MORNING COFFEE

Buffett Sells Kraft. Warren Buffett's Berkshire Hathaway (BRKA/BRKB) sold more than 31 million shares of Kraft (KRFT) in the first quarter, a stake worth almost a billion dollars.  The 22.8% reduction came as Buffett criticized Kraft for using its stock to acquire Cadbury's. After the sale, Buffett remains Kraft's largest shareholder with a 6.3% stake.

Treasury Bet On Chrysler Falls Short. The Treasury said it will lose $1.6 billion on the loan made to Chrysler in early 2009. Chrysler had borrowed $4 billion from the government and repaid $1.9 billion before filing for bankruptcy. The government does not intend to boost its stake in Chrysler to compensate for the loss, and may lose another $1.9 billion on a separate loan made to the firm.

Housing Numbers are Mixed. Housing starts rose more than expected to a 672,000 annual rate last month.  The number was the highest since October 2008 and up +5.8% from March.  But building permits, which forecast future building, fell -12% to a 606,000 annual rate in April.

Inflation What Inflation.The Producer Price Index (PPI) which measures inflation at the wholesale level, edged lower in April as energy prices dropped. The producer price index fell by a seasonally adjusted       -0.1% in April from March. Economists had expected a +0.1% increase. The Core rate which excludes food and energy rose by +0.2%, more than the expected +0.1% increase.

Upgrades

Intuit (INTU): Jefferies raised their rating from Hold to Buy and raised their target price from $35.00 to$45.00.

Coverage Initiated

Qualcomm (QCOM): Sterne Agee initiated coverage with a Neutral rating.

Apple (AAPL): Sterne Agee initiated coverage with a Buy rating and target price of $300.00.

Coverage Resumed

Teva (TEVA): Jefferies resumed coverage with a Hold rating and target price of $61.00.

Coverage Reiterated/Price Target Changed

Agilent (A): Longbow reiterated their Buy rating and raised their target price from $37.00 to $43.00.

Salesforce.com (CRM): Wedbush reiterated their Outperform rating and raised their target price from $85.00 to $95.00.

Norfolk Southern (NSC): Stifel Nicolaus reiterated their Buy rating and raised their target price from $70.00 to $74.00.

CSX (CSX): Stifel Nicolaus reiterated their Buy rating and raised their target price from $62.00 to $67.00.

Earning Reports 

Agilent Technologies (A): Reported Q2 EPS of $0.43 beating estimates by +$0.02 on revenue of $1.3 billion.

Home Depot (HD): Reported Q1 EPS of $0.45 beating estimates by +$0.05 on revenue of $16.9 billion.

Wal-Mart (WMT): Reported Q1 EPS of $0.88 beating estimates by +$0.03 on revenue of $99.85 billion.  The company forecast second-quarter earnings of 93 cents to 98 cents a share. 

·         Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +2.6% to $71.93. Gold -1.1% to $1214.20.

·         Asia: Japan +0.1% to 10243. Hong Kong +1.2% to 19945. China +1.4% to 2595. India +0.2% to 16876.

·         Europe: London +1.0%. Paris +1.6%. Frankfurt +1.3%.