$MGM MGM Resorts downgraded to Sell at Hudson Securities (15.33 )

Hudson Securities downgrades MGM to Sell from Hold saying MGM is trading at over 14x and 12x consensus 2011 and 2012 EBITDA, respectively. Previously MGM has only traded at these multiples during 2004-2005 as gaming M&A picked up and at the top of the last economic cycle during the LBO-boom of 2007. Firm says Las Vegas is staging a recovery, but they don't think the recovery is fast enough or strong enough to justify valuation multiples this high.

BONDX Yields move back towards session highs

2-yr -0.8 bps @ 0.6168%
3-yr -1.6 bps @ 1.048%
5-yr -1 bps @ 2.035%
7-yr -1.7 bps @ 2.782%
10-yr -1.1 bps @ 3.438%
30-yr -0.9 bps @ 4.600%

$FCX Freeport-McMoRan: Dahlman Rose lowers FY11 EPS ests on higher costs from restarting idled mines in North America (110.90 )

Dahlman Rose notes FCX exceeded ests, but restarting idled North American copper mines will lead to higher costs; this situation is not unique to FCX, as costs are increasing throughout the industry due to decreasing ore grades, a lack of skilled labor and increasing power and water costs. They are lowering their ests to $11.40 and $14.20 in 2011 and 2012, vs. their previous ests of $13.00 and $15.70, vs the $11.83 and $12.54 consensus.

$LUV Southwest Air: In line 4Q10 EPS; 2011 cost hurdles & revenue increases - Dahlman Rose (12.79 )

Dahlman Rose notes LUV reported in line 4Q10 EPS yesterday compared to the consensus estimate but slightly below firm's forecast. Co has cost headwinds in 2011 with jet fuel expectations at the high end for the industry. Management expects jet fuel prices to be in the range of $2.80 to $2.85 for 2011 and unit costs excluding fuel to be up by 2%. Revenues will have a tough time keeping pace with these increases as comps get more difficult through the year. Firm forecasts 1Q11 EPS of a loss of $0.01, compared to the consensus of $0.06. For 2011, it forecasts EPS of $0.71, down from its prior estimate of $0.90 and compared with the consensus of $0.90.

Manic Hates----> Simon Hobbs

European Markets Update: FTSE +0.6%, CAC +1.7%, DAX +1.0%

The major European indices are trading higher following reports that the Spanish government may nationalize some of the weaker cajas. Also helping momentum was the German IFO data that topped expectations in two out of three readings. Looking at the currencies...the euro is stronger to 1.3545 while the pound is stronger to 1.5985. In Britain, the FTSE is +0.6% as IT (+2.6%), energy (+1.1%), and materials (+1.1%) lead the way higher. Energy giant BP is higher by 1.3% as 62 of 102 stocks in the index trade positive.

In France, the CAC is +1.7% as financials and telecom led the broad based rally with each seeing gains of 2.8%. French bank BNP Paribas continues its solid performance, posting a gain of 3.4% as 36 of 40 stocks in the index trade higher.

In Germany, the DAX is +1.0% with telecom and financials leading the charge with 2.0% gains. Commerzbank is +2.4% as 20 of 30 stocks trade higher. Health care (-0.2%) is the worst performing sector.

$HES Hess trading lower; weakness attributed to tier 1 firm downgrade (79.44 )

$HBAN Huntington Banc: FBR Capital Mkts reviews the qtr; loan growth drives core franchise (6.85 ) -Update-

FBR notes credit improved dramatically this quarter as HBAN continues to work through its problems, and Franklin-related issues appear fully contained. Both NPAs and NCOs declined in the quarter, and inflows to NPAs slowed. FBR has been stressing the importance of loan growth in generating sustainable earnings and are encouraged by HBAN's progress. While HBAN only experienced mild loan growth, FRB expects its expansion into asset-based lending and equipment financing, as well as its overall C&I lending exposure, to serve the co well as the economy recovers. FBR is raising its FY11 EPS estimate to $0.52 from $0.29 and introducing its FY12 EPS estimate of $0.62.

$BDSI BioDelivery Services issues press release to refute MonoSol's patent claim (3.34 )

Co reponds to to a process patent infringement lawsuit filed and recently served against the co and certain co-defendants by MonoSol Rx. The purpose in responding at this time is for co to strongly refute MonoSol's claims and to assure stockholders that the co remains focused on vigorously progressing its pipeline and not allowing this claim to present a distraction. MonoSol claims that the manufacturing process for ONSOLIS infringes its patent.

