MORNING COFFEE

Global Central Banks Move to Save EU.  In a coordinated move the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank announced a plan to shore up Europe’s financial system in an attempt to prevent massive defaults on sovereign debt and a collapse of the Euro.  The announcement has U.S. futures rising and the Euro strengthening against the dollar.

S&P Lowers Bank Ratings. S&P has lowered the rating on 37 of the largest financial institutions around the globe.  U.S. banks were also hit with downgrades, which included Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS).

Upgrades

D.R. Horton (DHI): Raymond James raised their rating from Market Perform to Outperform.

Transocean (RIG): Tudor Pickering raised their rating from Trim to Hold.

Downgrades

Transocean (RIG): Argus lowered their rating from Buy to Hold.

Netflix (NFLX): Wedbush lowered their rating from Neutral to Underperform and placed a target price of $45.00 on the company.

Corning (GLW): CLSA lowered their rating from Outperform to Underperform and lowered their target price from $17.00 to $14.00.

Daimler AG (DDAIF): JP Morgan lowered their rating from Overweight to Neutral.

Coverage Initiated

Celgene (CELG): Auriga initiated coverage with a Buy rating and target price of $71.00.

Earnings

American Eagle (AEO): Reported EPS of $0.27 in-line with estimates.

Jos.A. Bank (JOSB): Reported EPS of $0.54 beating estimates by +$0.03.

OmniVision (OVTI): Reported EPS of $0.48 beating estimates by +$0.16.

Markets: 
Futures at 7:00: Dow +0.7%. S&P +0.8%. Nasdaq +0.9%. Crude +0.3% to $100.09. Gold +0.1% to $1720.40. 

Europe: London +1.1%. Paris +0.9%. Frankfurt +1.7%.

Asia: Japan -0.5% to 8435. Hong Kong -1.5% to 17989. China -3.3% to 2333. India +0.7% to 16123. 

MORNING COFFEE

Debt Issues Continue Around The Globe. Sovereign debt issues seem to be popping up like moles in a Whac-a-mole game. After a bad debt offering yesterday, things got worse for Italy. In the latest Italian bond auction yields on three-year paper rose to 7.89% from 4.93% only a month ago. Also in Europe, S&P said it could downgrade France’s AAA rating in the next week.  Moody’s has placed 87 EU banks on review with a view that the average downgrade will be 2 notches.  In the U.S. rating agency Fitch revised its outlook on the U.S. to Negative while affirming the country's AAA-rating. The Negative rating represents a slightly greater than 50% chance of a downgrade agency within the next two-years.

Upgrades

Honeywell (HON): Sterne Agee raised their rating from Neutral to Buy and placed a target price of $69.00 on the company. Pre-market: 51.55 -0.11 (-0.21%)

Coverage Initiated

E.I. DuPont (DD): UBS initiated coverage with a Neutral rating and placed a target price of $44.50 on the company. Pre-market: 45.02 +0.01 (0.02%)

Triumph Group (TGI): Sterne Agee initiated coverage with a Buy rating and placed a target price of $70.00 on the company.

Boeing (BA): Sterne Agee initiated coverage with a Buy rating and placed a target price of $82.00 on the company. Pre-market: 64.87 -0.12 (-0.18%)

National Oilwell (NOV): Jefferies initiated coverage with a Buy rating and placed a target price of $88.00 on the company. Pre-market: 66.25 +0.44 (0.67%)

Halliburton (HAL): Jefferies initiated coverage with a Buy rating and placed a target price of $47.00 on the company. Pre-market: 32.92 +0.15 (0.46%)

Coverage Reiterated/Price Target Changed

Netflix (NFLX): Canaccord Genuity reiterated their Sell rating and lowered their target price from $60.00 to $57.00. Pre-market: 69.22 -0.73 (-1.04%)

Guess? (GES): Brean Murray reiterated their Buy rating and lowered their target price from $44.00 to $39.00.

Earning Reports

Tiffany & Co. (TIF): Reported EPS of $0.70 beating estimates by +$0.10. Pre-market: 67.37 -6.25 (-8.49%)

Markets: 
Futures at 8:52: Dow +0.13%. S&P +0.30%. Nasdaq +0.18%. Crude +0.20% to $98.39. Gold -0.06% to $1709.60. 

