MORNING COFFEE

Sanofi-Aventis Extends Offer To Genzyme. Sanofi-Aventis (SNY) is expected to  extend its $18.5 billion tender offer for Genzyme (GENZ).  The two companies have been locked in a stalemate for several months. Sanofi’s current offer of $69.00 per share is set to expire on Friday.  

House Repeals Healthcare Reform Law. Yesterday the House of Representatives with bipartisan support voted 245-189 to repeal President Obama's healthcare reform law. The bill is not expected to pass the Senate and if passed is expected to be vetoed by President Obama. 

Downgrades

Goldman Sachs (GS): Ticonderoga lowered their rating from Buy to Neutral.

Coverage Initiated

VMware (VMW): Collins Stewart initiated coverage with a Hold rating and target price of $92.00.

Coverage Reiterated/Price Target Changed

Marathon Oil (MRO): Oppenheimer reiterated their Outperform rating and raised their target price from $39.00 to $52.00.

Raymond James (RJF): Ticonderoga reiterated their Buy rating and raised their target price from $35.00 to $40.00.

Goldman Sachs (GS): FBR Capital Oppenheimer reiterated their Outperform rating and raised their target price from $180.00 to $190.00.

Earning Reports

UnitedHealth (UNH): Reported Q4 EPS of $0.94 beating estimates by +$0.10 on revenue of $24.03 billion, up +10.3%.

Tyco Electronics (TEL): Reported FQ1 EPS of $0.73 beating estimates by +$0.05 on revenue of $3.2 billion, up +10.7%.

PNC FINL SVCS GROUP (PNC): Reported Q4 EPS of $1.50 beating estimates by +$0.12 on revenue of $3.90 billion, down -20.1%.

eBay (EBAY): Reported Q4 EPS of $0.52 beating estimates by +$0.05 on revenue of $2.5 billion, up +5%. Shares +5.6% afterhours.

Xilinx (XLNX): Reported FQ3 EPS of $0.58 beating estimates by +$0.06 on revenue of $567 million, up +11%.  Shares -0.4% afterhours.

·         Futures at 7:00: Dow -0.2%. S&P -0.1%. Nasdaq -0.1%. Crude -0.45% to $90.45. Gold -0.4% to $1364.20.

·         Europe: London -1.4%. Paris -0.4%. Frankfurt -0.8%.

·         Asia: Japan -1.1% to 10437. Hong Kong -1.7% to 24004. China -2.9% to 2678. India +0.4% to 19047.

MORNING COFFEE

Apple’s Steve Jobs Takes Medical Leave. Apple’s (AAPL) CEO Steve Jobs announced that he's taking a medical leave, but he will remain as CEO during his leave. In the announcement no details of his condition were given.  Job’s is a cancer survivor and has had a liver transplant. Apple is scheduled to report their earnings today after the close.  Analysts estimates are for the company to report Q1 EPS of $5.39 versus year over year of $3.67. Premarket: AAPL -4.2% (7:00 ET).

Upgrades

McDonald's (MCD): RBC Capital Markets raised their rating from Sector Perform to Outperform and placed a target price of $85.00 on the company.

Downgrades

Abbott Labs (ABT): RBC Capital Markets lowered their rating from Top Pick to Outperform and lowered their target price from $66.00 to $60.00.

Tim Hortons (THI): RBC Capital Markets lowered their rating from Outperform to Sector Perform and placed a target price of $45.00 on the company.

Coverage Reiterated/Price Target Changed

Canadian National Rail (CNI): Dahlman Rose reiterated their Buy rating and raised their target price from $70.00 to $79.00.

Johnson & Johnson (JNJ): RBC Capital Markets reiterated their Sector Perform rating and lowered their target price from $62.00 to $60.00.

Google (GOOG): Oppenheimer reiterated their Outperform rating and raised their target price from $640.00 to $705.00.

Xilinx (XLNX): Auriga U.S.A reiterated their Hold rating and raised their target price from $29.00 to $35.00.

Earning Reports

Delta Air Lines (DAL): Reported FQ4 EPS of $0.19 missing estimates by -$0.05 on revenue of $7.79 billion, up +14.5%.

TD Ameritrade (TD): Reported EPS of $0.25 in line with estimates.

·         Futures at 7:00: Dow +0.4%. S&P +0.3%. Nasdaq -0.4%. Crude -0.15% to $91.40. Gold +0.6% to $1368.90.

