MORNING COFFEE

China to Let Yuan Rise. Treasury Secretary Geithner will be holding talks in Beijing tomorrow signaling that Beijing might be paving the way to let the yuan rise. China's National Development and Reform Commission (NDRC),  suggested keeping the yuan "basically stable at a balanced and reasonable level." An economist from the agency also said Beijing should edge towards a more flexible yuan.

Comcast Wins Against FCC. Comcast (CMCSA) won a key verdict against the FCC after a federal appeals court ruled the government does not have the legal authority to force Comcast to refrain from withholding bandwidth from traffic-intensive downloads. The ruling is a blow to the so-called Net Neutrality initiative, which will prohibit all broadband providers from favoring or discriminating against certain kinds of Internet traffic.

Family Dollar Stores (FDO): Reported FQ2 EPS of $0.81 beating estimates by +$0.03 on revenue of $2.1 billion.

Upgrades

K-Swiss (KSWS): Sterne Agee raised their rating from Sell to Buy and placed a target price of $15.00 on the company.

Nokia (NOK): UBS raised their rating from Neutral to Buy.

Downgrades

Sony (SNE): Citigroup lowered their rating from Buy to Hold.

Coverage Initiated

Natl Oilwell Varco (NOV): Dahlman Rose initiated coverage with a Buy rating and a target price of $75.00.

Halliburton (HAL): Dahlman Rose initiated coverage with a Buy rating and a target price of $47.00.

Cephalon (CEPH): Hapoalim initiated coverage with an Outperform rating and a target price of $82.00.

Coverage Reiterated/Price Target Changed

3M (MMM): Argus reiterated their Buy rating and raised their target price from $91.00 to $94.00.

·         Futures: Dow -0.2% to 10895. S&P -0.3% to 1182.75. Nasdaq -0.2%.
Crude -0.6% to $86.33. Gold flat at $1134.60.
30-year Tsy +0.25% to 114-22. 10-year +0.19%. 5-year +0.14%. 2-year+0.04%.
Euro -0.4% vs. dollar. Yen -0.5%. Pound -0.8%. Loonie +0.3%.

·         Asia: Japan +0.1%. China -0.3%. Hong Kong +1.8%. India +0.2%.

·         Europe: London -0.1%. Paris -0.3%. Frankfurt -0.1%.

MIDDAY LUNCH

Dow 10956.54  -17.01, Nasdaq 2432.51  +2.98, S&P 1187.61  +0.17 

Trading has been lackluster again today, with little corporate or economic data having the ability to move the market in either direction.

The Fed released the latest FOMC minutes.  The Fed's noted that extended period language does not limit ability to tighten policy promptly, and the "extended period" could last longer if economy worsens or inflation declines.  Federal Reserve officials also noted signs of a strengthening recovery that could be hobbled by high unemployment and tight credit, and some warned of raising rates too soon. The FOMC minutes stated that consumer spending in the first quarter seemed constrained and that inflation has shown a greater-than-expected decline.

The Treasury’s $40 billion auction of 3-year Notes drew a yield of nearly 1.78%, which was higher than many analysts had expected.

MORNING COFFEE

Toyota Hit with Fine. The government is fining Toyota (TM) $16.4 million for allegedly hiding gas-pedal problems from safety officials for four months instead of reporting it within five days after discovery as required by law. Transportation Secretary Ray LaHood said "we now have proof that Toyota failed to live up to its legal obligations. Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."  The fine is the largest allowed by law against an automaker, and exceeds the previous record of $1 million.

Oil Prices Continue to Rise. Oil prices neared 18-month highs trading above $86 a barrel Tuesday as analysts considered whether the economic recovery it strong enough to warrant future gains.  Some on Wall Street are now calling oil to rise to over $100.00 per barrel.

AT&T to Improve Network. AT&T Inc.(T) announced it would spend $1 billion in 2010 to improve its mobile network for small business and support the proliferation of smart phones.  For years customers have complained about the company’s lack of coverage area.

