MORNING COFFEE

Warren Buffett Says Japan Is Buying Opportunity.  Warren Buffett has often said “Be fearful when others are greedy, and be greedy when others are fearful,” and in so many word said it again.  The investing guru while speaking in South Korea commented on the current situation in Japan saying that “Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception.”  He also said that “It will take some time to rebuild, but it will not change the economic future of Japan.”

Upgrades

TCF Financial (TCB): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $18.00 on the company.

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

Coverage Initiated

Archer-Daniels (ADM): Stifel Nicolaus initiated coverage with a Buy rating and placed a target price of $44.00 on the company.

Coverage Reiterated/Price Target Changed

Yahoo! (YHOO): The Benchmark Company reiterated their Hold rating and raised their target price from $16.00 to $18.00.

Earning Reports

Dollar General (DG): Reported Q4 EPS of $0.65 beating estimates by +$0.06 on revenue of $3.49 billion, in-line with estimates. The company also issued upside guidance, saying it sees FY'12 EPS of $2.20-2.30, revenue growth Y/Y of 12-13% and will open 625 new stores in 2011.

Express (EXPR): Reported EPS of $0.55 beating estimates by +$0.06.

Walgreens (WAG): Reported EPS of $0.80 in-line with estimates.

·         Futures at 7:00: Dow 0.0%. S&P -0.1%. Nasdaq +0.1%. Crude -0.3% to $102.03. Gold -0.1% to $1425.40.

·         Europe: London +0.0%. Paris +0.1%. Frankfurt -0.2%.

·         Asia: Japan +4.4% to 9608. Hong Kong +0.8% to 22858. China +0.3% to 2919. India +0.8% to 17988.

MORNING COFFEE

Oil Prices Rise As Airstrikes Hit Libya. A coalition of countries which include the   U.S., U.K., France, Canada, Qatar and several other nations have set up a  no-fly zone over Libya pounding government military sites with cruise missiles and bombs.  The offensive led to concerns about oil supply disruptions in Libya sending crude futures +2.1% to $103.17 (7:00 ET). Shokri Ghanem, chairman of Libya’s National Oil Co., announced that the country's oil production has fallen to less than 400,000 barrels per day, down from 1.6 million barrels per day in January.

AT&T To Buy T-Mobile. AT&T (T) announced that it would buy T-Mobile USA from Deutsche Telekom (DTEGY) for $39 billion in cash and stock.  The deal if approved by regulators would create America's largest mobile-phone company and ahead of Verizon Wireless (VZ).

Upgrades

AT&T (T): HSBC Securities raised their rating from Neutral to Overweight and raised their target price from $30.00 to $32.00.

Autodesk (ADSK): Robert W. Baird raised their rating from Neutral to Outperform and placed a target price of $46.00 on the company.

Bed Bath & Beyond (BBBY): FBR Capital raised their rating from Underperform to Market Perform and placed a target price of $45.00 on the company.

Deutsche Telekom (DTEGY): HSBC Securities raised their rating from Underweight to Overweight.

Qualcomm (QCOM): Sterne Agee raised their rating from Neutral to Buy and placed a target price of $62.00 on the company.

Textron (TXT): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $32.00 on the company.

Earning Reports

Tiffany (TIF): Reported Q4 EPS of $1.44 beating estimates by +$0.05 on revenue of $1.1 billion, in-line with estimates. 

·         Futures at 7:00: Dow +1.0%. S&P +1.1%. Nasdaq +1.2%. Crude +2.1% to $103.17. Gold +0.8% to $1427.80

·         Europe: London +1.3%. Paris +1.9%. Frankfurt +2.2%.

·         Asia: Japan closed. Hong Kong +1.7% to 22685. China +0.1% to 2910. India -0.2% to 17839.

