MORNING COFFEE

Auto Sale Rise. Auto sales for December were up 11% and posted the 11^th straight month of increases.  Overall, 2010 sales came in at 11.6 million vehicles. Analysts now estimate that 2011 sales could reach 13 million. Individual company sales for December were as follows: GM (GM) +7.5% to 223,932 vehicles, Ford (F) +6.7% to 190,976 vehicles, Chrysler (FIATY) +16% to 100,702 vehicles, and Toyota (TM) -5.5% to 177,488 vehicles.

Downgrades

Qwest (Q): Argus lowered their rating from Buy to Sell.

Boeing (BA): Argus lowered their rating from Buy to Hold.

Franklin Resources (BEN): FBR Capital lowered their rating from Outperform to Market Perform and lowered their target price from $130.00 to $125.00.

Legg Mason (LM): FBR Capital lowered their rating from Market Perform to Underperform.

Coverage Initiated

Masco (MAS): Oppenheimer initiated coverage with a Perform rating.

Fluor (FLR): Oppenheimer initiated coverage with an Outperform rating and target price of $84.00.

Jack In The Box (JACK): Wedbush initiated coverage with a Neutral rating and target price of $23.00.

Abercrombie & Fitch (ANF): Wedbush initiated coverage with a Neutral rating and target price of $60.00.

Apple (AAPL): Wedbush initiated coverage with an Outperform rating and target price of $405.00.

Coverage Resumed

Cisco Systems (CSCO): Auriga U.S.A resumed coverage with a Buy recommendation and target price of $25.00.

Juniper Networks (JNPR): Auriga U.S.A resumed coverage with a Buy recommendation and target price of $45.00.

Earning Reports

Mosaic Company (MOS): Reported FQ2 EPS of $1.01 beating estimates by +$0.10 on revenue of $2.7 billion, up +56.4%.

Family Dollar (FDO): Reported EPS of $0.58 missing estimates by -$0.03.

·         Futures at 7:00: Dow -0.6%. S&P -0.75%. Nasdaq -0.7%. Crude -1.2% to $88.31. Gold +0.1% to $1380.30.

·         Europe: London -0.6%. Paris -1.4%. Frankfurt -1.4%.

·         Asia: Japan -0.2% to 10381. Hong Kong +0.4% to 23758. China -0.5% to 2839. India -1.0% to 20301.

MORNING COFFEE

Bank Set For Foreclosure Settlement. Reports say that some of the largest mortgage loan servicers, including Bank of America Corp (BAC), Citigroup (C), JPMorgan Chase & Co (JPM), Wells Fargo & Co  (WFC) and Ally Financial, formally known as GMAC, may be willing to settle with 50 state attorneys general who are investigating their foreclosure practices.  The banks will reach individual settlements rather than a joint agreement.  The banks have been under pressure due to their improper foreclosure practices including “robo-signing”.

Bankruptcies Reach New High. The American Bankruptcy Institute reported that consumer bankruptcies reached a five-year high in 2010, increasing +9% over 2009 numbers.  Analysts say that consumer bankruptcies may not peak until sometime later in 2011.

Upgrades

Wynn Resorts (WYNN): KeyBanc Capital Markets raised their rating from Underweight to Neutral.

Downgrades

Pinnacle Airlines (PNCL): Dahlman Rose lowered their rating from Buy to Hold.

Coverage Initiated

eBay (EBAY): Wedbush initiated coverage with a Neutral rating and target price of $31.00.

Sherwin-Williams (SHW): Ticonderoga initiated coverage with a Neutral rating.

Potash (POT): Boenning & Scattergood initiated coverage with an Outperform rating and target price of $190.00.

Coverage Reiterated/Price Target Changed

Peabody Energy (BTU): Dahlman Rose reiterated their Buy rating and raised their target price from $66.00 to $80.00.

Massey Energy (MEE): Dahlman Rose reiterated their Buy rating and raised their target price from $48.00 to $67.00.            

CONSOL Energy (CNX): Dahlman Rose reiterated their Buy rating and raised their target price from $44.00 to $59.00. 

         

·         Futures at 7:00: Dow +0.35%. S&P +0.3%. Nasdaq +0.3%. Crude +0.5% to $91.98. Gold -1.05% to $1407.90.

·         Europe: London +2.3%. Paris +1.0%. Frankfurt +0.3%.

·         Asia: Japan +1.6% to 10398.1. Hong Kong +1.0% to 23668. China +1.6% to 2853. India -0.3% to 20499.

MORNING COFFEE

Goldman Invest In Facebook. It has been reported that Goldman Sachs (GS) and Russia's Digital Sky Technologies have invested $500 million in Facebook.  Goldman invested $450 million and Digital Sky, which has already invested around $500 million in Facebook, invested another $50 million. Analysts now value the social networking site at $50 billion.

Upgrades

Ruby Tuesday (RT): Morgan Keegan raised their rating from Market Perform to Outperform and raised their target price from $13.00 to $15.00.

