MORNING COFFEE

President Obama Pushes For a Deal On Spending Cuts and Debt Limit Increase. President Obama and top Republican and Democratic leading will meet for the third day to try to work out a deal to reduce spending and increase the debt limit.  All sides in the negotiations are very far apart and a deal needs to be struck by the week of July 18^th to have time to draft a bill and get it approved by both houses.  President Obama would like to see both tax increases and cuts to Social Security and Medicare, while Democrats only want tax increases.  Republican have said over and over again that it’s a spending problem and not a revenue problem and that they will not vote for any tax increase, which many economist believe would hurt the weakening economy and send the very high unemployment rate of 9.2% even higher.

Downgrades

Alcatel-Lucent (ALU): Deutsche Bank lowered their rating from Buy to Hold. Pre-market: 5.52 -0.06 (-1.08%)

Microchip Technology (MCHP): UBS lowered their rating from Buy to Neutral and lowered their target price from $44.50 to $37.00. Pre-market: 34.00 -3.48 (-9.28%)

Proctor & Gamble (PG): Jefferies lowered their rating from Buy to Hold and lowered their target price from $75.00 to $71.00. Pre-market: 64.56 -0.16 (-0.25%)

Coverage Initiated

Google (GOOG): Susquehanna Financial initiated coverage with a Positive rating and target price of $640.00. Pre-market: 528.80 +1.52 (0.29%)

US Steel (X): CRT Capital initiated coverage with a Fair Value rating and target price of $49.00. Pre-market: 43.36 -0.18 (-0.41%)

Amazon.com (AMZN): Robert W. Baird initiated coverage with an Outperform rating and target price of $260.00. Pre-market: 214.29 +1.74 (0.82%)

Amazon.com (AMZN): Susquehanna Financial initiated coverage with an Outperform rating and target price of $265.00. Pre-market: 214.29 +1.74 (0.82%)

eBay (EBAY): Robert W. Baird initiated coverage with an Outperform rating and target price of $40.00. Pre-market: 33.28 +0.37 (1.12%)

Priceline.com (PCLN): Susquehanna Financial initiated coverage with a Positive rating and target price of $670.00. Pre-market: 537.95 +1.40 (0.26%)

Coverage Resumed

Oracle (ORCL): Goldman Sachs resumed coverage with a Buy rating and target price of $40.00. Pre-market: 33.19 +0.05 (0.15%)

Google (GOOG): Goldman Sachs resumed coverage with a Neutral rating and target price of $600.00. Pre-market: 528.80 +1.52 (0.29%)

Microsoft (MSFT): Goldman Sachs resumed coverage with a Neutral rating and target price of $30.00. Pre-market: 26.60 -0.03 (-0.11%)

Coverage Reiterated/Price Target Changed

Novellus (NVLS): Needham reiterated their Buy rating and lowered their target price from $41.00 to $38.00. Pre-market: 34.10 -1.67 (-4.67%)

Franklin Resources (BEN): Ticonderoga reiterated their Buy rating and lowered their target price from $145.00 to $15.00

Earning Reports

Fastenal (FAST): Reported EPS of $0.32 beating estimates by +$0.01. Pre-market: 36.00 0.00 (0.00%)

Infosys (INFY): Reported EPS of $30.14 missing estimates by -$0.28. Pre-market: 61.29 -3.81 (-5.85%)

•Futures at 8:09: Dow -0.23%. S&P -0.45%. Nasdaq -0.27%. Crude -0.59% to $94.57. Gold -0.08% to $1547.80.
•Europe: London -1.00%. Paris -1.35%. Frankfurt -1.32%.
•Asia: Japan -1.42% to 9926. Hong Kong -3.06% to 21663. China -1.72% to 2754. India -1.65% to 18411.