Greek leaders face a deal for settling sovereign debt matters as workers strike. (Reuters)

Toyota (NYSE: TM) posts good third-quarter profits and says the U.S. will be a difficult market. (Reuters)

Boeing (NYSE: BA) may have trouble with its 787 deliveries after flaws were found in the body of the aircraft. (Reuters)

Verizon (NYSE: VZ) and Redbox set a deal to compete with Netflix (NASDAQ: NFLX). (Reuters)

Amazon.com (NASDAQ: AMZN) may open a physical store in Seattle. (Reuters)

House Republicans move to reopen debate on the Keystone XL pipeline. (Reuters)

Problems with regulators have made the Medco (NYSE: MHS) merger with Express Scripts (NASDAQ: ESRX) less likely. (Reuters)

The U.S. will create programs to help the troubled money market industry. (WSJ)

Barclays (NYSE: BCS), Credit Suisse (NYSE: CS), Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and Royal Bank of Scotland (NYSE: RBS) will bid as the New York Fed auctions risky bonds it got as part of its AIG (NYSE: AIG) bailout. (WSJ)

Greece will cut 15,000 public sector jobs. (WSJ)

Motorola Mobility (NYSE: MMI) wants a 2.25% royalty on Apple (NASDAQ: AAPL) iPhone sales based on IP claims. (WSJ)

Walt Disney (NYSE: DIS) and Univision are in talks to create a 24-hour news channel. (WSJ)

India cuts its growth forecast to 6.9%. (WSJ)

Eugene Isenberg of Nabor Industries (NYSE: NBR) gives up a $100 million retirement payout. (WSJ)

The Obama budget will have $3 trillion in cuts over 10 years and $1.5 trillion in new taxes — mostly on the rich. (WSJ)

Japan wants to enter a large Asia-Pacific trade agreement, but the U.S. may object. (WSJ)

Satellite makers say that U.S. regulations make it difficult for them to compete overseas. (WSJ)

Republic Airways (NASDAQ: RJET) is about to sell Frontier. (WSJ)

New LeadershipIQ research breaks companies into four groups based on management style and systems to create results. (WSJ)

Walmart (NYSE: WMT) promotes a manager to be the new CEO of its China operations. (WSJ)

Some large European banks will not take European Central Bank loans because they fear it will make them appear weak. (WSJ)

BP (NYSE: BP) raises its dividend. (FT)

An escrow fund may be set to help Greece instead of all aid money going to the nation directly. (FT)

Farmers to plant the largest corn crop since 1984. (Bloomberg)

Walmart will lower fat, sodium and sugar in some foods. (Bloomberg)

Douglas A. McIntyre

The move will allow Coinstar to look a bit more like Netflix as far as a physical video rental and a streaming video model.  This supposedly comes with all of the convenience, simplicity and value of Redbox.

A subscription service will launch in the second half of 2012 and the brand and product information will be revealed in the coming months.

The offerings will be instantly available online and mobile content with immediate access to physical media through rental kiosks.  The joint venture is a limited liability company with Verizon holding a 65 percent ownership share and Redbox holding a 35 percent ownership share at the outset.

Coinstar shares are up 6.5% at $53.00 against a 52-week range of $37.43 to $60.71; Netflix is down 3.4% at $122.10 against a 52-week range of $74.25 to $304.79.

JON C. OGG

Hulu is a relatively small premium content site that is owned by Walt Disney (NYSE: DIS), Providence Equity Partners, News Corp. (NYSE: NWS) and the NBCUniversal unit of Comcast (NASDAQ: CMCSA). Hulu says it will press into the paid content business as well. Hulu’s CEO, Jason Kilar, said at a recent AllThingsD conference that, “It is important that we deliver great content and stories that aren’t being told right now. And that serves two purposes. One, consumers are asking for it. And second, it does build up healthy differentiation versus other services.” What stories and what differentiation?

The major internet content and traditional VOD services have most of what consumers want. Otherwise, they would have no chance at success in the industry. It is important to have Saving Private Ryan in inventory. It is not important to have a French period piece from the 1930s — particularly if it does not have English subtitles. Kilar knows that. His chances of success are tiny.

