MORNING COFFEE

Alcoa To Kick Off Earnings Season.  

Dow component Alcoa (AA) is scheduled to kick off earnings season after the close today.  Analysts will be watching closely as companies report their earning, to see how inflation has impacted their bottom line.  Commodity price have been rising for some time and companies have been absorbing most of the cost versus passing it onto consumers.  Alcoa is expected to report Q1 earnings of $0.27. Pre-market: 18.06 +0.14 (0.78%)

NYSE Rejects Nasdaq Bid.  

The NYSE Eurnext (NYX) has reaffirmed its commitment to merge with Deutsche Boerse (DBOEY).  The $9.7 billion deal to merge with Deutsche Boerse is far less than the Nasdaq (NDAQ) and ICE (ICE) offer of $11.3 billion.  The NYSE cited “unacceptable execution risk” and said it would be a “strategic mistake” as their reason for not taking the higher offer.  The Nasdaq and ICE will now take their offer directly to the shareholders as a hostile bid for the company. NYX Pre-market: 38.56 -0.14 (-0.36%)

Coverage Initiated

Summit Hotel (INN): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $13.00.

Coverage Reiterated/Price Target Changed

Comcast (CMCSA): Wunderlich reiterated their Buy rating and raised their target price from $30.00 to $33.00.

Valero Energy (VLO): The Benchmark Company reiterated their Buy rating and raised their target price from $27.00 to $31.00.

Yingli Green Energy (YGE): Auriga U.S.A reiterated their Buy rating and lowered their target price from $18.00 to $14.50.

·         Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.45%. Crude -0.95% to $111.72. Gold -0.4% to $1467.90.

·         Europe: London +0.2%. Paris -0.5%. Frankfurt 0.0%.

·         Asia: Japan -0.5% to 9719.7. Hong Kong -0.4% to 24303. China -0.3% to 3023. India -1.0% to 19263.

MORNING COFFEE

Oil Prices Continue To Rise. 

Oil prices have risen to nearly $112 a barrel Friday on reports that the fighting in Libya has damaged oil fields.  Prices now are at their highest level since September 2008 and there seems to be no relief in sight.  The higher oil prices are going to hit consumers at the pump.  Gas prices have increased over $0.12 in one week, brining that national average for regular unleaded to $3.74.  In some areas prices have already risen above $4.00 per gallon.  Prices are expected to continue to rise as long as there is turmoil in the Middle East.  Additionally, gas prices will jump even if oil prices remain stable, since the oil refineries are required to switch over to more expensive summer formulas.  Some analysts are now saying that $5.00 gas prices are a real possibility this summer.

Upgrades

Expedia (EXPE): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $35.00 on the company.

Coverage Initiated

Medtronic (MDT): Wunderlich initiated coverage with a Buy rating and target price of $46.00.

Travelzoo (TZOO): Morgan Keegan initiated coverage with a Market Perform rating and target price of $81.00.

Coverage Reiterated/Price Target Changed

Limited (LTD): RBC Capital Markets reiterated their Outperform rating and raised their target price from $37.00 to $39.00.

Williams-Sonoma (WSM): Oppenheimer reiterated their Outperform rating and raised their target price from $42.00 to $51.00.

Tempur-Pedic (TPX): Stifel Nicolaus reiterated their Buy rating and raised their target price from $60.00 to $66.00.

·         Futures at 7:00: Dow +0.3%. S&P +0.4%. Nasdaq +0.25%. Crude +1.2% to $111.60. Gold +0.8% to $1470.80.

·         Europe: London +0.8%. Paris +0.8%. Frankfurt +0.5%.

·         Asia: Japan +1.9%  to 9768. Hong Kong +0.5% to 24396. China +0.7% to 3030. India -0.7% to 19451.

MORNING COFFEE

Google To Launch Cloud Music App. Due to a leak, it has become known that Google (GOOG) will introduce a service that will allow consumers to store music on the Internet. The service will compete against Amazon's (AMZN) Cloud Drive, which was introduced just last week. Reports also say that Google will overhaul YouTube in response to T.V. that have internet access and allow people watch videos online.  The new format will have “channels” on its home page, and will offer some professionally produced original programming. The changes to YouTube will roll out before the end of the year. GOOG Pre-market: 575.25 +1.07 (0.19%), AMZN Pre-market: 183.00 +0.24 (0.13%)

Upgrades

Elan (ELN): RBC Capital Markets raised their rating from Sector Perform to Outperform and raised their target price from $8.00 to $10.00.

Salesforce.com (CRM): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $155.00 to $170.00.

Downgrades

DISH Network (DISH): Wunderlich lowered their rating from Hold to Sell and lowered their target price from $24.00 to $21.00.

Travelzoo (TZOO): The Benchmark Company lowered their rating from Buy to Hold.

Allscripts-Misys Healthcare (MDRX): Auriga U.S.A lowered their rating from Buy to Hold and lowered their target price from $25.00 to $24.00.