Downgrades

Raytheon (RTN): Morgan Keegan lowered their rating from to Outperform to Market Perform and lowered their target price from $55.00 to $51.00.

L-3 Comms (LLL): Morgan Keegan lowered their rating from to Outperform to Market Perform and lowered their target price from $89.00 to $81.00.

General Dynamics (GD): Morgan Keegan lowered their rating from to Outperform to Market Perform and lowered their target price from $76.00 to $75.00.

Coverage Reiterated/Price Target Changed

Lockheed Martin (LMT): Morgan Keegan reiterated their Market Perform rating and lowered their target price from $77.00 to $73.00.

Morgan Stanley (MS): Ticonderoga reiterated their Buy rating and raised their target price from $29.00 to $31.00.

Boston Scientific (BSX): Collins Stewart reiterated their Buy rating and raised their target price from $7.50 to $8.50.

Apple (AAPL): ISI Group reiterated their Buy rating and raised their target price from $370.00 to $400.00.

·         Futures at 7:00: Dow +0.6%. S&P +0.6%. Nasdaq +0.8%. Crude +0.8% to $92.13. Gold -0.1% to $1420.20.

·         Europe: London closed. Paris +1.7%. Frankfurt +1.5%.

·         Asia, Japan closed. Hong Kong +1.7% to 23436. China closed. India +0.3% to 20561.

MORNING COFFEE

Banks To Go Bust Again.  According to the Wall Street Journal nearly 100 banks that received a Federal bailout are in danger of failing again.  98 of the banks had received a total of $4.2 billion from the Treasury Department from the Troubled Asset Relief Program, better known as TARP.  The warning comes after analyzing the third-quarter financial results and number of troubled banks appears to be increasing. 

Downgrades

RC2 (RCRC): Caris & Company lowered their rating from Above Average to Average and lowered their target price from $27.00 to $26.00.

Coverage Initiated

HiSoft Tech (HSFT): BMO Capital Markets initiated coverage with an Outperform rating and target price of $39.00.

Coverage Reiterated/Price Target Changed

Valmont (VMI): Stifel Nicolaus reiterated their Buy rating and raised their target price from $87.00 to $102.00.

ZAGG (ZAGG): Northland Securities reiterated their Outperform rating and raised their target price from $87.00 to $102.00.

Terremark Worldwide (TMRK): Kaufman Bros reiterated their Buy rating and raised their target price from $11.00 to $15.00.

·         Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.3% to $91.27. Gold +1.1% to $1397.80.

·         Europe: London closed. Paris +0.4%. Frankfurt +0.1%.

·         Asia: Japan -0.6% to 10293. Hong Kong -0.9% to 22622. China -1.7% to 2733. India 0.0% at 20025.

MORNING COFFEE

China Hikes Interest Rates. Over the weekend China raised their interest rates by 25 basis points.  The one-year lending rate now stands at 5.81% and the one-year deposit rate is 2.75%. This is the second rate hike since October as the government attempts to head off inflation.

Coverage Reiterated/Price Target Changed

Time Warner Cable TWC): Argus reiterated their Buy rating and raised their target price from $70.00 to $75.00.

Google (GOOG): Kaufman Bros reiterated their Buy rating and raised their target price from $650.00 to $690.00.

Earning Reports

Cal-Maine Foods (CLAM): Reported EPS of -$0.63 missing estimates -$0.09.

·         Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.1%. Crude -0.2% to $91.31. Gold +0.2% to $1383.40.

·         Europe: London closed. Paris -1.1%. Frankfurt -1.1%.

·         Asia: Japan +0.8% to 10356. Hong Kong closed. China -1.9% to 2781. India -0.2% to 20029.

MORNING COFFEE

U.S Files Complaint With WTO. The United States filed a complaint with the WTO over subsidies China provides its wind-energy manufacturers.  The complaint states that the Chinese government fund which gives grants to wind power manufacturers requires the companies to use Chinese-made parts, which is a violation of WTO rules.

Terror Attacks In Rome.  There have been two package bombs that have exploded at the Swiss and Chilean Embassies in Rome.  This comes just two days after a similar bomb was discovered on a train in Rome.

Coverage Reiterated/Price Target Changed

Bed Bath & Beyond (BBBY): Argus reiterated their Buy rating and raised their target price from $52.00 to $55.00.

Finish Line (FINL): Wedbush reiterated their Outperform rating and raised their target price from $21.00 to $23.00.

Finish Line (FINL): FBR Capital reiterated their Outperform rating and lowered their target price from $21.00 to $20.00.

Earning Reports

Piedmont (PNY): Reported EPS of -$0.13 missing estimates by -$0.04.

Bed Bath & Beyond (BBBY): Reported Q3 EPS of $0.74 beating estimates by +$0.08 on revenue of $2.2 billion, up +11.1%. 

Micron Technology (MU): Reported FQ1 EPS of $0.15 missing estimates by -$0.13 on revenue of $2.3 billion, up +32%.

·         Futures at 7:00: Dow 0.0%. S&P -0.1%. Nasdaq -0.2%. Crude +0.1% to $90.61. Gold -0.3% to $1383.60.

