MORNING COFFEE

U.S. Economy Slowing.  Yesterday the FOMC released their latest decision on interest rates and it was no surprise that the kept rates unchanged at 0.0% - 0.25%.  The Fed also lowered their 2011 GDP forecast to 2.7%-2.9% from the previous 3.1%-3.3%.  What the market didn’t like was when Ben Bernanke said the Fed doesn't "have a precise read on why this slower pace of growth is persisting," and that weak housing and problems in the banking system might be "more persistent than we thought." Also unnerving the market was the fact that the Fed also increased its unemployment and core inflation projections.  Initial jobless released this morning once again came in well above economists’ estimates at 429,000.

Upgrades

FedEx (FDX): Argus raised their rating from Hold to Buy and placed a target price of $111.00 on the company. Pre-market: 91.10 -0.34 (-0.37%)

Lumber Liquidators (LL): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $31.00 on the company.

Deckers Outdoors (DECK): BBT raised their rating from Hold to Buy and placed a target price of $105.00 on the company. Pre-market: 81.00 -1.09 (-1.33%)

BP PLC (BP): Evolution raised their rating from Add to Buy. Pre-market: 42.06 -1.05 (-2.44%)

Downgrades

CSX (CSX): Sterne Agee lowered their rating from Buy to Neutral and placed a target price of $26.00 on the company. Pre-market: 25.00 -0.55 (-2.15%)

Coverage Initiated

KeyCorp (KEY): Rochdale initiated coverage with a Neutral rating and target price of $9.50. Pre-market: 8.06 -0.12 (-1.47%)

Coverage Reiterated/Price Target Changed

Ulta Salon (ULTA): Oppenheimer reiterated their Outperform rating and raised their target price from $62.00 to $67.00. Pre-market: 60.31 -1.18 (-1.92%)

Bed Bath & Beyond (BBBY): Wedbush reiterated their Outperform rating and raised their target price from $63.00 to $67.00. Pre-market: 55.20 +1.14 (2.11%)

Bed Bath & Beyond (BBBY): Argus reiterated their Buy rating and raised their target price from $60.00 to $63.00. Pre-market: 55.20 +1.14 (2.11%)

Earning Reports

Lennar (LEN): Reported FQ2 EPS of $0.07 beating estimates by +$0.02 on revenue of $764.5 million, beating estimates by $96.9 million. Pre-market: 18.30 +0.20 (1.10%)

ConAgra (CAG): Reported EPS of $0.47 missing estimates by -$0.01. Pre-market: 24.60 -0.82 (-3.23%)

Rite Aid (RAD): Reported EPS of -$0.07 beating estimates by +$0.05. Pre-market: 1.13 +0.03 (2.73%)

Discover Financial Services (DFS): Reported EPS of -$1.09 beating estimates by +$0.34. Pre-market: 23.95 +0.36 (1.53%)

Bed Bath & Beyond (BBBY): Reported Q1 EPS of $0.72 beating estimates by +$0.10 on revenue of $2.11 billion, beating estimates by +$0.04 billion. Pre-market: 55.20 +1.14 (2.11%)

Paychex (PAYX): Reported FQ4 EPS of $0.33 in-line with estimates on revenue of $523 million, beating estimates by +$8 million. Pre-market: 29.49 -0.22 (-0.74%)

Red Hat (RHT): Reported Q1 EPS of $0.24 beating estimates by +$0.02 on revenue of $265 million, beating estimates by +$11 million. Pre-market: 45.30 +1.58 (3.61%)

·         Futures at 8:55: Dow -1.03%. S&P -1.20%. Nasdaq -1.05%. Crude -4.32% to $91.25. Gold -2.12% to $1520.60.

·         Europe: London -1.46%. Paris -2.12%. Frankfurt -1.67%.

·         Asia: Japan -0.34% to 9597. Hong Kong -0.46% to 21759. China+1.47% to 2688. India +1.01% to 17727.