>> curiosity unbounded. heading towards the end of our program. let's bring in scott wapner who is about to take over with the "half time report." i see the markets turned positive. >> what do you make of the volatility? when we were doing the show together we're down 80. then we come down maybe 30. now we're positive. >> very different from last year. you know, very different. we thought the volatility might come back but with tapering. they always said that, of course, with a potential, if a ceo is not to buy back their own stock, scott, at the rate that they did last year. >> it certainly teams to be a total change of sentiment, along those lines, simon, where people were willing to buy the dips and selling the rips as they say. really any bit of positive momentum in the market they seem to be laying into. we'll see if this holds. have a great weekend. look forward to seeing you on monday. welcome to the "halftime show" from post today. twitter's moment of truth. the company delivers the first earnings report tonight. will the stock live up to the

hype? activist backlash. a new alliance is fighting back against the biggest and baddest investors on the street. we're going to tell you who stands to win and why. and up in smoke, cvs will no longer sell cigarettes. let's meet today's starting lineup. jon that jairian on the latest unusual activity. buying or selling. pete najarian on why big pharma is his biggest sector. and mike says volatility is back but time to embrace it. and milton of lord abbott who is brace for a bummer of a jobs report on friday. we start with what the market is doing today. stocks have been all over the place, struggling to break the losing streak. the nasdaq is on pace for its worse week since june of 2012 if dow and small caps nearing correction territory. it seems we've gone from buying the dips to now selling the rips. how low do we go and when does this selling stop? pete? >> jon, go to you guys first.

volatility is enough to make you go crazy. markets all over the place today. >> right. and it's all about temperature, believe it or not, judge. what we're hearing over and over again from everything from the jobs report to car sales to virtually anything involves the temperatures which have been extremely cold. so that's great in the short term for people that are long natgas. natgas out on the curve isn't moving at all. that april contract is spiking like this. and as far as the market and its reaction with these jobs, i can't believe that we're going to actually have a good jobs report, scott, given that we've had temperatures down, down, down in the month of january. >> pete, you look at the stocks that had pretty good earnings reports, at least the stocks that reacted positively. >> right. >> two earnings reports. they laid into him right away. ralph lawyer we ralph lauren was down, merck was skidding on the flat line. >> i think what really take away from what we're seeing in the market, scott, is when you see this volatility you're looking for these opportunities because

i think this inflated volatility is telling you something that there are concerns, there's enough uncertainty out there that people are trying to figure out their way through the marketplace. is it the weather, the data? it's probably a combination of both. as you dissect that you go through the earnings. i look for any and every opportunity of something that's giving us good earnings and if they sell that off, that's the opportunity. whether that means it's jmj or merck, look at the big pharma names today. the big pharma names, the leg. the fanl names were not bulging despite the fact the s&p were getting hit to the downside. volatility was escalating. look at the financials as the leadership they have been today. >> murph, let's entertain the question that "usa today" puts on the front page of their money section. it may be time now to buy the dip. who knows how low this is going to go or how deep the correction we're in goes. is it time to start thinking about that? >> to pete's point. companies coming out with good earnings, those are the companies you want to be buying. is this the absolute bottom? i can't say that. we pulled the dow over 7% from the highs.

you look, you start putting together list of companies you want to own. like ralph lauren which came out with solid numbers. sometimes you just have to hold your nose go in and buy that. that's a name i would look at, ralph lauren. as far as the overall market goes, you're going to -- volatility is here for the present time. so embrace that volatility. trade that volatility. look for areas to get in low, get in there, and then when you get the rips, sell them like everyone else is. take your profit. >> i would say, judge, watch what, you know, what mike isn't patting himself on the back for but luckily he got me into some of this. general worth gen worth today is exploding. it sold off hard. murph, i know it's one of his picks, but now making a nice move to the upside today. >> pockets of strength. you just have to look long and hard. myriad had a really good quarter. blew away the numbers. noted technical analyst made a lot of calls in his career. not all of them have been

correct. he was on "squawk box" this morning. had interesting things to say about where he thinks we could go. let's listen to that. we'll react on the other side. >> what we're seeing right now if the market does unravel, i think you will have a 60% correction, 40% off the high. which put us at 1100. back to vix, 21 right now is significant because this could be the one time the market doesn't respond and goes lower and the vix goes higher. >> i've said, his track record may not be the greatest of late. however, when a flame thrower comes up like a demark and says that, it gets headlines. it causes people, milton, to think that milton is with us. it causes people to stop and think about where we are and may be a critical stage in this market. >> i think we are -- the pullback was almost -- it was easy forecast. we had a great year. we had a lot of need for tax selling. we went into january with that. it's probably extending into february.

