MORNING COFFEE

Kraft To Split Into Two. Kraft (KFT) announced that they will split into two companies. The company plans to spin off its North American grocery business to its shareholders which would divide the company into two parts: grocery operations and global snacks business.  The company also reported Q2 earnings that beat forecasts and raised its 2011 outlook. Pre-market: 36.81 +2.51 (7.32%)

Upgrades

Sprint Nextel (S): Stifel Nicolaus raised their rating from Sell to Hold. Pre-market: 4.14 -0.01 (-0.24%)

McDonalds (MCD): Piper Jaffray raised their rating from Neutral to Overweight and raised their target price from $87.00 to $98.00. Pre-market: 85.50 -0.04 (-0.05%)

Tiffany & Co. (TIF): Goldman Sachs raised their rating from Sell to Neutral and placed a target price of $68.00 on the company. Pre-market: 72.76 -0.31 (-0.42%)

Downgrades

Hormel Foods (HRL): Goldman Sachs lowered their rating from Neutral to Sell. Pre-market: 27.78 -0.84 (-2.94%)

Coverage Reiterated/Price Target Changed

MasterCard (MA): FBR Capital reiterated their Outperform rating and raised their target price from $330.00 to $390.00. Pre-market: 334.03 -4.44 (-1.31%)

Molex (MOLX): Longbow reiterated their Buy rating and lowered their target price from $32.00 to $29.00.

Earning Reports

Cardinal Health (CAH): Reported EPS of $0.59 beating estimates by +$0.01. After Hours: 42.19 0.00 (0.00%)

CBOE Holdings (CBOE): Reported EPS of $0.36 beating estimates by +$0.03. After Hours: 22.77 -0.11 (-0.48%)

Church & Dwight (CHD): Reported EPS of $0.57 beating estimates by +$0.01.

CVS Caremark (CVS): Reported EPS of $0.65 in-line with estimates. After Hours: 36.21 0.00 (0.00%)

Fortune Brands (FO): Reported EPS of $0.93 missing estimates by -$0.07. After Hours: 57.60 -0.34 (-0.59%)

Southwest Air (LUV): Reported EPS of $0.15 missing estimates by -$0.05.

Markets

Futures at 8:01: Dow -0.53%. S&P -0.80%. Nasdaq -0.73%. Crude -1.15% to $90.86. Gold +0.23% to $1670.20. 

Europe: London -1.87%. Paris -0.80%. Frankfurt -0.67%. 

Asia: Japan +0.23% to 9659. Hong Kong -0.49% to 21885. China +0.21% to 2684. India -1.38% to 17693.  

MORNING COFFEE

Two Rating Agencies Affirm AAA Rating. Yesterday President Obama signed the debt deal passed by both houses which raised the debt limit and cut some spending.  Now both Moody's and Fitch have confirmed the U.S. will keep its AAA rating. Moody’s did assign a negative outlook to the rating and both rating agencies said that more deficit-reduction measures are needed.  Analysts will now be watching S&P, since they had stated that they would lower the U.S.’s AAA credit rating if meaningful cuts were not made to control spending.

Upgrades

Allscripts-Misys Healthcare (MDRX): Auriga raised their rating from Hold to Buy and placed a target price of $22.00 on the company. After Hours: 17.02 +0.28 (1.67%)

Diageo PLC (DEO): Deutsche Bank raised their rating from Hold to Buy. Pre-market: 80.05 +0.60 (0.76%)

Fiserv (FISV): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $68.00 to $70.00.

Occidental Petroleum (OXY): Societe Generale raised their rating from Hold to Buy and placed a target price of $108.00 on the company. After Hours: 94.30 -0.30 (-0.32%)

Downgrades

Ford (F): Goldman Sachs lowered their rating from Conviction Buy to Buy and lowered their target price from $20.00 to $17.00. Pre-market: 11.84 -0.01 (-0.08%)

Leap Wireless (LEAP): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $19.00 to $11.00. After Hours: 10.27 0.00 (0.00%)

MetroPCS (PCS): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $22.00 to $10.00. After Hours: 10.17 -0.09 (-0.88%)

Texas Instruments (TXN): Sterne Agee lowered their rating from Buy to Neutral. Pre-market: 29.10 0.00 (0.00%)

Coverage Reiterated/Price Target Changed

Allscripts-Misys Healthcare (MDRX): FBR Capital reiterated their Market Perform rating and lowered their target price from $22.00 to $19.00. After Hours: 17.02 +0.28 (1.67%)

Emerson (EMR): FBR Capital reiterated their Market Perform rating and lowered their target price from $60.00 to $57.00. After Hours: 47.16 +0.10 (0.21%)

Coach (COH): Needham reiterated their Buy rating and raised their target price from $68.00 to $74.00. After Hours: 60.71 -0.32 (-0.52%)

Earning Reports

Agrium (AGU): Reported EPS of $4.56 beating estimates by +$0.26. After Hours: 86.00 +0.38 (0.44%)

Comcast (CMCSA): Reported EPS of $0.42 beating estimates by +$0.01. Pre-market: 22.97 +0.24 (1.06%)

Constellation Energy (CEG): Reported EPS of $0.76 missing estimates by -$0.09.

Garmin (GRMN): Reported EPS of $0.63 missing estimates by -$0.04. Pre-market: 27.00 -4.53 (-14.37%)

Marsh McLennan (MMC): Reported EPS of $0.50 beating estimates by +$0.02.

RR Donnelley & Sons (RRD): Reported EPS of $0.53 beating estimates by +$0.01.