$BDSI BioDelivery Services issues press release to refute MonoSol's patent claim (3.34 )

Co reponds to to a process patent infringement lawsuit filed and recently served against the co and certain co-defendants by MonoSol Rx. The purpose in responding at this time is for co to strongly refute MonoSol's claims and to assure stockholders that the co remains focused on vigorously progressing its pipeline and not allowing this claim to present a distraction. MonoSol claims that the manufacturing process for ONSOLIS infringes its patent.

$HBAN Huntington Banc upgraded to Neutral at Hilliard Lyons (6.85 )

Hilliard Lyons upgrades HBAN to Neutral from Underperform following earnings, a capital raise, repayment of TARP funds and improving asset quality there appears to be limited downside relative to peer stocks.

$AMZN Amazon.com Kindle digital text platform extends 70% royalty option to books sold to Canadian customers (181.95 )

Co announces that the popular Kindle Digital Text Platform is extending the 70 percent royalty option to include books sold to Canadian customers. This royalty option is available for books sold to Canadian customers from the Kindle Store for Kindle, Kindle 3G, Kindle DX, or one of the Kindle apps for iPad, iPhone, iPod touch, BlackBerry, PC, Mac, Windows Phones and Android-based devices.

$GE General Electric on Q4 conf call (18.43 ) -Update-

Ended 2010 with "very strong", record backlog... 2011 R&D spending +50% vs 2008... Strong CFOA is generatig substantial cash entering 2011. Co said 2011 will see a lot of financial flexibiilty... Co will have a higher tax rate in Q1 than the rest of the year... GE Capital portfolio quality: commercial drivers include delinquencies down 26 bps, non-earnings $ down $100 mln; consumer drivers include North America delinquencies down 22 bps to 6.18%, mortgage delinquency down 70 bps, and global banking delinquencies down 15 bps... Energy Infrastructure performing in line iwth expectation... Technology Infrastructure: continue to see strength in Healthcare, transportation environment was tough in 2010 but improving, aviation in line with expectations and should be flat in 2011... Home & Business Solutions: market continues to be challenging... 2011 operating framework: Industrial operating earnings ~flat in 2010 and expected to improve in 2011; operating earnings for GE Capital postive in 2010 and expected to continue to grow with higher margins and lower losses in 2011; Total revenues expected to grow 0-5% in 2011... Operating goals: services & growth markets organically up 5-10%; keep GE Capital at 30-40% of total operating earnings; grow cash greater or equal to net income and restore GE Capital dividend; maintain attractive divs payout ratio.

$IPCI Intellipharmaceutics Intl receives commitments from institutional investors to provide the co with ~$12 mln (5.95 )

Co announces that it has received purchase agreement commitments from institutional investors to provide the co with ~$12 mln in gross proceeds through the sale of its common stock and warrants. Among the investors in the transaction are H&Q Healthcare Investors (HQH) and H&Q Life Sciences Investors (HQL). The investors have agreed to purchase a total of ~4.8 mln units at a price of $2.50 per unit, each unit consisting of one share of common stock, a five-year warrant to purchase one-half of a share of common stock at an exercise price of $2.50 per whole share and a two-year warrant to purchase one-half of a share of common stock at an exercise price of $2.50 per whole share. Each warrant represents the right to purchase 50% of the aggregate amount of shares of common stock being sold by the co. The co intends to use the net proceeds to file additional Abbreviated New Drug Applications with FDA, to advance clinical trials for its abuse resistant Rexista technology and/or other NDA opportunities, to establish additional partnerships, and for working capital, research, product development and general corporate purposes.

Welcome to the board Drinks2much

$RAX Rackspace: Stifel Nicolaus discusses RAX & AMZN cloud pricing (29.78 )

Stifel Nicolaus notes RAX and AMZN Web Services (AWS), two of the leading Infrastructure-as-a-Service (IaaS) providers, recently made moves to offer higher levels of support in the cloud. It believes the common perception is that due to its scale advantages and the margin structure of the broader Amazon business, AWS has the ability to be the low cost provider. Although AWS' commodity offering is priced at a discount to Rackspace's core cloud, firm's analysis suggests that when making what we believe are more appropriate comparisons of service offerings, Rackspace's pricing appears to be at a discount to AWS' current pricing.

