MORNING COFFEE

North Korea Attacks South Korea. North Korea has fired artillery rockets at the South Korean island of Yeonpyeong.  The attack killed two soldiers, and wounded 16 soldiers and 3 civilians. The new sent world markets lower and the dollar rose as traders flocked to safety. China said that the attack was “very unlikely” to turn into full-scale hostilities.

J&J Recalls Children’s Medicine: Johnson & Johnson (JNJ) announced a recall on children's-strength Benadryl and children's Motrin because of manufacturing problems.  The company also said that the medicines in question are safe for consumption.

Medtronic To Buy Ardian. Medtronic (MDT) announced that they have agreed to buy privately-held Ardian for $800 million.  Ardian develops catheter-based therapies to relieve hypertension. Medtronic had priorly owned an 11% stake in the company.

Downgrades

Jack Henry (JKHY): Robert W. Baird lowered their Outperform rating to Neutral and placed a target price of $30.00 on the company.

Coverage Initiated

Old Dominion (ODFL): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $34.00.

Barrick Gold (ABX): HSBC Securities initiated coverage with an Overweight rating and target price of $64.00.

Newmont Mining (NEM): HSBC Securities initiated coverage with an Overweight rating and target price of $77.00.

Coverage Reiterated/Price Target Changed

Northrop Grumman (NOC): RBC Capital Markets reiterated their Underperform rating and raised their target price from $63.00 to $66.00.

Hewlett-Packard (HPQ):  RBC Capital Markets reiterated their Outperform rating and raised their target price from $55.00 to $56.00.

Pacific Sunwear (PSUN): Oppenheimer reiterated their Outperform rating and raised their target price from $4.75 to $7.50.

Exxon Mobil (XOM): Argus reiterated their Buy rating and raised their target price from $76.00 to $85.00.

Earning Reports

Hormel Foods (HRL): Reported EPS of $0.90 beating estimates by +$0.11.

Medtronic (MDT): Reported EPS of $0.82 beating estimates by +$0.01 on revenue of $3.9 billion.

Analog Devices (ADI): Reported FQ4 EPS of $0.73 beating estimates by +$0.03 on revenue of $770 million. 

Brocade Communications Systems (BRCD): Reported FQ4 EPS of $0.14 beating estimates by +$0.01 on revenue of $550 million. 

Campbell Soup (CPB): Reported EPS of $0.82 missing estimates by -$0.01.

Hewlett-Packard (HPQ): Reported FQ4 EPS of $1.33 beating estimates by +$0.06 on revenue of $33.2 billion.

·         Futures at 7:00: Dow -0.65%. S&P -0.8%. Nasdaq -0.6%. Crude -0.5% to $81.35. Gold +0.4% to $1363.20.

·         Asia: Japan +0.9% to 10115. Hong Kong -2.7% to 22896. China -1.9% to 2828. India -1.3% to 19692.

·         Europe: London -0.6%. Paris -0.9%. Frankfurt -0.2%.