MORNING COFFEE

Another Credit Agency Warns About U.S. Debt. Yesterday rating agency Fitch became the third rating agency to threaten to downgrade the government's credit status if the ceiling isn't lifted. Government leaders have until August 2 to work out a deal to raise the debt limit.  Republicans are standing firm on requiring spending cuts in conjunction with any increase in the debt limit.  Congressional leaders and White House officials will be meeting today to continue discussions on raising the U.S.'s $14.3T borrowing limit and cutting the deficit.

Citigroup Get Hacked. Citigroup (C) has confirmed that hackers have obtained access to the data of hundreds of thousands of bank card customers. The hackers were able to view clients' personal information such as account numbers, contact information and email addresses. Pre-market: 36.86 +0.05 (0.14%)

Upgrades

Elan (ELN): UBS  raised their rating from Neutral to Buy and raised their target price from $9.25 to $12.78. Pre-market: 10.16 +0.50 (5.18%)

Downgrades

Research In Motion (RIMM): Citigroup lowered their rating from Buy to Hold and lowered their target price from $80.00 to $45.00. Pre-market: 36.90 +0.17 (0.46%)

Coverage Initiated

United Technologies (UTX): William Blair initiated coverage with a Buy rating and target price of $94.00. Pre-market: 83.35 +0.31 (0.37%)

Aqua America (WTR): Ladenburg Thalmann initiated coverage with a Buy rating.

Autodesk (ADSK): RBC Capital initiated coverage with a Sector Perform rating and target price of $46.00.

3M (MMM): RBC Capital initiated coverage with an Outperform rating.

Coverage Reiterated/Price Target Changed

Eastman Chemical (EMN): Dahlman Rose reiterated their Buy rating and raised their target price from $105.00 to $112.00.

UPS (UPS): HSBC Securities reiterated their Overweight rating and raised their target price from $105.00 to $112.00.

Earning Reports

J.M. Smucker (SJM): Reported EPS of $1.00 beating estimates by +$0.02.

Vail Resorts (MTN): Reported EPS of $2.08 missing estimates by -$0.08.

·         Futures at 8:45: Dow +0.23%. S&P +0.20%. Nasdaq +0.18%. Crude +0.87% to $101.54. Gold -0.8% to $153760.

·         Europe: London  +0.07%. Paris +0.10%. Frankfurt +0.29%.

·         Asia: Japan +0.19% to 9467. Hong Kong -0.23% to 22610. China -1.71% to 2703. India -0.05% to 18385.

MORNING COFFEE

Bernanke Says Economy Slowing.  Speaking in Atlanta yesterday Fed Chairman Ben Bernanke caused the market to fear that the economy is slowing down, driving the markets lower.  In his speech Bernanke said that recent data on the labor market show a “loss of momentum” and that “the economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed.”  In addition he said that the Fed “will take whatever actions are necessary to keep inflation well controlled.”

With regards to the national debt he said “establishing a credible plan for reducing future deficits now would not only enhance economic performance in the long run, but could also yield near-term benefits by leading to lower long-term interest rates.”

In the question and answer portion of his speech Jamie Dimon, CEO of JPMorgan Chase & Co. (JPM) suggested to Bernanke that rules from last year's financial overhaul law and over-regulation is causing the slow economic recovery. (JPM) Pre-market: 40.63 -0.09 (-0.22%)

Upgrades

Noble Corp (NE): Dahlman Rose raised their rating from Hold to Buy and placed a target price of $48.00 on the company. Pre-market: 39.35 -0.10 (-0.25%)

Verizon (VZ): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $48.00 on the company. Pre-market: 35.53 +0.15 (0.42%)

Clearwire (CLWR): Kaufman Bros raised their rating from Hold to Buy and placed a target price of $6.00 on the company.

Downgrades

Sunpower (SPWRA): Needham lowered their rating from Hold to Underweight. Pre-market: 20.65 -0.30 (-1.43%)

Coverage Initiated

Nike (NKE): ISI Group initiated coverage with a Buy rating and target price of $100.00.

Guess? (GES): ISI Group initiated coverage with a Hold rating and target price of $45.00.

Tiffany (TIF): ISI Group initiated coverage with a Buy rating and target price of $90.00.

Phillips-Van Heusen (PVH): ISI Group initiated coverage with a Buy rating and target price of $81.00.

Coverage Resumed

Marvell (MRVL): Auriga resumed coverage with a Buy rating and target price of $18.00.

Coverage Reiterated/Price Target Changed

Ulta Salon (ULTA): Oppenheimer reiterated their Outperform rating and raised their target price from $60.00 to $62.00. Pre-market: 55.95 +6.34 (12.78%)

Talbots (TLB): Oppenheimer reiterated their Outperform rating and lowered their target price from $11.00 to $4.00. Pre-market: 2.70 +0.07 (2.66%)

LDK Solar (LDK): Brean Murray reiterated their Buy rating and lowered their target price from $20.00 to $12.00. Pre-market: 6.80 -0.30 (-4.23%)

Earning Reports

Ciena (CIEN): Reported EPS of -$0.24 missing estimates by -$0.13. Pre-market: 21.14 -3.07 (-12.68%)

Piedmont  (PNY): Reported EPS of $0.66 missing estimates by -$0.01.

