MORNING COFFEE

SEC Adds To List Of Investigations At Banks. The SEC has opened a preliminary investigation into possible conflicts of interest among firms that sold municipal bonds and then stood to profit if the bonds failed. The probe seeks to determine whether firms bet against the bonds and, if so, whether that fact was properly disclosed to investors. Several states are investigating the issue as well. California's inquiry is focused on Bank of America (BAC), Barclays (BCS), Citigroup (C), Goldman Sachs (GS), JPMorgan (JPM) and Morgan Stanley (MS). This comes on the heels of similar charges that firms bet against mortgages they bundled and sold to investors.

More Cuts In The EU. Portugal announced new austerity measures which include higher taxes and a wage cut for government employees.  Spain announced similar plans earlier this week. And Italy may have to also, due to its lack of growth and huge debt.  Some analysts are still questioning Greece’s ability to repay its debt.  In a statement Former Fed Chairman Paul Volcker said the EU’s fiscal crisis carries the risk of a "potential disintegration of the euro."

Upgrades

FirstEnergy (FE): Argus raised their rating from Hold to Buy and placed a target price of $45.00 on the company.

IRobot (IRBT): C.K. Cooper raised their rating from Hold to Buy and placed a target price of $30.00 on the company.

Office Depot (ODP): Oppenheimer raised their rating from Underperform to Perform and placed a target price of $7.00 on the company.

Downgrades

Netflix (NFLX): Merriman lowered their rating from Buy to Neutral.

Coverage Reiterated/Price Target Changed

NVIDIA (NVDA): Kaufman Bros reiterated their Buy rating and lowered their target price from $22.00 to $18.00.

Earning Reports

Blockbuster (BBI): Reported Q1 EPS of -$0.33 missing estimates by -$0.19 on revenue of $939 million.

Nordstrom (JWN): Reported Q1 EPS of $0.52 missing estimates by -$0.03 on revenue of $2 billion.

Nvidia (NVDA): Reported Q1 EPS of $0.23 beating estimates by +0.02 on revenue of $1 billion.

·         Futures: Dow -0.7%. S&P -0.7%. Nasdaq -0.6%. Crude -1.8% to $73.07. Gold +1.3% to $1245.70.

·         Asia: Japan -1.5% to 10463. Hong Kong -1.4% to 20145. China -0.5% to 2697. India -1.6% to 16995.

·         Europe: London -1.8%. Paris -2.6%. Frankfurt -1.4%.