·         Europe: London +1.3%. Paris +0.9%. Frankfurt +1.1%.

·         Asia: Japan +0.1% to 10519. Hong Kong 0.0% at 24154. China +0.1% to 2709. India +1.1% to 19092.

MORNING COFFEE

Muni Market Under Pressure. The municipal bond market is coming under growing pressure, as states attempt to refinance tens of billions of dollars of debt and investors are becoming leery of high state indebtedness. Yesterday a New Jersey agency cut the size of a bond issue by 40% and had to pay a higher rate than expected due to a lack of  demand. Additionally, the Vanguard Group also put on hold plans for three new muni bond funds, citing market conditions.

Upgrades

Alcoa (AA): Dahlman Rose raised their rating from Hold to Buy and placed a target price of $22.00 on the company.

Reliance Steel (RS): Dahlman Rose raised their rating from Hold to Buy and placed a target price of $63.00 on the company.

Downgrades

Coinstar (CSTR): Northland Securities lowered their rating from Outperform to Market Perform.

SAP AG (SAP): Jefferies lowered their rating from Buy to Hold.

Coverage Initiated

Royal Caribbean (RCL): Hudson Securities initiated coverage with a Buy rating and target price of $58.00.

Carnival (CCL): Hudson Securities initiated coverage with a Hold rating and target price of $56.00.

Taubman Centers (TCO): KeyBanc Capital Markets initiated coverage with a Hold rating.

Coverage Reiterated/Price Target Changed

Johnson & Johnson (JNJ): RBC Capital Markets reiterated their Sector Perform rating and lowered their target price from $62.00 to $60.00.

Applied Materials (AMAT):  Stifel Nicolaus reiterated their Buy rating and raised their target price from $15.00 to $16.00.

U.S. Steel (X): Dahlman Rose reiterated their Buy rating and raised their target price from $55.00 to $85.00.

Intel (INTC): Wedbush reiterated their Outperform rating and raised their target price from $24.00 to $27.00.

Intel (INTC): RBC Capital Markets reiterated their Sector Perform rating and lowered their target price from $24.00 to $27.00.

Earning Reports

JPMorgan (JPM): Reported Q4 EPS of $1.12 beating estimates by +$0.13 on revenue of $26.72 billion, up +6%.

Intel (INTC): Report Q4 EPS of $0.59 beating estimates by +$0.06 on revenue of $11.4 billion, up +8.4%.

·         Futures at 7:00: Dow -0.2%. S&P -0.2%. Nasdaq +0.05%. Crude -1.1% to $90.39. Gold -1.3% to $1368.80.

·         Europe: London -0.7%. Paris -0.2%. Frankfurt -0.3%.

·         Asia: Japan -0.9% to 10499. Hong Kong +0.2% to 24283. China -1.3% to 2791. India -1.7% to 18860.

MORNING COFFEE

GM To Leave Taxpayers On The Hook. In a report issued by the Congressional Oversight Panel says that taxpayers will unlikely to recover the full $50 billion investment in GM (GM). The shortfall is in part due to the government selling a larger chunk of shares at the IPO price of $33.00 instead of waiting for a higher price.  The government’s breakeven point is $53.00 per share.  The government's stake is currently down to 26.5% from a high of 61% and has recovered around $23 billion.

Upgrades

AFLAC (AFL): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $59.00 to $69.00.

UnitedHealth (UNH): Wedbush raised their rating from Neutral to Outperform and raised their target price from $41.00 to $48.00.

Chipotle Mexican Grill (CMG): Miller Tabak raised their rating from Hold to Buy and raised their target price from $210.00 to $255.00.

Micron (MU): Sterne Agee raised their rating from Neutral to Buy and placed a target price of $12.00 on the company.

Micron (MU): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $8.00 to $15.00.

Coverage Initiated

General Motors (GM): Argus initiated coverage with a Buy rating and target price of $47.00.

Precision Castparts (PCP): Stifel Nicolaus initiated coverage with a Buy rating and target price of $175.00.

Earning Reports

Infosys Technologies (INFY): Reported FQ3 EPS of $0.69 beating estimates by +$0.02 on revenue of $1.59 billion, up +28.7%.

·         Futures at 7:00: Dow 0.0%. S&P 0.0%. Nasdaq 0.0%. Crude -0.2% to $91.65. Gold -0.5% to $1378.60.

