MORNING COFFEE

BofA Settles for $8.5 Billion. Bank of America (BAC) announced that it will pay an $8.5 billion settlement, the largest in U.S. banking history.  The settlement will go to large investors who lost money on mortgage-backed securities. The bank will also record an additional $5.5 billion provision in Q2 2011 for representations and warranties exposure. Bank of America said they now expect to report a Q2 loss of $0.88-$0.93 a share, including a goodwill impairment charge of $2.6 billion. The investors included in the settlement are Pacific Investment Management, BlackRock (BLK) and the New York Fed. Many analysts had expected the settlement to be much larger. BAC Pre-market: 11.30 +0.48 (4.44%) BLK After Hours: 189.30 +0.04 (0.02%)

Upgrades

Nike (NKE): Capstone raised their rating from Hold to Buy and placed a target price of $105.00 on the company. Pre-market: 90.63 +0.73 (0.81%)

US Steel (X): Deutsche Bank raised their rating from Hold to Buy and placed a target price of $56.00 on the company. Pre-market: 44.54 +1.23 (2.84%)

Gilead Sciences (GILD): Piper Jaffray raised their rating from Neutral to Overweight and raised their target price from $42.00 to $53.00. Pre-market: 41.75 +0.80 (1.95%)

Airgas (ARG): KeyBanc raised their rating from Hold to Buy and placed a target price of $85.00 on the company. Pre-market: 70.11 +0.53 (0.76%)

Downgrades

Shaw Group (SHAW): Stifel Nicolaus lowered their rating from Buy to Hold. Pre-market: 28.00 -4.31 (-13.34%)

Earning Reports

Family Dollar Stores (FDO): Reported FQ3 EPS of $0.91 missing estimates by -$0.04 on revenue of $2.15 billion, missing estimates by -$0.02 billion. The company gave FY'11 EPS  guidance of $3.08-3.16. Pre-market: 51.52 -1.50 (-2.83%) 

General Mills (GIS): Reported FQ4 EPS of $0.52 in-line on revenue of $3.63 billion, missing estimates by -$0.04 billion. Pre-market: 36.30 -0.91 (-2.45%)

Shaw Group (SHAW): Reported FQ3 EPS of $0.39 missing estimates by -$0.28 on revenue of $1.5 billion, missing estimates by -$0.2 billion. Pre-market: 28.00 -4.31 (-13.34%)

American Greetings (AM): Reported EPS of $0.78 missing estimates by -$0.02. Pre-market: 25.25 +0.84 (3.44%)

·         Futures at 7:49: Dow +0.52%. S&P +0.58%. Nasdaq +0.66%. Crude +1.16% to $93.96. Gold +0.55% to $1508.60    .

·         Europe: London +1.37%. Paris +1.78%. Frankfurt +1.72%.

·         Asia: Japan +1.54% to 9797. Hong Kong 0.00% at 22061. China -1.11% to 2728. India +1.09% to 18694.