MORNING COFFEE

Japan in Recession. Japan saw its GDP fall 0.9% in the first quarter as the earthquake took its toll on the nation.  Economists were expecting a drop of only 0.5% and the decline follows the fourth quarter decline of 0.8%.  Japan has now officially entered a recession and economists predict that the Japanese economy will continue to slow in the second quarter.

Downgrades

Deere & Co. (DE): Jefferies lowered their rating from Buy to Hold and lowered their target price from $110.00 to $92.00. Pre-market: 86.31 -0.19 (-0.22%)

Intel (INTC): Goldman Sachs lowered their rating from Neutral to Sell and lowered their target price from $21.00 to $20.00. Pre-market: 23.38 -0.50 (-2.09%)

OfficeMax (OMX): Oppenheimer lowered their rating from Outperform to Perform and lowered their target price from $14.00 to $9.50. Pre-market: 8.24 -0.02 (-0.24%)

Staples (SPLS): Oppenheimer lowered their rating from Outperform to Perform and lowered their target price from $26.00 to $19.00. Pre-market: 16.65 +0.02 (0.12%)

Coverage Initiated

Cisco Systems (CSCO): Janney Capital initiated coverage with a Neutral rating and target price of $18.00. Pre-market: 16.69 +0.04 (0.24%)

Coverage Reiterated/Price Target Changed

Abercrombie & Fitch (ANF): Oppenheimer reiterated their Outperform rating and raised their target price from $74.00 to $80.00.

AFLAC (AFL): FBR Capital reiterated their Outperform rating and lowered their target price from $69.00 to $64.00.

BMC Software (BMC): Collins Stewart reiterated their Buy rating and raised their target price from $58.00 to $62.00.

PETsMART (PETM): Oppenheimer reiterated their Perform rating and raised their target price from $41.00 to $42.00. Pre-market: 43.55 +1.06 (2.49%)

Earning Reports

Advance Auto Parts (AAP): Reported Q1 EPS of $1.35 missing estimates by -$0.03 on revenue of $1.9 billion, in-line. Pre-market: 64.12 -6.54 (-9.26%)

Limited Brands (LTD): Reported Q1 EPS of $0.40 beating estimates by +$0.01 on revenue of $2.2 billion, in-line. Pre-market: 42.55 +0.10 (0.24%)

Sears (SHLD): Reported FQ1 EPS of -$1.58 missing estimates by -$0.17 on revenue of $9.7 billion, missing estimates by -$0.1 billion.

Williams-Sonoma (WSM): Reported Q1 EPS of $0.30 beating estimates by +$0.02 on revenue of $771 million, beating estimates by +$5.6 milion. Pre-market: 43.00 -0.26 (-0.60%)

·         Futures at 7:00: Dow +0.30%. S&P +0.25%. Nasdaq +0.21%. Crude +0.5% to $100.56. Gold -0.4% to $1490.30.

·         Europe: London +1.0%. Paris +1.3%. Frankfurt +1.4%.

·         Asia: Japan -0.4% to 9621. Hong Kong +0.7% to 23163. China -0.5% to 2860. India +0.3% to 18141.

MORNING COFFEE

LinkedIn IPO to Be Priced. Social network company LinkedIn will set its IPO price after the market closes today.  Analysts believe the price will be at the $42.00 - $45.00 range. This would be a 30% increase over its initial price range of $32.00 - $35.00.

Upgrades

Dicks Sporting Goods (DKS): Susquehanna raised their rating from Neutral to Positive and raised their target price from $39.00 to $47.00.

Dicks Sporting Goods (DKS): Susquehanna raised their rating from Neutral to Buy and placed a target price of $47.00 on the company.

Research In Motion (RIMM): Bernstein raised their rating from Underperform to Market Perform and placed a target price of $40.00 on the company. Pre-market: 44.71 +0.93 (2.12%)

Downgrades

Hewlett-Packard (HPQ): JP Morgan lowered their rating from Overweight to Neutral and lowered their target price from $55.00 to $42.00. Pre-market: 36.80 -0.11 (-0.30%)

Hewlett-Packard (HPQ): Susquehanna lowered their rating from Positive to Neutral and lowered their target price from $52.00 to $39.00. Pre-market: 36.80 -0.11 (-0.30%)

Coverage Initiated

Allscripts-Misys Healthcare (MDRX): Robert W. Baird initiated coverage with an Outperform rating and target price of $27.00.

