MORNING COFFEE

Alcoa Kicks Of Q3 Earnings Season. Alcoa (AA) kicked off the Q3 earnings season yesterday after the market close and reported EPS that beat estimates. The company posted adjusted earnings of $0.03 beating estimates by +$0.03 and down from $0.15 a year ago. Revenues came in at $5.83 billion beating estimates but down 9% from a year ago. Additionally, Alcoa cut its 2012 global aluminum demand forecast to 6% from 7%.Pre-market: 9.05 -0.08 (-0.88%)

Upgrades

True Religion (TRLG): KeyBanc Capital Markets raised their rating from Underweight to Hold. Pre-market: 26.10 +5.09 (24.23%)

Dominion Resources (D): Credit Suisse raised their rating from Neutral to Outperform and placed a target price of $59.00 on the company. Pre-market: 52.96 +0.14 (0.27%)

Volkswagen (VLKAY): Citigroup raised their rating from Neutral to Buy.

Ralph Lauren Polo (RL): Piper Jaffray raised their rating from Neutral to Overweight and raised their target price from $158.00 to $182.00.

Qualcomm (QCOM): BNP Paribas raised their rating from Neutral to Outperform. Pre-market: 60.43 +0.04 (0.07%)

Downgrades

Qualcomm (QCOM): DA Davidson lowered their rating from Buy to Hold and lowered their target price from $70.00 to $65.00. Pre-market: 60.43 +0.04 (0.07%)

Diamond Offshore (DO): FBR Capital lowered their rating from Outperform to Market Perform.

Home Depot (HD): Oppenheimer lowered their rating from Outperform to Perform. Pre-market: 60.40 -0.55 (-0.90%)

Viacom (VIAB): Bernstein lowered their rating from Market Perform to Underperform. Pre-market: 55.26 -0.96 (-1.71%)

CarMAx (KMX): Stephens lowered their rating from Overweight to Equal Weight and placed a target price of $33.00 on the company. Pre-market: 31.25 -0.37 (-1.17%)

Owens Corning (OC): JPMorgan lowered their rating from Overweight to Neutral and lowered their target price from $38.00 to $31.50.

Tyco International (TYC): Credit Suisse lowered their rating from Outperform to Neutral and placed a target price of $30.00 on the company.

Coverage Initiated

Carlyle Group (CG): JPMorgan resumed coverage with an Overweight rating and target price of $29.50.

Earning Reports

Alcoa (AA): Reported EPS of $0.03 beating estimates by +$0.03. Pre-market: 8.99 -0.14 (-1.53%)

Yum! Brands (YUM): Reported EPS of $0.99 beating estimates by +$0.02. Pre-market: 69.20 +3.16 (4.78%)

Costco (COST): Reported EPS of $1.39 beating estimates by +$0.08. Pre-market: 102.60 +2.96 (2.97%)

Helen of Troy (HELE): Reported EPS of $0.72 missing estimates by -$0.14. Pre-market: 29.40 -2.55 (-7.98%)

Progressive (PGR): Reported EPS of $0.46 beating estimates by +$0.12. Pre-market: 21.76 +0.06 (0.28%)

Markets: 
Futures at 7:00: Dow -0.28%. S&P -0.03%. Nasdaq +0.16%. Crude +0.02% to $92.42. Gold +0.20% to $1768.50.

Europe: London -0.48%. Paris -0.27%. Frankfurt -0.20%. 

Asia: Japan -1.98%. Hong Kong -0.08%. China +0.22%. India -0.86%. 

MORNING COFFEE

U.S. Stock Futures Fall After World Bank Cuts Growth Forecast.  U.S. Stock futures and overseas markets fell after the World Bank cut is economic growth forecast for East Asia and the Pacific region.  Additionally they said the slowdown in China could worsen.  The county’s growth has slowed as the Eurozone debt crisis has caused the Euozone’s economy to stall.  Wall Street analysts are also a little jumpy ahead out the third quarter earnings season.  Earnings season will officially begin on Tuesday with Alcoa (AA) reporting their earnings.  Consensus estimates are for the company to report EPS of $0.01 versus $0.15 a year ago. Pre-market: 9.01 -0.08 (-0.88%)

Upgrades

BlackRock (BLK): Citigroup raised their rating from Neutral to Buy and raised their target price from $190.00 to $220.00. Pre-market: 187.93 +0.54 (0.29%)

Constellation Brands (STZ): HSBC Securities raised their rating from Underweight to Neutral.

