MORNING COFFEE

Is The EU Debt Crisis Spreading? Almost daily there have been news stories about the debt problems in the EU PIIGS (Portugal, Ireland, Italy, Greece and Spain).  While Greece and Portugal seem to be the worst of the bunch many investors have been fearful that the sovereign debt problem could spread.  On Friday there was a sharp sell-off in Italian assets leading some to believe that Europe's sovereign debt crisis was spreading. Now the EU has scheduled an emergency meeting today to discuss Europe's sovereign debt crisis and the possibility that it was spreading to Italy.   Five-year credit default swaps on Italian bonds this morning rose to a record high. Euro (EUR/USD) +1.40. Italy -3.30%

Small Businesses Will Not Hire. A recent survey released does not bode well for employment.  Almost two-thirds of small-businesses, which are the main drivers of jobs, said they don't expect to increase their workforce over the next year. With many businesses worried about the economy and future tax changes, 12% said they plan on cutting jobs and 19% said they would increase their payrolls. The survey follows Friday's terrible jobs report that showed only 18,000 jobs were created when economist had been expecting 80,000 jobs to have been created.

Downgrades

Accenture (ACN): Bernstein lowered their rating from Outperform to Market Perform and raised their target price from $62.75 to $67.00. Pre-market: 62.25 -1.18 (-1.86%)

Advanced Micro (ADM): JMP Securities lowered their rating from Market Perform to Underperform and placed a target price of $4.50 on the company. Pre-market: 30.75 -0.29 (-0.93%)

Diageo plc (DEO): Bernstein lowered their rating from Outperform to Market Perform. Pre-market: 82.10 -1.39 (-1.66%)

Shaw Group (SHAW): Robert W. Baird lowered their rating from Outperform to Neutral and placed a target price of $34.00 on the company.

Coverage Initiated

Comcast (CMCSA): Brean Murray initiated coverage with a Buy rating.

DIRECTV (DTV): Brean Murray initiated coverage with a Buy rating and target price of $62.00.

DISH Network (DISH): Brean Murray initiated coverage with a Buy rating and target price of $41.00.

Time Warner Cable (TWC): Brean Murray initiated coverage with a Hold rating.

Coverage Reiterated/Price Target Changed

Amazon.com (AMZN): The Benchmark Company reiterated their Buy rating and raised their target price from $212.00 to $246.00. Pre-market: 215.90 -2.38 (-1.09%)

Cree (CREE): Wunderlich reiterated their Hold rating and lowered their target price from $40.00 to $34.00. Pre-market: 31.80 -0.43 (-1.33%)

Earning Reports

Q2 earnings season kicks off today with Alcoa (AA) reporting.  Street estimates are for the company to report EPS of $0.33 versus year-ago EPS of $0.13.

·         Futures at 9:00: Dow -0.90%. S&P -1.26%. Nasdaq -1.16%. Crude -1.65% to $94.65. Gold +0.95% to $1556.30.

·         Europe: London -1.06%. Paris -2.11%. Frankfurt -2.00%.

·         Asia: Japan -0.7% to 10070. Hong Kong -1.7% to 22347. China+0.2% to 2803. India -0.7% to 18721.