Upgrades

Walt Disney (DIS): Soleil raised their rating from Hold to Buy and placed a target price of $42.00 on the company.

Downgrades

Pulte Homes (PHM): Credit Suisse lowered their rating from Neutral to Underperform.

KB Home (KBH):  Credit Suisse lowered their rating from Underperform to Neutral.

Coverage Initiated

Pulte Homes (PHM): Stifel Nicolaus initiated coverage with a Sell rating.

KB Home (KBH):  Stifel Nicolaus initiated coverage with a Hold rating.

Cisco Systems (CSCO): Wunderlich initiated coverage with a Buy rating and a target price of $33.00.

eBay (EBAY): Thomas Weisel initiated coverage with a Overweight rating and a target price of $34.00.

Coverage Reiterated/Price Target Changed

Sybase (SY): Wedbush reiterated their Outperform rating and changed their target price from $48.00 to $50.00

·         Futures: Dow -0.1%. S&P -0.2%. Nasdaq -0.2%. Crude -0.3% to $86.34. Gold -0.8% to $1124.70.

·         Asia: Nikkei -0.5% to 11282. Shanghai flat at 3159. BSE flat at 17941. Hang Seng closed.

·         Europe: London +0.6% to 5779. Paris +0.6% to 4057. Frankfurt +0.2% to 6250.

MIDDAY LUNCH

Dow 10968.33  +41.26, Nasdaq 2426.27  +23.69, S&P 1186.64  +8.54 

Stocks remain higher this afternoon but the action is lackluster.

The Dollar Index has traded in a narrow range today.. At the moment it is down just -0.1%.  The dollar continues to be a primary source of support for or resistance against the stock market, depending on which way the dollar

 moves.

Treasuries remain under pressure in todays trading.  Results from a reopened auction of $8 billion in 10-year TIPS haven't helped.   The auction drew a yield of 1.71%.

Gains today increased after the release of the ISM Service Index and pending home sales figures.  The March ISM Service Index exceeded expectations and stands at a multiyear high of 55.4, while pending home sales for February made a surprise +8.2% month-over-month increase.

MORNING COFFEE

Payrolls Show Growth. Nonfarm payrolls rose by 162,000 in March, the biggest monthly advance in three years.  Job creation was spread across industries, suggesting the uptick reflects broad economic momentum. Still, the duration of unemployment remains near record highs, and the number of long-term unemployed (+27 weeks) rose by 414,000 to 6.5 million.

Lines at Apple Stores. Apple (AAPL) had lines at their stores on Saturday morning as people bought the new iPad.  Some stores reported sellouts, but others said they were well stocked. Estimates are that over 300,000 iPad were sold the first day.

Upgrades

Juniper Networks (JNPR): Wells Fargo raised their rating from Market Perform to Outperform.

Downgrades

TASER (TASR): Dougherty & Company lowered their rating from Buy to Neutral and lowered their target price from $10.00 to $5.00.

TASER (TASR): JP Morgan lowered their rating from Neutral to Underweight and lowered their target price from $7.50 to $6.00.

Alcoa (AA): Deutsche Bank lowered their rating from Buy to Hold lowered their target price from $25.00 to $18.00.

Coverage Reiterated/Price Target Changed

Apple (AAPL): Kaufman Bros reiterated their Buy rating and changed their target price from $253.00 to $295.00.

·         Futures: S&P +0.23%. 10-yr -0.05%. Euro -0.21% vs. dollar. Crude+0.57% to $85.35. Gold +0.04% to $1126.60.

·         Asia: Japan +0.5%. Hong Kong closed. China closed. India +1.3%.

·         Europe:  London closed. Paris closed. Frankfurt +1.3%.

MIDDAY LUNCH

Dow 10929.71  +73.08, Nasdaq 2404.92  +6.96, S&P 1178.29  +8.86 

Stock have been to the plus side all day which surprises me since the market will be closed for Good Friday and the all important  Nonfarm payroll report will be release on Friday.