Downgrades

Facebook (FB): BTIG lowered their rating from Neutral to Sell and placed a target price of $16.00 on the company. Pre-market: 20.37 -0.54 (-2.58%)

Abercrombie & Fitch (ANF): CLSA lowered their rating from Outperform to Buy and placed a target price of $39.00 on the company. Pre-market: 32.33 -0.33 (-1.01%)

Texas Instruments (TXN): ISI Group lowered their rating from Buy to Hold and lowered their target price from $37.00 to $38.00.

Panera Bread (PNRA): BMO Capital lowered their rating from Outperform to Market Perform and placed a target price of $180.00 on the company.

Walt Disney (DIS): Caris & Company lowered their rating from Above Average to Average.

Sonoco Products (SON): DA Davidson lowered their rating from Buy to Neutral and lowered their target price from $38.00 to $33.00.

Coverage Initiated

DirecTV (DTV): Pacific Crest initiated coverage with a Sector Perform rating and target price of $54.00.

Markets: 
Futures at 7:43: Dow -0.33%. S&P -0.37%. Nasdaq -0.44%. Crude -1.40% to $88.62. Gold -0.48% to $1772.20.

Europe: London -0.68%. Paris -0.99%. Frankfurt -1.21%. 

Asia: Japan closed. Hong Kong -0.89% to 20825. China -0.56% to 2074. India -1.21% to 18727. 

MORNING COFFEE

September Employment Data Surprises Market. Employment data for September were released this morning and surprised Wall Street. Economists had estimated that 120,000 new nonfarm payrolls were added in the month of September and that the Unemployment Rate would come in at 8.1%.  The Labor Department in their report said that only 115,000 new jobs were created in September.  While the unemployment rate fell to 7.8%. At first glance the fall in the unemployment rate seems to be a good thing, but Wall Street is mistrusting the report that was released just five weeks prior to the election. Looking deeper into the numbers with only 114,000 new jobs created and 873,000 people finding work, the fall in the unemployment rate does not match up.  Additionally, of the 875,000 people that found work over 600,000 of those people only found part-time work.  Since World War II, President Reagan was the only President to win re-election with unemployment above 6%. http://www.bls.gov/news.release/empsit.a.htm

UnitedHealth Looking to Acquire Amil Participacoes.  Reports say that UnitedHealth (UNH) is looking to acquire a part or a 100% of Brazilian insurer and hospital operator Amil Participacoes (AMPIF).  The deal if completed would allow UnitedHealth to tap a growing private-insurance market in Brazil.  Pre-market: 57.95 -0.02 (-0.03%)

Upgrades

Automatic Data Processing (ADP): Goldman Sach raised their rating from Neutral to Buy and raised their target price from $53.00 to $68.00. Pre-market: 59.22 +0.32 (0.54%)

Buffalo Wild Wings (BWLD): Wedbush raised their rating from Neutral to Outperform and raised their target price from $78.oo to $100.00. After Hours: 87.23 0.00 (0.00%)

Family Dollar Stores (FDO): Credit Suisse raised their rating from Neutral to Outperform and placed a target price of $81.00 on the company. After Hours: 68.70 +0.05 (0.07%)

Thermo Fisher (TMO): Wells Fargo raised their rating from Market Perform to Outperform and raised their target range from $55.00-$60.00 to $70.00-$75.00.

