MORNING COFFEE

FOMC Hints At QE2. The FOMC minutes were released yesterday and the committee cut its growth expectations for the rest of this year and next. The committee noted that spending is mixed and hiring concerns are weighing down business investment, but a return to recession is unlikely.  The release of the minutes also supported the idea of a second round of quantitative easing as officials said the Fed would need to act soon unless inflation moves back towards a more consistent level.

Intel Beats Estimates. Intel (INTC) announced earnings after the close yesterday that beat street estimates (see details below).  The company said it saw "solid global demand" for computers, alleviating some concerns that businesses are reducing tech spending. The company’s gross profit margin rose to 65.9% from 57.6%, and expects it to rise to 67% for Q4.

Google To Map Inflation.  Google’s (GOOG) chief economist, Hal Varian announces that the company is working on the “Google Price Index.”  The index would use Google’s vast online database to measure inflation on a daily basis.  The advantage over the Feds Consumer Price Index (CPI) is that the CPI numbers are only released on a monthly basis and that data is only collected from a limited number of companies. 

Upgrades

Alcatel-Lucent (ALU): Jefferies raised their rating from Underperform to Buy.

Priceline.com (PCLN): Morgan Keegan raised their rating from Market Perform to Outperform and placed a target price of $20.00 on the company.

Downgrades

Amazon.com (AMZN): The Benchmark Company lowered their rating from Buy to Hold.

KeyCorp (KEY): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Initiated

PPG Industries (PPG): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $89.00.

Progressive (PGR): RBC Capital Markets initiated coverage with an Outperform rating and target price of $24.00.

Allstate (ALL): RBC Capital Markets initiated coverage with an Outperform rating and target price of $38.00.

FLIR Systems (FLIR): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $38.00.

Coverage Reiterated/Price Target Changed 

Qualcomm (QCOM): Oppenheimer reiterated their Outperform rating and raised their target price from $45.00 to $51.00.

Intel (INTC): FBR Capital reiterated their Market Perform rating and raised their target price from $26.00 to $27.00.

Earning Reports

Host Hotels & Resorts, Inc. (HST): Reported Q3 EPS of $0.11 in-line on revenue of $1.01 billion.

JPMorgan (JPM): Reported Q3 EPS of $1.01 beating estimates by +$0.11 on revenue of $24.3 billion. 

CSX (CSX): Reported Q3 EPS of $1.08 beating estimates by +$0.03 on revenue of $2.7 billion.

Intel (INTC): Reported Q3 EPS of $0.52 beating estimates by +$0.02 on revenue of $11.1 billion. 

Linear Technology (LLTC): Reported FY11 Q1 EPS of $0.61 missing estimates by -$0.01 on revenue of $389 million.

·         Futures: Dow +0.6%. S&P +0.7%. Nasdaq +0.8%. Crude +1.2% to $82.66. Gold +0.9% to $1359.10.

·         Asia: Japan +0.2% to 9404. Hong Kong +1.4% to 23458. China +0.7% to 2861. India +2.4% to 20688.

·         Europe: London +1.3%. Paris +1.6%. Frankfurt +1.4%.