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%.