microsoft is trading lower. i think there's a lot of negativity because there were expectations that windows 8 would we the blowout product that everybody thought it would be eight months or so ago. we heard it from intel. >> and they missed on the windows numbers and they missed not too bad but people put everything into this windows rollout, and it's 25% of their business. so i'm not sure that people should be dwelling on this, but they look at where pc is going, and it's going to get worse. but the good news is that the corporate customer was billing out. it's positive. if you look at where microsoft was and their inclination to give some capital back, this is a story that i think people could get excited about. coming into these numbers they had a brutal three months. since their last call, you saw that the stock had really very little in the way of expectations. i'm a little surprised at how badly they've done this, but the whisper was higher. people thought it would come in at 77, it came in at 76. not a b

we were talking about microsoft's earnings which came out at the same time as microsoft. look like they were a scent light but let's get through more. jackie d'angelis digging through that release and instant reaction from compass. what did you think of the report? >> i'm very pleased with at&t's report. revenues are out which is show me why they are a bit light on the -- >> just to reiterate what you've said. it was penny less in terms of the eps, but on revenues we were slightly higher and that's been positive for the stock, but also looking at the guidance that at&t gave. they are saying for the 2013 eps, they are looking for the upper single digits or higher than that and looking for revenue growth exoceting 2% and a lot of investors concerned about ifoents given apple's report. activated 6.8 billion ifoepts in the first quarter, versus 4.7. >> looking at the higherless -- the number coming out at 1.19%. a little worse than expected, and the company saying they are expecting completion of its 300 million share repurchase as early as -- it's up charginged, closed down

microsoft knows this as well. so this could be a very natural pairing for them. >> reporter: but a pairing could ruffle more feathers between microsoft and its other computer maker partners. still, analysts say even if microsoft decides against investing in dell, the software giant, which is now sitting on more than $68 billion in cash will have to spend some of that money soon. ruben ramirez, "n.b.r.," new york. >> susie: our market monitor tonight is bullish on the stock market and says there are many choices for investors to pick up cheap stocks. he's john rogers, founder and chief investment officer of ariel investments and its flagship ariel mutual fund has tripled in value since march 2009. john, this is the first time you are our market monitor, so welcome to "nightly business report." let me begin by asking you, here we've got the stock market at these new levels. why do you think this momentum is going to continue? >> well, as we talked to companies all around the country, we continue to hear that, you kn

microsoft knows this as well. so this could be a very natural pairing for them. >> reporter: but a pairing could ruffle more feathers between microsoft and its other computer maker partners. still, analysts say even if microsoft decides against investing in dell, the software giant, which is now sitting on more than $68 billion in cash will have to spend some of that money soon. ruben ramirez, "n.b.r.," new york. >> susie: our market monitor tonight is bullish on the stock market and says there are many choices for investors to pick up cheap stocks. he's john rogers, founder and chief investment officer of ariel investments and its flagship ariel mutual fund has tripled in value since march 2009. john, this is the first time you are our market monitor, so welcome to "nightly business report." let me begin by asking you here we've got the stock market at these new levels. why do you think this momentum is going to continue? >> well, as we talked to companies all around the country, we continue to hear that, you kno

clearly, there are going to have to be assured that microsoft will firewall dell from the core microsoft, so that dell isn't mammothly advantaged. you know, lenovo, hewlett-packard, acer, those companies are going to want to be assured that this partnership won't put them at a disadvantage. but yeah, apple, which is another vertically integrated company, clearly would face a stronger partnership, the stronger microsoft-dell partnership, as a result of a successful engagement like this. what about microsoft's new surface that's coming out on february 9th? will this help the company? > > well, that is getting kind of interesting, because you would think that part of this deal might be that dell might take over service from microsoft. when you're making a huge investment in the company, competing in the company that you are investing in would seem to be counter-strategic. so, i would think that it would be far more likely that dell might negotiate with microsoft a way to take over the service effort from microsoft, bring that up, while still allowing the service effort to operate in perhaps