Downgrades

Autoliv (ALV): UBS lowered their rating from Neutral to Sell. Pre-market: 64.74 -0.48 (-0.74%)

Zanga (ZNGA): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $6.00 to $3.00. Pre-market: 2.19 -0.63 (-22.20%)

Hewlett-Packard (HPQ): Argus lowered their rating from Buy to Hold. Pre-market: 14.77 -0.17 (-1.14%)

Hewlett-Packard (HPQ): Sterne Agee lowered their rating from Buy to Neutral. Pre-market: 14.77 -0.17 (-1.14%)

TD Ameritrade (AMTD): Raymond James lowered their rating from Outperform to Market Perform. Pre-market: 15.85 -0.10 (-0.63%)

Coverage Initiated

USG Corp (USG): Robert W. Baird initiated coverage with an Outperform rating and a target price of $27.00.

RF Micro Devices (RFMD): Lazard Capital initiated coverage with a Neutral rating. After Hours: 3.87 0.00 (0.00%)

Earning Reports

Constellation Brands (STZ): Reported EPS of $0.74 beating estimates by +$0.17. Pre-market: 36.00 +1.28 (3.69%)

Markets: 
Futures at 6:36: Dow +0.13%. S&P +0.09%. Nasdaq +0.24%. Crude -0.93% to $90.85. Gold -0.24% to $1792.50.

Europe: London +0.46%. Paris +1.02%. Frankfurt +0.76%. 

Asia: Japan +0.44% to 8863.3. Hong Kong +0.50% to 21087. China closed. India -0.63% to 18938. 

MORNING COFFEE

McDonald’s Bringing Coffee to Your Home. Reports say the McDonald's (MCD) has filed a trademark with the USPTO to use its name for both whole-bean and other coffee products. Analysts believe that the move could signal plans to sell its coffee by the bag. The company's McCafe has been very successful and such a move could be a blow to both Dunkin’ Brands (DNKN) and Starbucks (SBUX). MCD Pre-market: 90.80 +0.45 (0.50%)

Upgrades

ProLogis (PLD): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $40.00 on the company.

Con Edison (ED): Argus raised their rating from Hold to Buy. Pre-market: 60.25 +0.49 (0.82%)

Thor Industries (THO): Wedbush raised their rating from Neutral to Outperform and raised their target price from $33.00 to $46.00.    

   

Advance Mico Devices (AMD): MKM Partners raised their rating from Sell to Neutral. Pre-market: 3.16 +0.04 (1.28%)

Ryder Systems (R): SunTrust raised their rating from Neutral to Buy and placed a target price of $48.00 on the company. Pre-market: 49.39 +0.80 (1.65%)

eBay (EBAY): Nomura raised their rating from Neutral to Buy and placed a target price of $60.00 on the company.

Downgrades

Time Warner (TWX): Argus lowered their rating from Buy to Hold. Pre-market: 45.68 -0.12 (-0.26%)

Con-Way (CNW): Bank of America / Merrill Lynch lowered their rating from Buy to Underperform and lowered their target price from $37.00 to $27.00.

United Postal Service (UPS): RBC Capital lowered their rating from Outperform to Sector Perform and lowered their target price from $84.00 to $75.00.

Sprint Nextel (S): RW Baird lowered their rating from Neutral to Underperform and placed a target price of $3.00 on the company. Pre-market: 5.05 -0.15 (-2.88%)

Coverage Initiated

Baxter International (BAX): Cowen initiated coverage with an Outperform rating.

Edison International (EIX): Credit Suisse initiated coverage with an Underperform rating and target price of $6.00. Pre-market: 46.95 +0.35 (0.75%)

Earning Reports

Marriott (MAR): Reported EPS of $0.44 beating estimates by +$0.04. Pre-market: 39.75 +0.75 (1.92%)

Intl Speedway (ISCA): Reported EPS of $0.01 missing estimates by -$0.07. Pre-market: 24.99 -3.46 (-12.16%)

Markets: 
Futures at 8:18: Dow +0.36%. S&P +0.44. Nasdaq +0.38%. Crude +0.61% to $88.66. Gold +0.60% to $1790.50.

Europe: London +0.13%. Paris +0.23%. Frankfurt +0.02%. 