Asian Markets Close: Nikkei -1.6%, Hang Seng -0.5%, Shanghai +1.4%, Sensex -0.2%

The major Asian indices closed mostly lower as investors continue to grapple with the possibility of rising interest rates to combat inflation. Indonesia's 10-yr bond dropped the most in almost two years, an indication that investors are still worried about future rate hikes. Looking at the currencies...the yuan closed stronger to 6.5841 while dollar/yen is weaker to 82.70. In Japan, the Nikkei closed -1.6% on weakness in energy (-3.1%), materials (-2.2%), and industrials (-2.2%). Electronic component maker TDK fell 2.6% as 193 off 225 stocks finished to the downside. Utilities (+0.7%) was the best performing sector.

In Hong Kong, the Hang Seng finished -0.5% as losses in IT (-2.6%), energy (-1.8%), and industrials (-1.8%) were a drag. Internet gaming co Tencent Holdings declined 2.8% as 31 of 45 stocks closed lower.

In China, the Shanghai Composite finished +1.4% as telecom (+3.6%) and industrials (+2.4%) led the surge. Agricultural Bank of China gained 1.6% as banks gained on expectations of solid earnings. Health care (-0.9%) was the weakest sector as 698 of 926 stocks closed higher.

In India, the Sensex settled -0.2% as IT, consumer staples, and materials all lost at least 1.0%. Infosys Technologies lost 1.2% as 18 of 30 stocks finished in the red.

$SWKS Skyworks tgt upped to $35 from $34 at Northland following earnings; firm lowers ests slightly from their street-high levels (30.03 )

$EK Eastman Kodak: Brean Murray previews Monday's International Trade Commission ruling on patent infringement suit against AAPL and RIMM (5.25 )

Brean Murray reminds investors that the ITC on Monday 1/24 is planning to complete its preliminary ruling on Kodak's patent infringement suit against AAPL and RIMM. The sense it gets is that while the ITC won't provide its suggestion for settlement on Monday (its "preliminary ruling"), it will declare whether Kodak's "suits" are valid and enforceable regarding the involved patents in the case. If history is a guide, firm believes it's reasonable to suggest the likelihood of a settlement between EK and Apple/RIMM could increase leading up to the time of ruling if Apple/RIMM believe the ITC will side in Kodak's favor (thus in theory increasing the leverage Kodak may hold in any subsequent negotiations)

$KG King Pharma: Pfizer (PFE) extends tender offer to acquire King Pharmaceuticals to January 28, 2011 (14.12 )

$KG King Pharma: Pfizer (PFE) extends tender offer to acquire King Pharmaceuticals to January 28, 2011 (14.12 )

$MXIM Maxim Integrated upgraded to Outperform from Market Perform at Raymond James (25.60 )

SCANX Gapping up

In reaction to strong earnings/guidance: PLCM +13.7%, ISRG +12%, GE +4.4%, TPX +2.9%, MXIM +2.5%, AMD +2.2%, SLB +2%, GOOG +1.5%, SWKS +1.4%, WPI +1.2%.

M&A news: DNBK +29.3% (to be acquired by People's United Financial in a 55% stock and 45% cash transaction valued at ~$493 million), WMG +27.1% (higher on reports the co is contemplating selling itself), NOVA +2.2% (to be acquired by Surgery Partners for $13.25 Per Share), SLE +0.8% (saw late strength on continued M&A speculation).

Select financial related names showing strength: RBS +6.8% (strength attributed to reports of possible earlier than expected exit from govt asset protection scheme), IRE 3.8%, STD 3.7%, ING 2.7%, BBVA 2.6%, IBN +2.5%, DB 2.2%, CS 2.2%, UBS 1.5%.

Select oil/gas names getting boost following SLB results: RIG +2.0%, NOV +1.9%, HAL +1.5%, WFT +1.2%.