this is a make-or-break year for microsoft. how is this doing? >> you know, so absolutely they have rolled out a lot of very radical new products. windows 8 in particular. it's their flagship product and they brought a whole new approach to it and the results that came this quarter on a very difficult macro backdrop were right in line. were pleasing. in fact, the windows division grew at 24% against a pc market that declined by 6%. we like what microsoft is doing. we like the software that they're making. it's good product. they have multiple revenue streams. the stock trades at 10 times and it's going to grow faster than apple in the march quarter. >> susie: you have a buy on the stock, so what will really drive it higher s it just slowly these window products, the tablets, anything else? >> you know, also the surface tablet that they sell. you know, we tell investors that microsoft needs to only sell a very small number of these for it to become meaningful if they can sell just a million a quarter that has a nice impact to their revenue line. u

this is a make-or-break year for microsoft. how is this doing? >> you know so absolutely they have rolled out a lot of very radical new products. windows 8 in particular. it's their flagship product and they brought a whole new approach to it and the results that came this quarter on a very difficult macro backdrop were right in line. were pleasing. in fact the windows division grew at 24% against a pc market that declined by 6%. we like what microsoft is doing. we like the software that they're making. it's good product. they have multiple revenue streams. the stock trades at 10 times and it's going to grow faster than apple in the march quarter. >> susie: you have a buy on the stock, so what will really drive it higher s it just slowly these window products, the tablets anything else? >> you know, also the surface tablet that they sell. you know we tell investors that microsoft needs to only sell a very small number of these for it to become meaningful if they can sell just a million a quarter that has a nice impact to their revenue line. unlik

what microsoft did with windows. the problem is that there are no economic incentives to maintain a cohesive platform and the result of some people like amazon have made kindle fires out of the thing. they're incompatible with everything else. and in technology they would say this product has forked. it has all these different versions that don't speak to each other. so you can't write one application on android and have it work across the products. that's a problem. well if i were google i wouldn't be trying that. i'd go wait a minute, my world is the world of the web. and there's going to be a next generation web. there's a new technology called haiti million 5, that's the programming language around which the web is built. so if you think what's the web built in, it's built in h.t.m.l.. there hadn't been a new one for 12 years. if you were google and you dominated the old one i would have thought the logical strategy was to try to obsolete apps by giving people something to -- where the -- gave the publisher total

that kind of plays to microsoft's strepgz. now, we need to show people that's the case by building these wonderful new cloud services. if you want to look at what your kids did or what you did in the past, now it's so hard. you've got photos here leathers there, bills over here. it's completely disorganized. in the future, with the right privacy controls which is a tricky part of it, your whole life of where you went, going back and sharing things with others you think they would be interested in. it's going to be utterly different. we're in a phase of great change where software and interface count a lot. you have at least six companies seizing this future -- >> rose: i hear you saying microsoft will be fine because software is key. >> i believe that. >> rose: is that the essence of what you're saying? >> i think microsoft can surprise people, and sometimes it's good when people are underestimating you. and i think-- oh, yeah, come on. x-box has been a huge success. don't go too overboard on me. it has done some wonderful thi

. >> that is exciting waiting on microsoft. microsoft has been pretty flat going into the close. you can see it is in the wait and see mode for the quarterly report. david: let's talk about good news which is netflix, if you own netflix yesterday. sandy and were covering it. we couldn't believe the pop it had after-hours and exceeded that during the day trading. >> tissues for apple shareholders who are drying and need a cool cloth for the net flicks folks. david: extraordinary. 42%. >> completely beat the street. [closing bell rings] david: big, big moves verse. the overall market not moving all that big, but these big movers on both the upside and the downside. we have a mixed picture on all the indices here. we have the dow jones up 50 points. might settle around that mark. looks like it is settling a little lower, pulling back. the s&p up just a fraction right now. much less percentagewise than the dow jones. nasdaq of course taking all of that apple bad news in stride, leading that index down into negative territory. down about 23 points the russell 2000 having a little bit

that up. >> they have the sound machines with the ocean noise, the microsoft call. >> the microsoft conference call. but that is it. i know that mcdonald has been heightening the zzz product, their sleep products. microsoft ought to add another line of business. >> it would do well. >> lunesoft. >> quickly touch on starbucks. those shares are rising pre-market. posting a 13% jump in quarterly profits. revenues beat forecasts. global same-store sales jumped 6% helped by strength in the u.s. and china/asia/pacific region. i think it was a real relief because of what we heard from the other companies doing business in that part of the world. >> so much to like in that conference call. china, two-year constant. three-year comps, mid-60s. moving into an incredible number of cities. at the same time they're doing the operating margin expanding. you've got a crimping operating market. four cities they're kicking butt in, st. petersburg, moscow, beijing and ho chi minh city. >> they'd probably be drinking a skim latte -- >> they would. >> i could see lenin getting off the finland station an