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

·         Asia: Japan +0.7% to 10590. Hong Kong +0.5% to 24239. China +0.2% to 2828. India -1.8% to 19183.

MORNING COFFEE

EIA Sees Tighter Oil Markets.  In a report the EIA said global crude oil markets will tighten over the next two years.  The EIA sees consumption increasing by an average 1.5 million barrels while OPEC supplies increasing by only 100,000 barrels. In the report the EIA said it expects that "the market will rely on both inventories and significant increases in production of crude oil and non-crude liquids in OPEC member countries to meet world demand growth.  The report also noted that the WTI crude spot prices should average $93 per barrel in 2011 and $98 in 2012.

Schwab Settles Law Suit. Charles Schwab (SCHW) has agreed to pay $118.9 million to settle civil charges.  The suit claimed that the company marketed their YieldPlus short-term bond fund as a conservative investment and did not disclose that more than half of the funds’ investments were invested in high-risk securities.   The fund's assets had fallen to $1.8 billion from $13.5 billion during an eight-month period in 2007-2008.

Upgrades

Sara Lee (SLE): Argus raised their rating from Sell to Hold.

Downgrades

International Flavors (IFF): KeyBanc Capital Markets lowered their rating from Buy to Hold.

Talbots (TLB): Janney Montgomery Scott lowered their rating from Buy to Neutral.

Coverage Reiterated/Price Target Changed

Southern Co (SO): Oppenheimer reiterated their Perform rating and raised their target price from $39.00 to $41.00.

Edison (EIX): Oppenheimer reiterated their Perform rating and raised their target price from $40.00 to $43.00.

Dominion (D): Oppenheimer reiterated their Perform rating and raised their target price from $44.00 to $46.00.

·         Futures at 8:43: S&P +0.74%. Nasdaq +0.67%. Dow +0.59%. 10-yr -0.17%. Crude -0.2% to $90.93. Gold -0.16% to $1382.10.

·         Europe: London +0.3%. Paris +1.2%. Frankfurt +1.2%.

·         Asia: Japan +0.02%. Hong Kong +1.5%. China +0.6%. India +1.8%.

MORNING COFFEE

DuPont Buys Danisco. DuPont (DD) announced that they have agreed to buy Danisco (DNSCY) for $5.8 billion per share. DuPont will also assume $500 million of debt. Danisco a Danish company is the world’s largest food-ingredients maker. DuPont expects the deal to reduce expected 2011 EPS of $3.30-3.60 by $0.30 to $0.45, and begin adding to earnings in 2012.

Upgrades

Jacobs Engineering (JEC): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $53.00 on the company.

Freeport-McMoRan (FCX): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $140.00 on the company.

Downgrades

Motorola Mobility (MMI): Morgan Keegan lowered their rating from Outperform to Market Perform.

RadioShack (RSH): FBR Capital lowered their rating from Outperform to Market Perform.

AT&T (T): Hudson Square Research lowered their rating from Buy to Hold.

Flagstar Bancorp (FBC): FBR Capital lowered their rating from Outperform to Market Perform and placed a target price of $1.75 on the company.

Wells Fargo (WFC): FBR Capital lowered their rating from Outperform to Market Perform and placed a target price of $31.00 on the company.

Coverage Initiated

Coach (COH): Brean Murray initiated coverage with a Buy rating and target price of $65.00.

Coverage Reiterated/Price Target Changed 

Broadcom (BRCM): reiterated their Outperform rating and raised their target price from $49.00 to $52.00.

NVIDIA (NVDA): Wedbush reiterated their Neutral rating and raised their target price from $10.00 to $18.00.

Fluor (FLR): Stifel Nicolaus reiterated their Buy rating and raised their target price from $64.00 to $77.00.

BP (BP): Oppenheimer reiterated their Outperform rating and raised their target price from $45.00 to $55.00.

Silicon Labs (SLAB): FBR Capital reiterated their Market Perform rating and raised their target price from $35.00 to $42.00.

Qualcomm (QCOM): FBR Capital reiterated their Outperform rating and raised their target price from $51.00 to $55.00.

Earning Reports

Fourth Quarter earnings season kicks off today with Alcoa (AA) reporting their earnings after the close today.  Analysts estimate the company will report earnings of $0.19 versus $0.01 a year ago.

Helen of Troy (HELE): Reported EPS of $0.86 beating estimates by +$0.09.

