MORNING COFFEE

All is Not Well at Blockbuster. In a 10-k yesterday, Blockbuster (BBI) said it may have to file for bankruptcy as part of a debt exchange.  The company also said it may pledge Canadian assets as collateral for accounts payable to studios. Shares fell nearly -28% in after hours trading to $0.29.

Hartford to Pay Back TARP. Hartford Financial Group (HIG) announced it will repay $3.4 billion in TARP yesterday.   To fund the repurchase the company will offer $1.45 billion in common stock and $500 million in mandatory convertible preferred stock, along with debt securities.

High on The Hog. Shares of Harley-Davidson (HOG) rose +7% yesterday on speculation the motorcycle maker may be the target of a leveraged buyout by private equity firm KKR.

Upgrades

General Electric (GE): Sterne Agee upgraded their rating from Sell to Neutral.

Boeing (BA): Wedbush Morgan upgraded their rating from Neutral to Outperform and raised their target price from $60.00 to $79.00.

Adobe Systems (ADBE): Brigantine upgraded their rating from Hold to Buy and placed a target price of $42.00 on the company.

Downgrades

Nucor (NUE): Longbow lowered their rating from Buy to Neutral.

Tractor Supply (TSCO): FBR Capital lowered their rating from Market Perform to Underperform.

Diamond Offshore (DO):  Credit Suisse lowered their rating from Neutral to Underperform and lowered their target price from $86.00 to $79.00.

Coverage Initiated

Hewlett-Packard (HPQ): Brigantine initiated coverage with a Buy rating and a target price of $59.00.

·         Futures: Dow +0.3%. S&P +0.4%. Nasdaq +0.2%. Crude +0.8% to $82.36. Gold +0.8% to $1131.60.

·         Asia: Nikkei +1.2% to 10847. Hang Seng +1.7% to 21384. Shanghai +1.9% to 3050. BSE +0.6% to 17490.

·         Europe: London +0.6% to 5656. Paris +0.7% to 3966. Frankfurt +0.9% to 6023.