·         Futures at 8:46: S&P -0.31%. Nasdaq -0.56%. Dow -0.30%. Crude -0.98% to $98.12. Gold -0.70% to $1533.10.

·         Europe: London -0.9%. Paris -0.7%. Frankfurt -1.1%.

·         Asia: Japan +0.1%. Hong Kong -0.9%. China +0.2%. India -0.6%.

MORNING COFFEE

Fed Chairman to Speak in Atlanta Today.  With all of the poor economic reports released over the past two weeks many economist are saying that the U.S. economy is slowing down, with a few saying that we are heading for another recession. Because of this all eyes will be on Fed Chairman Ben Bernanke when he gives a speech in Atlanta today. It is expected that he will acknowledge that the economy faces serious problems but will reiterate that these problems are temporary.

Ford to Unveil Aggressive Sales Plan. Ford (F) is expected to unveil a plan today at its shareholders meeting to increase the company's worldwide sales to 8 million over the next few years from 5.3 million. The company is expected to put additional focus on Asia. Pre-market: 14.12 +0.21 (1.51%)

Upgrades

Symantec (SYMC): Cowen raised their rating from Neutral to Outperform.

Xilinx (XLNX): Goldman Sachs raised their rating from Sell to Neutral and raised their target price from $25.00 to $33.00. Pre-market: 34.25 +0.49 (1.45%)

Coverage Initiated

Energizer (ENR): Standpoint Research initiated coverage with a Buy rating and target price of $90.00.

Vail Resorts (MTN): Rodman & Renshaw initiated coverage with a Market Perform rating.

RF Micro Devices (RFMD): Cantor initiated coverage with a Buy rating and target price of $10.00.

Starbucks (SBUX): Lazard Capital initiated coverage with a Buy rating and target price of $47.00. After Hours: 35.77 +0.03 (0.08%)

McDonalds (MCD): Lazard Capital initiated coverage with a Buy rating and target price of $92.00. Pre-market: 81.25 +0.55 (0.68%)

Coverage Resumed

Micron (MU): Goldman Sachs resumed coverage with a Sell rating and target price of $8.00. Pre-market: 9.06 +0.02 (0.22%)

Downgrades

Research In Motion (RIMM): Morgan Keegan lowered their rating from Outperform to Market Perform. Pre-market: 38.85 -0.06 (-0.15%)

Earning Reports

Navistar (NAV): Reported EPS of $1.02 missing estimates by -$0.15.

Talbots (TLB): Reported EPS of $0.08 beating estimates by +$0.05. Pre-market: 3.26 -1.16 (-26.24%)

·         Futures at 7:00: Dow +0.5%. S&P +0.6%. Nasdaq +0.4%. Crude 0.0% at $99.01. Gold +0.2% to $1549.90.

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

·         Asia: Japan +0.7% to 9443. Hong Kong -0.3% to 22869. China +0.6% to 2746. India +0.4% to 18496.

MORNING COFFEE

Steve Jobs to Speak at Developers Conference. Reports say that Apple’s (AAPL) Steve Jobs, who has been on medical leave since January will be the keynote speaker today at the company’s developer conference.  Along with other key executives Jobs is expected to announce iCloud.  iCloud is a new online storage service, which will enable users to store their song libraries on the Internet and then access the music using different devices. Additionally, Apple is expected to release details on the company’s next versions of its iOS and Mac OSX operating systems.  Developers are also expecting information about the iPhone 4GS or iPhone 5 product cycles. Pre-market: 346.33 +2.89 (0.84%)

Upgrades

American Eagle (AEO): Brean Murray raised their rating from Sell to Hold.

Starbucks (SBUX): BMO Capital raised their rating from Market Perform to Outperform and placed a target price of $45.00 on the company. Pre-market: 35.27 +0.11 (0.31%)

Downgrades

Wells Fargo (WFC): Rochdale lowered their rating from Neutral to Sell. Pre-market: 26.49 -0.37 

(-1.38%)

WellPoint (WLP): Citadel lowered their rating from Add to Neutral and placed a target price of $87.00 on the company. Pre-market: 74.60 -2.08 (-2.71%)

Lowe’s (LOW): JPMorgan Citadel lowered their rating from Overweight to Neutral and lowered their target price from $29 to $26.00. Pre-market: 23.02 -0.38 (-1.62%)

MetroPCS (PCS): RBC Capital lowered their rating from Outperform to Sector Perform and lowered their target price from $20 to $19.00.