A few ethanol names seeing early strength on reports the EPA is expected to allow E15 fuel (15% ethanol) in cars for models as old as 2001: BIOF +21.2%, PEIX +11.2%

Other news: LEI +11.1% (Lucas Energy says that the Hilcorp Energy Company operated Hagen EF No.1H Eagle Ford horizontal well is expected to be brought into production within the next two weeks), PULS +5% (Pulse Electronics confirms receipt of letter from Bel Fuse), GMXR +4.5% (GMX Resources announces 2010 year-end Haynesville/Bossier reserves; 2010 production and operations update), AHL +3.4% (will replace Baldor Electric in the S&P MidCap 400 index), HUGH +3.1% (continued strength following late reports that co hired an advisor), VSI +2.9% (will replace Volt Information Sciences in the S&P SmallCap 600 index), TI +2.8% (still checking), YMI +2.2% (announced that results were reported from a randomized Phase II gastric cancer study of nimotuzumab being conducted by its licensees), AIG +1.4% (reports out overnight related to positive comments from govt auditor).

Analyst comments: UN +1.3% (upgraded to Overweight from Neutral at HSBC Securities), RVBD +0.9% (initiated with an Overweight at JP Morgan), WAG +0.9% (upgraded to Buy from Neutral at SunTrust), ETN +0.4% (upgraded to Outperform from Neutral at Robert W. Baird).

SCANX Gapping up

In reaction to strong earnings/guidance: PLCM +13.7%, ISRG +12%, GE +4.4%, TPX +2.9%, MXIM +2.5%, AMD +2.2%, SLB +2%, GOOG +1.5%, SWKS +1.4%, WPI +1.2%.

M&A news: DNBK +29.3% (to be acquired by People's United Financial in a 55% stock and 45% cash transaction valued at ~$493 million), WMG +27.1% (higher on reports the co is contemplating selling itself), NOVA +2.2% (to be acquired by Surgery Partners for $13.25 Per Share), SLE +0.8% (saw late strength on continued M&A speculation).

Select financial related names showing strength: RBS +6.8% (strength attributed to reports of possible earlier than expected exit from govt asset protection scheme), IRE 3.8%, STD 3.7%, ING 2.7%, BBVA 2.6%, IBN +2.5%, DB 2.2%, CS 2.2%, UBS 1.5%.

Select oil/gas names getting boost following SLB results: RIG +2.0%, NOV +1.9%, HAL +1.5%, WFT +1.2%.

A few ethanol names seeing early strength on reports the EPA is expected to allow E15 fuel (15% ethanol) in cars for models as old as 2001: BIOF +21.2%, PEIX +11.2%

Other news: LEI +11.1% (Lucas Energy says that the Hilcorp Energy Company operated Hagen EF No.1H Eagle Ford horizontal well is expected to be brought into production within the next two weeks), PULS +5% (Pulse Electronics confirms receipt of letter from Bel Fuse), GMXR +4.5% (GMX Resources announces 2010 year-end Haynesville/Bossier reserves; 2010 production and operations update), AHL +3.4% (will replace Baldor Electric in the S&P MidCap 400 index), HUGH +3.1% (continued strength following late reports that co hired an advisor), VSI +2.9% (will replace Volt Information Sciences in the S&P SmallCap 600 index), TI +2.8% (still checking), YMI +2.2% (announced that results were reported from a randomized Phase II gastric cancer study of nimotuzumab being conducted by its licensees), AIG +1.4% (reports out overnight related to positive comments from govt auditor).

Analyst comments: UN +1.3% (upgraded to Overweight from Neutral at HSBC Securities), RVBD +0.9% (initiated with an Overweight at JP Morgan), WAG +0.9% (upgraded to Buy from Neutral at SunTrust), ETN +0.4% (upgraded to Outperform from Neutral at Robert W. Baird).

Manic Pick----> $BYD Boyd Gaming upgraded to Hold at Argus (11.51 )

Argus upgrades BYD to Hold from Sell saying on the Las Vegas Strip, leisure travel and convention bookings have started to improve, and growth in the convention segment appears especially likely to continue in 2011. They also expect a recovery on the Strip to benefit Boyd's Las Vegas locals business.

$TXN Texas Instruments 4Q preview (1/24); expect in-line 4Q and above Street 1Q guide - Wedbush (34.16 )

Wedbush expects TXN to report 4Q results in-line with its mid-Q update with comms and smartphones strength balanced by weaker PC / consumer and muted industrial. Looking ahead, it sees 1Q guidance above consensus with share gains driving subsequent accelerating growth. As we emerge from squishier near-term trends, firm sees TXN as a primary beneficiary of stabilizing trends, improving global demand, and tightening capacity as the 300mm strategy and RFAB ramp to volume.

