MORNING COFFEE

Cost of Fannie and Freddie Keeps Rising. New estimates show the cost of bailing out both Freddie Mac (FMCC) and Fannie Mae (FNMA) could reach over $685 billion according to Standard & Poor’s.  Initially the bailout of the two mortgage giants was estimated to cost a total of only $200 billion.   So far $134 billion has been spent to prop up the companies but the slow housing market could require the companies to receive another $280 billion.  In addition restructuring or creating companies to take the place of the two fallen mortgage giants will likely cost taxpayers another $400 billion.

Upgrades

MetroPCS (PCS): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $15.00 on the company.

bebe Stores (BEBE): Janney Montgomery Scott raised their rating from Neutral to Outperform and placed a target price of $8.00 on the company.

Downgrades

Midas (MDS): Morgan Keegan lowered their rating from Outperform to Market Perform .

Coverage Reiterated/Price Target Changed

Skyworks (SWKS): Sterne Agee reiterated their Buy rating and raised their target price from $22.00 to $25.00.

NRG Energy (NRG): Wunderlich reiterated their Buy rating and lowered their target price from $28.00 to $26.00.

PG&E (PCG): FBR Capital reiterated their Outperform rating and raised their target price from $49.00 to $52.00.

Earning Reports

Activision (ATVI): Reported Q3 EPS of $0.12 beating estimates by +$0.03 on revenue of $857 million.

Amylin Pharmaceuticals (AMLN): Reported Q3 EPS of -$0.35 in-line on revenue of $156 million. 

Clearwire (CLWR): Reported Q3 EPS of $0.58 beating estimates by +$1.19 on revenue of $147 million. 

Fluor (FLR): Reported Q3 EPS of $0.02 beating estimates by +$0.28 on revenue of $5.5 billion.

Kraft (KFT): Reported Q3 EPS of $0.47 beating estimates by +$0.01 on revenue of $11.9 billion. 

Microchip Technology (MCHP): Reported FQ2 EPS of $0.63 beating estimates by +$0.05 on revenue of $382 million.

Starbucks (SBUX): Reported FQ4 EPS of $0.37 beating estimates by +$0.05 on revenue of $2.8 billion.

·         Futures: Dow -0.3%. S&P -0.45%. Nasdaq -0.3%. Crude +0.1% to $86.60. Gold +0.1% to $1384.60.

·         Asia: Japan +2.9% to 9626. Hong Kong +1.4% to 24877. China +1.4% to 3130. India closed.

·         Europe: London -0.2%. Paris -0.6%. Frankfurt 0.0%.