MORNING COFFEE

California Falling Into The Ocean. As many have predicted, California is falling into the ocean, an ocean of debt that is sinking the state. Governor Jerry Brown (D) announced over the weekend that California faces a deficit of $16 billion, not the $9 billion he'd estimated in January. The increasing debt is due to increased state spending and lower tax revenues.  The problem is getting worse, as the state’s top income earners and companies flee that state for more tax friendly places to live and do business.

Upgrades

Xcel Energy (XEL): RW Baird raised their rating from Neutral to Outperform and raised their target price from $30.00 to $31.00. Pre-market: 27.50 0.00 (0.00%)

McDermott Intl (MDR): JPMorgan raised their rating from Neutral to Overweight and raised their target price from $14.50 to $16.00. Pre-market: 11.45 +0.08 (0.70%)

Arch Coal (ACI): UBS raised their rating from Neutral to Buy and raised their target price from $11.00 to $12.00.

St Jude Medical (STJ): Goldman Sachs raised their rating from Neutral to Buy and raised their target price from $45.00 to $50.00.

Downgrades

Symantec (SYMC): Goldman Sachs lowered their rating from Neutral to Sell and lowered their target price to $14.00.

Nokia (NOK): Societe Generale lowered their rating from Hold to Sell. Pre-market: 3.06 -0.14 (-4.38%)

Tiffany & Co. (TIF): CLSA lowered their rating from Outperform to Buy and lowered their target price from $95.00 to $73.00.

Dole Food (DOLE): Auriga lowered their rating from Buy to Hold.

Coverage Initiated

Magna Intl (MGA): Societe Generale initiated coverage with a Hold rating.

Markets: 
Futures at 7:43: Dow -0.63%. S&P -0.74%. Nasdaq -0.69%. Crude -1.63% to $94.53. Gold -1.25% to $1564.20. 

Europe: London -2.05%. Paris -2.14%. Frankfurt -2.04%. 

Asia: Japan +0.23%. Hong Kong -1.15%. China -0.60%. India -0.47%.