No one will entirely elbow aside the cable box on the top of most TVs, whether that box is from a cable company, satellite company or telecom operator. Netflix forced its way into the home through its initial DVD business. No other competitor had that early advantage, least of all Hulu.

Hulu also has to compete with several extremely well-financed businesses that nonetheless are likely to fail because they are late to market. First among these is the largest video site in the world — Google’s (NASDAQ: GOOG) YouTube. Despite its size and the size of Google’s balance sheet, Hollywood studios have been wary of YouTube’s hundreds of millions of amateur clips and its reputation as a site on which premium content is sometimes found without the permission of the owner.

Hulu is among of the last premium video companies to try to bring content to the living room. Even if it was not too late, it is too small and has no competitive advantages.

Douglas A. McIntyre

BSkyB’s entry is not good news for Netflix’s nascent service. The British company claims about 10.4 million paid subscribers to its satellite service that now costs about $75/month. Worse, for Netflix, is that BSkyB currently owns first-run satellite rights to most Hollywood movies and the company has been willing to pay high prices to maintain its catbird seat.

Customers of BSkyB will be able to pay a monthly subscription rate (as yet unspecified) or rent the movies on a per-viewing basis. Netflix offers only a subscription package. Still worse for Netflix, BSkyB already offers its 10.4 million subscribers free streaming of some content.

Perhaps worst of all for Netflix, which is getting price competition from Lovefilm already, is that BSkyB, with its lock on first rights for new content, may actually be able to charge customers more for the streaming service. Most of Netflix’s content is older movies and TV shows because content owners have been reluctant to allow the company to stream the content until DVDs have been released.

If BSkyB is able to maintain its hold on new content, and charge more for it, Netflix and the other streaming providers will have a very tough fight on their hands. One thing the competition has on its side is a running investigation of BSkyB’s near-monopoly position in the pay TV movie market. A final ruling is due in August, and a preliminary ruling did go against the British giant.

From a BSkyB shareholder’s point of view, it might be better to sign up more subscribers at $75/month than a lot of streaming only subscribers paying less than $10/month, at least in the short run.

Netflix shares are down nearly -5% today, at $119.20 in a 52-week range of $62.37-$304.79. In the last month, Netflix shares have gained 72% on a run of positive developments. Today’s news is the first serious hiccup.

Paul Ausick

The 24/7 Wall St. Top Analyst Calls of the Week were in shares of the following: AT&T Inc. (NYSE: T); Automatic Data Processing, Inc. (NYSE: ADP); Best Buy Co., Inc. (NYSE: BBY); Chesapeake Energy Corporation (NYSE: CHK); Dendreon Corporation (NASDAQ: DNDN); E*TRADE Financial Corporation (NASDAQ: ETFC); J.C. Penney Company, Inc. (NYSE: JCP); J.P. Morgan Chase & Co. (NYSE: JPM); Goldman Sachs Group Inc. (NYSE: GS); Morgan Stanley (NYSE: MS); Jefferies Group, Inc. (NYSE: JEF); KLA-Tencor Corporation (NASDAQ: KLAC); Life Technologies Corporation (NASDAQ: LIFE); McDonald’s Corporation (NYSE: MCD); Michael Kors Holdings Limited (NYSE: KORS); Netflix, Inc. (NASDAQ: NFLX); Vistaprint NV (NASDAQ: VPRT); and Zynga Inc. (NASDAQ: ZNGA).

We have covered these in more detailed summaries below and some of these will have links to broader coverage calls.  

AT&T Inc. (NYSE: T) has been a bit under pressure and frankly its earnings did not help the situation for the bulls despite some positive metrics.  Now there is a bit more caution as the stock was reinstated in coverage on Friday at Credit Suisse: with a NEUTRAL and a mere $30.00 price target. This was one of Jim Cramer’s 4 FAVORITE DJIA PICKS FOR 2012 and it is the highest yield of the DJIA. 