there are some concerns in this marketplace. we at abbott see this as a fundamental point of view, not as a trader. still a buying opportunity. valuations are there. kirks are coming in positive. it's not like they were a few years ago. this is an opportunity. >> what about demark's point though. if we get a couple more down days, momentum is going to start to really develop to, you know, use the weather pun of what we're dealing with here in new york city, the snowball is going to get bigger and start going downhill quickly. >> that could happen. i don't think it's going to but it could happen. the issue here is not to try to find the exact bottom. if i was giving advice to small investor today i would say take what money you want to put into the market, divide it into four parts and buy every other week, one quarter of what you want to put in. that way if it turns out, all right. so you're buying higher. if it goes down, you're getting that little piece. >> judge, i like tom demark. this is not said in a way that

i'm trying to rip him. but he called a top i believe in march of last year when the s&p was at 1560. we're 200 points above that so i would listen to what mr. demark said but i would not trade based on what he says because you would have missed 200 points calling that top and staying out. >> farber is out there as well. >> he's been the same way. >> i hear ya. but again, their headline grabbers. >> they are. >> force you to stop and think about where we are and put everything in perspective. >> scott, when you want to go into the market is not when everyone is out there and headlines is saying dow is going to 40,000 or 50,000. that's when you want to be more conservati conservative. right now for these people saying i missed this rally this year, right now a great opportunity as milton says to start picking up names out there. use this fear out there as your friend. >> milton, you're also an economist so you have a good thought process about where the economy is. big sigh of relee today, right?

ifm services report. larger part of the economy and the manufacturing part. maybe for tens a little bit better. >> it's a funny thing because we got such good numbers toward the end of last year. a little too much enthusiasm. we are saying to people tone it down. this is still a slow growing economy. then all of a sudden we got one or two bad statistics. consensus jumps to the other side. it's going to flip-flop. this is an opportunity. if you look at the fundamental value and underlying economic trend which is still growth, slow growth but still growth. >> milton m a great weekend. mortgage rates don't seem to be giving a boost to housing stock. diana olick has that story. mortgage apps are dropping but rates are falling. >> it doesn't make sense. but the fight to the bond market sent yields down. mortgage rates followed the yields. the ten-year treasury on agency mbs pricing. look. the average rate on the 30-year

fixed moving from 4 1/2% early last week to 4 1/4 at the beginning of this week. like skod said, it did not move mortgage applications much. as a whole, basically flat. up just .4% week to week according to the mortgage bankers association weekly survey. re-fis edged up 3%. they are still down nearly 63% from a year ago. applications to buy a home, down 4% week to week and down 17% from year ago. we know more than a third of today's housing market is running on cash. but we also know home sales have been slowing through the winter months. some of course blame the weather. others blame too high prices. this week we've got the full year numbers in and prices rose 11% in 2013 from 2012. that's the biggest annual jump since 2005. as for the week re-fis, the mba's chief economist says it's burnout. so many already re-fied last

year when rates were in the 3% range. we've got lots more online. scott? >> diana, appreciate that very much. take what diana said. look at where mortgage rates are. the fact that interest rates are falling. what's up the housing stocks? >> i think right now i stay away, avoid all housing names. homebuilders really. and the main reason for it, judge, is if you think about this, rates have gone from 3% down to 2.6 range. the housing stocks rallied on that news. rates are coming down i'll argue because you're seeing weaker economic data out there or perceived weaker economic data out there. i don't see how you can take that and say lower rates just plow into the homebuilders. i think these guys need to reset 10%, 15% lower. >> i don't think they have to go that much lower. inventories are down. margins are better. she talked about prices going up. where are they going up? from first-time home buyers and the next step up. we heard that from pulte and d.r. horton. as the market has been sold off

those names are almost unchanged right now. >> since you and i debated it at 2302 a week ago, it's held its own very well. i think you get a great -- i just believe you get a great opportunity in these names lower. >> spring housing season coming up. sale season. >> to your point, awfully hard to look for a house these days in a large swath of the country which is either under snow or ice, or a combination of both like we are here. coming up on the "half," today is twitter's moment of truth. the company is set for first ee earnings report. we're going to talk to the analyst who first gave twitter a buy rating and then downgraded it. cvs is going to stop selling tobacco products later this year. it could burn or boost a number of stocks in your portfolio. we're trading them all later in "the half." with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings

of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. bulldog: what's this?

