MORNING COFFEE

Bill Gross Sells All Govt. Bond Holdings. Pimco bond fund manager Bill Gross confirmed that he has sold all of his U.S. government holdings, including Treasuries, in the Total Return Fund. Pimco’s Total Return Fund manages $237 billion in investors funds making it the largest bond fund in the U.S. The sale is in response to QE2 and his belief that bonds yields will rise causing bond prices to fall.

Microsoft Sold 10 Million Kinects. Microsoft (MSFT) reported that it has sold 10 million Kinects just four months after its launch.  The accessory for the Xbox is a direct answer to Nintendo Wii’s successful use of motion controllers.  Kinects is the first pure gesture-control technology while both Wii and PlayStation use hand-held controllers.   Kinect's success should boost Microsoft's earnings.  The company forecasted in January that revenue in its entertainment and devices division will rise 50% in Q1 2011 after a increase of 55% to $3.7B in Q4 2010.

Upgrades

Hyatt Hotels (H): Robert W. Baird raised their rating from Neutral to Outperform and placed a target price of $54.00 on the company.

Hospitality Props (HPT): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $23.00 to $26.00.

Downgrades

Raymond James (RJF): Ticonderoga lowered their rating from Buy to Neutral and placed a target price of $40.00 on the company.

Coverage Reiterated/Price Target Changed

Honeywell (HON): FBR Capital reiterated their Market Perform rating and lowered their target price from $59.00 to $61.00.

Marathon Oil (MRO): Oppenheimer reiterated their Outperform rating and raised their target price from $52.00 to $62.00.

Coldwater Creek (CWTR): FBR Capital reiterated their Market Perform rating and lowered their target price from $3.50 to $2.50.

Earning Reports

Smithfield Foods (SFD): Reported FQ3 EPS of $0.84 beating estimates by +$0.18 on revenue of $3.19 billion, beating estimates by +$0.03 billion.

H&R Block (HRB): Reported FQ3 EPS of $0.14 beating estimates by +$0.14 on revenue of $852 million, in-line with estimates.

Jackson Hewitt (JTX): Reported EPS of $0.19 missing estimates by -$0.12.

·         Futures at 7:00: Dow -0.4%. S&P -0.5%. Nasdaq -0.7%. Crude -0.7% to $103.68. Gold -0.6% to $1421.40.

·         Europe: London -1.1%. Paris -0.7%. Frankfurt -1.0%.

·         Asia: Japan -1.5% to 10434. Hong Kong -0.8% to 23615. China -1.5% to 2958. India -0.8% to 18328.

MORNING COFFEE

Dynergy Could Seek Bankruptcy. Dynegy in an SEC filing yesterday, said "in light of our likely covenant non-compliance, we are attempting to amend or replace our existing credit facility." If the company fails, it may be forced to file for bankruptcy.  Any new or amended credit would be less than the current capacity of $1.8 billion and at a higher cost. Dynegy also reported a larger Q4 loss than expected and said it would not provide guidance estimates for 2011.  Investor Carl Icahn had offered to purchase the company for $665 million, which was rejected by shareholders. 

Coverage Initiated

Transocean (RIG): Morgan Keegan initiated coverage with a Market Perform rating and target price of $87.00.

Coverage Reiterated/Price Target Changed

IBM (IBM): Collins Stewart reiterated their Buy rating and raised their target price from $175.00 to $185.00.

Earning Reports

Boston Beer Co (SAM): Reported EPS of $0.87 missing estimates by -$0.03.

Navistar International (NAV): Reported FQ1 EPS of $0.16 missing estimates by -$0.07 on revenue of $2.74 billion, missing estimates by -$0.16 billion.

Children's Place (PLCE): Reported EPS of $1.22 beating estimates by +$0.21.

Suntech Power (STP): Reported Q4 EPS of $2.02 beating estimates by +$1.73 on revenue of $945 million, beating estimates by +$101 million.