yesterday we had a former microsoft senior vice president talking about how they shake things up at microsoft. the company sells software to microsoft. i think you agree, i think you believe steve ballmer should go microsoft. is that correct? >> microsoft has an opportunity to become one of the most valuable companies, the most valuable company in the world and embrace generation cloud. people embrace devices differently. everyone at laptops, tablets, phones, microsoft has a chance to embrace a new generation. it is not doing -- it is not doing it fast enough. they have an opportunity, x box is one of the most successful product. the home pc of today. on the enterprise they have an incredible windows phone that should be targeted at replacing black berries while x box -- stuart: when you create software and selling and microsoft uses it. you are talking that microsoft, talking about a great opportunity. i want to talk -- i want to talk about the management. you may be unwilling to criticize steve palmer but i want to know what you really think. should they change direction at microsoft? >> bi

microsoft will come into its own this year. buy it. it might go -- >> you're laughing. >> blodget is laughing at you. >> no he's laughing at you. >> what i hear is cheap stock. >> not cheap. revolutionary. take the pcs, everyone in a year or two from now will be on their pc, touching it all over the place off his ipad on it. that's where the business will go. >> if the business goes into that, microsoft is in trouble. the pc biz as soon as shrinking. why? because the cell phone business is exploding and the tablet business is exploding. microsoft launched the surface. you know how many they're selling? about 40-1 of their tablets versus ipads. >> they will take over all of r.i.m.'s business. >> they will take over blackberry and that will catapult them? >> i'm talking about where the business is going. in terms of research in motion going down, microsoft will go forward. it's revolutionary. they love it. we talked about why apple is not doing well? they're not revolutionary. this is the first time that microsoft has come out with somet

let's start with microsoft. what do you think about this stock? it was trading lower last night after the close. > > we saw earnings per share right in line. the whisper number was 77, estimates were 75, came out 75. right in line. revenues were just a tad short. they were about $150 million short or so. the big thing for microsoft right now is how is this windows 8? how is this integrating into their entire macro... lets call it "product base?" that is what their basic platform is now for the coming years. they have the new tablet coming out in two or three weeks. how are people accepting this windows 8? that is what we really have to sit and digest and see what the numbers are on that. but i will tell you that microsoft traded down last night to about $27.20 or so. $27 is really a pretty solid support area here. so i think that this is a great place to nibble and probably get in. > starbucks also traded lower after the close last night, but the company went as far as to back its 2013 numbers. why was this not good enough for wall street? > > i'm

microsoft was up near the $60 range back in 2000, the rest of the stocks, everything they lost, microsoft has not, why not say steve ballmer, you need to find a mobile hotshot to run this company, you need to hire jonathan ives from apple but why not get rid of all along? >> that point has been on a lot of investors' minds over the last few years. the board seems to support him. as long as he has board support he is in place but retirement age of 60 could be coming. certainly a fresh face, a fresh set of eyes are a great way to brand the company, wearing a black turtleneck. dennis: microsoft invests in $2 billion and $22 billion buyout of dell but once again they are going into the old fading business. why doesn't microsoft by the rim? >> that opened the big can of worms. they do better by letting rim stand on their own. the potential deal has a lot of interesting implications because dell is making the transition to being a cloud service provider too so it is not just about shoring up their legacy pc business but providing a new way to deliver ip storage and applications. dennis: we saw

microsoft a newer company. >> they announce a significant return of capital that will help. >> microsoft at 30, 27. look, this company needs omg and it need it s it now. miniipad, all the things they said, constrained, ipad constraint. we want something that just says, listen, can i just -- get into fine arts for a second, all right, go there to spots and dots, forgive me for visiting the metropolitan -- the museum of modern art. need to be -- got to get beyond the four walls of the canvas here. right now, another four walls of the canvas story, something that takes the leap from rembrandt too cezanne, not happening. >> not too shabby. >> i wasn't going klimt. >> one of the most profitable quarters in the history of tech, down 10%. that is silly, isn't it? >> huh? it is going to overshoot. frankly, it is now underneath the intel poll, which is galling. it's galling to them. you talk about the buy back and the buy back, they made it sound like, yeah, we got a buy back, like a -- like i don't have a pfizer by back going. >> don't buy back stock, it felt do -- >> maybe in today. maybe go to

