MORNING COFFEE

Japan in Recession. Japan saw its GDP fall 0.9% in the first quarter as the earthquake took its toll on the nation.  Economists were expecting a drop of only 0.5% and the decline follows the fourth quarter decline of 0.8%.  Japan has now officially entered a recession and economists predict that the Japanese economy will continue to slow in the second quarter.

Downgrades

Deere & Co. (DE): Jefferies lowered their rating from Buy to Hold and lowered their target price from $110.00 to $92.00. Pre-market: 86.31 -0.19 (-0.22%)

Intel (INTC): Goldman Sachs lowered their rating from Neutral to Sell and lowered their target price from $21.00 to $20.00. Pre-market: 23.38 -0.50 (-2.09%)

OfficeMax (OMX): Oppenheimer lowered their rating from Outperform to Perform and lowered their target price from $14.00 to $9.50. Pre-market: 8.24 -0.02 (-0.24%)

Staples (SPLS): Oppenheimer lowered their rating from Outperform to Perform and lowered their target price from $26.00 to $19.00. Pre-market: 16.65 +0.02 (0.12%)

Coverage Initiated

Cisco Systems (CSCO): Janney Capital initiated coverage with a Neutral rating and target price of $18.00. Pre-market: 16.69 +0.04 (0.24%)

Coverage Reiterated/Price Target Changed

Abercrombie & Fitch (ANF): Oppenheimer reiterated their Outperform rating and raised their target price from $74.00 to $80.00.

AFLAC (AFL): FBR Capital reiterated their Outperform rating and lowered their target price from $69.00 to $64.00.

BMC Software (BMC): Collins Stewart reiterated their Buy rating and raised their target price from $58.00 to $62.00.

PETsMART (PETM): Oppenheimer reiterated their Perform rating and raised their target price from $41.00 to $42.00. Pre-market: 43.55 +1.06 (2.49%)

Earning Reports

Advance Auto Parts (AAP): Reported Q1 EPS of $1.35 missing estimates by -$0.03 on revenue of $1.9 billion, in-line. Pre-market: 64.12 -6.54 (-9.26%)

Limited Brands (LTD): Reported Q1 EPS of $0.40 beating estimates by +$0.01 on revenue of $2.2 billion, in-line. Pre-market: 42.55 +0.10 (0.24%)

Sears (SHLD): Reported FQ1 EPS of -$1.58 missing estimates by -$0.17 on revenue of $9.7 billion, missing estimates by -$0.1 billion.

Williams-Sonoma (WSM): Reported Q1 EPS of $0.30 beating estimates by +$0.02 on revenue of $771 million, beating estimates by +$5.6 milion. Pre-market: 43.00 -0.26 (-0.60%)

·         Futures at 7:00: Dow +0.30%. S&P +0.25%. Nasdaq +0.21%. Crude +0.5% to $100.56. Gold -0.4% to $1490.30.

·         Europe: London +1.0%. Paris +1.3%. Frankfurt +1.4%.

·         Asia: Japan -0.4% to 9621. Hong Kong +0.7% to 23163. China -0.5% to 2860. India +0.3% to 18141.