Coverage Initiated

HSBC (HBC): Credit Suisse initiated coverage with a Neutral rating.

Texas Instruments (TXN): ThinkEquity initiated coverage with a Buy rating and target price of $40.00.

Coverage Reiterated/Price Target Changed

Newell Rubbermaid (NWL): Longbow reiterated their Buy rating and lowered their target price from $23.00 to $21.00. Pre-market: 14.95 -0.02 (-0.13%)

·         Futures at 8:18: Dow -0.22%. S&P -0.22%. Nasdaq -0.22%. Crude -1.24% to $98.99. Gold +0.15% to $1544.6 0.

·         Europe: London +0.16%. Paris -0.62%. Frankfurt -0.18%.

·         Asia: Japan -1.2% to 9380. Hong Kong closed. China closed. India +0.2% to 18420.

MORNING COFFEE

China Denies Google Hack. China's flatly denied hacking Google (GOOG) Gmail and described it has “completely unfounded.”' Google's claims that hackers from Jinan in China actively hacked Gmail passwords from senior U.S. government officials, Chinese political activists, military personnel, journalists and officials in other Asian countries.  Last year U.S. officials linked a previous attack to Jinan which is home to a technical reconnaissance bureau of the People's Liberation Army. Pre-market: 528.00 +2.40 (0.46%)

Upgrades

H.J. Heinz (HNZ): UBS raised their rating from Neutral to Buy and raised their target price from $47.00 to $62.00. Pre-market: 54.20 +0.48 (0.89%)

Downgrades

Zumiez (ZUMZ): Janney Montgomery Scott lowered their rating from Buy to Neutral and placed a target price of #33.00 on the company.

J.M. Smucker (SJM): Stephens lowered their rating from Overweight to Equal Weight. Pre-market: 78.38 -0.96 (-1.21%)

General Mills (GIS): UBS lowered their rating from Buy to Neutral and placed a target price of $41.00 on the company. Pre-market: 38.80 -0.42 (-1.07%)

Coverage Reiterated/Price Target Changed

Qualcomm (QCOM): FBR Capital reiterated their Outperform rating and raised their target price from $65.00 to $70.00.

Earning Reports

Joy Global (JOYG): Reported FQ2 EPS of $1.52 beating estimates by +$0.27 on revenue of $1.1 billion, beating estimates by +$0.07 billion. Pre-market: 88.60 +2.54 (2.95%)

·         Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq  +0.4%. Crude +0.2% to $100.47. Gold +0.1% to $1543.90.

·         Europe: London -0.8%. Paris -1.1%. Frankfurt -1.1%.

·         Asia: Japan -1.7% to 9555. Hong Kong -1.6% to 23254. China -1.4% to 2705. India -0.6% to 18494.

MORNING COFFEE

Housing Problems Continue. The S&P/Case-Shiller index released yesterday showed that home prices in 20 cities dropped in March to mid-2002 levels.   The index is now down 33.1% since its peak in July 2006, and fell 3.6% for March. Banks also have a huge backlog of foreclosures on their books that they will have to eliminate further hurting home prices.  Analysts are now saying that housing will experience a double-dip decline in home prices.

Upgrades

AT&T (T): Hudson Square Research raised their rating from Hold to Buy and raised their target price from $33.00 to $36.00. Pre-market: 31.50 -0.06 (-0.19%)

BlackRock (BLK): Goldman Sachs raised their rating from Neutral to Buy and raised their target price from $229.00 to $240.00. Pre-market: 208.00 +2.44 (1.19%)

Downgrades

Expedia (EXPE): Standpoint Research lowered their rating from Buy to Hold. Pre-market: 27.80 

-0.21 (-0.75%)

Verizon (VZ): Hudson Square Research lowered their rating from Hold to Sell and lowered their target price from $30.00 to $29.00. Pre-market: 36.56 -0.37 (-1.00%)

Tiffany & Co (TIF): Deutsche Bank lowered their rating from Buy to Hold and raised their target price from $65.50 to $76.00. Pre-market: 73.80 -1.86 (-2.46%)

Heinz (HNZ): Goldman Sachs lowered their rating from Hold to Sell and lowered their target price from $53.00 to $49.00. Pre-market: 53.70 -1.22 (-2.22%)

Coverage Reiterated/Price Target Changed

Nokia (NOK): Wedbush reiterated their Neutral rating and lowered their target price from $8.50 to $7.00. Pre-market: 6.48 -0.54 (-7.69%)

Earning Reports

Phillips-Van Heusen (PVH): Reported Q1 EPS of $1.23 beating estimates by +$0.07 on revenue of $1.37 billion, in-line. Pre-market: 68.71 +2.74 (4.15%)

·         Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude -0.3% to $102.35. Gold -0.25% to $1532.00.

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

·         Asia: Japan +0.3% to 9720. Hong Kong -0.2% to 23626. China 0.0% to 2744. India +0.6% to 18609.