Morning Coffee Pre-Market Wall Street News

World Markets Rally on Fiscal Cliff Deal. Markets around the world rallied and stock futures are higher after a last minute deal was reached to avoid the fiscal cliff. The deal raises taxes on household incomes of over $450K to 39.6%. The deal also raises taxes on capital gains, dividends and estate taxes. Social Security taxes will be increased on every worker to 6.2%. The Congressional Budget Office has calculated that The Taxpayer Relief Act will add almost $4 trillion to the deficit over the next ten years. The Taxpayer Relief Act creates $620 billion in new tax revenue and only $15 billion in spending cuts, a 41 to 1 ratio. 

Upgrades

United States Steel (X): Credit Suisse raised their rating from Neutral to Outperform and raised their target price from $20.00 to $30.00. Pre-market: 24.78 +0.93 (3.90%)

Walgreen (WAG): Raymond James raised their rating from Market Perform to Outperform and placed a target price of $45.00 on the company. Pre-market: 37.44 +0.43 (1.16%)

FLIR Systems (FLIR): Needham raised their rating from Hold to Buy and placed a target price of $27.00 on the company. Pre-market: 22.80 +0.48 (2.17%)

Marriott Intl (MAR): SunTrust raised their rating from Hold to Buy and placed a target price of $45.00 on the company. Pre-market: 37.86 +0.59 (1.58%)

Downgrades

Starwood Hotels (HOT): SunTrust lowered their rating from Buy to Neutral and placed a target price of $65.00 on the company. Pre-market: 57.81 +0.45 (0.78%)

American Eagle Outfitters (AEO): Jefferies lowered their rating from Buy to Hold and lowered their target price from $26.00 to $22.00.

Target (TGT): Jefferies lowered their rating from Buy to Hold and lowered their target price from $74.00 to $59.00. Pre-market: 59.25 +0.08 (0.14%)

Tilly’s (TLYS): Piper Jaffray lowered their rating from Overweight to Neutral and lowered their target price from $16.00 to $13.00.

Coverage Initiated

Lam Research (LRCX): DA Davidson initiated coverage with a Buy rating and target price of $56.00.

Facebook (FB): Cowen & Co initiated coverage with a Neutral rating. Pre-market: 27.35 +0.73 (2.74%)

Abbott Labs (ABT): BMO Capital initiated coverage with an Outperform rating and target price of $36.00. Pre-market: 32.20 -33.30 (-50.84%)

AbbVie (ABBV): BMO Capital initiated coverage with an Outperform rating and target price of $39.00.

AbbVie (ABBV): JPMorgan initiated coverage with a Neutral rating and target price of $38.00.

Coverage Reiterated/Price Target Changed 

Google (GOOG): Oppenheimer reiterated their Perform rating and lowered their target price from $765.00 to $715.00. Pre-market: 714.65 +7.27 (1.03%)

Markets: 
Futures at 7:18: Dow +1.29%. S&P +1.63%. Nasdaq +1.61%. Crude +1.31% to $93.00. Gold +0.61 to $1685.90.

Europe: London +2.28%. Paris +2.42%. Frankfurt +2.23%. 

Asia: Japan closed. Hong Kong +2.89% to 23312. China closed. India +0.68% to 19714.