Coverage Reiterated/Price Target Changed

Hewlett-Packard (HPQ): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $56.00 to $46.00. Pre-market: 36.80 -0.11 (-0.30%)

Dell (DELL): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $17.00 to $20.00. Pre-market: 16.77 +0.87 (5.47%)

Dell (DELL): Stifel Nicolaus reiterated their Buy rating and raised their target price from $18.00 to $20.00. Pre-market: 16.77 +0.87 (5.47%)

Dell (DELL): Brean Murray reiterated their Buy rating and raised their target price from $17.00 to $19.00. Pre-market: 16.77 +0.87 (5.47%)

Earning Reports

Analog Devices (ADI): Reported FQ2 EPS of $0.75 beating estimates by +$0.07 on revenue of $791 million, beating estimates by +$45 million. Pre-market: 42.36 +2.13 (5.29%)

Chico's FAS (CHS): Reported Q1 EPS of $0.26 beating estimates by +$0.01 on revenue of $537.2 million, missing estimates by -$7.2 million. Pre-market: 14.40 -0.81 (-5.33%)

Deere (DE): Reported FQ2 EPS of $2.12 beating estimates by +$0.06 on revenue of $8.33 billion, beating estimates by +$0.19 billion. Pre-market: 86.00 -0.96 (-1.10%)

Dell (DELL): Reported Q1 EPS of $0.55 beating estimates by +$0.11 on revenue of $15.01 billion, missing estimates by -$0.4 billion. Pre-market: 16.77 +0.87 (5.47%)

Staples (SPLS): Reported Q1 EPS of $0.28 missing estimates by -$0.04 on revenue of $6.17 billion, missing estimates by -$0.02 billion, The company also gave FY'11 EPS guidance of $1.35-1.45. Pre-market: 16.88 -2.77 (-14.10%)

·         Futures at 8:35: Dow +0.09%. S&P +0.08%. Nasdaq -0.04%. Crude +1.45% to $98.32. Gold +0.95% to $1494.00.

·         Europe: London +0.9%. Paris +0.6%. Frankfurt +0.8%.

·         Asia: Japan +1.0% to 9662. Hong Kong +0.5% to 23011. China +0.7% to 2873. India -0.3% to 18086.

MORNING COFFEE

Google Issues Bonds. Yesterday Google (GOOG) issued bonds for the first time in the company’s history.  Despite having $37 billion in cash, the company sold $3 billion in bonds with maturities of one-year, three-year and ten-years.  Orders for the bonds exceeded $10 billion.  Several analysts called the move a good one saying it was free money, since interest rates are so low.  Others called it a cheap insurance policy in case the economy turns negative. Pre-market: 520.49 +2.07 (0.40%)

Upgrades

Ford (F): Citigroup raised their rating from Hold to Buy and placed a target price of $18.00 on the company. Pre-market: 15.16 +0.03 (0.20%)

Forward Air (FWRD): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $36.00 to $40.00.

Coverage Initiated

True Religion (TRLG): The Benchmark Company initiated coverage with a Buy rating and target price of $34.00.

Quaker Chemical (KWR): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $50.00.

Coverage Resumed

PMC-Sierra (PMCS): Auriga U.S.A resumed coverage with a Hold rating and placed a target price of $8.00 on the company.

Coverage Reiterated/Price Target Changed

Intel (INTC): Bank of America Merrill Lynch reiterated their Neutral rating and raised their target price from $24.00 to $26.00. Pre-market: 23.39 -0.25 (-1.06%)

Intel (INTC): Citigroup reiterated their Buy rating and placed a target price of $27.00 on the company.

Intel (INTC): Zacks Investment Research reiterated their Neutral rating and placed a target price of $23.00 on the company.

OfficeMax (OMX): Oppenheimer reiterated their Outperform rating and lowered their target price from $18.00 to $14.00.

Earning Reports

Home Depot (HD): Reported Q1 EPS of $0.50 beating estimates by +$0.01 on revenue of $16.82 bilion, missing estimates by -$0.2 billion. Pre-market: 36.90 -0.08 (-0.22%)

Urban Outfitters (URBN): Reported Q1 EPS of $0.23 missing estimates by -$0.01 on revenue of $524 million, beating estimates by +$2 million. Pre-market: 32.10 -0.19 (-0.59%)

Vodafone (VOD): Reported full year profit of £7.97 billion ($12.9B), which was down -7.8% with £6.15 billion of impairment losses on some of its European businesses. Full year revenue came in at £45.9 billion +$0.4 billion. The company gave FY'12 profit guidance of £11B-11.8 billion. Pre-market: 27.71  +0.53 (1.95%)

·         Futures at 7:59: Dow +0.04%. S&P +0.11%. Nasdaq -0.02%. Crude +0.3% to $97.65. Gold +0.2% to $1493.90.

·         Europe: London +0.3%. Paris +0.1%. Frankfurt -0.6%.

·         Asia: Japan +0.1% to 9567. Hong Kong -0.3% to 22901. China +0.1% to 2853. India -1.1% to 18137.

MORNING COFFEE

Debt Limit Will Be Hit Today. 

Reports say that the Treasury department is expected to announce that they will stop issuing and reinvesting in government securities of certain state pension plans.  The effort is an attempt to delay hitting the $14.3 trillion debt limit that otherwise would be hit today.   Republicans and many Blue Dog Democrats want a deal on reducing the deficit before they vote to raise the debt ceiling.  I believe that not addressing the deficit and raising the debt ceiling would be a mistake.  It’s like maxing out your credit card with no plans on how you would make the payments.  Then asking the credit card company to raise you charge limit, it would not happen.

