MORNING COFFEE

GM Begins Trading Today. General Motors (GM) priced its IPO at $33.00 and sold 478 million common shares and $4.35 billion in preferred shares.  If underwriters exercise options to cover overallotment, GM's IPO could reach $18.1 billion which would make it the second-largest in U.S. history. The government also sold 358 million shares, raising $11.8 billion and reducing its stake in the company to just under 37%. The government plans to further reduce its ownership in the company and has agreed to a six month lockup.

Fed Wants New Stress Test. The Federal Reserve announced that it plans to do another round of stress tests on top U.S. banks.  The test will affect the top 19 banks and require they submit capital plans. The banks subject to the stress tests are: AXP, BAC, BK, BBT, COF, C, FITB, GJM, GS, JPM, KEY, MET, MS, PNC, RF, STT, STI, USB, WFC.

Upgrades

Estee Lauder (EL): Oppenheimer raised their rating from Underperform to Perform.

Downgrades

Research In Motion (RIMM): Stifel Nicolaus lowered their rating from Buy to Hold and lowered their target price from $65.00 to $45.00.

Coverage Initiated

Motorola (MOT): Stifel Nicolaus initiated coverage with a Buy rating and target price of $11.00.

TiVo (TIVO): Stifel Nicolaus initiated coverage with a Hold rating.

Garmin (GRMN): Stifel Nicolaus initiated coverage with a Sell rating.

Chipotle Mexican Grill (CMG): Miller Tabak initiated coverage with a Hold rating and target price of $210.00.

Coverage Reiterated/Price Target Changed

Coca-Cola (KO): Stifel Nicolaus reiterated their Buy rating and raised their target price from $70.00 to $75.00.

Netease.com (NTES): Auriga U.S.A reiterated their Buy rating and raised their target price from $44.00 to $48.00.

Earning Reports

Staples (SPLS): Reported Q3 EPS of $0.41 beating estimates by +$0.01 on revenue of $6.5 billion. 

Applied Materials (AMAT): Reported FQ4 EPS of $0.36 beating estimates by +$0.05 on revenue of $2.9 billion.

Limited Brands (LTD): Reported Q3 EPS of $0.18 beating estimates by +$0.01 on revenue of $2 billion.

PetSmart (PETM): Reported Q3 EPS of $0.38 in-line on revenue of $1.4 billion. 

Sears Holdings (SHLD): Reported EPS of -$1.98 missing estimates by -$0.90.

Dollar Tree (DLTR): Reported ESP of $0.73 beating estimates by +$0.11.

·         Futures at 7:00: Dow +0.9%. S&P +1.1%. Nasdaq +1.25%. Crude +1.6% to $81.76. Gold +1.5% to $1356.40.

·         Asia: Japan +2.1% to 10014. Hong Kong +1.8% to 23637. China +0.9% to 2865. India +0.3% to 19931.

·         Europe: London +1.4%. Paris +2.4%. Frankfurt +1.4%.