Stocks started the morning to the plus side as overseas markets set a positive tone amid good data in Europe and a commitment by China to loose monetary policy.

Traders ignored a weaker than expected construction spending report and focused on a strong ISM Manufacturing Index.

The ISM Manufacturing Index for March came in at 59.6, which exceeded economist expectations and marked the best reading in more than five years.

Research In Motion (RIMM) 69.32 -4.65, -6.29% is having a rough day after the company reported earnings that missed street estimates and Goldman Sachs downgraded the company.

Ford (F) 12.76 +0.19, +1.51% reported that its U.S. auto sales for March climbed nearly +40% year-over-year. General Motors reported a near +16% year-over-year increase in monthly sales, but analyst had expected  a larger increase.  Chrysler reported its total U.S. sales during March fell -8% year-over-year.

MORNING COFFEE

Ford and Microsoft to Partner on Electric Cars. Microsoft (MSFT) will expand its Hohm consumer energy management software to work with Ford's (F) electric cars. The partnership will allow drivers to determine the best time to recharge their vehicles at home. As more people use electric cars and want to recharge the batteries after coming home from work, "the demand placed on the energy grid will be momentous. Addressing the challenge of how that demand is managed in a smart and affordable way is absolutely going to be critical." Microsoft also provides the popular Sync system to Ford.

Hartford Repays TARP. Hartford Financial Services (HIG) announced that it had bought back $3.4 billion in TARP preferred shares, but still has 52million warrants outstanding. The company said that by repaying the government, the company is "well positioned from both a capital and balance sheet perspective."

China Hacks Yahoo. Several activists and journalists working on issues related to China and Taiwan reported yesterday that their Yahoo (YHOO) email accounts were hacked into. This the latest of a string of internet incidents involving China. Yahoo said it "condemns all cyber attacks regardless of origin or purpose."

Micron (MU): Reported Q2 2010 EPS of $0.39 beating estimates by +$0.15 on revenue of $1.96 billion.

Mosaic Company (MOS): Reported FQ3 EPS of $0.50 missing estimates by -$0.12 on revenue of $1.7 billion.

Research In Motion (RIMM): Reported Q4 EPS of $1.27 missing estimates by -$0.01 on revenue of $4.08 billion. The company also gave Q1 EPS guidance above consensus estimates.

Upgrades

Omnicare (OCR): UBS raised their rating from Neutral to Buy.

Foot Locker (FL): FBR Capital raised their rating from Market Perform to Outperform and placed a target price of $17.00 on the company.

Finish Line (FINL): Capital raised their rating from Market Perform to Outperform and raised their target price from $15.00 to $19.00.

Downgrades

BlackRock (BLK): Citigroup lowered their rating from Buy to Sell.

BlackRock (BLK): Deutsche Bank lowered their rating from Buy to Hold.

Coverage Initiated

Gap Inc (GPS): Sun Trust Rbsn Humphrey initiated coverage with a Buy rating and target price of $28.00.

Coverage Reiterated/Price Target Changed

Micron (MU): Credit Suisse reiterated their Outperform rating and raised their target price from $15.00 to $20.00

Micron (MU): Broadpoint AmTech reiterated their Buy rating and raised their target price from $13.00 to $14.00

Baidu.com (BIDU): Deutsche Bank reiterated their Buy rating and raised their target price from $604 to $752.00.

·         Futures: Dow +0.5%. S&P +0.5%. Nasdaq +0.2%. Crude +0.9% to $84.52. Gold +0.2% to $1115.30.

·         Asia: Nikkei +1.4% to 11244.4. Hang Seng +1.4% to 21537. Shanghai +1.2% to 3147. BSE +0.9% to 17693.

·         Europe: London +0.7% to 5721. Paris +1.1% to 4016. Frankfurt +0.8% to 6206.