MORNING COFFEE

Possible EU Bailout.  European Central Bank President Jean-Claude Trichet sparked rumors of an imminent Greece bailout when he abruptly left a summit in Sydney today.  An ECB spokesman said the travel change was purely due to logistics "because there was some concern that he would not catch a connecting flight and therefore miss the EU summit" this Thursday. Speculation of a Greek bailout helped lift the euro +0.4% against the dollar.

UBS Beats Estimates, But Bleeds Clients.  UBS (UBS) announced its first profit in more than a year, earning 1.2 billion Swiss francs ($1.1 billion) in Q4.  However, UBS said withdrawals by wealthy clients are accelerating, rising to 45.2 billion francs from 26.6 billion francs in the previous quarter, and far exceeding analysts' estimates of 17.5 billion francs in outflows. CEO Oswald Gruebel expects outflows to continue "in the immediate future."

Traders Short Euro.  Traders and hedge funds have bet nearly $8 billion against the euro in the largest ever short position of the currency. Concerned about a Eurozone debt crisis, traders have built up more than 40,000 contracts against the euro.

Opel’s Restructuring Plan.  General Motors' Opel unit outlined a restructuring plan today.  The plan asks for €2.7 billion ($3.7 billion) in loans and loan guarantees from European governments. Opel plans to invest a total of €11 billion through 2014 and will cut around 8,300 jobs across Europe.

Lehman Brothers Report To Be Released. The court-appointed examiner looking into the collapse of Lehman Brothers said he has completed his 2,200-page report and it will be made public as soon as possible. The examiner was asked to investigate Lehman's collapse and its sale of key assets to Barclays (BCS).  The report will also address whether there were any signs of fraud, dishonesty or misconduct.

Cognizant Technology Solutions (CTSH): Announced Q4 EPS of $0.47 beating estimates by +$0.01, on revenue of $903 million (+20%) vs. $888 million. Shares are up+2.4% premarket. 

NYSE Euronext (NYX): Reported Q4 EPS of $0.58 which beat estimates by +$0.10, on revenue of $640million. Shares are up+1.3% premarket.

Earning reports to be released today include: Biogen Idec (BIIB), Church & Dwight (CHD), Coca-Cola (KO), Pulte Homes (PHM), Baidu.com (BIDU), and Walt Disney (DIS)

Upgrades

PetSmart (PETM): Credit Suisse upgraded their rating from Neutral to Outperform.

UPS (UPS): Argus upgraded their rating from Hold to Buy and set a target price of $70.00.

Downgrades

Gamestop (GME): Credit Suisse downgraded their rating from Outperform to Neutral and lowered their target price from $28.00 to $25.00.

Electronic Arts (ERTS): Needham downgraded their rating from Buy to Hold.

·         Futures: Dow +0.4%. S&P +0.6%. Nasdaq +0.7%. Crude +0.3% to $72.09. Gold +0.1% to $1,067.

·         Asia, Nikkei -0.2% to 9933. Hang Seng +1.2% to 19790. Shanghai +0.5% to 2949. BSE +0.7% to 16042.

·         Europe at midday, London +0.2% to 5100. Paris -0.3% to 3595. Frankfurt -0.1% to 5479.