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.