MORNING COFFEE

Banks To Go Bust Again.  According to the Wall Street Journal nearly 100 banks that received a Federal bailout are in danger of failing again.  98 of the banks had received a total of $4.2 billion from the Treasury Department from the Troubled Asset Relief Program, better known as TARP.  The warning comes after analyzing the third-quarter financial results and number of troubled banks appears to be increasing. 

Downgrades

RC2 (RCRC): Caris & Company lowered their rating from Above Average to Average and lowered their target price from $27.00 to $26.00.

Coverage Initiated

HiSoft Tech (HSFT): BMO Capital Markets initiated coverage with an Outperform rating and target price of $39.00.

Coverage Reiterated/Price Target Changed

Valmont (VMI): Stifel Nicolaus reiterated their Buy rating and raised their target price from $87.00 to $102.00.

ZAGG (ZAGG): Northland Securities reiterated their Outperform rating and raised their target price from $87.00 to $102.00.

Terremark Worldwide (TMRK): Kaufman Bros reiterated their Buy rating and raised their target price from $11.00 to $15.00.

·         Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.3% to $91.27. Gold +1.1% to $1397.80.

·         Europe: London closed. Paris +0.4%. Frankfurt +0.1%.

·         Asia: Japan -0.6% to 10293. Hong Kong -0.9% to 22622. China -1.7% to 2733. India 0.0% at 20025.

MORNING COFFEE

China Hikes Interest Rates. Over the weekend China raised their interest rates by 25 basis points.  The one-year lending rate now stands at 5.81% and the one-year deposit rate is 2.75%. This is the second rate hike since October as the government attempts to head off inflation.

Coverage Reiterated/Price Target Changed

Time Warner Cable TWC): Argus reiterated their Buy rating and raised their target price from $70.00 to $75.00.

Google (GOOG): Kaufman Bros reiterated their Buy rating and raised their target price from $650.00 to $690.00.

Earning Reports

Cal-Maine Foods (CLAM): Reported EPS of -$0.63 missing estimates -$0.09.

·         Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.1%. Crude -0.2% to $91.31. Gold +0.2% to $1383.40.

·         Europe: London closed. Paris -1.1%. Frankfurt -1.1%.

·         Asia: Japan +0.8% to 10356. Hong Kong closed. China -1.9% to 2781. India -0.2% to 20029.

MORNING COFFEE

U.S Files Complaint With WTO. The United States filed a complaint with the WTO over subsidies China provides its wind-energy manufacturers.  The complaint states that the Chinese government fund which gives grants to wind power manufacturers requires the companies to use Chinese-made parts, which is a violation of WTO rules.

Terror Attacks In Rome.  There have been two package bombs that have exploded at the Swiss and Chilean Embassies in Rome.  This comes just two days after a similar bomb was discovered on a train in Rome.

Coverage Reiterated/Price Target Changed

Bed Bath & Beyond (BBBY): Argus reiterated their Buy rating and raised their target price from $52.00 to $55.00.

Finish Line (FINL): Wedbush reiterated their Outperform rating and raised their target price from $21.00 to $23.00.

Finish Line (FINL): FBR Capital reiterated their Outperform rating and lowered their target price from $21.00 to $20.00.

Earning Reports

Piedmont (PNY): Reported EPS of -$0.13 missing estimates by -$0.04.

Bed Bath & Beyond (BBBY): Reported Q3 EPS of $0.74 beating estimates by +$0.08 on revenue of $2.2 billion, up +11.1%. 

Micron Technology (MU): Reported FQ1 EPS of $0.15 missing estimates by -$0.13 on revenue of $2.3 billion, up +32%.

·         Futures at 7:00: Dow 0.0%. S&P -0.1%. Nasdaq -0.2%. Crude +0.1% to $90.61. Gold -0.3% to $1383.60.

·         Asia: Japan -0.2% to 10346. Hong Kong -0.6% to 22903. China -0.8% to 2855. India -0.2% to 19983.

·         Europe: London +0.1%. Paris -0.4%. Frankfurt +0.1%.