$VRTX Vertex Pharm: PDUFA date set for May 23, 2011; 222/TVR and VX-770 data coming soon - ThinkEquity (39.90 )

ThinkEquity believes 1H11 promises to be meaningful for Vertex on several fronts. With the announcement of a PDUFA date in May, the firm fully expects an advisory committee meeting to serve as a full look at the profile of telaprevir and boceprevir. They have high conviction that both drugs will receive approval, however FDA reviews are frequently full of surprises and the firm expects new information on both drugs to come to light. They expect initial data from the combination study of VX-222 and telaprevir and the Phase 3 program for VX-770 to be key drivers in the next two months.

$BHP BHP Billiton: Queensland floods caused met coal production to decline 30% QoQ in 2Q11 - Dahlman Rose (88.08 )

Dahlman Rose notes reported record iron ore production in its 2Q11 production report; the Queensland floods caused met coal production to decline 30% q/q in 2Q11, but sales fell by only 15% due to healthy levels of inventory built prior to the beginning of the quarter. The floods are expected to impact production, sales and costs for the remainder of FY11. They now expect met coal and petroleum production in FY11 to be lower than their prior forecast, but are increasing their iron ore output est for the fiscal year; maintaining FY11 ests.

$COF Capital One: Card revenue margin better than expected - FBR Capital (47.25 )

FBR Capital notes COF last night beat ests; investors may take a skeptical view of earnings, given reserve release continues to comprise a large portion (nearly 50% of net income, down slightly from 3Q10); however, US Card's rev margin declined less than expected. Mgmt noted credit will continue to improve at a faster rate than the U.S. economy. Marketing spending increased significantly YoY, reflecting increased confidence in the economic environment -- the 10% increase in YoY purchase volume was a positive sign. They view the stock as attractive. Quarterly results increase their confidence that COF will be able to transition from earnings that are reserve release -- dependent to earnings driven by rev growth.

$AIG American Intl trading modestly higher; reports out overnight related to positive comments from govt auditor (43.18 )

Click here for AP story.

$SMOD Smart Modular Tech upgraded to Outperform at Wedbush; tgt raised to $8 (5.62 )

Wedbush upgrades SMOD to Outperform from Neutral and raises their tgt to $8 from $7 saying while the uncertainty of the depth in DRAM ASP declines and timing of the DRAM market recovery had kept them cautious, they remained constructive on SMART's long-term diversification strategy into enterprise SSDs, specialty DRAM modules, and NAND flash memory cards in Brazil. Firm thinks with: DRAM ASPs nearing a bottom, DRAM supply/demand fundamentals improving, investor expectations set for a trough in FQ2 (Feb) earnings and revenue, and the long-term diversification strategy on track the risk/reward to buy shares of SMART is now compelling.

$RADS Radiant Systems target raised to $26 at Wedbush- added to Best Ideas List (17.69 )

Wedbush raises their RADS tgt to $26 from $24 and adds it to their Best Ideas List. Firm believes Radiant will generate mid teen revenue growth for the next 3-5 years as acceleration in restaurant chain activity and recurring service penetration has been joined by expanded international opportunities and a pick up of activity in the channel business.

Nilly---> $TPX Tempur-Pedic target raised to $49 at Wedbush (39.40 )

Wedbush raises their TPX tgt to $49 from $44 following earnings. Firm expects TPX to be a strong beneficiary of market share gains from new products and internal execution as the mattress industry continues to recover.

$AUMN Golden Minerals: Apogee enters into definitive agreement to acquire a 100% interest in the Pulacayo-Paca Silver Project, Bolivia (20.63 )

Apogee Minerals entered into a definitive agreement with Golden Minerals to acquire all of the issued and outstanding shares of an indirectly held subsidiary of Golden Minerals which holds a 100% interest in the Pulacayo-Paca Project. Upon completion of the proposed transaction, Apogee will acquire a 100% interest in the property. Pursuant to the Agreement, the Company shall acquire all of the issued and outstanding shares of a subsidiary of Golden Minerals, which holds a 100% interest in the Pulacayo-Paca Project. In consideration, Apogee shall issue 5,000,000 common shares of the Company upon closing of the transaction and shall issue an additional 3,000,000 Common Shares and shall pay GMC a cash fee in the amount of $500,000 eighteen (18) months following closing of the transaction. Closing of the transaction is scheduled to occur next week.

