MORNING COFFEE

Glaxo Agrees To Settlement. GlaxoSmithKline (GSK) has agreed to pay approximately $460 million to settle lawsuits alleging its diabetes drug Avandia can cause heart attacks and strokes. The settlement works out to be roughly $46,000 per person, while analysts had assumed a worst-case scenario payout of $500,000 per case. 

Berkowitz Buys MBIA & AIG. In a SEC filing yesterday showed that Fairholme Capital Management's Bruce Berkowitz invested in MBIA (MBI) and AIG (AIG).  The value investor now owns an 11% stake in MBIA and 24% in AIG. AIG closed +6.8%, MBIA closed +11.5%.

Upgrades

Motorola (MOT): MKM Partners raised their rating from Sell to Hold and raised their target price from $5.00 to $7.00.

KB Homes (KBH): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $17.00 on the company.

Coverage Initiated

Medtronic (MDT): Oppenheimer initiated coverage with an Outperform rating and target price of $48.00.

Coverage Reiterated/Price Target Changed

Intel (INTC): FBR Capital reiterated their Market Perform rating and raised their target price from $30.00 to $32.00.

CSX (CSX): RBC Capital Markets reiterated their Outperform rating and raised their target price from $63.00 to $66.00.

Google (GOOG): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $690.00 to $675.00.

Earnings Reports

Intel (INTC): Reported Q2 EPS of $0.51 beating estimates by +$0.08 on revenue of $10.7 Billion.

Yum! Brands (YUM): Reported Q2 EPS of $0.58 Beating estimates by +$0.04 on revenue of $2.6 billion.

·         Futures: Dow +0.3%. S&P +0.4%. Nasdaq +0.8%. Crude -0.2% to $76.97. Gold 0.0% at $1213.70.

·         Asia: Japan  +2.7% to 9795. Hong Kong  +0.6% to 20561. China +0.8% to 2470. India  -0.3% to 17938.

·         Europe: London  -0.6%. Paris -0.7%. Frankfurt  -0.1%.