Bank of America shares rise on Berkshire investment

Berkshire Hathaway's (BRK.A/BRK.B) Warren Buffett to invest $5 billion into troubled Bank of America (BAC) 8.61 +1.62 +23.03%

MORNING COFFEE

Apple’s Steve Jobs Steps Down. After quitting Stanford in 1976 Steve Jobs started Apple in his parent’s garage.  Jobs left Apple only to return and save the company from collapse, while building it into a powerhouse known for its innovative products such as the iPod, iPhone, and iPad not to mention the company’s sleek computers.  Yesterday Mr. Jobs announced that he would be leaving the company since he was unable to perform his duties.  Jobs has been ill with pancreatic cancer.  His successor will be COO Tim Cook who has been acting as chief executive for more than a year. Cook has been with Apple for the past 13 years and analysts call him a “capable” successor.  Jobs will remain as Chairman of the Board. Pre-market: 366.07 -10.11 (-2.69%)

Upgrades

BHP Billiton (BHP): Societe Generale raised their rating from Hold to Buy. Pre-market: 81.64 +0.69 (0.85%)

Downgrades

Hewlett-Packard (HPQ): RBC Capital lowered their rating from Outperform to Sector Perform and lowered their target price from $35.00 to $30.00. Pre-market: 25.20 -0.01 (-0.04%)

Coverage Reiterated/Price Target Changed 

Applied Materials (AMAT): Needham reiterated their Buy rating and lowered their target price from $16.00 to $13.00. Pre-market: 10.90 -0.46 (-4.05%)

Guess? (GES): Brean Murray Needham reiterated their Buy rating and lowered their target price from $60.00 to $44.00. After Hours: 31.79 -1.50 (-4.51%)

Earning Reports

Applied Materials (AMAT): Reported EPS of $0.35 beating estimates by +$0.02. Pre-market: 10.90 -0.46 (-4.05%)

Guess? (GES): Reported EPS of $0.84 beating estimates by +$0.03. After Hours: 31.79 -1.50 (-4.51%)

Big Lots (BIG): Reported EPS of $0.50 beating estimates by +$0.06. After Hours: 32.38 0.00 (0.00%)

Hormel Foods (HRL): Reported EPS of $0.37 beating estimates by +$0.02.

Market

Futures at 7:30: Dow +0.20%. S&P +0.11%. Nasdaq -0.34%. Crude +0.55% to $85.65. Gold -2.48% to $1715.00. 

Europe: London -0.16%. Paris +0.91%. Frankfurt +0.69%.

Asia: Japan -1.54% to 8772. Hong Kong -1.47% to 19752. Shanghai +2.92% to 2615. India -0.85% to 16146.

MORNING COFFEE

Problems Continue For BofA.  The problems at Bank of America (BAC) just keep piling on.  Yesterday shares tumbled -6.4% before recovering with the broader market to close down -1.9%.  The five-year CDS spreads hit levels higher than during the peak of the financial crisis. Fears about mounting legal liabilities and writeoffs keep hitting the company.  On a Blog post former securities analyst Henry Blodget, said the bank faces $100 billion-$200 billion of writeoffs and troubled assets. BofA called the claims "exaggerated and unwarranted." Pre-market: 6.38 +0.08 (1.27%)

Signs of Slowdown In Germany  and EU. German business confidence in August had its largest fall since late 2008. The Ifo index tumbled more than what economist had expected to 108.7 from 112.9 in July. Additionally, Eurozone industrial orders fell 0.7% in June after rising 3.7% in May, the sharpest fall in almost a year.