MORNING COFFEE

Trader Corners Copper Market. A trader has acquired 80-90% ownership of all the copper in London Metal Exchange.  This equates to around half the world's exchange-registered copper stockpile and is worth about $3 billion. Copper prices reached a record high yesterday of $4.2705 per pound, and has gained +28% this year.

Downgrades

Micron (MU): Avian lowered their rating from Positive to Neutral.

Coverage Reiterated/Price Target Changed

Nike (NKE): FBR Capital reiterated their Outperform rating and raised their target price from $90.00 to $98.00.

Wells Fargo (WFC): Oppenheimer reiterated their Outperform rating and raised their target price from $42.00 to $44.00.

US Bancorp (USB): Oppenheimer reiterated their Outperform rating and raised their target price from $29.00 to $31.00.

Morgan Stanley (MS): Oppenheimer reiterated their Outperform rating and raised their target price from $32.00 to $34.00.

JPMorgan Chase (JPM): Oppenheimer reiterated their Outperform rating and raised their target price from $60.00 to $63.00.

Citigroup (C): Oppenheimer reiterated their Outperform rating and raised their target price from $5.20 to $5.50.

Goldman Sachs (GS): Oppenheimer reiterated their Outperform rating and raised their target price from $185.00 to $207.00.

Earning Reports

Navistar International (NAV): Reported Q3 EPS of $0.54 missing estimates by -$0.06 on revenue of $3.37 billion up +2.6%. 

Cintas (CTAS): Reported FQ2 EPS of $0.38 in-line on revenue of $937 million up +5.9%.

Nike (NKE): Reported FQ2 EPS of $0.94 beating estimates by +$0.06 on revenue of $4.8 billion up +9.9%. 

Red Hat (RHT): Reported Q3 EPS of $0.20 in-line on revenue of $236 million up +21%. 

TIBCO Software (TIBX): Reported FQ4 EPS of $0.31 beating estimates by +$0.03 on revenue of $241 million up +23.3%.

·         Futures at 7:00: Dow 0.0%. S&P 0.0%. Nasdaq -0.1%. Crude +0.6% to $90.32. Gold +0.1% to $1390.

·         Asia: Japan -0.2% to 10346. Hong Kong +0.2% to 23045. China -0.9% to 2878. India -0.2% to 20016.

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

MORNING COFFEE

Wells Fargo To Modify Loans. California Attorney General Jerry Brown announced that  Wells Fargo (WFC) has agreed to loan modifications totaling $2.4 billion to California homeowners with "pick-a-payment" adjustable-rate mortgages. The agreement also has Wells Fargo paying an additional $32 million to borrowers who lost their homes through foreclosure. Wells Fargo in a statement said they hope to reach similar agreements with all fifty states.

Upgrades

Regis (RGS): Wedbush raised their rating from Neutral to Outperform and raised their target price from $20.00 to $22.00.

Downgrades

Urban Outfitters (URBN): Brean Murray lowered their rating from Buy to Hold.

Coverage Initiated

SunTrust Banks (STI): RBC Capital Markets initiated coverage with an Outperform rating and target price of $31.00.

Unisys (UIS): Oppenheimer initiated coverage with an Outperform rating and target price of $28.00.

Coverage Reiterated/Price Target Changed

Jabil Circuit (JBL): RBC Capital Markets reiterated their Outperform rating and raised their target price from $20.00 to $22.00.

Jabil Circuit (JBL): Collins Stewart reiterated their Buy rating and raised their target price from $18.00 to $23.00.

Adobe Systems (ADBE): FBR Capital reiterated their Market Perform rating and raised their target price from $31.00 to $33.00.

Adobe Systems (ADBE): ISI Group reiterated their Hold rating and raised their target price from $30.00 to $34.00.

Earning Reports

Adobe (ADBE): Reported FQ4 EPS of $0.56 beating estimates by +$0.04 on revenue of $1 billion up +33%.

Darden Restaurants (DRI): Reported FQ2 EPS of $0.54 in-line on revenue of $1.7 billion up +5.2%.