Time Warner (TWX): Reported EPS of $0.60 beating estimates by +$0.04. Pre-market: 32.16 -1.84 (-5.41%)

Futures at 7:30: Dow +0.38%. S&P +0.38%. Nasdaq +0.39%. Crude -0.67% to $93.18. Gold +1.48% to $1668.90.

Europe: London -1.27%. Paris -0.56%. Frankfurt -0.96%. 

Asia: Japan -2.11% to 9637. Hong Kong -1.91% to 21993. China -0.03 at 2678. India -0.94% to 17941. 

MORNING COFFEE

House Passes Deal to Raise Debt Limit. Despite opposition the House voted to increase the debt limit yesterday.  With no time to spare the Senate is expected to today approve the bill which will increase the debt ceiling by $2.4 trillion. The deadline for raising the debt limit is midnight tonight. But the U.S. is not out of the woods yet, if passed by the Senate the U.S. will overt a default, but the rating on the U.S. debt could still be lowered.  All three major rating agencies S&P, Moody’s and Fitch have said that the U.S.’s AAA rating could be lowered.  The rating agencies have said that substantial cuts in spending would have to coincide with any increase in the debt limit.

Upgrades

Southern (SO): Hilliard Lyons raised their rating from Neutral to Buy and placed a target price of $43.00 on the company. Pre-market: 39.65 -0.01 (-0.03%)

Las Vegas Sands (LVS): Argus raised their rating from Hold to Buy and placed a target price of $58.00 on the company. Pre-market: 47.56 -0.41 (-0.85%)

Downgrades

Teva Pharma (TEVA): Oppenheimer lowered their rating from Outperform to Perform. Pre-market: 44.00 +0.24 (0.55%)

Illinois Tool Works (ITW): ISI Group lowered their rating from Buy to Hold. Pre-market: 49.50 -0.40 (-0.80%)

Wal-Mart (WMT): Jefferies lowered their rating from Buy to Hold and lowered their target price from $61.00 to $56.00. Pre-market: 52.15 -0.47 (-0.89%)

Earning Reports

Archer-Daniels (ADM): Reported EPS of $0.58 missing estimates by -$0.25. Pre-market: 29.25 -1.23 (-4.04%)

Becton Dickinson (BDX): Reported EPS of $1.53 beating estimates by +$0.10. Pre-market: 83.20 +0.90 (1.09%)

Cognizant Tech (CTSH): Reported EPS of $0.67 beating estimates by +$0.01. Pre-market: 72.50 +1.81 (2.55%)

Emerson (EMR): Reported EPS of $0.90 missing estimates by -$0.01. After Hours: 48.00 -1.06 (-2.16%)

Molson Coors Brewing (TAP): Reported EPS of $1.23 missing estimates by -$0.06. Pre-market: 44.00 -0.63 (-1.41%)

Pfizer (PFE): Reported EPS of $0.60 beating estimates by +$0.01. Pre-market: 18.77 -0.24 (-1.26%)

Futures at 7:51: Dow -0.39%. S&P -0.52%. Nasdaq -0.49%. Crude -0.83% to $94.10. Gold +0.54% to $1630.50. 

Europe: London -0.55%. Paris -0.56%. Frankfurt -0.76%. 

Asia: Japan -1.20% to 9845. Hong Kong -1.07% to 22421. China -0.91% to 2679. India -1.12% to 18110.  

MORNING COFFEE

Debt Deal Ready For Vote. Over the weekend both Republicans and Democrats leaders reached a deal on how to address the debt ceil and cut spending.  Congress will vote today on a bill to raise the debt ceiling by $2.4 trillion in two stages and cut spending.  The deal would cut the debt by $917 billion over 10 years, while another bipartisan committee will be formed to find another $1.5 trillion in cuts. The committee will have until December 23 to come up with at least $1.2 trillion in reductions, or automatic cuts will kick in.

Upgrades

EMC (EMC): Oppenheimer raised their rating from perform to Outperform and placed a target price of $32.00. Pre-market: 26.60 +0.52 (1.99%)

Eili Lilly (LLY): Leerink raised their rating from Underperform to Market Perform. Pre-market: 39.00 +0.70 (1.83%)

Raytheon (RTN): Bernstein raised their rating from Market Perform to Outperform and placed a target price of $60.00 on the company. Pre-market: 45.85 +1.12 (2.50%)

Radio Shack (RSH): Goldman Sachs raised their rating from Neutral to Conviction Buy and placed a target price of $18.00 on the company. Pre-market: 14.79 +0.87 (6.25%)

Downgrades

Oceaneering Intl (OII): Credit Suisse lowered their rating from Outperform to Neutral and placed a target price of $48.00 on the company. Pre-market: 43.30 +0.10 (0.23%)

Arch Coal (ACI): CLSA lowered their rating from Outperform to Buy and lowered their target price from $39.00 to $34.00. Pre-market: 26.61 +1.01 (3.95%)

Earning Reports

Humana (HUM): Reported EPS of $2.50 beating estimates by +$0.45. Pre-market: 78.62 +4.04 (5.42%)

Loews Corp (L): Reported EPS of $0.62 missing estimates by -$0.22. Pre-market: 39.74 -0.13 (-0.33%)

Futures at 7:41: Dow +1.39%. S&P +1.24%. Nasdaq +1.17%. Crude +1.21% to $96.86. Gold -0.58% to $1621.60. 

Europe: London +1.31%. Paris +0.66%. Frankfurt +0.60%. 

Asia: Japan +1.34% to 9965. Hong Kong +0.99% to 22663. China +0.08% to 2704. India +0.64% to 18314.