bulldog: mattress discounters presidents day sale ending? but mattress discounters has the largest selection of memory foam mattresses under one roof! comforpedic, icomfort, optimum... even a queen-size sealy gel memory foam mattress for just $497. and wow! four years interest-free financing on the entire tempur-pedic cloud collection. [yawns] the presidents day sale

is ending soon. ♪ mattress discounters let's do our trader blitz. six stocks, six trades on six stocks. be quiet, pete. making news today. merck trading levels not seen today following earns. pete? >> when you look at the earnings, for merck they missed on several category bus they didn't miss the pipeline. everybody is looking ahead. what does their pipeline look like? they've got a cancer drug in their pipeline. they're put that in for approval ro cess. people are excited about it. i think it's going higher. >> ralph lauren posting

earnings, shares falling to the lowest level since december of 2012. i mentioned this earlier, murph. >> bizarre move. 21-point swing today intraday. they beat, they raised revenue guidance. and this to me is a quality retail name. if you see a drop like this on good numbers, as i said, you jump in, you pick some up here. >> what i will say is that i think we was matthew at jpmorgan that we had on "squawk on the street" this morning who said some of the comments on the call related to guidance, margins, and other things were a little bit disappointing. the stock took a downturn on those comments. first blush, look at the quarter and say, okay, that's why it's so important to listen to the comments from the coe ceo or cf. >> that tumbled the stock and now i think some people sow it down trading in the mid 140s. and they said, okay, here there's value. we're back up 152 range. >> gaming revenue in macaw last month jumped year over year. light of estimates and wynn

resorts took the brunt of that. >> lds, exact same story. 7% number. what i would do, judge, is what i did last week after josh and i debated it. take profits. babies born, hit the dpitexits. it traded up to 220 almost last friday. that was your exit call. >> jcpenney. pete, stock today dropped below five bucks for the first time ever. >> let's see where it is now. >> it's bounced pretty nice. >> a little bounce. will r. you short it now? >> i puts in this. i own puts in this stock multiple months out. i still think this name struggles. i think the management team is trying their very best but it's a difficult process. under five this thing could hit towards one. >> ch robinson missing earnings estimates on the top and bottom line. that was due in part to a 5% drop in trucking revenue. shares trading now at their lowest level since august of 12 making it the west s&p performer. >> completely different story. they came out and give you terrible guidance. never do well on the conference calls, these guys.

they never do well on the quarterly earnings or they haven't the last five or six times. stay away from this name. no reason to buy it now. >> doc, buffalo wild wing got hammered, hammered. >> yeah. and one of the biggest problems is the ceo correct ly cited thee could be increased labor costs going forward. this is part of that minimum wage debate that's raging right now. i got to believe that buffalo wild wings and a number of others in that space is going to take a hit based on that. >> some says the stock is priced to per fngs fekz. great run over the last 52 weeks. you have any sort of blip anywhere and it's susceptible to a downturn of the magnitude we're seeing today. >> big sell-off today. i would wait until it gets more towards 115. >> twitter to announce the first earnings report ever since going public three months ago. the stock has more than doubled since then. will the numbers justify the momentum. suntrust is a top ranked analyst. downgraded twitter to hold in december. this, of course, coming after he was the first analyst to put a

buy on that stock with the $50 price target. bob, welcome back. >> thanks for having me. >> what are you expects tonight? >> looking for 210 million in revenues. looking for a little over 250 monthly active users. quite honestly i think the take away from today's call won't be about the quarter which we expect to be good, the take away will be about guidance and how management handles the first earnings call. you've got a dichotomy of the underwriters of the deal have much lower estimates going forward than the nonunderwriters. any sort of color or clarity as far as what they can do in top line and margins for '14 and beyond will be helpful. >> fundamentally it seems this is a business that has momentum. active users, closely watched. and mobility for certain. >> yeah, the monthly users are growing about 30% or so year over year. so look for investors to focus there and look at acceleration. one metric we like a lot is the timeline used per monthly active user to level of engagement, how