$FLEX Flextronics: Color on qtr (8.22 )



* Collins Stewart notes, last night, FLEX delivered another beat-and-raise quarter; actually its 7th quarter in a row beating consensus EPS & 3rd straight top-line beat. Overall, mgmt felt business trends & end demand were ‘good.' March qtr guidance was raised from firm's prior $6.85B to a range of $7.1B-$7.4B, up 23% y/y and down 7% q/q. Computing was better than expected up 5% vs. flat expectations, likely driven by a slower transition of Sun server business to CLS, along with strong ramping of new ODM revenue; FLEX also has a Tablet that is being sold in retail channels today.
* Ticonderoga notes FLEX was upbeat on its revenue growth prospects this year; however, profitability in the co's components business again appears to be a bit behind schedule, and Flextronics's margin profile still remains the lowest in the group. After a difficult stretch in the component business over the past several quarters, the co remains hopeful in turning this business around. However, management indicated on last night's call that it is targeting breakeven levels in the March quarter, which is a bit different from commentary in October when the team indicated the components business would be "certainly profitability" in the March quarter.
* FLEX is trading at $8.18 pre market (light volume).

$ACO Amcol target raised to $32 at Wedbush (31.80 )

Wedbush raises their ACO tgt to $32 from $29 as stock price keeps pace with recovering end markets, including growth in metal casting. Firm says they remain encouraged by the higher levels of automotive production and increased demand for oil field services due to higher commodity prices, but maintain cautious stance as they believe the share price adequately reflects the margin benefit forthcoming.

PRICE Filings, Offerings and Pricings

Filings:

* Corcept Therapeutics (CORT) filed for a common stock offering for an indeterminate amount.
* Constellation Energy (CEP) filed for a $500 mln mixed shelf offering.

Offerings:

* ARMOUR Residential REIT (ARR) announces that it intends to offer shares of its common stock in an underwritten public offering.
* Equal Energy (EQU) announced a $45 mln convertible unsecured junior subordinated debenture offering at a price of $1,000 per Debenture.

$ZRAN Zoran raises Q4 EPS, rev guidance above consensus (8.74 )

Sees Q4 EPS of ($0.30)-(0.33), ex-items, vs ($0.41) Thomson Reuters consensus and ($0.39)-(0.43) previously; revs $68.8 mln vs $62.12 mln Thomson Reuters consensus and $60-65 mln previously. "We are seeing design momentum beginning to build within DTV and have recently secured two top-tier wins for our SoC and FRC solutions, one of which will be shipping to the European market. Typically, 80 to 90 percent of design wins for products that will ship Q4 2011 and 2012 are awarded in the current design cycle. As we move through this critical cycle, with our new universal platforms addressing the higher-end segments of the DTV market, we are very optimistic that our ongoing designs for customers will translate into additional top-tier design wins."

$WPI Watson Pharm sees FY11 aj. cash EPS of $3.85-4.15 vs $4.13 Thomson Reuters consensus; sees revs ~$4.2 bln vs $4.17 bln Thomson Reuters consensus (52.87 )

Co issues in-line guidance for FY11 (Dec), sees EPS of $3.85-4.15 vs. $4.13 Thomson Reuters consensus; sees FY11 (Dec) revs of ~$4.2 bln vs. $4.17 bln Thomson Reuters consensus. 2010 Global Brands revenue is expected to be $400 mln, and the co expects 2011 Global Brands segment revenue of between $470-490 mln, reflecting continued growth of its current promoted products, as well as the launch of new brand products into the U.S. market during the year. Watson estimates 2012 adjusted cash earnings per share to increase 20-25% YoY, and in 2013, the co estimates adjusted cash earnings per share to increase 15-20% YoY.

$MS Morgan Stanley: Still work ahead, but some positive signs; lowering estimates - Ticonderoga (29.02 )

Ticonderoga notes a lot of moving parts were evident in the quarter, but it's most encouraged by the 15% seq. improvement in revs to $7.8 bln. The rev growth was driven largely by equity-centric businesses such as banking, equity trading, retail, and asset management. While ROE is still well below historical levels, it firmly believes that growth in the less capital intensive businesses is the best chance for MS to regain past return levels. The quarter was a glimpse of the potential. Firm is lowering its 2011 and 2012 EPS estimates to $2.63 and $2.93, respectively, from $3.02 and $3.16 previously. The revision is reflective of lower fixed income trading revenues.