Asia: Japan +0.89%. Hong Kong +0.09%. China closed. India +1.00%. 

MORNING COFFEE

Apple Starts Ipad Mini Production. The Wall Street Journal has reported that Apple (AAPL) has begun production of the iPad mini. The new device will have a 7.85" screen.  The current iPad has a 9.7" screen and Goggle’s (GOOG) Nexus has a 7” screen. Reports say that AU Optronics (AUO) and LG Display started production for the new screen last month. (AAPL) Pre-market: 663.75 +2.44 (0.37%), (GOOG) Pre-market: 758.45 +1.46 (0.19%), (AUO) Pre-market: 3.61 +0.01 (0.28%)

Earning Reports

Family Dollar (FDO): Reported EPS of $0.75 in-line with estimates. Pre-market: 68.00 +2.00 (3.03%)

Monsanto (MON): Reported EPS of $0.44 missing estimates by -$0.01. Pre-market: 88.16 -2.78 (-3.06%)

Upgrades

Norfolk Southern (NSC): Bernstein raised their rating from Underperform to Market Perform. Pre-market: 65.50 +0.48 (0.74%)

American Axle & Manufacturing (AXE): RBC Capital raised their rating from Sector Perform to Outperform and raised their target price from $13.00 to $16.00.

Downgrades

Waddell & Reed (WDR): Stifel Nicolaus lowered their rating from Buy to Hold.

Discover Financial Services (DFS): Argus lowered their rating from Buy to Hold. Pre-market: 39.20 -0.29 (-0.73%)

Mosaic (MOS): Lazard Capital lowered their rating from Buy to Neutral. Pre-market: 55.45 -0.31 (-0.56%)

Potash (POT): Lazard Capital lowered their rating from Buy to Neutral. Pre-market: 42.01 -0.62 (-1.45%)

Texas Instruments (TXN): Pacific Crest lowered their rating from Outperform to Sector Perform and placed a target price of $23.00 on the company. Pre-market: 27.36 -0.25 (-0.91%)

Coverage Initiated

Kraft Food Group (KRFT): CLSA initiated coverage with a Buy rating and target price of $50.00.

Titanium Metals (TIE): Longbow initiated coverage with a Neutral rating. Pre-market: 12.80 0.00 (0.00%)

Markets: 
Futures at 7:28: Dow -0.01%. S&P -0.02%. Nasdaq +0.08%. Crude -0.67% to $91.26. Gold +0.35% to $1781.90.

Europe: London +0.14%. Paris -0.22%. Frankfurt +0.09%. 

Asia: Japan -0.45%. Hong Kong +0.23%. China closed. India +0.24%. 

MORNING COFFEE

U.S. Postal Service Defaults on Payment.  The Postal Service has defaulted on a $5.6 billion payment to its retirement fund. The payment was due at the end of September.  The Postal Service had already missed a payment earlier this year.  The total of missed payments now stands at over $10.7 billion.  The agency has also forecast net operating losses of $15 billion for FY 2012. The Postal Service has been hit hard as more people use the internet to communicate and retiree pension cost accelerate.

Upgrades
Synaptics (SYNA): Felti & Co. raised their rating from Sell to Hold.

Cisco Systems (CSCO): MKM Partners raised their rating from Neutral to Buy and placed a target price of $24.00 on the company.

Downgrades
Intl Rectifier (IRF): FBR Capital lowered their rating from Outperform to Market Perform.

IDEX Corp (IEX): Oppenheimer lowered their rating from Outperform to Perform.

Baker Hughes (BHI): Tudor Pickering lowered their rating from Buy to Accumulate. Pre-market: 44.83 -0.22 (-0.49%)

Old Dominion Freight (ODFL): RBC Capital lowered their rating from Outperform to Sector Perform and lowered their target price from $50.00 to $30.00.

Coverage Initiated
ADT (ADT): Imperial Capital initiated coverage with an Outperform rating and target price of $41.00.

Kraft Foods (KRFT): Stifel Nicolaus initiated coverage with a Buy rating and target price of $49.00.