much people are using it. that's been going flat recently. see an acceleration there. investors would like that. >> bob, as far as the revenue growth, we saw those incredible numbers on fous facebook. what are you anticipating? you've been in front of this story for a long time. when you put that $50 price tag oint way long before it ipo'd. what are you expecting to shear tonight? >> social and general had a very good. facebook is almost a must buy when you talk to advertisers nowadays, particular lay at last 4q. twitter is getting momentum but it's not the must buy yet that facebook is. it's done well but it's not the sto story for tonight. >> facebook i agree with you is a must buy. when you look at twitter, can't they take a page out of facebook's book and, in other words, facebook went through all the missteps that they did and i believe that twitter would need to go through the exact same thing. looks like maybe they're taking a page out of faith facebook's book and skipping right over the

issues. is that possible? >> yeah, i think you're dead on. i think investors expect that as well, to learn from what facebook did wrong and what they're doing right now. whether it be video revenues, e-commerce, payments, a lot of optionality there which is why we built up revenues up to $4 billion from the current level of $650 million. >> bob, be well. we'll talk to you soon. >> thanks again. >> jack, that was a good point. how do you trade it? >> thank you, wednesday. i think you stay long facebook. that's the way i've played it. i wouldn't be in twitter here in front of the number. although i think there's an opportunity for them to shock everybody and to stock takes off. tinge risk reward isn't there right now. i'm on the sideline. >> twitter stays below that base. for that reason i think their growth percentage could be incredible on the revenue side. i don't have a position in there right now before the close i may actually try to put on a sort of an upside position. >> i've had the same position

since the stock was 58. still long the stock here. and i think that costelo when he gets on the call, he's done almost everything right, from the ipo through. i think it's going to be a very strong call and keep the n. mind the door is very small. entrance or exit in this name. there's still a relatively small amount of float. what, 1/8 or 1/10 of what facebook has. watch that. people that want to buy it on 2 dip might not get that opportunity. >> let's stick with technology and talk pandora now. internet radio provider surging 30% so far in 2014. with earnings in just a few hours is now the time to sell? let's debate it. pete is the bull. murphy is the bear. pete, you got your case. >> i think there's upside in pando pandora. they own this space. 70% market share. very similar to the way google owns search for so long. they own this space. we talk about growth, you talk about just about every single metric. we have seen growth, whether it's the active users or the hours listened or any of the

subgrowth. all of those things are growth area where's they continue to grow and take market share. they do have competition out there but so far they've been able to weather that and they've gotten themselves into other areas of growth including the auto. so, murph, even though this is a valuation that neither one of us can get our arms around, the growth right now, we'll worry about valuation another time. >> let's look the growth and 24e7b valuation. the growth on this thing, pete, it was up at 30% two quarters ago, last quarter dropped down to 13%. while it's still growing i think you can see the growth slowing down. then you have to look at the elephant in the room which is the valuation. for 2014 numbers, assuming they hit analyst expectations you are trading 110 times. that to me is way too high. when you is a lot of other names coming into this space. yes, they control it now but you have the apples out there, the googles out there. you don't know who else could be coming in. lastly, insider selling in there which makes me say too expensive for me. >> it's made a huge run. you can understand why the insiders discipline would be take a little bit off.

we talked about that with under armour. doesn't mean you take it all off. insiders didn't take everything off. they didn't take a huge percentage off. they're just taking some off into this run. i think like morgan stanley talked about, $40 is in their future. >> doc? >> to me, scott, beats and it e itunes have not taken market share yet. will they have strategy to do so going forward? we'll have to see. that move with at&t could help beats. but right now i'm sticking with pete and pandora long. >> no. >> shocked. >> oh, boy. >> if you would ever take the bull side of one of these cases. >> can we call my wife? >> somebody is going to accuse doc of being the east german judge. i don't know. >> with the figure skating. i like figure skating. tell us who you think won that debate. tweet us at cnbc fast money, use #bull or #bear. we do have breaking news in the sports world, dominic chu,

what is it? >> we got this idea we knew that thursday night games are going to be up for bid by the nfl. now we know who won it. nfl on thursday nights will be broadcast by both cbs sports and by the nfl network. they've all inked a deal. cbs sports to produce all games in the 2014 season's thursday nightlineup by cbs sports. they will produce all 16 of those games. eight of them will be broadcast on a simulcast basis by the nfl network and cbs and the other eight games just by the nfl network. phil simms and jim nance, two, of course, very recognizable names in cbs sports will anchor the programming and nfl network talent will be used in the pre, post, and halftime portions of the show. cbs one of those names we're going to watch. >> watching it right now. stocks at the high of the day. >> everyone is talking about the nfl, slow down, interest is gone. why did we have record numbers for super bowl, including the

