MORNING COFFEE

SAP Makes Offer on Sybase. 

SAP AG (Sap) announced yesterday that it will acquire Sybase (SY) for $65 per share, or about $5.8 billion. The price is a 56% premium to Sybase's shares before news became public. Rick Paler president of RL Paler Investment Advisors LLC said “I believe that the acquisition could be a good thing for both parties, but risks lay in the integration of the two companies.  He also said that “we will continue holding Sybase for our clients for now, as we evaluate the deal and look for other opportunities to maximize client’s returns.”  Yesterday Sybase climbed +35.05% during regular trading yesterday on rumors of the deal. In the premarket Sybase is trading up +14.7%, SAP -1.3% (7:00 ET).

Criminal Investigations into Banks. 

New York Attorney General Andrew Cuomo has opened a criminal investigation against nine major banks.  The banks involved in the investigation include: Bank of America, Merrill Lynch (BAC), Citigroup (C), Credit Agricole (CRARY), Credit Suisse (CS), Deutsche Bank  (DB), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS), and UBS (UBS). The investigation centers around whether the banks provided misleading information to ratings agencies in order to get higher ratings on certain mortgage-related products. The SEC is also participating in the investigations.

 HTC Sues Apple. 

Cell phone manufacturer HTC, maker of Google's (GOOG) Nexus One phone, filed a complaint with the International Trade Commission to stop the importation and sale of Apple's (AAPL) iPhones and iPads in the U.S claiming patent infringements.  Apple had filed a patent infringement suit against HTC in March.

Wal-Mart Wants to Invade Russia. Wal-Mart (WMT) is said to be in preliminary talks to acquire Russian retailer Lenta.  Lenta has become a major chain in Russia, and had $1.86 billion of sales in 2009.

Upgrades

News Corp (NWSA): Argus raised their rating from Hold to Buy and placed a target price of $21.00 on the company.

Morgan Stanley (MS): FBR Capital raised their rating from Market Perform to Outperform and placed a target price of $35.00 on the company.

Halliburton (HAL): FBR Capital raised their rating from Market Perform to Outperform and placed a target price of $44.00 on the company.

Downgrades

Teva Pharm (TEVA): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

Marathon Oil (MRO): Caris & Company reiterated their Average rating and raised their target price from $28.00 to $35.00.

Las Vegas Sands (LVS): Argus reiterated their Buy rating and raised their target price from $26.00 to $30.00.

Cisco Systems (CSCO): Canaccord Adams reiterated their Buy rating and raised their target price from $27.50 to $29.00.

Earning Reports

Kohl's (KSS): Reported Q1 EPS of $0.64 beating estimates by +$0.02 on revenue of $4 billion.

Urban Outfitters (URBN): Reported Q1 EPS of $0.31 beating estimates by +$0.01 on revenue of $480 million.

Cisco Systems (CSCO): Reported Q1 EPS of $0.42 beating estimates by +$0.03 on revenue of $10.4 billion.

Whole Foods Market (WFMI): Reported Q2 EPS of $0.38 beating estimates by +$0.05 on revenue of $2.1 million.

·         Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.4%. Crude -1.0% to $74.93. Gold -0.8% to $1233.20.

·         Asia: Japan +2.2% to 10621. Hong Kong +1.0% to 20422. China +2.1% to 2711. India +0.4% to 17266.

·         Europe: London +0.5%. Paris +0.2%. Frankfurt +0.8%.