MORNING COFFEE

Verizon Customers Angered. Verizon (VZ) has angered customers by announcing it will charge a $2 "convenience fee" for phone or online with credit cards bill payments. The move comes after several outages of Verizon's 4 G high-speed data network.

Markets: 
Futures at 7:00: Dow -0.02%. S&P +0.02%. Nasdaq +0.01%. Crude+0.25% to $99.90. Gold +2.1% to $1572.70. 

Europe: London -0.5%. Paris +0.2%. Frankfurt +0.1%. 

Asia: Japan +0.7% to 8455. Hong Kong +0.2% to 18434. China +1.2% to 2199. India -0.6% to 15455. 

MORNING COFFEE

Oil Expected To Be Above $100.00 in 2012. Commodity analysts see oil prices staying above $100 a barrel in 2012. Iran’s threats of a supply disruption are causing a $10-$20 premium in prices. If Iran does ratchet up their rhetoric and attempt to close the Straits of Hormuz prices could go much higher. Also seen as keeping oil above $100 is the effort of OPEC nations to keep prices elevated to provide social assistance programs promised in response to the Arab Spring uprisings. Crude +0.31% to $99.67

Upgrades

News Corp. (NWSA): RBC Capital raised their rating from Outperform to Top Pick and placed a target price of $21.00 on the company. After Hours: 17.45 0.00 (0.00%)

Downgrades

United Technologies (UTX): Argus lowered their rating from Buy to Hold. Pre-market: 72.71 -0.42 (-0.57%)

Coverage Initiated

Pandora Media (P): Collins Stewart initiated coverage with a Neutral rating and target price of $13.00. After Hours: 9.98 -0.03 (-0.30%)

LinkedIn (LNKD): Collins Stewart initiated coverage with a Buy rating and target price of $86.00. Pre-market: 61.76 +0.03 (0.05%)

Delphi Automotive (DLPH): Citigroup initiated coverage with a Neutral rating and target price of $25.00.

Markets: 
Futures at 7:32: Dow +0.16%. S&P +0.29%. Nasdaq +0.29%. Crude +0.31% to $99.67. Gold -2.33%  to $1527.60. 

Europe: London +0.21%. Paris +0.31%. Frankfurt +0.40%. 

Asia: Japan -0.29% to 8399. Hong Kong -0.65% to 18398. China +0.162% to 2174. India -1.17% to 15544. 

MORNING COFFEE

Obama Wants To Raise Debt Limit Again. President Obama will ask Congress to raise the nation's debt limit by another $1.2 trillion this week. The government is projected to approach within $100B of the current debt limit by Friday.

Upgrades

Starbucks (SBUX): DA Davidson raised their rating from Neutral to Buy and placed a target price of $55.00 on the company.

Dunkin’ Brands (DNKN): DA Davidson raised their rating from Underperform to Neutral and placed a target price of $26.00 on the company.

Coverage Initiated

Forest Oil (FST): Capital One initiated coverage with an Add rating and target price of $17.00.

Markets: 
Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.25%. Crude -0.4% to $100.94. Gold -0.4% to $1589.50. 

Europe: London +0.6%. Paris +0.6%. Frankfurt +0.1%. 

Asia: Japan -0.2% to 8424. Hong Kong -0.6% to 18519. China +0.2% to 2170. India -0.9% to 15728. 

MORNING COFFEE

Bank of America Needs More Assets. To meet compliance with the new capital rules, BofA (BAC) is considering the sale of additional assets.  The struggling bank according to an analyst thinks BofA will need an additional $45 billion in capital by 2019.  The bank has already sold off $50 billion in assets Jan. 2010, and according to the analysts the bank may not have many big ticket items left to sell. 

Upgrades

VMware (VMW): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $100.00 on the company. Pre-market: 84.97 +1.30 (1.55%)

Downgrades

Time Warner (TWX): Caris lowered their rating from Buy to Above Average and maintained a target price of $42.00 on the company. Pre-market: 35.42 -0.54 (-1.50%)

Coverage Initiated

Delphi Automotive (DLPH): Robert W. Baird initiated coverage with an Outperform rating and target price of $29.00. Pre-market: 22.50 +0.56 (2.55%)

Delphi Automotive (DLPH): Credit Suisse initiated coverage with an Outperform rating and target price of $34.00. Pre-market: 22.50 +0.56 (2.55%)

Delphi Automotive (DLPH): JP Morgan initiated coverage with an Outperform rating and target price of $34.00. Pre-market: 22.50 +0.56 (2.55%)

Delphi Automotive (DLPH): Goldman Sachs initiated coverage with a Buy rating and target price of $34.00. Pre-market: 22.50 +0.56 (2.55%)

Delphi Automotive (DLPH): Citigroup initiated coverage with a Neutral rating and target price of $25.00. Pre-market: 22.50 +0.56 (2.55%)

Delphi Automotive (DLPH): RW Baird initiated coverage with a Outperform rating and target price of $29.00. Pre-market: 22.50 +0.56 (2.55%)

Markets: 
Futures at 9:02: Dow -0.14%. S&P -0.26%. Nasdaq +0.07%. Crude+0.08% to $99.76. Gold -0.67% to $1595.40. 