Jabil Circuit (JBL): Reported FQ1 EPS of $0.61 beating estimates by +$0.07 on revenue of $4.1 billion up +32%.

Paychex (PAYX): Reported FQ2 EPS of $0.37 beating estimates by +$0.02 on revenue of $512 million up +3.1%.

·         Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.2%. Crude +0.1% to $89.44. Gold +0.05% to $1386.80.

·         Asia: Japan +1.5% to 10371. Hong Kong +1.6% to 22994. China+1.8% to 2904. India +0.9% to 20060.

·         Europe: London +0.7%. Paris +0.5%. Frankfurt +0.6%.

MORNING COFFEE

Ernst & Young Faces Fraud Charges. Reports say that New York Attorney General Andrew Cuomo is close to filing the civil fraud charges against accounting firm Ernst & Young.  The charges stem from the accounting firms alleged role in the collapse of Lehman Brothers (LEHMQ). If charges are filed it would be the first time a major accounting firm was held responsible for its role during the financial crisis.

Upgrades

CONSOL Energy (CNX): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $48.00 to $61.00.

InterMune (ITMN): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $15.00 to $47.00.

Downgrades

Fiserv (FISV): Robert W. Baird lowered their rating from Outperform to Neutral and placed a target price of $63.00 on the company.

American Express (AXP): Stifel Nicolaus lowered their rating from Buy to Hold and placed a target price of $53.00 on the company.

Coverage Initiated

Carnival (CCL): HSBC Securities initiated coverage with an Overweight rating and a target price of $51.00.

Royal Caribbean (RCL): HSBC Securities initiated coverage with a Neutral rating and a target price of $43.00.

Coverage Reiterated/Price Target Changed

Accenture (ACN): Argus reiterated their Buy recommendation and raised their target price from $55.00 to $58.00.

InterMune (ITMN): Stifel Nicolaus reiterated their Buy recommendation and raised their target price from $17.00 to $56.00.

ITT Industries (ITT): FBR Capital reiterated their Market Perform recommendation and raised their target price from $59.00 to $61.00.

Peabody Energy (BTU): FBR Capital reiterated their Outperform recommendation and raised their target price from $61.00 to $75.00.

Massey Energy (MEE): FBR Capital reiterated their Market Perform recommendation and raised their target price from $55.00 to $56.00.

Earning Reports

Companies reporting after the market close today.

Adobe Systems (ADBE): Consensus $0.52 versus $0.39 yr ago.

Darden Restaurants (DRI): Consensus $0.54 versus $0.43 yr ago.

Jabil Circuit (JBL): Consensus $0.54 versus $0.32 yr ago.

Paychex (PAYX): Consensus $0.35 versus $0.35 yr ago.

·         Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude +0.3% to $88.25. Gold +0.2% to $1382.50.

·         Asia: Japan -0.8% to 10216. Hong Kong -0.3% to 22639. China -1.4% to 2853. India +0.1% to 19889.

·         Europe: London +0.5%. Paris +1.1%. Frankfurt +1.1%.

MORNING COFFEE

Oracle Surprises Market. Oracle (ORCL) announced earnings that beat expectations.  The company saw quarterly profits jump 28% on a 47% increase in revenue.  The company also said it sees sales in the current quarter increasing 32-36%. Many traders saw this as further evidence that tech spending is rebounding. In the premarket ORCL shares are 4.1% higher.

Upgrades

Oracle (ORCL): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $38.00 on the company.

Downgrades

Comerica (CMA): Robert W. Baird lowered their rating from Outperform to Neutral.

NASDAQ (NDAQ): FBR Capital lowered their rating from Outperform to Market Perform.

Coverage Initiated

Visa (V): Wedbush initiated coverage with a Neutral rating and a target price of $72.00.

Check Point Software (CHKP): Wunderlich initiated coverage with a Hold rating and a target price of $46.00.

Symantec (SYMC): Wunderlich initiated coverage with a Hold rating and a target price of $18.00.

MetroPCS (PCS): FBR Capital initiated coverage with a Market Perform rating and a target price of $14.00.