fact it was a blowout by halftime and the second half. because people are fascinate bid this sport. i think everybody out there, the content folks understand, they want to have that content. great news by cbs. they've been doing a great job over the last multiple years adding to the content. this is one more feather in their hat. >> this stock has had a run and a half, doc. >> it's a real issue that a lot of folks with the nfl network didn't have access to those thursday nights and this is a big move for cbs. could be a ratings windfall for them. >> one thing you taught about the blowout in the super bowl. i think what's interesting is everyone stays tuned in for the commercials. why don't other shows, program sporting events have great commercials like the super bowl, people would stay tuned in. help revenue. >> no doubt about thanchts coming up next, you may have just seen the chart. it is a bad day to be a 3d printer maker and investor. one of our traders is on the wrong side of that one right there. we're going to put him on the hot seat over 3d systems, big drop of 16%. plus, news flash. it'sll c out there.

morgan brennan is live in sully, iowa, with a special report. hey, morgan. >> hey. man, it's 3 degrees here in iowa before if wind right now. all the cold weather is leading to propane shortages in the midwest and north east. we'll more on that after the break. [ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity.

call or click to open your fidelity account today. when does your work end?

does it end after you've expanded your business? after your company's gone public? and the capital's been invested? or when your company's bought another? is it over after you've given back? you never stop achieving.

that's why, at barclays, our ambition is to always realize yours. ♪ welcome back to the "half time show" where the plunge and temperatures are sending propane skyrocketing. surge the in demand is putting the pain in propane. morgan brennan is live in sully, iowa, with that story. morgan? >> hi, yes, it's very cold and it's causing demand for propane to keep on skyrocketing. we have new data out today showing propane inventories nationwide are down. we're looking at a draw of 830,000. all of this has really pushed prices to record highs for the last week of january alone.

the national average hit $4 a gallon. that was a 30% increase from the week prior. here in eye oh wra where we are, prices surged 80% hitting $5 a gallon. in some parts of the state. all of this has propane retailers rationing their supplies as well. we spoke to one vendor here in sully, iowa. he's been selling fuel since the '70s. he hasn't seen prices surge like this since then. >> stay on the the subject. wild day for natural gas. commodity diving after litting a four-year high. let's go to jackie deangeles and the "futures now" crew. >> they are hitting records that we haven't seen since january 2010. anthony, you were here with me at the nymex. give me your take on what is happening with natgas here. >> jackie, one of the most extremely volatile days i've seen in natgas in a long time. very difficult to trade.

here's how i'm approaching it. tomorrow we get supply numbers released. expecting a draw of 273 to 277. if we come up to the high end of that range, 277 in the market rallies, i'm selling into that rally because i think a lot of the cold and the weather has been factor into prices. >> want to get your take on this, brian. you're watching natgas as well. what do you think of the volatility and how you would want to trade it? >> jackie, volatility is the word. i've been around watching and studying volatility long enough to tell when things move around like this it's speculation. fundamentals have gone out the window here. when you see the level of volatility in nas gas you have to worry a blow up top is around. i think you're price point now is basically the closing print of natgas yesterday. around this 530 level anywhere below there you can short it and hang tight because i think this blowoff top might be in place right now with the wild swing we saw today. >> for more on natgas and everything else that's moving head to futuresnow@cnbc.com. >> thank you.

doc, you have a trade here. >> keep in mind how fast this moves, scott, because we've been drawing down this natural gas which those two just talked about so eloquently. we've been drawing it down substantially. that's the spot contract. the further out on the curve they've been down there in the mid $4 range. even though it spiked up to $6, the only contract spiking up there is the one that's the short-term contract, that april contract. those others are flat. you could see another spike higher on any cold weather and we're going to have a cold weekend in the mid west. >> yeah. >> i would be a buyer. murph? >> cabot oil and gas. cog is a name we've been involved with in the past. no position right now but it's two points off the 52-week high through the $42 range. there's more upside for cog. not so fast, josh brown. traders are quick but not always right. last month josh made a bullish bet on 3d systems. let's listen. >> companies in this stage of development should be acquiring. they can get companies like this gentle giant studios today.