Europe: London closed. Paris +0.5%. Frankfurt +0.4%. 

Asia: Japan -0.5% to 8441. Hong Kong closed. China -1.1% to 2166. India -0.6% to 15874. 

MARKET CLOSED

MORNING COFFEE

House set to Pass Payroll Tax Cut Extension. The House is expected to pass a two-month extension to the payroll tax cut today.  House republicans wanted to extend the cuts for one year, but gave up their fight.  President Obama said "I congratulate members of Congress for ending the partisan stalemate," and continued with "Because of this agreement, every working American will keep his or her tax cut - about $1,000 for the average family."  Yet American’s should be angered about the extension because the payroll tax pays for Social Security which is already bankrupt.  The continuation of these cuts will only harm Social Security in the long run.

Markets: 
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.35%. Crude +0.3% to $99.80. Gold -0.2% to $1607.60. 

Europe: London +1.0%. Paris +1.2%. Frankfurt +0.3%. 

Asia: Japan closed. Hong Kong +1.4% to 18629. China +0.8% to 2205. India -0.5% to 15739. 

MORNING COFFEE

U.S. Warned About Debt Level. Rating agency Fitch has once again warned that rising U.S. debt is not consistent with the U.S. maintaining its AAA rating. Fitch said at least an additional $3.5 trillion in deficit reduction measures will be needed to lower the debt to 90% of GDP by the second half of the decade. This comes as Zero Hedge said that they have calculated that the U.S. debt has passed the 100% mark.

Upgrades

Zimmer Holdings (ZMH): Mizuho raised their rating from Neutral to Buy and raised their target price from $53.00 to $62.00. Pre-market: 52.83 +1.00 (1.93%)

VMware (VMW): Wunderlich raised their rating from Hold to Buy and placed a target price of $95.00 on the company. Pre-market: 78.25 +1.40 (1.82%)

Micron Tech (MU): Wedbush raised their rating from Neutral to Buy and raised their target price from $7.00 to $8.00. Pre-market: 5.58 +0.04 (0.72%)

Advance Auto Parts (AAP): BB&T raised their rating from Hold to Buy.   

Downgrades

KB Homes (KBH): Stifel Nicolaus lowered their rating from Buy to Hold. Pre-market: 7.14 -0.08 (-1.11%)

Boston Scientific (BSX): Mizuho lowered their rating from Buy to Neutral and lowered their target price from $7.00 to $5.40. Pre-market: 5.15 -0.06 (-1.15%)

Coverage Initiated

EMC (EMC): Ticonderoga initiated coverage with a Buy rating and target price of $27.00.

VMware (VMW): Ticonderoga initiated coverage with a Neutral rating. Pre-market: 78.25 +1.40 (1.82%)

Earning Reports

Bed Bath & Beyond (BBBY): Reported EPS of $0.95 beating estimates by +$0.06. Pre-market: 58.70 -2.73 (-4.44%)

Micron (MU): Reported EPS of -$0.19 missing estimates by -$0.09. Pre-market: 5.58 +0.04 (0.72%)

American Greetings (AM): Reported EPS of $0.50 missing estimates by -$0.32.

Markets: 
Futures at 8:32: Dow +0.49%. S&P +0.61%. Nasdaq +0.60%. Crude +0.43% to $99.10. Gold +0.07% to $1614.70. 

Europe: London +1.17%. Paris +1.44%. Frankfurt +1.20%. 

Asia: Japan -0.77% to 8395. Hong Kong -0.21% to 18378. China -0.22% to 2186. India +0.82% to 15813. 

MORNING COFFEE

ECB Loans to 523 Banks.  The ECB has loaned €489 billion ($639 billion) to 523 banks in the ECB's "longer-term refinancing operation." Economist had expected only €310B in loans. The three-year loans averaged a benchmark rate of 1%. The move was an attempt to prevent the credit market from freezing up due to the eurozone debt crisis. It was the biggest ECB infusion of credit into the banking system in the euro's 13 year history.  Portfolio manager Rick Paler at RL Paler Investment Advisors, LLC said “The loans may avoid a short liquidity crunch, but it does nothing to ease the sovereign debt crisis.”

