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.