·         Futures at 7:00: Dow +0.3%. S&P +0.2%. Nasdaq +0.2%. Crude -0.3% to $104.73. Gold +0.2% to $1430.30.

·         Europe: London -0.1%. Paris +0.3%. Frankfurt +0.7%.

·         Asia: Japan +0.6% to 10589.5. Hong Kong +0.4% to 23810. China +0.1% to 3003. India +0.2% to 18470.

MORNING COFFEE

Oil Prices Fall.  Oil prices are lower following reports from Asharq Al-Awsat and Al Jazeera that negotiations have occurred between rebel leaders where Gaddafi would step down and leave Libya in return for his and his family's wealth and safety. Additionally, OPEC is considering ramping up production and the US government is considering releasing the strategic oil reserves.  If the reserves are release it would only be the 3^rd time in history the strategic reserves were tapped.

Upgrades

Avnet (AVT): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $40.00 on the company.

Downgrades

Bed Bath & Beyond (BBBY): Oppenheimer lowered their rating from Outperform to Perform and lowered their target price from $54.00 to $51.00.

Coverage Initiated

Whirlpool (WHR): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $99.00.

Tidewater (TDW): Dahlman Rose initiated coverage with a Buy rating and target price of $71.00.

Schlumberger (SLB): Dahlman Rose initiated coverage with a Buy rating and target price of $113.00.

Transocean (RIG): Dahlman Rose initiated coverage with a Buy rating and target price of $98.00.

Oceaneering Intl (OII): Dahlman Rose initiated coverage with a Buy rating and target price of $93.00.

National Oilwell Varco (NOV): Dahlman Rose initiated coverage with a Buy rating and target price of $104.00.

Halliburton (HAL): Dahlman Rose initiated coverage with a Buy rating and target price of $62.00.

Earning Reports

Dick's Sporting Goods (DKS): Reported EPS of $0.76 beating estimates by +$0.04.

Dynegy (DYN): Reported EPS of -$1.38 missing estimates by -$0.88.

Hot Topic (HOTT): Reported EPS of $0.12 missing estimates by -$0.01.

Urban Outfitters (URBN): Reported Q4 EPS of $0.45 missing estimates by -$0.07 on revenue of $668 million, missing estimates by -$6 million. Shares -14.27% Pre-market.

·         Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.1%. Crude -0.1% to $105.34. Gold 0.0% at $1434.90.

·         Europe: London 0.0%. Paris +0.2%. Frankfurt +0.3%.

·         Asia: Japan +0.2% to 10525. Hong Kong +1.7% to 23712. China +0.1% to 3001. India +1.2% to 18440.

MORNING COFFEE

Oil Continues Its Rise. With fighting between government troops and rebels intensifying in Libya, oil was sent above $106 per barrel. Traders fear a spread of violence throughout the Middle East and North Africa regions and a protracted suspension of oil production and export from Libya. Occurring to Citigroup analysts expect "output disruption, or at least the threat of, will support a fear premium for the rest of 2011." Crude futures today stand at  $106.57 up +2.1%. (7:00 ET).

Moody’s Downgrades Greece. Moody's cut Greece's credit rating again, this time three notches to B1 with a negative outlook which is “highly speculative.”  The Greek finance ministry said the downgrade was completely unjustified.

Upgrades

CA Tech (CA): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $29.00 on the company.

Downgrades

Molson Coors Brewing (TAP): Argus lowered their rating from Buy to Hold.

Coverage Reiterated/Price Target Changed

CME Group (CME): Stifel Nicolaus reiterated their Buy rating and raised their target price from $330.00 to $360.00.

OmniVision (OVTI): OmniVision reiterated their Outperform rating and raised their target price from $40.00 to $50.00.

Earning Reports

James River Coal (JRCC): Reported EPS of $0.93 beating estimates by +$0.67.

Madison Square Garden (MSG): Reported EPS of $0.42 missing estimates by -$0.01.