MORNING COFFEE

Multinational Companies Get Hurt By Earthquake. Multinational corporations are facing supply-chain and manufacturing disruptions due to the earthquake in Japan. Some analysts are saying that Apple (AAPL) may have some difficulties getting the parts needed to manufacture its iPad 2. Toyota (TM), Honda (HMC) Nissan (NSANY), Mitsubishi and Isuzu, have had their plants closed since the earthquake and have said that they would be limiting their production in the U.S. to keep parts for their Japanese plants.  General Motors (GM) announced they will also halt production at their Louisiana plant due to part shortages. Analysts expect Volkswagen (VLKAY) Sony (SNE) Ericsson (ERIC) and Nokia (NOK) to experience supply issues although the current thought is that Intel (INTC), Qualcomm (QCOM), Motorola Mobility (MMI) and Research in Motion (RIMM) would see little if any impact from the quake.

Upgrades

Humana (HUM): Argus raised their rating from Hold to Buy and placed a target price of $77.00 on the company.

Accenture (ACN): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $59.00 on the company.

Diamond Offshore (DO): FBR Capital raised their rating from Underperform to Market Perform and placed a target price of $80.00 on the company.

Coverage Initiated

Devon Energy (DVN): RBC Capital Markets initiated coverage with an Outperform rating and target price of $105.00.

Coverage Reiterated/Price Target Changed

Ross Stores (ROST): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $64.00 to $68.00.

News Corp (NWSA): RBC Capital Markets reiterated their Outperform rating and raised their target price from $18.00 to $20.00.

Nike (NKE): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $100.00 to $98.00.

JDS Uniphase (JDSU): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $32.00 to $28.00.

China Automotive (CAAS): Oppenheimer reiterated their Outperform rating and lowered their target price from $24.00 to $15.00.

Urban Outfitters (URBN): FBR Capital reiterated their Market Perform rating and lowered their target price from $34.00 to $32.00.

Earning Reports

LDK Solar (LDK): Reported Q4 EPS of $1.09 beating estimates by +$0.17 on revenue of $921 million, beating estimates by+$34 million.

Nike (NKE): Reported FQ3 EPS of $1.08 missing estimates by -$0.04 on revenue of $5.1 billion, beating estimates by +$0.1 billion. 

Perry Ellis (PERY): Reported EPS of $0.69 beating estimates by +$0.02.

·         Futures at 7:00: Dow +0.6%. S&P +0.7%. Nasdaq +0.55%. Crude+0.5% to $101.93. Gold +0.8% to $1415.20.

·          Europe: London +0.3%. Paris +0.8%. Frankfurt +0.5%.

·         Asia: Japan +2.7% to 9207. Hong Kong +0.1% to 22300. China+0.4% to 2909. India -1.5% to 17879.

MORNING COFFEE

Retailers Attack Amazon’s Tax Break. The alliance for Main Street Fairness which includes retail giants Wal-Mart (WMT), Target (TGT) and other leading retailers are ratcheting up a campaign to force Amazon (AMZN) to collect sales taxes. The alliance is leading efforts to change sales tax laws in more than a dozen states, including Texas and California. In a 1992 Supreme Court ruling, only merchants with a physical presence in a state, such as stores, have to collect sales taxes.

Earning Reports

FedEx (FDX): Reported EPS of $0.81 missing estimates by -$0.01.

Guess? (GES): Reported FQ2 EPS of $1.11 beating estimates by +$0.05 on revenue of $757 million, beating estimates by +$32 million.

Winnebago Industries (WGO) Reported EPS of $0.11 beating estimates by +$0.05.

Upgrades

ProLogis (PLD): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $16.50 on the company.

Akamai Tech (AKM): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $44.00 on the company.

Downgrades

Devon Energy (DVN): Argus lowered their rating from Buy to Hold.

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

Coverage Reiterated/Price Target Changed

Noble Energy (NBL): FBR Capital reiterated their Market Perform rating and raised their target price from $85.00 to $95.00.

·         Futures at 7:00: Dow +0.45%. S&P +0.7%. Nasdaq +0.55%. Crude +1.6% to $99.52. Gold +0.5% to $1403.40.

·         Europe: London +0.5%. Paris +1.0%. Frankfurt +0.5%.

