MORNING COFFEE

Intel (INTC) posted better than expected quarterly results yesterday after the market close. earnings of +$0.40 beating estimates of only +$0.30 per share. Revenues rose +28% to $10.6 billion. Chief Financial Officer Stacey Smith said in an interview. “My expectation for 2010 is that we’re going to see robust unit growth.” “The consumer segments of the market will stay pretty strong, and I do believe we are going to see a resurgence in PC client sales.”

Obama Attacks Banks.  As expected, President Obama announced his plans for a bank levy (Tax) yesterday, which will bring in at least $90 billion from 50 top financial firms over the next ten years. The President in a speech spoke of "obscene bonuses" "twisted logic," and said "we want our money back, and we're going to get it." The problem is most of the firms have already paid back TARP, plus interest and the ones not included in the new levy (Tax) are the one that have not paid it back, General Motors and Chrysler.

Sartwood vs. Hilton.  Starwood Hotels (HOT) stepped up its lawsuit against Hilton Worldwide, adding new allegations to a lawsuit filed last April over corporate-espionage charges. Starwood claims Hilton stole over 100,000 sensitive documents and used them to pursue a rival to Starwood's successful "W" hotel chain. The newest allegations say that Hilton's misconduct reached the highest level of Hilton's management, including its CEO Christopher Nassetta.

Chancellor Merkel To Resign.  German officials are denying rumors that German Chancellor Angela Merkel is going to resign.  The Euro is being heavily sold off and was recently down -0.8% vs. the dollar.

Unions Are Exempt From Tax.  Yesterday, Union leaders announced that the White House and Unions have agreed to an exemption of the 40% tax on Cadillac health insurance plans for union members and government employees.

JPMorgan (JPM): reported Q4 EPS of +$0.74 beating estimates by +$0.13 on revenue of $23.16 billion vs. $26.8 billion. In a statement the company said "Though these results showed improvement, we acknowledge that they fell short of both an adequate return on capital and the firm’s earnings potential... While we are seeing some stability in delinquencies, consumer credit costs remain high, and weak employment and home prices persist. Accordingly, we remain cautious."

Economic reports to be released today are: CPI, Empire Manufacturing Survey, Capacity Utilization, Industrial Production and  Michigan Sentiment

Upgrades: Comerica (CMA) BMO Capital Markets changed their rating from Market Perform to Outperform.

 Intel (INTC) ThinkEquity changed their rating from Hold to Buy with a target price of $25.00.

Downgrades: Paychex (PAYX) Janney Mntgmy Scott changed their rating from Hold to Sell.

Coverage Initiated: Xilinx (XLNX) Broadpoint AmTech Research initiated coverage with a Buy rating and target price of $30.00

Coverage Reiterated/Price Target Changed: Intel (INTC) Credit Suisse reiterated their Outperform rating and changed their target price from $27.00 to $30.00.           

·         Futures at 7:00: Dow -0.4% to 10620. S&P -0.5% to 1139. Nasdaq -0.5%.

30-year Tsy +0.19% to 117-00. 10-year +0.15%.
March crude -0.7% to $79.33. Gold -0.8% to $1,133.50.
Euro -0.9% vs. dollar. Yen +0.3%. Pound -0.2%.

·         Asia: Nikkei +0.7% to 10982.1. Hang Seng -0.3% to 21654. Shanghai+0.3% to 3224. BSE -0.2% to 17554.

·         Europe at midday: FTSE +0.1% to 5505. CAC -0.5% to 3998. DAX -0.6% to 5955.