. >> will microsoft give investors to cheer about? software giant reports earnings after the bell today. while the dow and s&p are flirting with all-time highs, set in october of '07, microsoft is basically going nowhere, down 5% over the same period of time. john fortt is on that story as well for us. john? >> yeah, tyler, the street is looking for around 75 sent in eps on 25.1 billion in revenue, the decline in the pc market looks to be down 5 or 6% year over year. looms pretty large over this report. analyst are expecting the bulk of the revenue contribution to come from the business and server and tools divisions. ibm suggests enterprise spending might actually hold up. that a good sign for them. windows isn't expected to do that badly, just over 5 billion in revenue bolstered by businesses refreshing pcs with windows 7. that would be pretty good considering that number i gave before about pcs being down year over year. so we will see. we will also get a strong showing from the entertainment and devices division where xbox and kin

microsoft didn't own equity as i reported it would not. a debt security of some kind. he would still control 50% of the overall equity in private dell. that would give him enormous power, along with silver lake to do whatever it is he wants. one of the key considerations here will be our shareholders' interests being looked out for by the special committee of dell right now in terms of allowing him to pay them what should be the highest possible number that they can get. >> for their shares. >> right. >> thanks, david. >> all right. >> good stuff. >> see you later. >> did he say he'd do the balcony in the orchestra financeing? >> only mezzanine, not the rest of it. >> 37 minutes before the close bell. the dow jones industrial average is higher by 47 points as we head into the close. >> do you think michael dell likes opera? >> don't answer that. a private joke. >> thank you. >>> who has more creative fees right now? did you hear about southwest asking for $40 if you want to board first. some people are actually paying that, so should you love the stock? symbol l-u-v lo

that is good for microsoft and probably a negative for google h. >> that's why we see microsoft stock up perhaps a third of a percent. you know, you have been very enthusiastic about this. yelp is now down 5.3%. are there ore companies that you think are going to get hurt by this particular announcement? >> some of them are not public, but foursquare is a company that's built itself on this kind of recommendation and if facebook gets this right, it could be bad for a number of private internet companies like foursqua foursquare. >> i think foursquare will do well in the long run, but, you know, it's something i can tell you in their office right now they're like really wondering. >> fascinating. >> scott, do you want to comment? >> i apologize. i didn't realize my mike row phone was open. this puts the instagram a little more into perspective. facebook does say today that the first version of graph search focuses on four air yas. that being people, photos, places, and interest. >> absolutely. very good point. >> great to have david here as well as he's one of the resident persons on f

so what exactly is the new product from microsoft? it is a nice up grid upgrade existingofficecece programs and applications that you know and love. can connect 20 gigs of storage, skype. and, the stock not really moving today. this is the next step in the evolution. first it was windows 8. for lack of a better. [audio difficulties. millions of other operatings system users out there. lori: thank you, shibani, so much. coming up next hour shibani will sit down with actress and microsoft office 365 spokeswoman, fet listy huffman of "desperate housewives" fame. >> that is very cool. melissa: case-shiller reporting home prices are on the way up, citing a 5.5% increase in the to city index. jeff flock is in geneva, illinois, what markets are worth looking at and how homebuilders will take the news. jeff? >> i will give you the secret to success even in a tough market. first the good markets and the bad markets. look at winners in the case-shiller home price index first of all. it is the places that did the worst during the recession. plac

microsoft has other areas -- at least microsoft has other areas beyond pcs that they're focusing on growing. and look at those numbers tonight. all the various different segments they grow double digits. >> those are cue cards you could have used for last four years. it doesn't work. that's the catch all phrase. >> i don't agree with that. >> ever see civil war movie where -- >> not all ideas -- >> they line up shooters row after row after row and then they shoot them down row after row after row. those areal have y le havvalue have died in the graveyard of microsoft. >> dr. j, who made the more compelling argument? >> i want that to keep going. this is something like antemy. i think the surface will be a big winner for these guys. they're moving the right way. i'm a bull on this one, sorry, steven. >> speaking of debates, we had a spirited one on netflix last month. here is what joe and stephanie to say. >> joe, our bull, stephanie, our bear. let's debate it. >> this disney deal in 2016, in my estimation, places a put underneath the stock itself. >> it got domestic issues. you got the comp

