MORNING COFFEE

Four Banks Fail Fed Stress Test. The Federal Reserve released the results of its stress tests and 15 of the 19 major banks passed.  Four major banks did not meet the Fed’s mandated minimum tier 1 capital ratio of 5% and failed to get their capital plans approved. Citigroup (C) had a projected 4.9% ratio, SunTrust (STI) had a 4.8% ratio, MetLife (MET) had a 3.4% ratio and Ally Financial had only a 2.5% ratio. C Pre-market: 34.96 -1.49 (-4.09%) STI Pre-market: 21.60 -0.98 (-4.34%) MET Pre-market: 38.15 -1.31 (-3.32%)

Upgrades

Anadrako Petro (APC): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $100.00 on the company. Pre-market: 84.50 +0.86 (1.03%)

American Eagle Outfitters (AEO): Caris raised their rating from Above Average to Buy and raised their target price from $18.00 to $20.00. Pre-market: 16.70 +0.15 (0.91%)

Micron Tech (MU): Bernstein raised their rating from Market Perform to Outperform. Pre-market: 8.66 +0.17 (2.00%)

Alcatel-Lucent (ALU): BMO Capital raised their rating from Market Perform to Outperform and raised their target price from $3.00 to $4.00. Pre-market: 2.42 +0.05 (2.11%)

Altera (ALTR): Goldman Sachs raised their rating from Buy to Conviction Buy and placed a target price of $44.00 on the company. Pre-market: 38.75 +0.69 (1.81%)

Downgrades

Citigroup (C): JP Morgan lowered their rating from Overweight to Neutral and lowered their target price from $46.50 to $42.50. Pre-market: 35.00 34.96 -1.49 (-4.09%)

Pilgrim’s Pride (PPC): Stephens lowered their rating from Overweight to Equal Weight.

Juniper Networks (JNPR): BMO Capital lowered their rating from Outperform to Market Perform. Pre-market: 21.00 -0.31 (-1.45%)

Earning Reports

Medifast (MED): Reported EPS of $0.08 missing estimates by -$0.13. Pre-market: 15.25 -1.45 (-8.68%)

Pacific Sunwear (PSUN): Reported EPS of -$0.19 beating estimates by +$0.03. Pre-market: 2.15 -0.36 (-14.34%)

Federal Signal (FSS): Reported EPS of $0.06 missing estimates by -$0.01.

Markets: 
Futures at 7:43: Dow +0.13%. S&P -0.05%. Nasdaq -0.04%. Crude -0.43% to $106.25. Gold -2.79% to $1647.00. 

Europe: London +0.35%. Paris +0.66%. Frankfurt +1.16%. 

Asia: Japan +1.53% to 10051. Hong Kong -0.15% to 21308. China-2.63% to 2391. India +0.59% to 17919.