MORNING COFFEE

Administration Attacking Banks.  President Obama rolled out his plans for financial reforms, warning that the financial system is "still operating under the same rules that led to its near collapse." His proposals, which include limits on the size of banks and severely restrict proprietary trading. This comes after last week’s accouchement of a special tax levy aimed at financial institutions.  The news sent the financial sector into a free fall, with Goldman Sachs (GS), JPMorgan (JPM), Citigroup (C) and Bank of America (BAC) each falling more than -4%.

Earning Reports:

American Express (AXP): Reported Q4 EPS of $0.59 beating estimates by +$0.02, on revenue of $6.5 billion.

Capital One (COF): Reported Q4 EPS of $0.83 beating estimates +$0.38 on revenue of $4.4 billion.

Google (GOOG): Reported Q4 EPS of $6.79 beating estimates by +$0.29 on revenue ex-tax of $4.95 billion.  The company also said "As we enter 2010, we remain hugely optimistic about the internet and are continuing to invest heavily in technological innovation."

GE (GE):  ReportedQ4 EPS of $0.28 beating estimates by +$0.02 on revenue of $41.4 billion. “GE’s environment has improved and we saw some encouraging signs at year-end... Capital Finance is executing well in a difficult environment, earning $0.3B in the quarter and $2.3B. Every segment at GE Capital was profitable with the exception of Commercial Real Estate, which continues to operate in a difficult environment."

Upgrades/Downgrades

Upgrades

JPMorgan Chase (JPM) Citigroup upgraded their rating from Hold to Buy, with a target price of $48.00.

Downgrades

Google (GOOG) Collins Stewart lowered their rating from Buy to Hold, and changed their target price from $635 to $615.

Coverage Initiated

TJX (TJX) Deutsche Bank initiated coverage with a Buy rating and a target price of $43.00.

Coverage Reiterated/Price Target Changed

Google (GOOG) Deutsche Bank reiterated their Buy rating and changed their target price from $615.00 to $626.00

Goldman Sachs (GS) FBR Capital reiterated their Outperform rating and changed their target price from $205.00 to $190.00

·         Futures: Dow -0.2%. S&P -0.1%. Nasdaq flat. Crude flat at $76.05. Gold flat at $1,102.70.

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Asia, Nikkei -2.6% to 10,591. Hang Seng -0.65% to 20,726. Shanghai-1% to 3,129. BSE -1.1% to 16,860.

·         Europe at midday, London -0.8%. Paris -1.4%. Frankfurt -0.8%.