MORNING COFFEE

Hewlett-Packard to Cut 27,000 Jobs. After the market close yesterday, Hewlett-Packard (HPQ) reported EPS for FQ2 that beat Wall Street estimates by nearly 8%.  Analysts were looking for the company to report EPS of $0.91 versus the $0.98 reported, revenue fell -3% to $30.69 billion. The company also announced that it would be cutting 27,000 jobs as part of a restructuring plan. Estimates are that the restructuring would save approximately $3-$3.5 billion a year by the end of FY14. H-P also provided FY 2012 guidance above consensus. Pre-market: 22.87 +1.79 (8.49%)

Greece’s Exit from EU Edging Closer. It appears that the EU summit in Brussels to discuss stimulating the eurozone economy, the Greek bailout and the division between the EU nations has produced no new plans.  Leaders would like Greece to stay in the EU, but reports say that they are making plans for the country to leave.  Economists believe that if Greece leaves the eurozone other countries such as Spain and Portugal would consider leaving also.  Such contagion would leave Europe in economic chaos that would spill over the U.S. economy.

 Upgrades

National Oilwell (NOV): Societe Generale raised their rating from Hold to Buy and placed a target price of $85.00 on the company. Pre-market: 68.54 +0.59 (0.87%)

Watson Pharmaceuticals (WPI): Well Fargo raised their rating from Market Perform to Outperform and raised their target range from $78.00-$79.00 to $84.00-$90.00.

Aeropostale (ARO): Well Fargo raised their rating from Underperform to Market Perform and placed a target range of $20.00-$21.00 on the company.

Eaton Vance (EV): Citigroup raised their rating from Sell to Neutral and raised their target price from $23.50 to $24.00.

Duke Energy (DUK): UBS raised their rating from Neutral to Buy and raised their target price from $22.00 to $24.00.

Downgrades

RailAmerica (RA): JPMorgan Chase lowered their rating from Overweight to Neutral and placed a target price of $26.00 on the company.

Human Genome Science (HGSI): BMO Capital lowered their rating from Outperform to Market Perform and lowered their target price from $17.00 to $13.00.

Coverage Initiated

Cree (CREE): Stephens initiated coverage with an Equal Weight rating and target price of $35.00. Pre-market: 26.79 +0.34 (1.29%)

Earning Reports

Hewlett-Packard (HPQ): Reported EPS of $0.98 beating estimates by +$0.07. Pre-market: 22.87 +1.79 (8.49%)

PVH (PVH): Reported EPS of $1.30 beating estimates by +$0.04. Pre-market: 81.00 +3.63 (4.69%)

Synopsys (SNPS): Reported EPS of $0.53 missing estimates by -$0.02.

Costco (COST): Reported EPS of $0.88 beating estimates by +$0.01. Pre-market: 84.93 +1.62 (1.94%)

HJ Heinz (HNZ): Reported EPS of $0.81 beating estimates by +$0.02. Pre-market: 52.85 -1.01 (-1.88%)

Tiffany & Co (TIF): Reported EPS of $0.64 missing estimates by -$0.06. Pre-market: 56.65 -5.15 (-8.33%)

Toronto-Dominion Bank (TD): Reported EPS of $1.82 beating estimates by +$0.04.

Markets: 
Futures at 8:44: Dow +0.33%. S&P +0.44%. Nasdaq +0.34%. Crude +0.67% to $90.50. Gold +1.05% to $1564.70. 

Europe: London +1.53%. Paris +1.30%. Frankfurt +0.76%. 

Asia: Japan +0.08%. Hong Kong -0.64%. China -0.53%. India +1.72%.