·         Asia: Japan -0.2% to 10346. Hong Kong -0.6% to 22903. China -0.8% to 2855. India -0.2% to 19983.

·         Europe: London +0.1%. Paris -0.4%. Frankfurt +0.1%.

MORNING COFFEE

Trader Corners Copper Market. A trader has acquired 80-90% ownership of all the copper in London Metal Exchange.  This equates to around half the world's exchange-registered copper stockpile and is worth about $3 billion. Copper prices reached a record high yesterday of $4.2705 per pound, and has gained +28% this year.

Downgrades

Micron (MU): Avian lowered their rating from Positive to Neutral.

Coverage Reiterated/Price Target Changed

Nike (NKE): FBR Capital reiterated their Outperform rating and raised their target price from $90.00 to $98.00.

Wells Fargo (WFC): Oppenheimer reiterated their Outperform rating and raised their target price from $42.00 to $44.00.

US Bancorp (USB): Oppenheimer reiterated their Outperform rating and raised their target price from $29.00 to $31.00.

Morgan Stanley (MS): Oppenheimer reiterated their Outperform rating and raised their target price from $32.00 to $34.00.

JPMorgan Chase (JPM): Oppenheimer reiterated their Outperform rating and raised their target price from $60.00 to $63.00.

Citigroup (C): Oppenheimer reiterated their Outperform rating and raised their target price from $5.20 to $5.50.

Goldman Sachs (GS): Oppenheimer reiterated their Outperform rating and raised their target price from $185.00 to $207.00.

Earning Reports

Navistar International (NAV): Reported Q3 EPS of $0.54 missing estimates by -$0.06 on revenue of $3.37 billion up +2.6%. 

Cintas (CTAS): Reported FQ2 EPS of $0.38 in-line on revenue of $937 million up +5.9%.

Nike (NKE): Reported FQ2 EPS of $0.94 beating estimates by +$0.06 on revenue of $4.8 billion up +9.9%. 

Red Hat (RHT): Reported Q3 EPS of $0.20 in-line on revenue of $236 million up +21%. 

TIBCO Software (TIBX): Reported FQ4 EPS of $0.31 beating estimates by +$0.03 on revenue of $241 million up +23.3%.

·         Futures at 7:00: Dow 0.0%. S&P 0.0%. Nasdaq -0.1%. Crude +0.6% to $90.32. Gold +0.1% to $1390.

·         Asia: Japan -0.2% to 10346. Hong Kong +0.2% to 23045. China -0.9% to 2878. India -0.2% to 20016.

·         Europe: London +0.2%. Paris -0.1%. Frankfurt 0.0%.

MORNING COFFEE

Wells Fargo To Modify Loans. California Attorney General Jerry Brown announced that  Wells Fargo (WFC) has agreed to loan modifications totaling $2.4 billion to California homeowners with "pick-a-payment" adjustable-rate mortgages. The agreement also has Wells Fargo paying an additional $32 million to borrowers who lost their homes through foreclosure. Wells Fargo in a statement said they hope to reach similar agreements with all fifty states.

Upgrades

Regis (RGS): Wedbush raised their rating from Neutral to Outperform and raised their target price from $20.00 to $22.00.

Downgrades

Urban Outfitters (URBN): Brean Murray lowered their rating from Buy to Hold.

Coverage Initiated

SunTrust Banks (STI): RBC Capital Markets initiated coverage with an Outperform rating and target price of $31.00.

Unisys (UIS): Oppenheimer initiated coverage with an Outperform rating and target price of $28.00.

Coverage Reiterated/Price Target Changed

Jabil Circuit (JBL): RBC Capital Markets reiterated their Outperform rating and raised their target price from $20.00 to $22.00.

Jabil Circuit (JBL): Collins Stewart reiterated their Buy rating and raised their target price from $18.00 to $23.00.

Adobe Systems (ADBE): FBR Capital reiterated their Market Perform rating and raised their target price from $31.00 to $33.00.

Adobe Systems (ADBE): ISI Group reiterated their Hold rating and raised their target price from $30.00 to $34.00.

Earning Reports

Adobe (ADBE): Reported FQ4 EPS of $0.56 beating estimates by +$0.04 on revenue of $1 billion up +33%.

Darden Restaurants (DRI): Reported FQ2 EPS of $0.54 in-line on revenue of $1.7 billion up +5.2%.

Jabil Circuit (JBL): Reported FQ1 EPS of $0.61 beating estimates by +$0.07 on revenue of $4.1 billion up +32%.

Paychex (PAYX): Reported FQ2 EPS of $0.37 beating estimates by +$0.02 on revenue of $512 million up +3.1%.

·         Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.2%. Crude +0.1% to $89.44. Gold +0.05% to $1386.80.

·         Asia: Japan +1.5% to 10371. Hong Kong +1.6% to 22994. China+1.8% to 2904. India +0.9% to 20060.

·         Europe: London +0.7%. Paris +0.5%. Frankfurt +0.6%.