·         Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.5%. Crude +2.1% to $106.64. Gold +0.9% to $1441.30.

·         Europe: London +0.7%. Paris +0.2%. Frankfurt +0.6%.

·         Asia: Japan -1.8%  to 10505. Hong Kong -0.4% to 23313. China +1.9% to 2997. India -1.4% to 18223.

MORNING COFFEE

PC’s Could Be A Think Of The Past. 

According to the research firm Gartner Consulting the huge growth of tablets is eroding PC sales, which makes Apple’s CEO Steve Jobs claim of a “post-PC” device era more likely.  PC shipments are expected to grow 10.5% this year to 387.8 million units, down from earlier estimates for 15.9% growth. The largest declines will occur in consumer laptops. Shipments are expected to increase 14.6% in 2011 instead of prior projected 25.1% increase.  Analysts now project that Tablet sales could reach 40 million this year.  According to Gartner Tablets are “obviously one of the biggest challenges the PC has ever faced."

Upgrades

Intel (INTC): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $25.00 to $27.00.

Altera (ALTR): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $38.00 to $53.00.

Coverage Reiterated/Price Target Changed

Viacom (VIA.B): The Benchmark Company reiterated their Hold rating and raised their target price from $43.00 to $50.00.

Marvell (MRVL): FBR Capital reiterated their Outperform rating and lowered their target price from $25.00 to $23.00.

Earning Reports

Marvell Technology Group (MRVL): Reported Q4 EPS of $0.40 missing estimates by -$0.02 on revenue of $901 million, missing estimates by -$24 million.

Novell (NOVL): Reported FQ1 EPS of $0.07 in-line on revenue of $191 million, missing estimates by -$8 million.

·         Futures at 7:00: Dow +0.2%. S&P 0.0%. Nasdaq 0.0%. Crude +0.6% to $102.54. Gold +0.1% to $1418.20.

·         Europe: London +0.5%. Paris +0.2%. Frankfurt +0.6%.

·         Asia: Japan +1.0% to 10694. Hong Kong +1.2% to 23409. China +1.4% to 2942. India 0.0% at 18486.

MORNING COFFEE

Global Food Prices Rise To Record High.  Global food prices rose to a record high in February and gain prices are expected to rise further according to The United Nations.  An index made up of 55 food commodities rose 2.2% to 236 from 230.7 in January.  This was the eighth consecutive gain.  Wheat has risen 58% on the Chicago Board of Trade in the past 12 months, corn rose 87% and rice rose 6.5%.

 

Bernanke Says Deficit Reduction Important. In testimony before Congress Fed Chairman Ben Bernanke acknowledged the need for budget cuts and said “What I have been trying to focus on is, we have got to keep our eye on deficit reduction, but we need to think about it in a long-term framework."   Bernanke said budget cuts proposed by Republican lawmakers could lead to the loss of 200,000 jobs over two years, which is far less than the 700,000 loss Democrats have been warning about.

Downgrades

McCormick & Schmick's (MSSR): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

Apollo Group (APOL): FBR Capital reiterated their Market Perform rating and raised their target price from $42.00 to $44.00.

Costco (COST): McAdams Wright Ragen reiterated their Hold rating and raised their target price from $71.00 to $73.00.

Earning Reports

Big Lots (BIG): Reported Q4 EPS of $1.46 beating estimates by +$0.08 on revenue of $1.52 billion, in-line with estimates.

HJ Heinz (HNZ): Reported EPS of $0.84 beating estimates by +$0.02.

Foot Locker (FL): Reported Q4 EPS of $0.39 beating estimates by +$0.03 on revenue of $1.4 billion, in-line with estimates.

·         Futures at 7:00: Dow +0.8%. S&P +1.0%. Nasdaq +0.9%. Crude -0.4% to $101.83. Gold -0.7% to $1427.70.

·         Europe: London +1.3%. Paris +1.4%. Frankfurt +1.5%.