Downgrades

AT&T (T): Argus lowered their rating from Buy to Hold. Pre-market: 29.00 -0.12 (-0.41%)

JP Morgan Chase (JPM): Sterne Agee lowered their rating from Buy to Neutral and placed a target price of $36.00 on the company. Pre-market: 31.87 -0.34 (-1.06%)

Oracle (ORCL): CLSA lowered their rating from Buy to Underperform and lowered their target price from $36.00 to $30.00. Pre-market: 26.19 -2.98 (-10.22%)

Oracle (ORCL): Canaccord lowered their rating from Buy to Hold and placed a target price of $28.00 on the company. Pre-market: 26.19 -2.98 (-10.22%)

Coverage Initiated

Xylem (XYL): Ladenburg initiated coverage with a Buy rating and target price of $30.00.

 Cree (CREE): Needham initiated coverage with a Buy rating. Pre-market: 20.52 +0.03 (0.15%)

Pep Boys (PBY): The Benchmark Company initiated coverage with a Buy rating and target price of $14.00.

General Motors (GM): Sterne Agee initiated coverage with a Buy rating and target price of $36.00. Pre-market: 19.70 +0.01 (0.05%)

Earning Reports

Cintas (CTAS): Reported EPS of $0.57 beating estimates by +$0.09. After Hours: 33.50 +2.22 (7.10%)

Nike (NKE): Reported EPS of $1.00 beating estimates by +$0.03. Pre-market: 95.00 +1.37 (1.46%)

Oracle (ORCL): Reported EPS of $0.54 missing estimates by -$0.03. Pre-market: 26.19 -2.98 (-10.22%)

Paychex (PAYX): Reported EPS of $0.39 beating estimates by +$0.01. Pre-market: 29.70 -0.54 (-1.79%)

CarMax (KMX): Reported EPS of $0.36 missing estimates by -$0.02. Pre-market: 30.51 -0.56 (-1.80%)

Shaw Group (SHAW): Reported EPS of $0.69 beating estimates by +$0.25. 

         

Walgreens (WAG): Reported EPS of $0.63 missing estimates by -$0.04. Pre-market: 31.45 -2.05 (-6.12%)

Markets: 
Futures at 7:53: Dow -0.04%. S&P -0.11%. Nasdaq -0.10%. Crude +0.14% to $97.10. Gold -0.14% to $1615. 

Europe: London -0.48%. Paris -0.71%. Frankfurt -0.43%. 

Asia: Japan +1.48% to 8460. Hong Kong +1.86% to 18416. China -1.12% to 2191. India +3.36% to 15685. 

MORNING COFFEE

Lockheed Wins Big Contract. Lockheed Martin (LMT) has won a military contract to supply 42 stealth F-35 jets to Japan for $5.33 billion. Lockheed beat out rival Boeing (BA) and the Euro Typhoon. Analysts now say that the company could now receive a contract from South Korean for 60 jets.

EU Raises Less Money Than Expected. The EU announced it raised €150 billion, €50 Billion less than analysts expected from member states to lend to the IMF to lend back to needy EU members. No contributions were made by the U.K. Additionally the Czech Republic, Denmark, Poland and Sweden made no contributions, saying they have to bring it before their parliaments first.  Spain and Italy will contribute €38.3 billion. Additionally, yesterday the ECB in its Financial Stability Report said  the risk to the eurozone's financial system have risen "substantially."

Coverage Initiated

CVS Caremark (CVS): Macquarie initiated coverage with an Outperform rating and target price from $45.00.

TJX Co. (TJX): Collins Stewart initiated coverage with a Buy rating and target price of $75.00.

Tiffany (TIF): Collins Stewart initiated coverage with a Neutral rating and target price of $72.00.

Coach (COH): Collins Stewart initiated coverage with a Neutral rating and target price of $67.00.

Downgrades

Novellus (NVLS): JP Morgan lowered their rating from Overweight to Neutral.

Owens Corning (OC): RBC Capital lowered their rating from Top Pick to Outperform and lowered their target price from $33.00 to $30.00.

Baxter International (BAX): RBC Capital lowered their rating from Top Pick to Outperform and lowered their target price from $61.00 to $58.00.

AT&T (T): JP Morgan lowered their rating from Overweight to Neutral and lowered their target price from $33.00 to $31.00.

Earning Reports

ConAgra (CAG): Reported EPS of $0.47 beating estimates by +$0.04.

General Mills (GIS): Reported EPS of $0.76 missing estimates by -$0.03.

Markets: 
Futures at 7:43: Dow +0.85%. S&P +1.03%. Nasdaq +1.19%. Crude +1.53% to $95.32. Gold +0.56% to $1605.70. 

Europe: London -0.24%. Paris +0.87%. Frankfurt +0.83%. 

Asia: Japan +0.49% to 8336. Hong Kong +0.06% to 18080. China -0.10% to 2216. India -1.33% to 15175.