·         Futures at 7:00: Dow -0.3%. S&P -0.5%. Nasdaq -0.3%. Crude +0.6% to $88.58. Gold 0.0% at $1368.40.

·         Europe: London -0.5%. Paris -1.6%. Frankfurt -0.8%.

·         Asia: Japan closed. Hong Kong -0.7% to 23527. China -1.6% to 2792. India -2.4% to 19224.

MORNING COFFEE

Facebook To Go Public. According to the company’s private-placement document, which allows up to 500 individuals to invest into the company, Facebook plans to increase its number of investors above 500 this year, at which point the SEC would require the company to disclose their financials. Analysts suggest that the company could go public by April 2012.

Upgrades

Dollar General (DG): Avondale raised their rating from Market perform to Market Outperform and raised their target price from $33.00 to $34.00.

Fiserv (FISV): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $72.00 on the company.

Downgrades

MetroPCS (PCS): Auriga U.S.A lowered their rating from Buy to Hold and placed a target price of $13.00 on the company.

Express Scripts (ESRX): FBR Capital lowered their rating from Outperform to Market Perform.

Coverage Resumed

Laboratory Corp (LH): RBC Capital Markets resumed their coverage with an Outperform rating and target price of $103.00.

Quest Diagnostics (DGX): RBC Capital Markets resumed their coverage with a Sector Perform rating.

Coverage Reiterated/Price Target Changed

Zimmer Holdings (ZMH): Stifel Nicolaus reiterated their Buy rating and raised their target price from $58.00 to $60.00.

TJX (TJX): RBC Capital Markets reiterated their Outperform rating and raised their target price from $50.00 to $52.00.

Tiffany & Co (TIF): HSBC Securities reiterated their Overweight rating and raised their target price from $60.00 to $75.00.

Earning Reports

Shaw Group (SHAW): Reported FQ1 EPS of -$0.06 missing estimates by -0.11.

Texas Industries (TXI): Reported FQ2 EPS of -$0.40 beating estimates by +$0.13.

KB Home (KBH): Reported FQ4 EPS of $0.23 beating estimates by +$0.40.

·         Futures at 7:00: Dow 0.0%. S&P 0.0%. Nasdaq 0.0%. Crude +0.4% to $88.71. Gold -1.0% to $1357.90.

·         In Europe: London -0.6%. Paris -0.3%. Frankfurt -0.1%.

·         In Asia, Japan +0.1% to 10541. Hong Kong -0.4% to 23687. China +0.5% to 2839. India -2.4% to 19692.

MORNING COFFEE

U.S. Nears Debt Limit Again. Analysts believe that the U.S. will again hit its $14.3 trillion debt limit by March unless Congress takes action to raise the limit again. Hitting the debt limit could cause the government to default on its debt and cause a shutdown in the government.  Many are now pushing for aggressive cuts in spending before agreeing to increase the Federal debt limit again.

Upgrades

Elan (ELN): RBC Capital Markets raised their rating from Underperform to Sector Perform and raised target price from $4.00 to $8.00.

Exxon Mobil (XOM): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $90.00 on the company.

BB&T Corp (BBT): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $32.00 on the company.

Downgrades

bebeStores (BEBE): Brean Murray lowered their rating from Buy to Hold.

Zumiez (ZUMZ): Wedbush lowered their rating from Neutral to Underperform and lowered their target price from $30.00 to $20.00.

Comerica (CMA): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

Estee Lauder (EL): Wedbush reiterated their Outperform rating and raised their target price from $80.00 to $87.00.

Massey Energy (MEE): FBR Capital reiterated their Market Perform rating and raised their target price from $80.00 to $87.00.

Earning Reports

Constellation Brands (STZ): Reported EPS of $0.66 beating estimates by +$0.04.

Monsanto (MON): Reported EPS of $0.02 beating estimates by +$0.01.

Ruby Tuesday (RT): Reported EPS of $0.07 beating estimates by +$0.02.

·         Futures at 7:00: Dow +0.3%. S&P +0.35%. Nasdaq +0.4%. Crude -0.5% to $89.81. Gold 0.0% at $1373.60.

·         Europe: London +0.7%. Paris +0.8%. Frankfurt +1.1%.

·         Asia: Japan +1.4% to 10530. Hong Kong +0.1% to 23786. China -0.5% to 2824. India -0.6% to 20185.