really doesn't cost that much but it adds to the effect of them being the leader in the space. ic that continues. i'm still sticking with the trade. i think it breaks 100. >> yosh is on the phone now. josh, what do you think today? this thing is getting hammered. >> yeah, so a little perspective. i bought it in the fall of 2012 at $30. i'm up 101%. i left a lot of money on the table by sticking with the trade. i'm not going anywhere. the stock is down about -- up about ten points off the low. so it's off about 16 or 17%. you know, it pretty ugly. i would prefer not to be in this stock when they come out with full-year earnings guidance that the street doesn't love, but what are you going to do? longer term, i think they can get back to that 30% earnings growth trend that they were. it's still going to be an expensive stock. lit still be 60, 70 times earnings. there's no way around that. i still think it's the second or third inning of 3d printing.

i think it's going to radically author the way industry works over the next decade. so i got to take my lumps and hang out in the stock. i'm not really that worried. >> yeah, i mean, would you be -- i guess you can believe in the fundamentals of the story, i suppose, but at some point for a momentum name like a 3d, once momentum starts to dissipate and it breaks, you've got a problem regardless of the fundamental of the story, right? >> scott, let's look a at lodger term chart. it's happened four times before and each time that's led to even further new highs. the most recent example is one year ago. in february of 2013, this stock traded from 50 to 30. so there were people at $30 that said, oh, no, the momentum broke. it's over. we could look at netflix, how many times that got cut in half. if you're a momentum tradered and you're in for short term you probably bloour out of the name and that's fine. when it dropped from 90 to 70. you're probably not in it right now. when i brought into the company almost two years ago, the idea

was that, look, i have no idea how big this could get but i think it's revolutionary and i'm willing to deal with this. and unfortunately today is one of those swings, you know, for the downside. and i'm meeting it but that's life. that's trading. >> yeah. josh, thanks. >> thank you. all right. our own josh brown. coming up next, not so fast. carl icahn is offering an alternative to icahn's activism. we're going to tell you what it means tofor the stock and how t trade it. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪

[ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim from td ameritrade. ♪ we asked people a question, how much money do you think you'll need when you retire? $500,000. maybe half-million. say a million dollars. [ dan ] then we gave each person a ribbon to show how many years that amount might last. ♪ i was trying to like pull it a little further. you know, i was trying to stretch it a little bit more. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. [ man ] i looked around at everybody else and i was like, "are you kidding me?" [ dan ] it's just human nature to focus on the here and now. so it's hard to imagine how much we'll need for a retirement that could last 30 years or more.

so maybe we need to approach things differently, if we want to be ready for a longer retirement. ♪ ♪ ♪ save get a sealy queen set on befor just $399.osturepedic. even get 3 years interest-free financing on tempur-pedic. keep more presidents in your wallet. sleep train's presidents' day sale is on now.

welcome back. a war of words breaking out between activists investor carl icahn and one of the country's largest pension funds over what apple should do with its cash hoard. as you probably know by now apple or icahn wants a bigger buyback but calpers wants icahn

to stay out of the way. josh lipton spoke to both parties in this battle. josh, what did they say? >> fists are flying between two big investors over the future of apple. on the one side, carl icahn, on the other, calpers, the country's largest public fence fund. the two are fighting over apple's buy back program. icahn proposing a $50 billion byeback on february 28th. apple recommends shareholders vote against the proposaproposa. they're committed to returning $100 billion to shareholders by 2015, anne simpson senior portfolio manager at calpers agrees with apple and has a serious problem with icahn's activism. >> i think this is more sound and fury than sensible advice. the long-time owners should be there backing apple in a rational, sensible, fishtd deployment of can't fapital but don't want the company to be

distracted by short term noise. >> icahn is firing back saying that simpson's priorities are misguided. it is a shame, icahn tells me, that anne simpson is more interested in spewing pejoratives than improving corporate governance in this country, which calpers is in a position to do. over the last ten years, through october 31st, 2013, the last eight returns are available. calpers generate and annualized return of 7.1%. icahn enterprises over that same period posted an annualized return of more than 26%. of course, icahn and calpers have very different investing styles. icahn carves out positions in companies and then rattles boardrooms for change. calpers, one of the largest institutional investors, a traditional bye and hold pension fund with as sets of $277 billion. so who is right when it comes to apple, calpers or icahn? we'll see who prevails on

