MORNING COFFEE

Microsoft to Acquire Skype. 

Microsoft (MSFT) announced that it is in negotiations to purchase internet phone company Skype.  The deal said to be worth $8.5 billion would be Microsoft’s largest acquisition. The deal could help Microsoft with its consumer market and mobile devices. Pre-market: 25.35 -0.48   (-1.86%)

Google to Unveil Music Service. 

Reports say that Google (GOOG) may unveil its new online music service today. The service would allow users to upload music to listen too, but would not allow the downloading of music files.  Google is in negotiations with the four major recorded-music companies to secure licenses. Pre-market: 539.88 +2.20 (0.41%)

Upgrades

Viacom (VIA.B): Argus raised their rating from Hold to Buy and placed a target price of $65.00 on the company. Pre-market: 51.19 0.00 (0.00%)

Calpine (CPN): Dahlman Rose raised their rating from Hold to Buy and placed a target price of $65.00 on the company. Pre-market: 16.57 +0.18 (1.10%)

Downgrades

American Eagle (AEO): Janney Montgomery Scott lowered their rating from Buy to Neutral and placed a target price of $15.00 on the company. Pre-market: 14.45 -0.12 (-0.82%)

Coverage Initiated

Bob Evans (BOBE): Miller Tabak initiated coverage with a Hold rating and placed a target price of $35.00 on the company.

NRG Energy (NRG): Dahlman Rose initiated coverage with a Buy rating and placed a target price of $29.00 on the company.

Coverage Reiterated/Price Target Changed

Crocs (CROX): Stifel Nicolaus reiterated their Buy rating and raised their target price from $23.00 to $26.00. Pre-market: 21.92 +0.35 (1.62%)

Fluor (FLR): FBR Capital reiterated their Outperform rating and lowered their target price from $84.00 to $81.00. Pre-market: 72.35 +0.13 (0.18%)

Amgen (AMGN): MP Advisors reiterated their Buy rating and raised their target price from $63.00 to $65.00. Pre-market: 57.69 0.00 (0.00%)

Earning Reports

Activision (ATVI): Reported Q1 EPS of $0.13 beating estimates by +$0.05 on revenue of $755 million, beating estimates by +$87 million. Pre-market: 11.30 -0.23 (-1.99%)

Dean Foods (DF): Reported Q1 EPS of $0.14 beating estimates by +$0.08 on revenue of $3.05 billion, missing estimates by -$0.02 billion. The company gave Q2 estimates of $0.15-0.20 vs. $0.13 consensus.  Pre-market: 12.25 +1.27 (11.57%)

James River Coal Company (JRCC): Reported Q1 EPS of -$0.28 missing estimates by -$0.55 on revenue of $164.6 million, missing estimates by -$10.5 million. Pre-market: 23.12 -0.58 (-2.45%)

Warner Music Group (WMG): Reported FQ2 EPS of -$0.25 beating estimates by +$0.03 on revenue of $682 million, beating estimates by $84 million. Pre-market: 8.20 +0.01 (0.12%)

·         Futures at 7:00: Dow +0.4%. S&P +0.4%. Nasdaq +0.6%. Crude -1.1% to $101.43. Gold +0.9% to $1516.10.

·         Europe: London +1.2%. Paris +1.4%. Frankfurt +1.5%.

·         Asia: Japan +0.3% to 9819. Hong Kong closed. China +0.6% to 2890. India -0.2% to 18499.