bill gates as microsoft's big search engine is better than google's. what's next from microsoft to move forward? that is coming up with bill gates in davos. n't a thing at a? it's lots of things. all waking up. connecting to the global phenomenon we call the internet of everything. ♪ it's going to be amazing. and exciting. and maybe, most remarkably, not that far away. we're going to wake the world up. and watch, with eyes wide, as it gets to work. cisco. tomorrow starts here. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." >>> what's next? what do you see as the most important goal toward economic growth. >> we've learned the hard way in mexico that the cost of civilit

and by the way, i own no stock in microsoft. i sold they will ten years ago and never touched them again. stuart: then, you, sir, are a very smart guy. i was the guy who bought them ten years ago and nothing's happened since. joachim kempin, we appreciate it, sir. >> thank you. stuart: how do we feel about ourselves, about our future? not that good. a new gallup poll shows only 39% of you and us are positive about the state of the country. this is the lowest reading on optimism since jimmy carter was in office. joining us now, who else, but kirsten powers from the daily beast. >> feeling positive today. stuart: i'm wildly positive. and you listened to the president's speech you and i both want to restore prosperity and optimism to the united states and to do that, i think you and i agree we've got to have economic growth, we've got to have it. do you think that the president's policies as enunciated in that speech are going to give us 4 or 5% growth, do you think so? >> well, my crystal ball wasn't working totally perfectly this

there's not a lot of growth in microsoft's products. it will probably be a moderate performer after these earnings come out. i think you'll get a good boost short term. longer term microsoft has serious growth issues, so i think it's a company to be avoided. >> all right. we'll leave it there. gentlemen, thanks very much for joining us. so appreciate it. we'll watch all of those names next week in a busy earnings week. over to bertha coombs with a quick market flash. over to you, bertha. >> reporter: the s&p and dow both up 1% this year ending at five-year highs, and when you take a look at the dow jones industrial average, five stocks are closing at new highs for travelers, j&j and also 3m, they closed at historic highs. 3m, the best performers, up 2.5 this week. >> thanks so much. the fed knows everything. transcripts from our 2007, pour cold water on that. shocking details of what was said and what wasn't said as the financial crisis was unfolding, and later, which batmobile would you buy in the one from the 1960s tv series. goes up

we are talking about microsoft. and we are covering all angles straight up for you and let's begin now with apple. because yesterday's results really make it everybody panic. but let's talk about apple from a valuation perspective. right? this thing could still be cheap. joining us now is roger cape, president and founder of input technologies associates. roger, what i did this morning is look at apple, still right now, number one, exxon, google and wal-mart. on price to sales, a ford priced earning basis, on peg ratio basis, apple is trading at discount to other three biggest names, even though it's growing more quickly. why? >> right. well, that would indicate a buy, i would say. apple is a great company. the apple stores were full, not only through christmas, but through new year's, and right into january. the enthusiasm for product that has never been higher. they have a tremendous cash flow. you know, people think the stock is expensive because its got a high number. but they forget tech stocks during their gro

no microsoft products were reported stolen. but from what i understand, microsoft makes a great tablet. >>> let's check in with jeff for a look at tomorrow. >> cold, some dense fog. dense fog advisory for the east bay and south bay. we're going to get showers wednesday night and thursday. it could go so cold we'll get snow at 1,000 feet by thursday morning. >> thanks for joining us tonight. jay leno's next. >> see you tomorrow. bye-bye. ♪ [ female announcer ] no more paper coupons. no more paper lists. [ dog barking ] ♪ no more paper anything. safeway presents just for u. ♪ save more. save easier. saving more, starts now. just for u on the safeway app. >> announcer: it's "the tonight show with jay leno," featuring rickey minor and "the tonight show" band. tonight, jay welcomes bill maher, from "snooki and jwoww," nicole polizzi and jenni farley, the music of miguel, and "headlines." and now, jay leno! [ cheers and applause ] captions paid for by nbc-universal television captions by vitac www.vitac.com ♪ [ cheers and app