MIDDAY LUNCH

Dow 10427.65  -39.51, Nasdaq 2248.03  -3.66, S&P 1097.99  -3.54 

The markets are struggling to get into positive territory today, the weakness stems largely from smaller-than-expected second quarter GDP growth.

Economists were looking for the Q2 preliminary GDP to come in at +3.0% and were disappointed when it came in at only +2.4%.  This combined with other recent economic data suggested to traders that the economy is slowing down.

On the plus side the Chicago PMI and University of Michigan Consumer Sentiment Survey came in stronger than expected.

Commodities are strong today; the CRB Commodity Index is up +0.9%.  Precious metals are leading the way, with gold up +2.3%.

MORNING COFFEE

Disney Selling Miramax. Disney (DIS) announced that it’s selling its Miramax film studio to Filmyard Holdings for $660 million. Disney agreed to the plan after a nonrefundable $40 million deposit and financing plan were made.

IMF Says U.S. At Risk. The IMF said that the U.S. financial system is "slowly recovering," but is still vulnerable to crisis, because of a failure to streamline the regulatory system and take bolder action. The IMF also conducted stress tests on 53 of the largest banks in the U.S. and found that 12 banks would need to raise more capital.

Downgrades

Mylan Labs (MYL): Oppenheimer lowered their rating from Outperform to Perform.

Halliburton (HAL): FBR Capital lowered their rating from Outperform to Market Perform.

Coverage Reiterated/Price Target Changed

Colgate-Palmolive (CL): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $91.00 to $88.00.

Dr Pepper Snapple (DPS): Stifel Nicolaus reiterated their Buy rating and raised their target price from $40.00 to $41.00.

Synaptics (SYNA): Collins Stewart reiterated their Buy rating and raised their target price from $36.00 to $38.00.

Earning Reports

Newell Rubbermaid (NWL): Reported Q2 EPS of $0.51 beating estimates by +$0.07.

Amgen (AMGN): Reported Q2 EPS of $1.38 beating estimates by +$0.08 on revenue of $3.8 billion.

Eastman Chemical Company (EMN): Reported Q2 EPS of $2.05 beating estimates by +$0.40 on revenue of $1.7 billion

Expedia (EXPD): Reported Q2 EPS of $0.44 beating estimates by +$0.02 on revenue of $834 million. 

MetLife (MET): Reported Q2 EPS of $1.23 beating estimates by +$0.23 on revenue of $12.8 billion.

·         Futures: Dow -0.2%. S&P -0.3%. Nasdaq -0.4%. Crude -0.6% to $77.90. Gold +0.1% to $1172.80.

·         Asia: Japan -1.6% to 9537.3. Hong Kong -0.3% to 21030. China -0.4% to 2638. India -0.7% to 17868.

·         Europe: London -0.6%. Paris -0.5%. Frankfurt -0.8%.

MIDDAY LUNCH

Dow 10427.50  -70.38, Nasdaq 2235.64  -28.92, S&P 1096.62  -9.51 

Stocks started the day to the plus side, but are now trading near the session lows.

Disappointing earnings in the tech and consumer-staples sectors and a warning from a Fed official is causing sellers to enter the market.

Akamai Technologies (AKAM) 39.07 -4.98, -11.31%, Nvidia (NVDA) 9.18 -0.96, -9.48%, Symantec (SYMC) 13.17 -1.50, -10.22%, Kellogg (K) 48.83 -2.69, -5.20%, and Colgate-Palmolive (CL) 78.16 -5.70, -6.80% all had earning reports that disappointed the market.

Additionally, St. Louis Fed President James Bullard said that the U.S. could tip into a Japanese-like  prolonged deflation were prices of homes, wages and goods would fall.

MORNING COFFEE

California Declares An Emergency. Yesterday California Governor Arnold Schwarzenegger declared a state of fiscal emergency.  California is sinking in $19 billion in debt and the budget is more than a month overdue. The emergency order requires state employees to take three unpaid days off a month, starting in August.

The SEC Exempt From FOIA. A little known provision of the financial reform law signed into law by President Obama exempts the Securities and Exchange Commission from the Freedom of Information Act.   The law exempts the SEC from disclosing to the public information derived from "surveillance, risk assessments, or other regulatory and oversight activities," this covers nearly every SEC action. This came to light after the law was billed as giving more transparency.

Upgrades

Flagstar Bancorp (FBC): FBR Capital raised their rating from Market Perform to Outperform.

Downgrades

AstraZeneca (AZN): Standpoint Research lowered their rating from Buy to Hold.

Symantec (SYMC): FBR Capital lowered their rating from Outperform to Market Perform and lowered their target price from $20.00 to $15.00.

Advanced Micro Devices (AMD): FBR Capital lowered their rating from Outperform to Market Perform and lowered their target price from $14.00 to $11.00.

Coverage Initiated

Blue Nile (NILE): MKM Partners initiated coverage with a Buy rating and target price of $60.00.

Earning Reports

Potash Corp. (POT): Reported Q2 EPS of $1.38 beating estimates by +$0.19 on revenue of $1.4 billion.

Ameriprise Financial (AMP): Reported Q2 EPS of $0.98 beating estimates by +$0.21 on revenue of $2.6 billion.

BMC Software (BMC): Reported FQ1 EPS of $0.62 missing estimates by -$0.02 on revenue of $461 million.

Express Scripts (ESRX): Reported Q2 EPS of $0.60 beating estimates by +$0.01 on revenue of $11.3 billion.

Mylan Laboratories (MYL): Reported Q2 EPS of $0.37 in-line on revenue of $1.4 billion. 

Skechers (SKX): Reported Q2 EPS of $0.82 beating estimates by +$0.38 on revenue of $505 million.

