MORNING COFFEE

European Debt Worries Send World Markets Lower. 

US stocks are due to open lower today after speculation that Greece will need to restructure its €340B ($484 billion) sovereign debt. Greece has already fallen behind in its debt payments to healthcare companies just months after restructuring it. Rating agency Fitch downgraded its view on Greece's debts further below junk status.

In Spain the Socialist party suffered huge losses yesterday in local and regional elections in a protest vote against deep budget cuts and assistance to banks that have kept a fiscal crisis in check, but has not brought down high unemployment. Analysts believe more cuts are needed to prevent Spain from defaulting on their debt.

Additionally, fear of the debt crisis in Europe spreading beyond the PIGS (Portugal, Ireland, Greece, Spain) was heightened after Standard & Poor's lowered its outlook on Italy's debt. 

Upgrades

Walt Disney (DIS): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $50.00 on the company.

Mosaic (MOS): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $77.50 on the company.

Coverage Initiated

Silicon Labs (SLAB): Needham initiated coverage with a Buy rating and target price of $51.00.

Clean Harbors (CLH): Oppenheimer initiated coverage with a Perform rating and target price of $110.00.

Coverage Reiterated/Price Target Changed

Herbalife (HLF): Canaccord Genuity reiterated their Buy rating and raised their target price from $54.00 to $61.00.

Foot Locker (FL): FBR Capital reiterated their Outperform rating and raised their target price from $24.00 to $28.00.

Earning Reports

Krispy Kreme Doughnuts (KKD): Reported EPS of $0.13 beating estimates by +$0.04.

Campbell Soup (CPB): Reported EPS of $0.57 beating estimates by +$0.05.

·         Futures at 7:00: Dow -0.9%. S&P -1.0%. Nasdaq -0.1%. Crude +1.1% to $99.49. Gold +0.1% to $1510.10.

·         Europe: London -1.6%. Paris -1.8%. Frankfurt -1.7%.

·         Asia, Japan -1.5% to 9461. Hong Kong -2.1% to 22711. China -2.9% to 2776. India -1.8% to 17993.