Coverage Reiterated/Price Target Changed

Clean Harbors (CLH): RBC Capital Markets reiterated their Top Pick rating and raised their target price from $107.00 to $120.00.

Bed Bath & Beyond (BBBY): Argus reiterated their Buy rating and raised their target price from $55.00 to $60.00.

Bed Bath & Beyond (BBBY): FBR Capital reiterated their Market Perform rating and raised their target price from $45.00 to $57.00.

Bed Bath & Beyond (BBBY): Oppenheimer reiterated their Perform rating and raised their target price from $51.00 to $58.00.

Earning Reports

Bed Bath & Beyond (BBBY): Reported Q4 EPS of $1.12 beating estimates by +$0.15 on revenue of $2.5 billion, beating estimates by +$0.1 billion. Pre-market: 54.40 +5.01 (10.14%)

Pier 1 Imports (PIR): Reported FQ4 EPS of $0.48 beating estimates by +$0.01 on revenue of $426.6 million, beating estimates by +$1.1 million. Pre-market: 11.15 +0.61 (5.79%)

Movado Group (MOV): reported EPS of $0.05 beating estimates by +$0.04.

Rite Aid (RAD): Reported EPS of -$0.24 in-line with estimates. Pre-market: 1.11 +0.05 (4.72%)

·         Futures at 9:07: Dow +0.16%. S&P +0.02%. Nasdaq +0.03%. Crude +0.22% at $108.81. Gold +0.4% to $1457.90.

·         Europe: London -0.13%. Paris +0.08%. Frankfurt -0.09%.

·         Asia: Japan +0.1% to 9591. Hong Kong -0.01% to 24282. China +0.2% to 3008. India -0.1% to 19591.

MORNING COFFEE

No Budget Meeting Scheduled. 

The Republican and Democratic negotiators were scheduled to meet again today, but reports say no meeting will occur.  The meeting would have attempted to seal a deal on budget cuts to avert a government shutdown which will occur on Friday. The budget should have taken effect back in October of last year, but was not voted on while the Democrats had control of both houses and the Oval Office.  Some political analysts say it was a strategic move by Democrats, since they didn’t want to pass budget cuts prior to the November election. The Republican controlled House is calling for $61 billion in cuts, while Democrats have tentatively agreed on $33 billion in cuts.

Upgrades

Broadcom (BRCM): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $55.00 on the company.

Aeropostale (ARO): KeyBanc Capital Markets raised their rating from Underweight to Hold.

La-Z-Boy (LZB): KeyBanc Capital Markets raised their rating from Hold to Buy and placed a target price of $13.00 on the company.

Barclays PLC (BCS): Canaccord Genuity raised their rating from Hold to Buy.  

Coverage Reiterated/Price Target Changed

Diamond Foods (DMND): RBC Capital Markets reiterated their Outperform rating and raised their target price from $54.00 to $69.00.

KB Home (KBH): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $17.00 to $14.00.

Stryker (SYK): Oppenheimer reiterated their Outperform rating and lowered their target price from $61.00 to $68.00.

Abercrombie & Fitch (ANF): KeyBanc Capital Markets reiterated their Buy rating and lowered their target price from $65.00 to $75.00.

Abercrombie & Fitch (ANF): Oppenheimer reiterated their Outperform rating and lowered their target price from $60.00 to $74.00.

Abercrombie & Fitch (ANF): Brean Murray reiterated their Buy rating and lowered their target price from $70.00 to $80.00.

Abercrombie & Fitch (ANF): Janney Mntgmy Scott reiterated their Buy rating and lowered their target price from $72.00 to $81.00.

Earning Reports

Monsanto (MON): Reported EPS of $1.87 beating estimates by+$0.03.

·         Futures at 7:00: Dow +0.5%. S&P +0.7%. Nasdaq +0.8%. Crude -0.1% to $108.20. Gold +0.5% to $1460.40.

·         Europe: London +0.6%. Paris +0.3%. Frankfurt +0.7%.

·         Asia: Japan -0.3% to 9584. Hong Kong +0.6% to 24285. China +1.1% to 3001. India -0.4% to 19612.

MORNING COFFEE

Texas Instruments To Buy National Semi. 

After the market closed yesterday Texas Instruments (TXN) announced that they have agreed to buy National Semiconductor (NSM).  Shares of National Semi shares surged +73% in after-hours trading on the news.  Texas Instruments (TXN) will purchase National Semi for $6.5 billion, or $25 a share.  Some analysts are openly questioning the price, saying that Texas Instruments is paying too much.  TXN Pre-market: 33.00 -1.11 (-3.25%), NSM Pre-market: 24.18 +10.11 (71.86%)

Earning Reports

Intl Speedway (ISCA): Reported EPS of $0.49 beating estimates by +$0.01.

KB Home (KBH): Reported EPS of -$1.49 missing estimates by -$1.22.