·         Asia: Japan +0.9% to 10586. Hong Kong +0.3% to 23122. China -0.3% to 2904. India +0.2% to 18490.

MORNING COFFEE

Buffett Signs Deal With Bombardier. NetJets which is owned by Warren Buffett’s company Berkshire Hathaway (BRK.A/BRK.B) signed a deal with Bombardier (BDRAF) to purchase as many as 120 aircrafts from the company.  This is Bombardier's largest business aircraft sale to date, and could earn more than $6.7 billion if all the options are exercised.

Upgrades

Chipotle Mexican Grill (CMG): Morgan Keegan raised their rating from Underperform to Market Perform.

BTU International (BTUI): Wunderlich raised their rating from Hold to Buy and raised their target price from $13.00 to $16.00.

Earning Reports

BJ's Wholesale Club (BJ): Reported Q4 EPS of $0.95 beating estimates by +$0.03 on revenue of $2.9 billion, missing estimates by -$0.07 billion.

Costco (COST): Report FQ2 EPS of $0.79 in-line on revenue of $20.88 billion, beating estimates by +$0.34 billion.

Joy Global (JOYG): Reported Q4 EPS of $0.96 missing estimates by -$0.11 on revenue of $870 million, missing estimates by -$11.1 million.

Staples (SPLS): Reported Q4 EPS of $0.39 missing estimates by -$0.01 on revenue of $6.42 billion, missing estimates by -$0.05 billion.

MBIA (MBI): Reported Q4 EPS of $2.24 beating estimates by +$2.51.

TiVo (TIVO): Reported Q4 EPS of -$0.30 missing estimates by -$0.02 on revenue of $41.4 million, in-line.

·         Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.25%. Crude +0.3% to $99.95. Gold +0.2% to $1433.60.

·         Europe: London -0.5%. Paris -0.7%. Frankfurt -0.7%.

·         Asia: Japan -2.4% to 10492. Hong Kong -1.5% to 23049. China -0.2% to 2914. India closed.

MORNING COFFEE

General Mills and Nestle Look To Buy Yoplait. Reports says that both General Mills (GIS) and Nestle (NSRGY) are among the leading bidders for a 50% stake in Yoplait.  Both companies summated bids valuing the company at €1.6 billion ($2.2 billion). Reports also say that Bright Dairy & Food Co. a Chinese firm, submitted an offer of around €1.7 billion. The final bidder may be selected in the next few weeks.

Coverage Initiated

Regis (RGS): Oppenheimer initiated coverage with an Outperform rating and target price of $23.00.

Allscripts-Misys Healthcare (MDRX): FBR Capital initiated coverage with a Market Perform rating and target price of $22.00.

Coverage Resumed

Cognizant Tech (CTSH): Kaufman Bros resumed coverage with a Buy rating and target price of $91.00.

Coverage Reiterated/Price Target Changed

Public Storage (PSA): Argus reiterated their Buy rating and raised their target price from $112.00 to $122.00.

Waddell & Reed (WDR): Stifel Nicolaus reiterated their Buy rating and raised their target price from $43.00 to $46.00.

Edison (EIX): Wunderlich reiterated their Hold rating and raised their target price from $37.00 to $39.00.

Earning Reports

AutoZone (AZO):  Reported EPS of $3.34 beating estimates by +$0.28.

Domino's Pizza (DPZ): Reported EPS of $0.40 in-line with estimates.

Fortress Investment (FIG): Reported EPS of $0.24 beating estimates by +$0.09.

Fresh Del Monte (FDP): Reported EPS $0.07 missing estimates by -$0.04.

·         Futures at 7:00: Dow +0.4%. S&P +0.4%. Nasdaq +0.6%. Crude +0.1% to $97.08. Gold +0.6% to $1418.70.

·         Europe: London 0.0%. Paris +0.3%. Frankfurt +0.5%.

·         Asia: Japan +1.2% to 10754. Hong Kong +0.3% to 23396. China +0.5% to 2920. India +3.4% to 18447.