MORNING COFFEE

U.S. Bank Need More Capital. According to a report by Barclays Capital the largest U.S. banks face a capital shortfall of between $100 billion and $150 billion once Basel III rules go into effect.  Additionally 90% of the shortfall will be concentrated in the top six banks.  To meet the new capital requirements for Basel III banks could increase their capital through retained earnings, issuing new stock or selling off assets.

Ireland Asks For Aid. Ireland is now the second eurozone country to ask for aid from the EU and IMF.  The aid package will be around €80 billion ($110 billion). Reports say that the U.K. government will loan £7 billion, and that Sweden may also extend a loan.

Upgrades

Hewlett-Packard (HPQ): Wedbush raised their rating from Neutral to Outperform and raised their target price from $46.00 to $50.00.

SanDisk (SNDK): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $42.00 to $56.00.

Downgrades

Massey Energy (MEE): FBR Capital lowered their rating from Outperform to Market Perform .

Coverage Reiterated/Price Target Changed

Foot Locker (FL): FBR Capital reiterated their Outperform rating and raised their target price from $17.00 to $21.00.

Honeywell (HON): FBR Capital reiterated their Market Perform rating and raised their target price from $47.00 to $57.00.

Earning Reports

Tyson Foods (TSN): Reported EPS of $0.64 beating estimates by +$0.08.

·         Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.3%. Crude +0.8% to $82.64. Gold +0.3% to $1356.60.

·         Asia: Japan +0.9% to 10115. Hong Kong -0.3% to 23524. China -0.1% to 2884. India +1.9% to 19958.

·         Europe: London -0.2%. Paris -0.1%. Frankfurt +0.3%.