Upgrades

Accenture (ACN): UBS raised their rating from Neutral to Buy and raised their target price from $54.00 to $63.00. Pre-market: 56.12 +0.38 (0.68%)

American Eagle (AEO): Susquehanna raised their rating from Neutral to Positive. Pre-market: 14.85  +0.16 (1.09%)

Jacobs (JEC): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $54.00 to $55.00. Pre-market: 47.00 +0.41 (0.88%)

Ford (F): Citigroup raised their rating from Hold to Buy and placed a target price of $18.00 on the company. Pre-market: 15.23 +0.15 (0.99%)

Sara Lee (SLE): JP Morgan Baird raised their rating from Neutral to Overweight and raised their target price from $21.00 to $23.00. Pre-market: 19.44 +0.18 (0.93%)

Downgrades

Knight Transportation (KNX): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their rating from $22.00 to $20.00.

Coverage Reiterated/Price Target Changed

Apple (AAPL): Credit Suisse reiterated their Outperform rating and placed a target price of $500.00 on the company. Pre-market: 339.70 -0.80 (-0.23%)

Mastercard (MA): Argus reiterated their Buy rating and placed a target price of $325.00 on the company. Pre-market: 279.00 -1.00 (-0.36%)

Earning Reports

Lowe's (LOW): Reported Q1 EPS of $0.34 missing estimates by -$0.02 on revenue of $12.18 billion, missing estimates by -$0.3 billion. Pre-market: 24.77 -0.99 (-3.84%)

JC Penny Co. (JCP): Reported Q1 EPS of $0.28 beating estimates by +$0.02. Pre-market: 40.85 +2.41 (6.27%)

·         Futures at 9:09: Dow -0.19%. S&P -0.26%. Nasdaq -0.15%. Crude -1.9% to $97.79. Gold -0.15% to $1491.30.

·         Europe: London -0.9%. Paris -1.5%. Frankfurt -1.3%.

·         Asia: Japan -0.9% to 9558.3. Hong Kong -1.4% to 22961. China -0.7% to 2850. India -1.0% to 18345.

MORNING COFFEE

Google Computers Hit The Market. The long awaited Laptops that use Google's (GOOG) Chrome operating system will hit the shelves in June.  Acer and Samsung will be the first to release laptops using the new OS.  The Chrome OS uses cloud computing to steer users to applications such as email and spreadsheets on the internet rather than storing Outlook and other software on the computer.

Google also released a new version of Android 3.1 "Honeycomb." Honeycomb is their operating system for tablet computer and will support Google TV and the upgrade due out later this year.

The company also said its next Android smartphone OS, code-named Ice Cream Sandwich, will include Honeycomb features. The new system will also have a holographic user interface, improved multitasking, and richer widgets. Pre-market: 533.51 -1.94 (-0.36%)

Upgrades

Hershey Foods (HSY): Argus raised their rating from Hold to Buy. Pre-market: 53.15 -3.08 (-5.48%)

Downgrades

Choice Hotels (CHH): Argus lowered their rating from Buy to Hold.

Cisco Systems (CSCO): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $22.00 to $20.00. Pre-market: 17.02 -0.76 (-4.27%)

Coverage Initiated

Dell (DELL): Auriga U.S.A initiated coverage with a Buy rating and target price of $25.00.    Pre-market: 16.61 -0.12 (-0.72%)

Seagate Tech (STX): Auriga U.S.A initiated coverage with a Buy rating and target price of $29.00.

Western Digital (WDC): Auriga U.S.A initiated coverage with a Buy rating and target price of $51.00. Pre-market: 38.41 -0.03 (-0.08%)

Coverage Reiterated/Price Target Changed

Cisco Systems (CSCO): Oppenheimer reiterated their Outperform rating and lowered their target price from $24.00 to $22.00. Pre-market: 17.02 -0.76 (-4.27%)

Macy's (M): FBR Capital reiterated their Outperform rating and raised their target price from $31.00 to $34.00. Pre-market: 28.11 -0.25 (-0.88%)

Symantec (SYMC): FBR Capital reiterated their Market Perform rating and raised their target price from $18.00 to $21.00. Pre-market: 19.70 +0.29 (1.49%)

Earning Reports

Kohl's (KSS): Reported FQ1 EPS of $0.73 in-line with estimates on revenue of $4.2 billion, also  in-line. Pre-market: 52.70 -0.91 (-1.70%)

Cisco Systems (CSCO): Reported FQ3 EPS of $0.42 beating estimates by +$0.05 on revenue of $10.9 billion, in-line. Pre-market: 17.02 -0.76 (-4.27%)

Symantec (SYMC): Reported FQ4 EPS of $0.38 beating estimates by +$0.02 on revenue of $1.7 billion, beating estimates by +$0.1 billion. Pre-market: 19.70 +0.29 (1.49%)

·         Futures at 8:44: Dow -0.45%. S&P -0.48%. Nasdaq -0.56%. Crude -2.2% to $96.08. Gold -1.3% to $1482.50.

·         Europe: London -1.3%. Paris -1.4%. Frankfurt -1.6%.

·         Asia: Japan -1.5% to 9717. Hong Kong -0.9% to 23074. China -1.3% to 2845. India -1.3% to 18336.