·         Asia: Japan -1.4% to 8963. Hong Kong -1.8% to 22284. China -1.1% to 2897. India -1.1% to 18150.

MORNING COFFEE

Producer Price Index Jumps.  Just one day after the Fed said that their inflation expectations “remained stable” the Labor Department released the most recent PPI data.  On a seasonally adjusted basis the PPI jumped +1.6% in February as food costs experienced the biggest one-month rise since 1974.  The Core rate, which excludes the volatile food and energy categories, rose a smaller +0.2%. Economists had estimated the PPI to come in at just +0.6% and the core rate to come in at +0.2%. Over the last year producer prices have risen +5.6%, although the core rate has gone up at a much slower pace of +1.8%. The difference between the PPI and core rate indicate that companies are not passing all the cost increases to consumers, but this could change as company profits get squeezed.

Upgrades

Frontier Communications (FTR): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $9.00 on the company.

Coverage Initiated

United Rentals (URI): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $42.00.

Coverage Reiterated/Price Target Changed

Northrop Grumman (NOC): RBC Capital Markets reiterated their Sector Perform rating and lowered their target price from $75.00 to $70.00.

Liberty Media (LINTA): Wunderlich reiterated their Buy rating and raised their target price from $18.50 to $22.00.

Earning Reports

Federal Signal (FSS): Reported EPS of $0.02 missing estimates by -$0.06.

General Steel (GSI): Reported EPS of $0.04 beating estimates by +$0.01.

·         Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.1%. Crude +1.5% to $98.63. Gold +0.4% to $1398.80.

·         Europe: London -0.9%. Paris -0.9%. Frankfurt -0.3%.

·         Asia: Japan +5.7% to 9094. Hong Kong +0.1% to 22701. China +1.2% to 2931. India +1.1% to 18359.

MORNING COFFEE

World Markets Sell Off On Nuclear Fears. Stock markets continue to sell off as fears of a nuclear meltdown at Japans Fukushima Daiichi nuclear plant increase.   The Nikkei 225 fell as much as -14% before rebounding to close down -10.6% to 8,605.15 while the broader Topix index ended -9.5%. In efforts to stabilize markets, the Bank of Japan added ¥20 trillion or $245 billion of short-term liquidity to the record ¥15 trillion it pumped in yesterday. Autos fell since Toyota (TM), Honda (HMC), Nissan (NSANY), Mitsubishi and Isuzu, halted production after the quake. Oil fell as well, as did gold and other metals, although chip prices  extended the large gains they made on Monday.

Mid East Turmoil Escalates.  Saudi Arabian troops moved into Bahrain per a request from the kingdom to help put down the uprising.  In Oman protesting continued even after Sultan Qaboos bin Said gave a string of concessions to protestors.  In Libya the air force has attacked rebels in the town of Ajdabiya, just 100 miles from the opposition capital of Benghazi. Government forces have now recaptured the oil port of Ras Lanuf, the nearby town of Bin Jawad and the western city of Zawiyah. Crude futures are down -2.8% to $98.38 (7:00 ET).

Upgrades

Lowe's (LOW): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $29.00 to $31.00.

Downgrades

Lubrizol (LZ): KeyBanc Capital Markets lowered their rating from Buy to Hold.

Coverage Initiated

Charles Schwab (SCHW): Ticonderoga initiated coverage with a Neutral rating.

Coverage Resumed

Cognizant Tech (CTSH): Robert W. Baird resumed coverage with a Neutral rating and target price of $82.00.

Accenture (ACN): Robert W. Baird resumed coverage with an Outperform rating and target price of $63.00.

Infosys (INFY): Robert W. Baird resumed coverage with a Neutral rating and target price of $75.00.

Coverage Reiterated/Price Target Changed

Motorola Mobility (MMI): Oppenheimer reiterated their Outperform rating and lowered their target price from $36.00 to $32.00.

Earning Reports

Brown Shoe (BWS): Reported EPS of $0.11 missing estimates by -$0.04.

FactSet (FDS): Reported EPS of $0.89 beating estimates by +$0.02.