Upgrades

Analog Devices (ADI): Auriga U.S.A raised their rating from Sell to Hold and raised their target price from $31.00 to $39.00.

IDEX Corp (IEX): Oppenheimer raised their rating from Perform to Outperform and placed a Target price of $53.00 on the company.

Coverage Initiated

PMC-Sierra (PMCS): Kaufman Bros initiated coverage with a Buy rating and target price of $8.50.

Almost Family (AFAM): Collins Stewart initiated coverage with a Hold rating and target price of $38.00.

Coverage Resumed

Broadcom (BRCM): Kaufman Bros resumed coverage with a Buy rating and target price of $48.00.

Texas Instruments (TXN): Kaufman Bros resumed coverage with a Buy rating and target price of $40.00.

Intel (INTC): Kaufman Bros resumed coverage with a Buy rating and target price of $25.00.

Qualcomm (QCOM): Kaufman Bros resumed coverage with a Buy rating and target price of $65.00.

Coverage Reiterated/Price Target Changed

BP (BP): The Benchmark Company reiterated their Buy rating and raised their target price from $55.00 to $70.00.

·         Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.8%. Crude -0.65% to $107.76. Gold 0.0% at $1432.90.

·         Europe: London -0.3%. Paris -0.6%. Frankfurt -0.3%.

·         Asia: Japan -1.1% to 9616. Hong Kong closed. China closed. India -0.1% to 19687.

MORNING COFFEE

Sanofi-Aventis Completes Genzyme Deal.  

Drug maker Sanofi-Aventis (SNY) completed its $20.1 billion to purchase Genzyme (GENZ) after 84.6% of the U.S. company's stock was tendered.  Sanofi-Aventis will give Genzyme's remaining shareholders an additional four days to tender their shares.

Downgrades

CSX (CSX): Stifel Nicolaus lowered their rating from Buy to Hold.  

       

Royal Dutch Shell (RDS.A): The Benchmark Company lowered their rating from Hold to Sell.

Coverage Reiterated/Price Target Changed

Rockwell Automation (ROK): Longbow reiterated their Buy rating and raised their target price from $95.00 to $105.00.

Verizon (VZ): RBC Capital Markets reiterated their Outperform rating and raised their target price from $39.00 to $41.00.

Verizon (VZ): Argus reiterated their Buy rating and raised their target price from $39.00 to $44.00.

Apple (AAPL): Canaccord Genuity reiterated their Buy rating and raised their target price from $460.00 to $480.00.

·         Futures at 7:00 AM: S&P +0.23%. 10-yr -0.04%. Crude +0.44% to $108.41. Gold +0.6% to $1437.50.

·         Europe: London +0.1%. Paris 0.0%. Frankfurt 0.0%.

·         Asia: Japan +0.1%. Hong Kong +1.5%. China +1.3%. India +1.4%.

MORNING COFFEE

Nasdaq & Ice Make Offer To Buy NYSE.  

The Nasdaq OMX (NDAQ) and Intercontinental Exchange (ICE) have made a $11.3 billion offer what works out to $42.50/share for the NYSE Euronext (NYX).   The bid is a 19% premium over the Deutsche Boerse (DBOEY) offer of $9.5 billion. Pre-market: 39.00 +3.83 (10.89%)

SEC Investigates David Sokol. 

Reports say that the SEC is investigating David Sokol for possible insider trading.  Sokol recently resigned from Berkshire Hathaway (BRK.A/BRK.B) after it was revealed that he purchased 96,000 shares of Lubrizol (LZ) just before he recommended to Warren Buffet that he should buy the company.  By front running the Berkshire Hathaway trade and announcement, he may have illegally profited from the subsequent price run-up.  Some estimate that Sokol may have made over $3 million on the trade.

Upgrades

Las Vegas Sands (LVS): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $55.00 on the company.

Allergan (AGN): Leerink raised their rating from Market Perform to Outperform and placed a target price of $83.00 on the company.

Coverage Initiated

Huntington Ingalls (HII): Deutsche Bank initiated coverage with a Hold recommendation.

Downgrades

Mosaic (MOS): Scotia Capital lowered their rating from Outperform to Sector Perform.

Baidu (BIDU): Mizuho lowered their rating from Buy to Hold.

Logitech (LOGI): Credit Suisse lowered their rating from Outperform to Neutral.

Coverage Reiterated/Price Target Changed

Nokia (NOK): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $14.00 to $12.00.

Medifast (MED): Northland Securities reiterated their Outperform rating and lowered their target price from $44.00 to $29.00.

·         Futures at 7:00: Dow +0.4%. S&P +0.4%. Nasdaq +0.5%. Crude +0.3% to $107.06. Gold -0.35% to $1434.80.

·         Europe: London +0.8%. Paris +0.8%. Frankfurt +1.0%.

·         Asia: Japan -0.5% to 9708. Hong Kong +1.2% to 23802. China +1.3% to 2967. India -0.1% to 19420.