Upgrades

Sacks (SKS): Credit Suisse raised their rating from Underperform to Neutral and placed a target price of $8.00 on the company. Pre-market: 8.74 0.00 (0.00%)

Elan Corp (ELN): Credit Suisse raised their rating from Neutral to Outperform and raised their target price from $7.60 to $8.60. Pre-market: 10.05 +0.42 (4.36%)

Downgrades

Pacific Sunwear (PSUN): Oppenheimer lowered their rating from Outperform to Perform. Pre-market: 1.77 -0.40 (-18.43%)

Boston Scientific (BSX): Morgan Keegan lowered their rating from Outperform to Market Perform and lowered their target price from $8.00 to $7.00. Pre-market: 6.20 -0.14 (-2.21%)

Abbott Labs (ABT): Morgan Keegan lowered their rating from Outperform to Market Perform and lowered their target price from $60.00 to $57.00. Pre-market: 50.26 -0.25 (-0.49%)

Coverage Initiated

Google (GOOG): Robert W. Baird initiated coverage with an Outperform rating and target price of $650.00. Pre-market: 519.49 +0.67 (0.13%)

ValueClick (VCLK): Robert W. Baird initiated coverage with a Neutral rating and target price of $17.00.

Earning Reports

American Eagle (AEO): Reported EPS of $0.10 missing estimates by -$0.01. Pre-market: 10.85 -0.77 (-6.63%)

Toll Brothers (TOL): Reported EPS of $0.25 beating estimates by +$0.22. Pre-market: 14.80 +0.06 (0.41%)

Markets

Futures at 8:50: Dow -0.03%. S&P -0.04%. Nasdaq -0.13%. Crude +0.66% to $86.00. Gold -0.91% to $1843.70. 

Europe: London -0.91%. Paris +1.27%. Frankfurt +2.27%. 

Asia: Japan -1.07% to 8640. Hong Kong -2.06% to 19467. Shanghai -0.51% to 2541. India -1.29% to 16285. 

MORNING COFFEE

Apple To Build Cheaper iPhone.  Reuters has reported that Asian suppliers to Apple (APPL) have begun manufacturing a lower-priced version of its iPhone 4. The new iPhone S will have a smaller 8 gigabyte flash drive, versus the current phones 16 GB and 32 GB versions. The new iPhone S is expected to launch in just a few weeks.  Additionally, the highly anticipated iPhone 5 will launch toward the end of September when it’s expected to do head to head against Motorola’s (MMI) new Droid Bionic which is also expected to launch in September. AAPL Pre-market: 359.48 +3.04 (0.85%) MMI Pre-market: 38.00 -0.04 (-0.11%)

Upgrades

Juniper Networks (JNPR): Morgan Keegan raised their rating from Market Perform to Outperform and placed a target price of $27.00 on the company. Pre-market: 20.14 +0.42 (2.13%)

Coach (COH): Jefferies raised their rating from Hold to Buy and placed a target price of $60.00 on the company. Pre-market: 48.20 +1.00 (2.12%)

Downgrades

Suntech Power (STP): Collins Stewart lowered their rating from Neutral to Sell and lowered their target price from $5.50 to $4.00. Pre-market: 4.99 -0.08 (-1.58%)

Hormel Foods (HRL):  BMO Capital lowered their rating from Outperform to Market Perform and placed a target price of $13.00 on the company. Pre-market: 28.10 +0.12 (0.43%)

Coverage Initiated

AOL (AOL): CLSA initiated coverage with an Outperform rating and target price of $14.00.

Priceline.com (PCLN): Credit Suisse initiated coverage with an Outperform rating and target price of $720.00. Pre-market: 453.75 +7.43 (1.66%)

Expedia (EXPE): Credit Suisse initiated coverage with a Neutral rating and target price of $37.00.

Earning Reports

HJ Heinz (HNZ): Reported EPS of $0.78 beating estimates by +$0.02. Pre-market: 51.35 -0.69 (-1.33%)

Medtronic (MDT): Reported EPS of $0.79 in-line with estimates.

Williams-Sonoma (WSM): Reported EPS of $0.37 beating estimates by +$0.01. Pre-market: 30.21 +0.18 (0.60%)

Markets

Futures at 8:35: Dow +1.37%. S&P +0.84%. Nasdaq +0.89%. Crude +1.52% at $85.62. Gold -0.43% to $1883.40. 

Europe: London +0.43%. Paris +1.19%. Frankfurt +0.79%. 

Asia: Japan +1.22% to 8733. Hong Kong +1.99% to 19876. China +1.52% to 2554. India +0.96% to 16498.