MORNING COFFEE

Boeing Open To Merger. Boeing (BA) announced that it will consolidate its military aircraft business to four divisions from six yesterday. But more news worthy was Dennis Muilenburg, Boeing's head of defense, comment that the company is "actively" looking at potential acquisitions and would not rule out a merger with another defense contractor.

Bristol-Myers Buys ZymoGenetics. Bristol-Myers Squibb (BMY) has agreed to buy biotech firm ZymoGenetics (ZGEN) for $9.75/share in cash or $885 million. Bristol-Myers expects the purchase to lower earnings by $0.03/share in 2010 and by $0.07/share in 2011.

Here Come Google TV. Google’s (GOOG) CEO Eric Schmidt announced yesterday that the company's plans to launch Google TV in the U.S. this fall and internationally in 2011. The service will be free and allow users to use their TV’s to search the web, access TV shows and movies and the Android market place.

Downgrades

Viacom (VIA.B): The Benchmark Company lowered their rating from Buy to Hold and lowered their target price from $42.00 to $37.00.

Time Warner (TWX):  The Benchmark Company lowered their rating from Buy to Hold and lowered their target price from $40.00 to $34.00.

H & R Block (HRB): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Initiated

Plantronics (PLT): Northland Securities initiated coverage with an Outperform rating and target price of $36.00.

Zimmer Holdings (ZMH): Oppenheimer initiated coverage with a Perform rating.

Stryker (SYK): Oppenheimer initiated coverage with an Outperform rating and target price of $57.00.

Coverage Reiterated/Price Target Changed 

Continental Air (CAL): Argus reiterated their Buy rating and raised their target price from $28.00 to $30.00.

PNC Bank (PNC): Oppenheimer reiterated their Outperform rating and lowered their target price from $80.00 to $75.00.

Huntington Banc (HBAN): Oppenheimer reiterated their Outperform rating and lowered their target price from $8.00 to $7.50.

Comerica (CMA): Oppenheimer reiterated their Outperform rating and lowered their target price from $50.00 to $45.00.

Earning Reports

Phillips-Van Heusen (PVH): Reported Q2 EPS of $0.72 beating estimates by +0.18 on revenue of $1.1 billion. The company also raises FY11 Revenue and EPS guidance to $4.44 billion - $4.47B and $3.70 - $3.80 respectively.

Jackson Hewitt (JTX): Reported EPS of -0.65 beating estimates by +0.10.

Talbots (TLB): Reported EPS of +0.14 beating estimates by +0.09.

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·         Futures: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude -0.4% to $73.79. Gold +0.1% to $1260.90.

·         Asia: Japan -2.2% to 9024.6. Hong Kong -1.5% to 21089. China -0.1% to 2695. India +0.1% to 18667.

·         Europe: London 0.0%. Paris +0.2%. Frankfurt +0.2%.