february 28th. scott, back to you. >> josh, the interesting thing here at least among many is that through its, you know, last several years calpers has been active at times as well. so, you know, for it to suggest that it has a problem with, you know, his style of activism, i would think is a little bit dis disdi disingenuo disingenuous. >> when i asked mr. icahn about that and the essential charge of calpers that he was a short-term investor that he was just interested in getting in and out, icahn, you know, to his point said, listen, that's not always true. i'm also a long-term holder. i had biogen since 2007 and federal mogul since 2001. icahn was saying sometimes i'm short term but i'm equally long term as well. >> interesting story that's developed here. what do you think of it? >> i think the efficient deployment of capital is what a anne simpson talked about. i don't agree with the whole

carl icahn's push for this buyback but i do agree as jon pointed out many times, give us a plan. what are you doing this w. this cash? let's start seeing some of these acquisitions. let's use that capital effectively. i don't buybacks are the most effective right now. >> i agree. i bet if carl was sitting here amongst other things he would say this is what he wants. the stock is reacting positively to this. just to get some notoriety around it is playing into his hands already. i think this helps. calpers wants a buyback but over longer period of time. both sides are going to get what they want. >> the other thing is, doc, whether the short-term noise comment towards the end is unfair or not, i mean, carl has a big position in apple. it's still only maybe little north of 1% of the outstanding. but by dollar amount, it's large. he's given no indication whatsoever publicly that, you know, he's a hit and run guy on this story.

in fact, if anything, he said the other. >> right. and i think the only way carl would be a hit and run on this one is if it traded north of 600. so you've got 100 points of upside before that even starts to happen. and like pete said, my whole issue isn't that they have to do a buyback or any of these other economic plays but they have to verbalize a plan. if they do that, judge, then i'm happy and i think most shareholders including calpers will be happy. >> all right. as activist investors become more active than ever, newly formed organization is coming together to fight back. that's where shareholder director exchange comes in. it's an initiative made up of board members and executive members like vanguard and black rock. so joining us now is vanguard's glen borun on what they hope to accomplish. welcome to the show. good to have you on especially following this story we just spoke about regarding mr. icahn and calpers. >> thanks for having me.

>> why is vanguard interested in participating in this new ventu venture? >> we've had long realized the engagement of companies in which our funds invest and we think that by socializing the best practices that we've observed among many companies to a broader set of investors and companies all investors can benefit. >> i mean, it would seem to you is jesuggest or one could make e argument that your mere presence in this new alliance suggests that vanguard's taking sides in the battle with activist. >> absolutely not taking sides. you know, we see -- we see value in ongoing relationships and discussions with companies and activists. we, as activist situations present themselves, we talk to companies, we we talk to activist investors. and what we're really looking for for the benefit of our shareholders is the best ideas going forward. what course of action, what ideas are going to result in long-term value creation.

not a short-term pop in the stock price but long-term value creation for the benefit of our fund shareholders. >> what would your opinion of an icahn or a loeb or ackman for that matter if you don't want to address either one of them by name, but in general, what would vanguard's position be on activists? >> there's not a stock position on activists or activism, per se. it really comes down to what's the case in the instance of each individual stock, each individual activist situation. you know, we don't think either activists or companies have a monopoly on the best ideas. and what we want to understand as long-term investors in a case of our index funds, practically permanent investors, what's the best course of action to ensure long-term value creation for all shareholders. >> but can you make the argument that you guys at vanguard, you're buying, you know, ain

apple, for example, because you have to. you're not doing the, let's say, the deep work that an activist may be doing. maybe they have an advantage and that maybe they know more, maybe they can cause significant change that would actually add shareholder value. >> well, and that may, in fact, be the case. but i don't think it's either one way or the other. and the fact that we're in the case of the index funds not buying particular stocks because we want to but because they're included in the index means we've got to engage to make sure that companies are taking those actions that are positive from a long-term standpoint because we don't have an exit strategy. >> my last question. does this suggest that the vanguards of the world, the black rocks of the world, are going to be more public and more vocal in the way that they view activism on a specific stock basis, because ordinarily you really don't hear that much from the big institutional holders. >> i don't think this translates into a higher public profile for

our views on individual firms or individual activists. i think what it sets the stage for is a broader discussion and dialogue with companies. if we think about engagement only as activists insurance, if you will, we're really missing the bigger picture. the opportunity for investors and companies to engage on issues of long-term consequences really the benefit to investors here. >> glenn, interesting topic. we know you guys don't do this publicly that much. we appreciate you coming on to talk about it. >> thanks. >> all right. guys, this is interesting. it's certainly an interesting idea in this new era of activism that we're in. it should be noted that of all of the parties the activists weren't invited to the party in terms of this new alliance. but it will be interesting to see what develops from here. >> and these guys are the mouthpiece for the shareholders really because a lot of folks end up owning through the vanguards of the world, owning their shares that way.

