MORNING COFFEE

Moody’s Warns About US Debt. Moody's released a statement yesterday that unless the U.S. works to lower its budget deficit or the economy grows more than expected, the government's triple-A bond rating will eventually come under pressure. Moody's said "the deficits projected in the budget do not stabilize debt levels in relation to GDP, and the portion of government expenditures going to pay interest on the debt shows a steady rise."

PNC Pays Money Back. PNC Financial (PNC) said yesterday that it will repay $7.6 billion of TARP funds. PNC will use $2.3 billion from the sale of its Global Investment Servicing to Bank of New York Mellon (BK).  The company will also offer $3 billion in common shares and will offer $1.5 billion-2 billion in senior notes.PNC is down -1.6% the premarket.

Auto Sale Give Hope. U.S. auto companies saw sales rebound in January from the previous year, with the notable exception of Toyota (TM). Overall, sales increased 6% from Jan. 2009. Companies reported the following: Ford (F): +24% to 112,406 vehicles, Chrysler: -8% to 57,143 vehicles. GM: +14% to 146,825 vehicles, Honda (HMC): -5% to 67,479 vehicles, Toyota (TM): -8.7% to 98,796 vehicles, Nissan (NSANY): +16.1% to 62,572 vehicles.

Homes Sales Rise. Pending home sales rose +1% in December to 96.6 month-on-month, better than the 0% expected by economist and November's -16% drop to 96. Sales were up +10.9% year-over-year.

Retail Sales Rise. ICSC reported retail sales inched up +0.1% from the previous week, vs. -2.5% prior. Sales rose +0.4% from the previous year, vs. +1.9% prior. According to Redbook, chain store sales were up +0.8% from the previous year, vs. +1% prior.

Comcast (CMCSA): Reported Q4 EPS of $0.33 that beat estimates by +0.06 on revenue of $9 billion.

Time Warner (TWX): Reported Q4 EPS of $0.55 beating estimates by +0.03 on revenue of $7.3 billion.

AFLAC (AFL): Reported Q4 operating earnings of $1.18 beating estimates by +0.03 on revenue of $4.6 billion.

News Corp. (NWS):  Reported FQ2 EPS of $0.25 beating earnings estimates by +0.05 on revenue of $8.7 billion.

Other Earnings to be reported today:  International Paper (IP), Microchip Tech Corp (MCHP), Pfizer (PFE), Polo Ralph Lauren (RL),Silicon Labs (SLAB), ITT Corp (ITT), National Oilwell (NOV), Cysco Systems (CSCO)

Upgrades

Wal-Mart (WMT): Stifel Nicolaus upgraded the company from Hold to Buy with a target price of $62.00.

Genzyme (GENZ):  UBS upgraded the company from Neutral to Buy.

Coverage Reiterated/Price Target Changed 

America Movil SA (AMX): Stifel Nicolaus reiterated they Buy rating and changed their target price from $52.00 to $53.00.

·         Futures: Dow +0.15%. S&P +0.15%. Nasdaq +0.2%. Crude +0.7% to $77.75. Gold +0.3% to $1,120.50.

·         Asia, Nikkei +0.3% to 10,404. Hang Seng +2.2% to 20,722. Shanghai+2.4% to 3,004. BSE +2.1% to 16,496.

·         Europe at midday, London +0.3%. Paris +0.3%. Frankfurt +0.2%.