Automatic Data Processing, Inc. (NYSE: ADP) met its second quarter earnings estimates this last week but apparently there are some valuation concerns despite the CFO seeing some continued positive trends in the economy.  On Thursday there were two downgrades: Cut to NEUTRAL at Citigroup and Cut to MARKET PERFORM at Wells Fargo.  Shares were around $57.oo pre-earnings and ended the week down at $55.34 and that may be another failed break-out attempt on the chart as the year high is $57.10.

Best Buy Co., Inc. (NYSE: BBY) is supposed to be down and out with absolutely nothing going for it.  In fact, its real risk is that no one under 30 or so may ever go there again.  Not so fast, according to Credit Suisse as the firm reinstated coverage with an OUTPERFORM rating and with a call of almost 30% upside to its $32.00 price target (versus $28.21 target from Thomson Reuters. This drove shares up 1.7% on Friday when the broad market was down.

Chesapeake Energy Corporation (NYSE: CHK) is the pure-play when it comes to investing in natural gas.  It is no secret that nat-gas is in the tank.  Apparently J.P.Morgan just couldn’t take the pressure any longer.  The analyst team there cut Chesapeake to UNDERWEIGHT on Thursday… That is just a “Sell” masqueraded by vocabulary.

Dendreon Corporation (NASDAQ: DNDN) was given two calls of caution or at least calls with no enthusiasm despite its shares having more than doubled from the lows.  Zacks maintained a NEUTRAL rating with a $14.00 target, while the team at Cantor Fitzgerald started it with only a HOLD rating.  Both calls came on Wednesday and Wednesday’s was Dendreon’s highest price of the week.

E*TRADE Financial Corporation (NASDAQ: ETFC) is still supposed to be a buyout target according to the great analyst predictions of 2012, even though the company’s review ended with nothing.  Earnings stank up the joint and the promise (or forecast) of exceptionally low rates through 2014 offers no comfort for earnings at online brokers.  The stock was cut to NEUTRAL at Goldman Sachs this week.  Keep in mind that Goldman Sachs was the firm hired to go find a buyer for E*TRADE.  Not promising at all.

The unofficial closing bells put the DJIA down more than 22 points to 12,734.63 (-0.18%), the NASDAQ fell about 13 points (-0.46%) to 2,805.28, and the S&P 500 fell -0.57% or nearly 7 points to 1,318.45.

There were several analyst upgrades and downgrades today, including General Dynamics Corp. (NYSE: GD) cut to ‘perform’ at Oppenheimer; Vale S.A. (NYSE: VALE) cut to ‘hold’ at Deutsche Bank; Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) started as ‘perform’ at Williams Capital; Corning Inc. (NYSE: GLW) cut to ‘underweight’ at Morgan Stanley; and Chesapeake Energy Corp. (NYSE: CHK) cut to ‘underweight’ at JPMorgan.

Earnings reports since markets closed on last night have led to some price changes as of the last half hour of trading today: Airgas Inc. (NYSE: ARG) is down -3.66% at $77.29; Arctic Cat Inc. (NASDAQ: ACAT) is up more than 19% at $28.40 after posting a new 52-week high of $29.20 earlier today; AT&T Inc. (NYSE: T) is down -2.65% at $29.41; Bristol-Myers Squibb Co. (NYSE: BMY) is down -0.92% at $32.40; Caterpillar Inc. (NYSE: CAT) is up 1.95% at $111.18; Cypress Semiconductor Corp. (NASDAQ: CY) is down more than -11% at $17.03; Lockheed Martin Corp. (NYSE: LMT) is up 0.95% at $82.51; McCormick & Co. Inc. (NYSE: MKC) is up 0.90% at $78.55; Monster Worldwide Inc. (NYSE: MWW) is down more than -20% at $7.18; Potash Corp. of Saskatchewan Inc. (NYSE: POT) is up 1.61% at $45.96; and Raytheon Co. (NYSE: RTN) is up 0.34% at $49.88.

