. the market is growing faster as a consequence of these new products coming out and the new applications. windows 7. it's also adding. so there are a lot of good positive dynamics that are driving the market both geographically and in the product sectors. >> windows 7 is doing well? >> it's doing well and getting stronger as we go along. yes. >> okay. what about, kind of tangential to chips, but really in the same basket, cisco, which is reporting earnings i believe today? what do you expect there? good news? >> i really -- i wouldn't forecast anything with regard to that because i just don't know. but what i do feel is that the enterprise is beginning to come back into the marketplace and replace some of the older systems that they have in place
today. as a consequence, that's driving more of the semiconductor demand as well. we didn't see that over the last year or so when things were tight. they all kind of pulled back and waited to see what would happen. so there's pentup demand there now that needs to be satisfied. >> all right. >> george, thanks a lot. pleasure to see you in person by the way. >> thank you. good to see you folks. >> usually we have george remote somewhere. >> all right. we're heading to small town usa next to see if seymour, indiana is feeling the impact of the stimulus money. but first, oh, melissa! >> hey, mark and erin. coming up at the top of the hour we have a jam packed show, two ceos led by time warner's jeff bewkes. find out what he thinks about his company's earnings and more importantly what the outlook is like. we'll talk to the head of denny's. they're giving out free breakfast. we love that. we'll have the details. when it comes to obama's budget we'll tell you which sectors are sure winners and which sector is a sure loser. all that plus the latest earnings and market reaction only on "the call" at the top of
the hour. first "squawk on the street" is back right after this break. what happened? i used to ask my broker for advice. funny how the "best" funds always turned out to be his. what about the funds we bought years ago? yeah. how do we know they're still right for us? td ameritrade does mutual funds differently. with free, unbiased research. like td ameritrade's premier list. it shows me top picks, from the fund experts at morningstar associates. that's advice i can trust. and simple, powerful portfolio tools. morningstar instant x-ray helps us analyze the holdings inside our funds. yep. no more flying blind. you'll find 4- and 5-star funds from leading fund companies. plenty of no-transaction-fee funds, too. that means more of my money stays my money. and real, live investment consultants, to make it all make sense. maybe mutual funds are simple after all. at td ameritrade. announcer: before investing, consider the fund's investment objectives, risks, charges and expenses. contact td ameritrade for a prospectus containing this and other information. read it carefully before investing
crossing road. >> like a chicken. we're going across the country on route 50 to find out ma main street thinks and what's been happening on wall street and we started out in salisbury, maryland. our latest stop and then we went to -- where did we go? oh, yeah. parke parkersberg, virginia. and now we're in seymour, indiana. craig is the mayor of that city ask on the next stop on the road to recovery. good morning, mr. mayor. thank you for being with us. >> good morning and welcome to seemore, indiana. >> we're delighted to be there. okay, you've heard the politicians from both sides and you've heard all of the populist rhetoric. are people in your constituency genuinely upset about things like wall street bonuses. >> there's not a lot of talk
about wall street bonuses as much as health care and jobs in southern indiana. >> jobs, gee, that's a shock. jobs and health care are the two biggies that might turn an election where you are. >> exactly. jobs probably leading the forefront and then health care in second. >> is there a feeling, the president was speaking today just a little while ago the democratic caucus of the senate and he was tying job losses to free trade and things like that. is there a resentment about free trade where you are? what do people blame for the loss of jobs? >> basically, just, you know, i don't think free trade as much as just jobs are disappearing. we just lost jobs and we needed to give something to give tax breaks in this area to increase small business growth. >> mayor, i'm curious what your
perception is of the broad category of let's just call it resentment. do you feel there's a great deal of resentment between wall street and main street or do you think that that very construct is a little bit made up? i think it's a little bit made up. i would welcome wall street to come to southern indiana and talk on the street and see the difference of how we live lives. we think very conservatively in this area and will continue to think that way and anything we can do to grow small business, we're going to do it. manufacturing is a big key in this area. so any time manufacture's down, so is our economy. >> have you seen any improvement there at all? >> slightly. it's kind of a wait and see terminology right now. our big dip was in june of this past year and we've slowly started coming out of, we're at 9.4 unemployment and we're just
under the national average and we're slowly, slowly climbing out of the trench. >> how is your city government handling what i assume is the downturn in tax revenues? >> we've made cuts. we've laid off or not rehired about 20 people locally. we only employ 200 in seymour here. we've lost 10% of our workforce because of budget constraints and not giving pay raises or giving marginal pay races at best. >> thank you very much for your time and appreciate the insight into how things are in seymour, indiana. >> thank you again and come back any time. >> a vote on our poll, should america scrap the penny and the nickel? >> can't do one without the other. >> i would scrap the penny and not the nickel. i'll give them 4 cents not 5 or more.
feeling down and out because he thinks maggie's response was the best. maggie's response was funny unless it actually happened. she said we don't want to get rid of them because we'll soon have the dollar replace the nickel and dollar. funny, maggie, except if you're right. >> maggie may ob to something there. i would have to keep them. all right. we're out of time. thank you very much. what's up on "street signs?" >> we have a lot of things including a special discussion on how much each subsidized sugar job is worth in america. a lot more than you make, haynes, and i don't know what haynes makes. >> here comes "the call." welcome to "the call." i'm phil lebeau withic breaking news. let's look at shares of toyota they've been under extreme pressure in the last half hour, following ray la hood. the stock down more than $5, more than 6% on the day and they started tanking after these comments from the transportation secretary when he was asked what advice he would give those toyota owners who have recalled
cars. >> my advice is if anyone owns one of these vehicles, stop driving it, take it to the toyota dealer because they believe they have the fix for it. >> the transportation secretary la hood also says he would like to meet with the ceo of toyota. he also believes they need to keep the pressure on the company to show, quote, how serious we are, the we being the transportation department, how serious we are about what's happening with toyota. all of this as toyota shops around the country prepare to start repairing these vehicles perhaps as soon as this weekend. secretary secretary lahood was also asked about whether or not electronics are a part of the problem at toyota, and here's what he had to say. >> we've also had complaints about the electronics. we will be investigating the electronic components that are in these cars to make sure that they are safe and if ty