MORNING COFFEE

Japan’s Economy May Be Slowing. Japan's May industrial production slipped, as did household spending, and the unemployment rate unexpectedly increased. The data suggest Japan's economic recovery is slowing down.

Concerns Grow Over Glaxo Drug.  Two studies released found the GlaxoSmithKline (GSK) diabetes drug Avandia is unsafe.  The studies found a linked to an increased risk of heart attack and heart failure.  A vote on whether to withdraw the drug from the market will likely come next month.

Upgrades

Noble Corp (NE): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $36.00 to $42.00.

Downgrades

Ethan Allen (ETH): KeyBanc Capital Markets lowered their rating from Hold to Underweight and placed a target price of $13.00 on the company.

American Eagle (AEO): Brean Murray lowered their rating from Hold to Sell and placed a target price of $10.00 on the company.

Akamai Tech (AKAM): Akamai Tech lowered their rating from Buy to Neutral.

Coverage Reiterated/Price Target Changed

Lowe's (LOW): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $30.00 to $27.00.

Home Depot (HD): RBC Capital Markets reiterated their Sector Perform from rating and lowered their target price from $37.00 to $34.00.

General Dynamics (GD):  Gleacher & Company reiterated their Neutral rating and lowered their target price from $87.00 to $73.00.

Earning Releases

Barnes & Noble (BKS): Reported FQ4 EPS of -$0.89 missing estimates by -$0.08 on revenue of $1.3 billion.

Micron Technology (MU): Reported FQ3 EPS of $0.92 beating estimates by +$0.43 on revenue of $2.3 billion. Earnings may not be comparable.

·         Futures: Dow -1.1%. S&P -1.3%. Nasdaq -1.4%. Crude -1.9% to $76.78. Gold -0.2% to $1236.20.

·         Asia: Japan -1.3% to 9571. Hong Kong -2.3% to 20249. China -4.3% to 2427. India -1.2% to 17557.

·         Europe: London -2.0%. Paris -2.5%. Frankfurt -2.2%.