Coverage Reiterated/Price Target Changed

Halliburton (HAL): Oppenheimer reiterated their Outperform rating and raised their target price from $42.00 to $49.00.

Oracle (ORCL): RBC Capital Markets reiterated their Outperform rating and raised their target price from $32.00 to $36.00.

Oracle (ORCL): Stifel Nicolaus reiterated their Buy rating and raised their target price from $29.00 to $34.00.

Oracle (ORCL): FBR Capital reiterated their Outperform rating and raised their target price from $32.00 to $36.00.

Oracle (ORCL): ISI Group reiterated their Buy rating and raised their target price from $32.00 to $39.00.

FedEx (FDX): RBC Capital Markets reiterated their Outperform rating and raised their target price from $98.00 to $105.00.

Research In Motion (RIMM): Wedbush reiterated their Neutral rating and raised their target price from $58.00 to $60.00.

Research In Motion (RIMM):  Canaccord Genuity reiterated their Hold rating and raised their target price from $57.00 to $60.00.

Research In Motion (RIMM):  ISI Group reiterated their Hold rating and raised their target price from $60.00 to $65.00.

  

Earning Reports

Accenture (ACN): Reported FQ1 EPS of $0.81 beating estimates by +$0.06 on revenue of $6.1 billion. 

Oracle (ORCL): Reported FQ2 EPS of $0.51 beating estimates by +$0.05 on revenue of $8.6 billion.

Research In Motion (RIMM): Reported Q3 EPS of $1.74 beating estimates by +$0.09 on revenue of $5.5 billion. 

Take-Two Interactive Software (TTWO): Reported FQ4 EPS of $0.67 beating estimates by +$0.36 on revenue of $374 million. 

·         Futures at 7:00: Dow 0.0%. S&P -0.1%. Nasdaq -0.15%. Crude -0.25% to $87.48. Gold +0.1% to $1372.20.

·         Asia, Japan -0.1% to 10304. Hong Kong +0.2% to 22715. China -0.1% to 2894. India +1.1% to 19865.

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

MORNING COFFEE

Senate Approves Tax Bill. In an 81-19 vote the Senate approved the $858 billion tax bill laid out by President Obama.  The bill will now go to the House, where it faces strong opposition. Lawmakers have until Dec. 31 to get the bill signed into law or tax rates will increase. Many are upset that the bill which is over 1,800 pages long and stuffed with billions of dollars in wasteful spending on pet projects.

Upgrades

Oracle (ORCL): Macquarie raised their rating from Neutral to Outperform and placed a target price of $37.00 on the company.

Downgrades

Alliant Tech (ATK): FBR Capital lowered their rating from Outperform to Market Perform.

L-3 Comms (LLL): FBR Capital lowered their rating from Outperform to Market Perform.

Raytheon (RTN): FBR Capital lowered their rating from Outperform to Market Perform.

VeriSign (VRSN): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

Joy Global (JOYG): RBC Capital Markets reiterated their Outperform rating and raised their target price from $88.00 to $96.00.

Delta Air Lines (DAL): Stifel Nicolaus reiterated their Buy rating and raised their target price from $16.00 to $18.00.

Take-Two (TTWO): Kaufman Bros reiterated their Hold rating and raised their target price from $12.00 to $13.00.

Apple (AAPL): Kaufman Bros reiterated their Buy rating and raised their target price from $380.00 to $395.00.

Earning Reports

FedEx (FDX): Reported EPS of $1.16 missing estimates by -$0.15.

General Mills (GIS): Reported EPS of $0.76 missing estimates by -$0.02.

Rite Aid (RAD): Reported EPS of -$0.09 beating estimates by +$0.04.

Pier 1 Imports (PIR): Reported Q3 EPS of $0.18 beating estimates by +$0.04 on revenue of $353.8 million.

·         Futures at 7:00: Dow +0.05%. S&P +0.1%. Nasdaq +0.1%. Crude -0.7% to $88.01. Gold -0.1% to $1384.70.

·         Asia: Japan 0.0% at 10311. Hong Kong -1.3% to 22669. China -0.5% to 2898. India +1.1% to 19865.

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