Visa (V): Reported FQ3 EPS of $0.97 beating estimates by +$0.04 on revenue of $2 billion. 

·         Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.4%. Crude +0.3% to $77.21. Gold +0.5% to $1165.80.

·         Asia: Japan -0.6% to 9696. Hong Kong 0.0% at 21094. China +0.6% to 2648. India +0.2% to 17992.

·         Europe: London +0.8%. Paris +0.4%. Frankfurt +0.6%.

MIDDAY LUNCH

Dow 10513.85  -23.84, Nasdaq 2273.83  -14.42, S&P 1108.66  -5.18 

Stocks have been trading in slight negative territory all day, but the Transportation Index is trading with a slight gain on some good earnings reports.

C H Robinson (CHRW) 64.75 +3.55 and Norfolk Southern (NSC) 54.90 -1.62 both beat earnings estimates, while C H Robinson was upgraded by an analyst and Norfolk Southern said it was increasing the size of its share repurchase program.

Meanwhile, the Healthcare and Technology sectors are the big losers so far today, with both sectors off -1.06%.

In economic news Durable Orders misses estimates coming in at -1.0%.  Economists were looking for a gain of +1.0%.

MORNING COFFEE

Disney to Acquire Playdom. Disney (DIS) announced that it will be purchasing social-games maker Playdom in a deal worth up to $763 million. Companies are enthusiastic about social online games because the high growth rate.

UnitedHealth to Acquire Executive Health. UnitedHealth (UNH) has been reported to be close to a deal with Executive Health Resources to purchase the company for $1.5 billion.  The purchase of Executive Health Resources would be UnitedHealth's fifth acquisition this year.

Upgrades

NASDAQ (NDAQ): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $23.00 on the company.

Downgrades

RF Micro Device (RFMD): Charter Equity lowered their rating from Buy to Market Perform.

Coverage Initiated

Capital One (COF): Oppenheimer initiated coverage with a Perform rating.

Coverage Reiterated/Price Target Changed

U.S. Steel (X): Dahlman Rose reiterated their Buy rating and lowered their target price from $80.00 to $61.00.

Norfolk Southern (NSC): Stifel Nicolaus reiterated their Buy rating and raised their target price from $74.00 to $76.00.

Broadcom (BRCM): Brigantine reiterated their Buy rating and raised their target price from $43.00 to $47.00.

Broadcom (BRCM): FBR Capital reiterated their Outperform rating and raised their target price from $41.00 to $42.00.

Earning Reports

AFLAC (AFL): Reported Q2 EPS of $1.35 beating estimates by +$0.02 on revenue of $5 billion.

Broadcom (BRCM): Reported Q2 EPS of $0.52 missing estimates by -$0.10 on revenue of $1.6 billion.

DreamWorks Animation SKG (DWA): Reported Q2 EPS of $0.27 beating estimates by +$0.05 on revenue of $158 million. 

Eastman Kodak (EK): Reported Q2 EPS of -$0.51 missing estimates by -$0.19 on revenue of $1.56 billion.

International Game Technology (IGT): Reported FQ3 EPS of $0.21 in-line on revenue of $490 million.

Sprint Nextel (S): Reported Q2 EPS of -$0.15 beating estimates by +$0.05 on revenue of $8.02 billion. 

·         Futures: Dow -0.1%. S&P -0.1%. Nasdaq 0.0%. Crude -0.35% to $77.23. Gold +0.3% to $1161.80.

·         Asia: Japan +2.7% to 9753. Hong Kong +0.6% to 21091. China +2.3% to 2634. India -0.7% to 17957.

·         Europe: London -0.6%. Paris +0.1%. Frankfurt -0.6%.

MORNING COFFEE

Sanofi-Aventis Offers to Buy Genzyme.  Sanofi-Aventis (SNY) is reportedly in informal talks with Genzyme (GENZ) to take over the company in a unsolicited bid.  Some analysts believe that other companies may come forward expressing interest in Genzyme.

Upgrades

Costco (COST): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $68.00 on the company.

Downgrades

Wal-Mart (WMT): Stifel Nicolaus lowered their rating from Buy to Hold.

Mosaic (MOS): Stifel Nicolaus lowered their rating from Buy to Hold.

Coverage Initiated

Dow Chemical (DOW): Dahlman Rose initiated coverage with a Hold rating.

Coverage Reiterated/Price Target Changed

Fluor (FLR): Stifel Nicolaus reiterated their Buy rating and raised their target price from $57.00 to $60.00.

RadioShack (RSH): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $27.00 to $25.00.

Comcast (CMCSA): Kaufman Bros reiterated their Hold rating and raised their target price from $20.00 to $21.00.

Earning Reports

CIT Group (CIT): Reported Q2 EPS of $0.71 beating estimates by +$0.38.

DuPont (DD): Reported Q2 EPS of $1.17 beating estimates by +$0.24 on revenue of $8.61 billlion.

Lockheed Martin (LMT): Reported Q2 EPS of $1.96 beating estimates by +$0.18 on revenue of $11.4 billlion.

SAP AG (SAP): Reported Q2 EPS of $0.62 beating estimates by +$0.03 on revenue of $3.74 billion.

Teva Pharmaceutical Industries (TEVA): Reported Q2 EPS of $1.08 beating estimates by +$0.04 on revenue of $3.80 billion.

·         Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.1% to $79.07. Gold -0.1% to $1182.

·         Asia: Japan -0.1% to 9497. Hong Kong +0.6% to 20973. China -0.5% to 2575. India +0.3% to 18078.

·         Europe: London +0.8%. Paris +1.1%. Frankfurt +0.6%.