MORNING COFFEE

Obama to Propose State Bailout. The Obama administration is proposing a bailout to states burdened with unemployment insurance debt.  The state aid will be included in the budget plan due to be released next week.  High unemployment has burden 30 states to a tune of $42 billion, which is owed to the Federal government. Three states have had to raise their taxes to meeting their unemployment insurance obligations and more than 20 other states likely would have to raise taxes to cover their unemployment insurance debts.

China Raises Interest Rates.  Once again in an attempt to slow inflationary pressures in China, the government raised interest rates.  The move was widely expected by analysts and came as no surprise. The one year’s savings rate was increased by +25 basis points to 3% and the one-year leading rate was raised by the same amount and now stands at 6.06%.

Upgrades

General Dynamics (GD): Argus raised their rating from Hold to Buy and placed a target price of $86.00 on the company.

Coverage Reiterated/Price Target Changed

Apple (AAPL): Canaccord Genuity reiterated their Buy rating and raised their target price from $432.00 to $460.00.

Walt Disney (DIS): Wunderlich reiterated their Hold rating and raised their target price from $36.00 to $41.00.

Cognizant Tech (CTSH): Oppenheimer reiterated their Outperform rating and raised their target price from $76.00 to $82.00.

Tidewater (TDW): Argus reiterated their Buy rating and raised their target price from $56.00 to $65.00.

Earning Reports

Elan (ELN): Reported Q4 EPS of -$0.09 missing estimates by -$0.05 on revenue of $309 million, up +3%.

NYSE Euronext (NYX): Reported Q4 EPS of $0.46 beating estimates by +$0.03 on revenue of $613 million, down -4%.

Teva Pharmaceutical Industries (TEVA): Reported Q4 EPS of $1.25 missing estimates by -$0.03 on revenue of $4.4 billion, up +16%.

• Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -1.3% to $86.33. Gold +0.3% to $1351.60.
• Europe: London -0.2%. Paris -0.1%. Frankfurt +0.2%.
• Asia: Japan +0.4% to 10636. Hong Kong -0.3% to 23484. China closed. India -1.45% to 17776.