MORNING COFFEE

Non-Farm Payrolls To Be Released. While yesterday’s big sell-off will weaken sentiment in the broader market, traders still have not seen the latest nonfarm payrolls report, which often brings volatility. The nonfarm payrolls report for January is scheduled to be released today at 8:30 ET.

Toyota’s Problems Continue. U.S. safety regulators launched a formal probe into brake problems on Toyota's (TM) 2010 Prius, and plan to recall 270,000 Prius hybrids in the U.S. and Japan. Toyota is also facing at least 29 class action suits in the U.S. and Canada, demanding compensation for vehicle flaws the company has disclosed. The company also faces at least 10 lawsuits claiming death or injury from sudden vehicle acceleration.

BofA Charged With Fraud. New York Attorney General Andrew Cuomo filed securities fraud charges 

against Bank of America (BAC), former CEO Kenneth Lewis and former CFO Joe Price, alleging they hid massive losses at Merrill Lynch in order to get shareholder approval for the merger.  The suit shows BofA board members gathered on Sept. 15, 2008, thinking they would approve the purchase of Lehman Brothers not Merrill Lynch, but then signed off on the Merrill acquisition after just twenty-five hours of examining the books. Separately, BofA reached a $150 million settlement with the SEC over Merrill-related charges; the settlement must be approved by Judge Jed Rakoff, who rejected an earlier one for $33 million.  Shares are down another -1.1% the premarket.

State Street Bank Receaches Settlement With SEC. State Street (STT) has agreed to pay $313 milliom back to investors as part of a settlement with the SEC and state regulators. State Street was charged with alerting preferred clients to fund problems while withholding information from other investors who then suffered significant losses on their exposure to subprime mortgages. The firm was also accused of telling clients their assets were "diversified" when in fact they were concentrated in subprime loans.   

       

Berkshire Hathaway’s Debt Downgraded. Berkshire Hathaway (BRK.A/BRK.B) sold $8 billion of senior unsecured notes on Thursday to help finance its purchase of Burlington Northern Santa Fe (BNI). S&P said that it downgraded Berkshire from AAA to AA+ because its acquisition of Burlington Northern.

Jobless Claims Rise. Initial Jobless Claims rose 8,000 to 480,000 vs. 460,000 consensus. Continuing claims rose 2,000 to 4,602,000.

Aetna (AET): Reported Q4 EPS of $0.40 missing estimates by -$0.02 on revenue of $8.7 billion.

Upgrades

MasterCard (MA): Wells Fargo upgraded their rating from Market Perform to Outperform.

Starwood Hotels (HOT): Robert W. Baird upgraded their rating from Underperform to Neutral and changed their target price from $29.00 to $31.00.

·         Futures: Dow -0.5%. S&P -0.6%. Nasdaq -0.3%. Crude +0.1% to $73.23. Gold -0.7% to $1,055.10.

·         Asia, Nikkei -2.9% to 10,057. Hang Seng -3.3% to 19,665. Shanghai -1.9% to 2,939. BSE -2.7% to 15,791.

·         Europe at midday, London -1.8%. Paris -2.2%. Frankfurt -1.5%.