Williams-Sonoma (WSM): Reported EPS of $1.08 beating estimates by +$0.10.

·         Futures at 7:00: Dow -2.2%. S&P -2.65%. Nasdaq -2.8%. Crude -2.8% to $98.17. Gold -1.3% to $1406.20.

·         Europe: London -2.6%. Paris -3.4%. Frankfurt -4.7%.

·         Asia: Japan -10.6% to 8605. Hong Kong -2.9% to 22678. China-1.4% to 2897. India -1.5% to 18168.

MORNING COFFEE

Berkshire To Buy Lubrizol. Warren Buffett’s Berkshire Hathaway (BRKA/BRKB) announced it would buy Lubrizol (LZ), for $135 per share which is a 28% premium to Lubrizol's close.  The $9 billion deal also includes around $700M in net debt.

AT&T To Limit Internet Usage. AT&T (T) Announced over the weekend that it will begin to cap data usage for its internet customers, charge people for going over the limit.  Customers who use more than a monthly limit of 150 gigabytes of data in three separate months will be charged $10 for every extra 50 gigabytes of data they use.  The new data limits are scheduled to go into effect on May 2.

Upgrades

Amer States Water (AWR): Brean Murray raised their rating from Hold to Buy and a target price of $39.00.

Cerner (CERN): Auriga U.S.A raised their rating from Hold to Buy and raised their target price from $105.00 to $121.00.

Cintas (CTAS): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $105.00 to $121.00.

Downgrades

Noble Corp (NE): FBR Capital lowered their rating from Outperform to Market Perform and placed a target price of $48.00 on the company.

Coverage Reiterated/Price Target Changed

Cephalon (CEPH): Collins Stewart their Hold rating and lowered their target price from $70.00 to $60.00.

Earning Reports

Gulfport Energy (GPOR): Reported EPS of $0.32 beating estimates by +$0.03.

·         Futures at 7:00: Dow -0.4%. S&P -0.4%. Nasdaq -0.7%. Crude -2.1% to $99.03. Gold +0.1% to $1423.30.

·         Europe: London -0.1%. Paris -0.3%. Frankfurt -0.7%.

·         In Asia, Japan -6.2% to 9620. Hong Kong +0.4% to 23346. China+0.2% to 2939. India +1.5% to 18439.

MORNING COFFEE

Earthquake Hits Japan. An 8.9 magnitude earthquake has struck off the coast of Japan, leaving most of Tokyo without power.  The earthquake has triggered a massive tsunami and hundreds could be missing out dead.  Tsunami warnings have been issued for several countries, including the U.S West Coast and Hawaii.  Global markets are down on the uncertainty of how the earthquake will impact the global economy with the insurance sector getting hit the most.

 Coverage Initiated

Oracle (ORCL): BMO Capital Markets initiated coverage with an Outperform rating and target price of $42.00.

Ensco (ESV): Morgan Keegan initiated coverage with an Outperform rating and target price of $63.50.

Coverage Reiterated/Price Target Changed

Aeropostale (ARO): Brean Murray reiterated their Buy rating and lowered their target price from $32.00 to $28.00.

Earning Reports

Aeropostale (ARO): Reported Q4 EPS of $0.98 beating estimates by +$0.01 on revenue of $839 million, beating estimates by +$5 million. Shares -8.61% Pre-market.

AnnTaylor (ANN): Reported EPS of $0.19 beating estimates by +$0.02.

National Semiconductor (NSM): Reported FQ3 EPS of $0.24 in-line with estimates on revenue of $344 million, missing estimates by -$8 million.

·         Futures at 7:00: Dow -0.4%. S&P -0.4%. Nasdaq -0.4%. Crude -3.1% to $99.54. Gold -0.4% to $1406.80.

·         Europe: London -0.5%. Paris -1.0%. Frankfurt -0.9%.

·         Asia: Japan -1.7% to 10254. Hong Kong -1.6% to 23250. China -0.7% to 2936. India -0.8% to 18174.