MORNING COFFEE

HP Buys Palm. Hewlett-Packard (HPQ) announced they have agreed to buy Palm (PALM) in a $1.2 billion deal.  HP said Palm's webOS operating system will help it compete in the smartphone market. Palm shareholders will receive $5.70 in cash for each share of common stock, a 23% premium over Palm's share price before the deal was announced.

Fed Keeps Rates Unchanged. The Federal Open Market Committee maintained its 0.0-0.25% zero rates and said it expects rates to remain at their current levels "for an extended period," keeping the language that has accompanied the rate statement for more than a year. The Fed also said that the economy has continued to strengthen and said that inflation will be "subdued for some time."

Upgrades

Palm (PALM): Morgan Joseph raised their rating from Sell to Hold.

Owens Corning (OC): Longbow raised their rating from Neutral to Buy and placed a target price of $41.00 on the company.

Downgrades

Dollar Thrifty (DTG): MKM Partners lowered their rating from Buy to Neutral.

Children's Place (PLCE): Stifel Nicolaus lowered their rating from Buy to Hold.

Equifax (EFX): Robert W. Baird lowered their rating from Outperform to Neutral.

Coverage Resumed

Celgene (CELG): Wedbush resumed coverage with an Outperform rating and a target price of $73.00.

Earning Reports:

Burger King (BKC): Reported FQ3 EPS of $0.32 beating estimates by +$0.03 on revenue of $597 million.

Eastman Kodak (EK): Reported Q1 EPS of $0.82 missing estimates by -$0.08 on revenue of $1.9 billion.

Potash Corp. (POT): Reported Q1 EPS of $1.47 beating estimates by +$0.15 on revenue of $1.7 billion.

Baidu.com (BIDU): Reported Q1 EPS of $2.02 beating estimates by +$0.52 on revenue of $190 million. 

Express Scripts (ESRX): Reported Q1 EPS of $1.10 in-line on revenue of $11.1billion. 

Visa (V): Reported Q2 EPS of $0.96 beating estimates by +$0.05 on revenue of $1.96 billion. The company also raised FY10 net revenue growth outlook, reaffirmed EPS growth outlook through FY11.

Xilinx (XLNX): Reported Q4 EPS of $0.46 beating estimates by +$0.01 on revenue of $529 million.

·         Futures: Dow +0.3%. S&P +0.5%. Nasdaq +0.4%. Crude +1.2% to $84.25. Gold -0.3% to $1168.40.

·         Asia: Japan -2.6% to 10925. Hong Kong -0.8% to 20779. China -1.1%to 2868. India +0.7% to 17503.

·         Europe: London +0.6%. Paris +1.1%. Frankfurt +0.4%.