Other standouts from today include the following stocks:

VIST Financial Corp. (NASDAQ: VIST) is up more than 62% at $11.20 after posting a new 52-week high of $11.50 earlier today. The bank holding company has agreed to be acquired by Tompkins Financial Corp. (AMEX: TMP) in an all-stock deal at an 86% premium to last night’s closing price, or about $85 million.

RealNetworks Inc. (NASDAQ: RNWK) is up more than 35% at $9.98. The digital media company has sold a video codec and a number of patents to Intel Corp. (NASDAQ: INTC) for $120 million.

Momenta Pharmaceuticals Inc. (NASDAQ: MNTA) is down nearly -21% at $15.13. The biotechnology company lost its bid for an injunction against certain competitors.

Netflix Inc. (NASDAQ: NFLX) is up about 22% at $116.01. The digital video streaming and rental company reported a better-than-expected number of new subscribers after markets closed last night.

Enterprise Financial Services Corp. (NASDAQ: EFSC) is down more than -19% at $12.51. The bank holding company will restate earnings for 2010 and the first three quarters of 2011 and expects to dilute 2010 earnings by half as a result.

Stay tuned for Friday. New York Fed President William Dudley is giving a speech in the morning. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – US GDP report
• 9:55 a.m. – Reuters/University of Michigan consumer sentiment index

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Paul Ausick

After the first hour of trading, VIST is up more than 65% at $11.40, a new 52-week high. Volume is nearly 4x the daily average of about 8,300 shares traded. The bank holding company has agreed to be acquired by Tompkins Financial Corp. (AMEX: TMP) in an all-stock deal at an 86% premium to last night’s closing price, or about $85 million.

RealNetworks is up more than 33% at $9.80. Volume is already about 5x the daily average of about 116,000 shares traded. The digital media company has sold a video codec and a number of patents to Intel Corp. (NASDAQ: INTC) for $120 million.

Netflix is up more than 22% at $116.35. Volume is already greater than average daily of 8.9 million shares traded. The digital video streaming and rental company reported a better-than-expected number of new subscribers after markets closed last night.

Enterprise Financial Services is down nearly -16% at $13.00. Volume is already equal to the daily average of about 47,000 shares traded. The bank holding company will restate earnings for 2010 and the first three quarters of 2011 and expects to dilute 2010 earnings by half as a result.

Monster Worldwide is down more than -16% at $7.50. Volume is already about 75% of the daily average of 935,000 shares traded. The online employment company missed estimates and has announced that it will cut 400 jobs.

Paul Ausick

We covered the short interest changes for the January 13 settlement date and compared them to the December 30 short interest data and added in other color if applicable.

Alcatel Lucent S.A. (NYSE: ALU) rose to 22.54 million shares from over 18.2 million for a gain of almost 24%.

Bank of America (NYSE: BAC) rose 18.5% to 186.1 million from over 157 million at the end of December.

Dendreon Corporation (NASDAQ: DNDN) saw nearly a 6% gain to 34.76 million shares in the short interest to its highest level in a year.

Diamond Foods, Inc. (NASDAQ: DMND) saw a gain of 12% to 10.46 million shares during its time of accounting woes, but this is still not as large as in OCT/NOV-2011.

First Solar, Inc. (NASDAQ: FSLR) was down only marginally.  The solar leader (and whipping boy) was down again to 18.04 million shares from a reading of 18.7 million at the end of 2011. Be advised that this was FIVE STRAIGHT lower readings in the short interest.

Ford Motor Co. (NYSE: F) was up by 14.7% to 147.1 million.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) remains a battleground stock and the uptick was less than 1% to 26.489 million shares in the short interest.  That is still down about 10% from last year’s peak.

Human Genome Sciences, Inc. (NASDAQ: HGSI) posted another rise in the short interest to a new year record of over 32.2 million shares in the short interest.  So much for loving the lupus drug.

LinkedIn Corporation (NYSE: LNKD) continues to see rising bets against its stock.  The reading was 6.9 million shares short and that marks EIGHT STRAIGHT gains in the bets against the stock.