Europe: London -0.21%. Paris -0.30%. Frankfurt 0.00%. 

Asia: Japan +2.30% to 8478. Hong Kong +1.21% to 18256. China +1.23% to 2412. India -0.98% to 16008. 

MORNING COFFEE

Italian Yields Hit 7.3%. In a sign that the EU debt crisis has spread and is getting worse the yields on Italian bonds jumped to 7.3% in an auction of €567M ($758.4 million) of inflation-linked paper due to mature in 2023. The yield is up from 2.9% from a sale of the same bonds back in March 2010. Traders will be watching closely as the country tries to sell up to €8B in various bonds tomorrow. Additionally the IMF is dismissing reports that it was considering loaning Italy up to €600B ($797B). On this side of the pound some are now calling for the Fed to step in to save the EU.  Back in 2002 Fed Chairman Ben Bernanke said “The Fed has the authority to buy foreign government debt."

Upgrades

Foot Locker (FL): UBS raised their rating from Neutral to Buy and raised their target price from $4.00 to $30.00. Pre-market: 22.35 +1.23 (5.82%)

Coinstar (CSTR): JP Morgan raised their rating from Neutral to Overweight and maintained their $50.00 target price.

Google (GOOG): Citigroup raised their rating from Neutral to Buy and maintained their $680.00 target price. Pre-market: 578.95 +15.95 (2.83%)

Fossil (FOSL): The Benchmark Company raised their rating from Hold to Buy and maintained their $115.00 target price. Pre-market: 84.88 +3.62 (4.45%)

Salesforce.com (CRM): Needham raised their rating from Hold to Buy and placed a target price of $125.00 on the company. Pre-market: 108.42 +3.49 (3.33%)

Wynn Resorts (WYNN): Needham raised their rating from Hold to Buy and placed a target price of $145.00 on the company. Pre-market: 111.60 +4.58 (4.28%)

Texas Instruments (TXN): ThinkEquity raised their rating from Hold to Buy and raised their target price from $30 to $35.00.

Downgrades

Ryder Systems (R): Sun Trust lowered their rating from Buy to Neutral. Pre-market: 47.70 +0.96 (2.05%)

Kellogg (K): BMO Capital lowered their rating from Outperform to Market Perform and placed a target price of $53.00 on the company. Pre-market: 49.43 +0.68 (1.39%)

Coverage Initiated

PETsMART (PETM): Needham initiated coverage with a Buy rating and target price of $57.00.

Markets: 
Futures at 8:48: Dow +2.35%. S&P +2.94%. Nasdaq +2.49%. Crude +2.83% to $99.55. Gold +1.85% to $1716.90. 

Europe: London +2.61%. Paris +4.35%. Frankfurt +3.96%. 

Asia: Japan +1.56% to 8287. Hong Kong +1.97% to 18038. China +0.12% to 2383. India +3.01% to 16167. 

MORNING COFFEE

Fed Imposes New Bank Stress Test. The Fed has announced new bank stress tests in which banks will model a severe eurozone recession, a 6.9% decline in real GDP and a skyrocketing domestic unemployment rate.  Additionally, the six largest U.S. banks need to estimate losses "stemming from a hypothetical global market shock."

Downgrades

Patterson Cos. (PDCO): William Blair lowered their rating from Outperform to Market Perform.

Gilead Sciences (GILD): Argus lowered their rating from Buy to Hold.

Earning Reports

TiVo (TIVO): Reported EPS of -$0.21 beating estimates by +$0.04.

Pandora Media (P): Reported EPS of $0.02 beating estimates by +$0.03.

Markets: 
Futures at 7:00: Dow -0.6%. S&P -0.7%. Nasdaq -0.6%. Crude -1.6% to $96.47. Gold -0.5% to $1694.10. 

Europe: London -0.6%. Paris -0.1%. Frankfurt +0.6%. 

Asia: Japan closed. Hong Kong -2.1% to 17864. China -0.7% to 2395. India -2.3% to 15700.