MORNING COFFEE

Problems Mount at Goldman. Goldman Sachs (GS) is in the news again and it isn’t good.  Reports say that a Goldman director gave insider information to hedge-fund billionaire Raj Rajaratnam about a planned $5B investment into the company by Berkshire Hathaway (BRKA/BRKB) before the deal was publicly announced. Other reports alleged that Goldman served as both an underwriter and an investor in Lloyds' (LYG) refinancing deal late last year, which raises serious questions about conflict of interest.

Fitch Warns Japan About Debt. Rating agency Fitch warned Japan that its sovereign debt rating could be at risk unless the country improves its economy and reins in debt.  

Greece Asks For Money. Prime Minister George Papandreou said "The time has come" referring to Greece’s request to activate of the €45B ($61B) aid package offered by the EU and the IMF.  The bailout is "a necessity. The request comes a day after data showed Greece's debt crisis to be worse than previously believed.

Upgrades

Union Pacific (UNP): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $95.00 on the company.

Columbia Sportswear (COLM): Citigroup raised their rating from Sell to Hold and raised their target price from $36.00 to $62.00

Hershey Foods (HSY): JP Morgan raised their rating from Underweight to Neutral and raised their target price from $40.00 to $49.50.

Downgrades

King Pharms (KG): BMO Capital Markets lowered their rating from Market Perform to Underperform.

Sybase (SY): Needham lowered their rating from Buy to Hold.

Sherwin-Williams (SHW): JP Morgan lowered their rating from Overweight to Neutral.

Baxter (BAX): William Blair lowered their rating from Outperform to Market Perform.

Nokia (NOK): Jefferies lowered their rating from Hold to Underperform.

Coverage Reiterated/Price Target Changed

American Express (AXP): FBR Capital reiterated their Market Perform rating and raised their target price from $44.00 to $48.00.

Ensco (ESV): FBR Capital reiterated their Outperform rating and raised their target price from $56.00 to $63.00.

Amazon.com (AMNZ): Reported Q1 EPS of $0.66 beating estimates by +$0.05 on revenue of $7.13 billion.  The company also sees Q2 operating income of $220-320M vs. $328M consensus. 

American Express (AXP): Reported Q1 EPS of $0.73 beating estimates by +$0.09 on revenue of $6.61 billion. 

Chubb (CB): Reported Q1 EPS of $1.14 beating estimates by +$0.19 on revenue of $2.8 billion. 

Microsoft (MSFT): Reported Q3 EPS of $0.45 beating estimates by +$0.03 on revenue of $14.5 billion.

·         Futures: Dow +0.15%. S&P +0.3%. Nasdaq +0.1%. Crude -0.2% to $83.51. Gold -0.2% to $1140.10.

·         Asia: Nikkei -0.3% to 10914. Hang Seng -1.0% to 21244. Shanghai -0.5% to 2984. BSE +0.7% to 17694.

·         Europe: London +0.8% to 5709. Paris +0.6% to 3949. Frankfurt +1.3% to 6247.