Netflix, Inc. (NASDAQ: NFLX) may feel after-the-fact now that earnings are out, but the short interest rose by a sharp 25% to 11.422 million shares.  That is the highest short interest reading since last March.  Today’s gains have to be some short covering.

Research in Motion Limited (NASDAQ: RIMM) has had the vultures circling it for some time but this last short interest reading of 36.6 million was down more than 3% and was actually the lowest short interest reading since the end of last July.  Maybe all the short-sale money has been made since the stock fell about 75%.

Sirius XM Radio Inc. (NASDAQ: SIRI) always has a high short interest due to its low price and controversial stock… What is interesting is that the gain was not even 2% in short shares to 305 million BUT… That is the highest short interest since the end of last May.

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JON C. OGG

Automatic Data Processing, Inc. (NYSE: ADP) Cut to Neutral at Citigroup; Cut to Market Perform at Wells Fargo.
Chesapeake Energy Corporation (NYSE: CHK) Cut to Underweight at JPMorgan.
The Charles Schwab Corporation (NYSE: SCHW) Cut to Neutral at JPMorgan.
Corning Inc. (NYSE: GLW) Cut to Underweight at Morgan Stanley.
E*TRADE Financial Corporation (NASDAQ: ETFC) Cut to Neutral at Goldman Sachs.
General Dynamics Corporation (NYSE: GD) Cut to Perform at Oppenheimer.
General Electric Co. (NYSE: GE) Reiterated Buy with $22 Target at Argus.
Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) Started as Perform at Williams Capital.
Inergy Midstream, L.P. (NYSE: NRGM) Started as Outperform with $26 target at Credit Suisse.
Illinois Tool Works Inc. (NYSE: ITW) Raised to Buy at BofA/ML.
Lam Research Corporation (NASDAQ: LRCX) Maintained Outperform with $56 target price at Credit Suisse.
Life Technologies Corporation (NASDAQ: LIFE) Raised To Outperform From Market Perform By Leerink Swann
Netflix, Inc. (NASDAQ: NFLX) Raised to Buy at Citigroup; Maintained Outperform and raised target to $125 at Credit Suisse.
NVIDIA Corporation (NASDAQ: NVDA) Raised to Positive at Susquehanna.
Ryanair Holdings plc (NASDAQ: RYAAY) Cut to Neutral at Nomura.
Vale S.A. (NYSE: VALE) Cut to Hold at Deutsche Bank.

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JON C. OGG

Netflix announced that it made $41 million on revenue of $876 million in the fourth quarter. Each of the numbers was higher than expected. Estimates were based on an exodus of customers away from the Netflix streaming service.

It is impossible to say why customer reactions were not as severe as expected. It could be that the new $7.99 price point is still considered reasonable. It could be that people dropped the DVD-by-mail service to save money. It could be that the Netflix product is considered better than most other VOD-like services offered by cable and other streaming vendors. Whatever the reason, there are no longer tens of thousands of protestors on message boards savaging Netflix for its new price points.

Wall St. has not been so forgiving. True, Netflix earnings moved the company’s stock higher by 13% to nearly $100. And some analysts increased their price targets to $125 or $150. But that is nowhere near its 52-week high of $304, a price that the stock may never reach again.

What Wall St. does not like about Netflix is twofold, and neither of the reasons mean anything to consumers. The first is that investors do not like a company that takes the kind of risks that Netflix did when it raised prices, particularly so quickly. It is, from a financial point of view, irresponsible. The other criticism is that Netflix has been unable to keep the costs of its content acquisition low. The service has become so popular that Hollywood wants higher prices for the shows and movies that Netflix offers.

Netflix can fix the first problem, but not the second. Price increases to customers can be more gradual, although that could hurt margins. Netflix management cannot help it if studios want more money because the video rental company is so successful.

The only way that Netflix will overcome the skepticism of investors is if subscriber numbers continue to increase rapidly and revenue grows at rate quick enough to offset content costs. That is happening for now. If it continues to, Wall St. will almost be forced to put investment dollars back into the stock.

Douglas A. McIntyre