Kraft Foods (KRFT): Credit Suisse initiated coverage with an Outperform rating and target price of $50.00.

Kraft Foods (KRFT): Jefferies initiated coverage with a Buy rating and target price of $50.00.

Kraft Foods (KRFT): Citigroup initiated coverage with a Neutral rating and target price of $48.00.

Las Vegas Sands (LVS): ISI Group initiated coverage with a Hold rating and target price of $50.00. Pre-market: 46.40 +0.26 (0.56%)

MGM Resports (MGM): ISI Group initiated coverage with a Buy rating and target price of $13.00. Pre-market: 10.80 +0.11 (1.03%)

Wynn Resorts (WYNN): ISI Group initiated coverage with a Buy rating and target price of $145.00.

Earning Reports
Mosaic (MOS): Reported EPS of $1.01 missing estimates by -$0.15. Pre-market: 56.30 -1.71 (-2.95%)

Markets:
Futures at 8:32: Dow +0.29%. S&P +0.44%. Nasdaq +0.39%. Crude +0.28% to $92.77. Gold -0.17% to $1780.30.

Europe: London +0.15%. Paris +0.24%. Frankfurt +0.33%.

Asia: Japan -0.12%. China closed. Hong Kong closed. India closed.

MORNING COFFEE

Eurozone Still Struggling. The Eurozone PMI for September came in at just 46.1, up from August's 45.1. While the number is better than the previous months any number below 50 indicates contraction in the economy. This was the 14th consecutive month of contraction. France saw its PMI fall to a 41-month low of 42.7, just slightly higher than Greece. Germany and Spain, saw their PMI rise to 6-month highs of 47.4 and 44.5, respectively.

Unemployment in the Eurozone came in at a very high 11.4% in August (June and July were revised higher to 11.4% as well), this was the highest unemployment rate since the data series began in 1995.

Upgrades

Duke Energy (DUK): Argus raised their rating from Hold to Buy and placed a target price of $72.00 on the company. Pre-market: 65.11 +0.32 (0.49%)

Allscripts-Misys Healthcare (MDRX): Cowen & Co. raised their rating from Neutral to Outperform. Pre-market: 12.83 +0.41 (3.30%)

Allscripts-Misys Healthcare (MDRX): Isis Group raised their rating from Hold to Buy and raised their target price from $11.50 to $14.50. Pre-market: 12.83 +0.41 (3.30%)

Downgrades

Microsoft (MSFT): RBC Capital lowered their rating from Outperform to Sector Perform and lowered their target price from $34.00 to $33.00.

Boston Beer Co. (SAM): UBS lowered their rating from Neutral to Sell and lowered their target price from $103.00 to $96.00.

Allstate (ALL): FBR Capital lowered their rating from Outperform to Market Perform and placed a target price of $40.00 on the company.

Owens Corning (OC): Longbow lowered their rating from Buy to Neutral.

VMware (VMW): RBC Capital lowered their rating from Outperform to Market Perform and lowered their target price from $115.00 to $100.00.

Emerson Electric (EMR): Macquarie lowered their rating from Outperform to Neutral and placed a target price of $48.00 on the company.

Nokia (NOK): Credit Suisse lowered their rating from Neutral to Underperform.

Coverage Initiated

Kraft Foods Group (KRFT): Goldman Sachs initiated coverage with a Neutral rating and target price of $48.00 on the company.

Kraft Foods Group (KRFT): JPMorgan initiated coverage with a Neutral rating and target price of $47.00 on the company.

Citigroup (C): Guggenheim initiated coverage with a Buy rating and target price of $45.00.

Markets: 
Futures at 8:40: Dow +0.55%. S&P +0.47%. Nasdaq +0.61%. Crude -0.16% to $92.04. Gold +0.29% at $1779.00.

Europe: London +1.20%. Paris +1.72%. Frankfurt +1.33%. 

Asia: Japan -0.83% to 8797. Hong Kong closed. China closed. India +0.33% to 18827.