and most people never vote, but these guys are their mouth piece. so the people that own these big chunks of stock, for them to be a mouthpiece, that's important. >> hard to argue, too, with some of the things that lobe did at yahoo! for the stock price and what carl has done on many instances as well. >> agree. >> stocks have gone up as a result of thanchts cot. cvs announces it will sacrifice $2 billion in sales and stop selling tobacco. what does that mean? we'll give you the trade next. plus, s&p downgrading puerto rico's debt to chunk stat tusz. halfway down the field to our low pressurefully still wide open tailback. i call it the annexation of puerto rico. >> not bad. >> all right. as the risk worth the reward in this trade? we'll going to have that answer and more when we come back to post 9 live here at the stock exchange. the dow is down seven. mine was earned in korea in 1953.

afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. anybody have occasional constipation, diarrhea, gas, bloating?

one phillips' colon health probiotic cap each day helps defend against these digestive issues with three types of good bacteria. i should probably take this. live the regular life. phillips'. [ male announcer ] even more impressive than the research this man has at his disposal is how he puts it to work for his clients. morning. morning. thanks for meeting so early. come on in. [ male announcer ] it's how edward jones makes sense of investing. coming up on "power lunch" top of the hour, protecting yourself in this volatile market. we will show you how with some real actionable voice. plus the market guru. he saw the sell-off coming on "power lunch." we will see what he's forecasting now. and two of silicon valley's most prominent women in venture capital teamed up for a venture of their own. we have the very first broadcast interview on "power lunch" straight ahead, 1:00 p.m. eastern.

get you. cialis tadalafil for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. to manage your money.r guy around 2 percent that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you.

welcome back. the downgrade of puerto rican debt by s&p is hitting many u.s. municipal bond investors. 70% of muni funds own that territory's debt. we have a 23-year fixed income veteran who joins us to weigh in on what this means for investors. hans, welcome. i didn't realize until today it's the third biggest issuer of

municipal bonds behind new york and california. that's why it's so serious. >> and it's in every muni portfolio out there. it's interesting, my background is really emerging markets. i was involved in the restructuring of argentina and greece and i think that what everybody is missing in this is you're not supposed to evaluate this as a domestic u.s. issue. it's a sovereign debt crisis. >> so what do you do? >> i think at this point, if you own the bonds, you have to be ready for a very complicated workout of some sort. this is not an issue of liquidity. there was a deal that was being proposed to puerto rico where they would get some new financing above 10%, puerto rico said no. without this financing, you have to start thinking about a restructuring. with the financing, it would have just kicked the can down the road. >> you have issues flairing up as it pertains to emerging markets. their currencies have been volatile. where would you put money to work in the face of this?

>> well, in the case of puerto rico, i would wait for the capitulation trade. i think everyone was in denial with greece and you have to wait to see what the price action ends, when everybody starts going for the exits. the one thing that's important is with the downgrade, a junk rating with puerto rico, that doesn't mean that the funds that own it have to sell. it just means they can't buy more so you're not looking at almost concessionary financing like they have access to last year. i think in the general emerging markets, with the selloff you're seeing some really great buys in places like argentina and venezuela, two year duration, one year duration, paper north of 20%. >> thanks for coming in. >> no problem. back after this.

let me talk to you about retirement. a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.

♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade. welcome back. the results are in. you said murphy won the debate. >> how about that? >> way to go.

congratulations. >> thank you. >> let's do final trades. start us off. >> sticking with micron. >> doc? >> pipelines have been hot. williams, wmb. >> pete? >> like facebook off twitter tonight. >> have a great day. see you tomorrow. "power lunch" starts now. "halftime" is over. "power lunch" and the second half of the trading day starts right now. >> the first thing you need to know this hour is that the nasdaq has been jumping wildly again today, off the lows right now. we were down 50 points on the open this morning. now we have a decline of about 15 points. just before the recent drop we had a market watcher who on "power lunch" said watch out, the dip is coming fast and he was right. it's an old friend of mine, as a matter of fact. not that you asked. he's back with us today. we'll see what he says about the markets right now. and atlanta, pay attention. we had snow and ice overnight here in the northeast. it's making its