MORNING COFFEE

Halliburton Q1 Profit Up.  Halliburton's reported net income that more than doubled in the first quarter, as drilling activity in North America picked up.  The company reported Q1 earnings of $511 million, or $0.56 per share, compared with $206 million, or $0.23 per share, in the same period last year. Revenue rose 40 % to $5.28 billion.  Halliburton said it earned $0.61 per share after taking a $46 million charge related to international sanctions on oil operations in Libya. Halliburton Co. posted nice revenue gains despite a slowdown in offshore drilling in the Gulf of Mexico and political turmoil in North Africa.   President and CEO Dave Lesar said "We remain very optimistic about this market and expect to be profitable in 2011." Pre-market: 47.38 +0.56 (1.20%)

J&J In Talks With Synthes. Johnson & Johnson (JNJ) confirmed they are in acquisition talks with Zurich based Synthes (SYST.VX).  An acquisition of Synthes would give J&J substantial access to the $5.5 billion trauma sector, which grew 8% last year. Synthes manufactures products in five main areas - Trauma, Spine, Cranio-Maxillofacial (CMF), Biomaterials, Power Tools and veterinary. JNJ Pre-market: 60.40 -0.16 (-0.26%) SYST 149.90 +11.20 (+8.07)

Upgrades

Hyatt Hotels (H): FBR Capital raised their rating from Market perform to Outperform and placed a target price of $49.00 on the company.

Downgrades

Best Buy (BBY): KeyBanc Capital Markets lowered their rating from Buy to Hold.

Papa John's (PZZA): Stifel Nicolaus lowered their rating from Buy to Hold.

Community Health (CYH): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

EMC (EMC): Brean Murray reiterated their Buy rating and raised their target price from $30.00 to $33.00.

Qualcomm (QCOM): FBR Capital reiterated their Outperform rating and raised their target price from $60.00 to $62.00.

Earning Reports

Citigroup (C): Reported EPS of $0.10 beating estimates by +$0.01 on revenue of $19.7 billion. Pre-market: 4.48 +0.06 (1.36%)

Eli Lilly (LLY): Reported Q1 EPS of $1.24 beating estimates by +$0.08 on revenue of $5.84 billion, beating estimates by +$0.2 billion. Pre-market: 35.42 -0.59 (-1.64%)

Halliburton (HAL): Reported Q1 EPS of $0.61 beating estimates by +$0.03 on revenue of $5.28 billion, beating estimates by +$0.3 billion. Pre-market: 47.38 +0.56 (1.20%)

KeyCorp (KEY): Reported Q1 EPS of $0.21 beating estimates by +$0.05. Pre-market: 8.85 +0.03 (0.34%)

·         Futures at 7:00: Dow -0.6%. S&P -0.7%. Nasdaq -0.6%. Crude -1.1% to $108.45. Gold -0.1% to $1484.50.

·         Europe: London -1.0%. Paris -1.5%. Frankfurt -1.1%.

·         Asia: Japan -0.4% to 9557. Hong Kong -0.7% to 23830. China +0.2% to 3057. India -1.5% to 19091.