MORNING COFFEE

Airline Merger Talks. United Airlines (UAUA) and US Airways (LCC) are reportedly in talks to merge into one of the world's largest airlines.  Both United and US Airways have gone on the record in the past about the need for greater industry consolidation in response to falling revenues.

Jobless Claims Rise. The Labor Department reported the number of people applying for unemployment benefits rose unexpectedly 18,000 to a seasonally adjusted 460,000 in the week ended April 3.

Pier 1 Imports (PIR): Reported Q4 EPS of $0.31missing estimates by -$0.01 on revenue of $396 million.

Bed Bath & Beyond (BBBY): Reported Q4 EPS of $0.86 beating estimates by +$0.13 on revenue of $2.24 billion.  The company also sees Q1, FY11 EPS above consensus estimates.

Downgrades

Sherwin-Williams (SHW):  Hilliard Lyons lowered their rating from Buy to Long Term Buy and placed a target price of $90.00 on the company.

Zumiez (ZUMZ): Wedbush lowered their rating from Outperform to Neutral and placed a target price of $23.00 on the company.

eBay (EBAY): Kaufman Bros lowered their rating from Buy to Hold and placed a target price of $31.00 on the company.

Monsanto (MON): Jefferies lowered their rating from Buy to Hold and lowered their target price from $100.00 to $71.00.

Coverage Initiated

Oracle (ORCL): Soleil initiated coverage with a Buy rating and placed a target price of $30.00 on the company.

Oracle (ORCL): Janney Mntgmy Scott initiated coverage with a Buy rating and placed a target price of $32.00 on the company.

Microsoft (MSFT): Soleil initiated coverage with a Buy rating and placed a target price of $34.00 on the company.

·         Futures: Dow -0.3%. S&P -0.3%. Nasdaq -0.2%. Crude -0.55% to $85.41. Gold -0.45% to $1147.80.

·         Asia: Nikkei -1.1% to 11168.2. Hang Seng -0.3% to 21867. Shanghai -0.9% to 3119. BSE -1.4% to 17714.

·         Europe: London -1.0% to 5703. Paris -1.5% to 3968. Frankfurt -1.0% to 6160.