MORNING COFFEE

Middle Class Hit Hard. A new Pew Research study has found that the middle class has suffered its "worst decade in modern history" The study found that from 2000-2010 the middle class saw their income decline for the first time since World War II. In 1970, the share of U.S. income going to the middle class was 62%, while the wealthy received 29%; by 2010, the middle class took 45% of total income vs. 46% for upper-income Americans. The study also found that 62% of the middle class reported that they are being forced to curb spending. Only 43% of the middle class when asked said that their children’s standard of living would be better than theirs, down from 51% in 2008. When asked who was to blame 62% blamed the government.

Upgrades

Tilly’s (TLYS): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $20.00 on the company. Pre-market: 16.60 +0.02 (0.12%)

L-3 Communications (LLL): RBC Capital raised their rating from Underperform to Sector Perform and placed a target price of $74.00 on the company.

Downgrades

U.S. Steel (X): Dahlman Rose lowered their rating from Buy to Hold. Pre-market: 22.36 -0.41 (-1.80%)

Northrop Grumman (NOC): RBC Capital lowered their rating from Sector Perform to Underperform and placed a target price of $68.00 on the company.

Coverage Initiated

Whole Foods Market (WFM): Wells Fargo initiated coverage with an Outperform rating and target price range of $110.00-$115.00. Pre-market: 97.40 +0.40 (0.41%)

Caterpillar (CAT): CLSA initiated coverage with an Outperform rating and target price of $105.00. Pre-market: 88.34 -0.38 (-0.43%)

Joy Global (JOY): CLSA initiated coverage with an Underperform         rating and target price of $60.00. Pre-market: 57.20 -0.67 (-1.16%)

Coverage Reiterated/Price Target Changed

Guess? (GES): Caris & Company reiterated their Above Average rating and lowered their target price from $35.00 to $33.00. Pre-market: 27.15 -6.39 (-19.05%)

Earning Reports

Guess? (GES): Reported EPS of $0.49 missing estimates by -$0.01. Pre-market: 27.15 -6.39 (-19.05%)

Hewlett-Packard (HPQ): Reported EPS of $1.00 beating estimates by +$0.02. Pre-market: 18.12 -1.08 (-5.63%)

Tilly’s (TLYS): Reported EPS of $0.9 beating estimates by +$0.02. Pre-market: 16.60 +0.02 (0.12%)

Big Lots (BIG): Reported EPS of $0.36 missing estimates by -$0.05. Pre-market: 31.90 -6.94 (-17.87%)

Hormel Foods (HRL): Reported EPS of $0.41 in-line with estimates. Pre-market: 29.00 +0.58 (2.04%)

Markets: 
Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.6% to $97.82. Gold +1.5% to $1664.90.

Europe: London +0.4%. Paris +0.3%. Frankfurt +0.2%. 

Asia: Japan +0.5%. Hong Kong +1.2%. China +0.3%. India 0.0%.