MORNING COFFEE

Bank of America to Charge for Debit Card Use. Bank of America (BAC) which has been struggling with their mortgage business and lawsuits is looking to increase revenues on the backs of consumers.  The bank announced that it will soon charge customers a new $5 fee per month if they use a BofA debit card to make a purchase. The bank, is blaming the new fee on lost revenue due to the new Dodd-Frank regulations. Year to date Bank of America shares have fallen -52.4%. Pre-market: 6.24 -0.11 (-1.73%)

Morgan Stanly Credit-Defult Swaps Soar. Fears about the EU debt crisis and French bank exposure have spread to the U.S. The fear of U.S. bank exposure has caused credit-default swaps to insure Morgan Stanley's (MS) debt to soar to 456bp.  This is higher than the cost of buying swaps for some major French and Italian banks and is the highest level since March 2009. Pre-market: 14.68 -0.41 (-2.72%)

Upgrades

Marathon Oil (MRO): The Benchmark Company raised their rating from Sell to Hold and placed a target price of $23.00 on the company. Pre-market: 22.10 -0.22 (-0.99%)

Edison (EIX): Wunderlich raised their rating from Hold to Buy and placed a target price of $23.00 on the company. Pre-market: 38.30 +0.04 (0.10%)

Downgrades

Altera (ALTR): Auriga lowered their rating from Buy to Hold and lowered their target price from $42.00 to $37.00.

Coverage Initiated

Dunkin” Brands (DNKN): Argus initiated coverage with a Hold rating.

H.J. Heinz (HNZ): Jefferies initiated coverage with a Buy rating and target price of $59.00 on the company.

Dow Chemical (DOW): Jefferies initiated coverage with a Hold rating and target price of $27.00 on the company. Pre-market: 23.45 -0.29 (-1.22%)

United States Steel (X): Longbow initiated coverage with a Buy rating and target price of $37.00 on the company. Pre-market: 22.61 -0.46 (-1.99%)

Earning Reports

Micron (MU): Reported EPS of -$0.14 missing estimates by -$0.14. Pre-market: 5.45 -0.42 (-7.16%)

Markets
Futures at 8:24: Dow -0.91%.S&P -0.98%. Nasdaq -0.84%. Crude -0.80% to $81.48. Gold +0.30% to $1622.10.

Europe: London -1.50%. Paris -2.04%. Frankfurt -2.52%.

Asia: Japan -0.01%. Hong Kong -2.32%. China -0.26%. India -1.46%.

MORNING COFFEE

Online Ad Revenues Jump. The Internet Advertising Bureau reported that U.S. online ad revenues rose +23% in the first half of the year to a record $14.9 billion.  This is a big jump from the prior year’s +11% growth and $12.1 billion.  Search and display ad sales both rose +27%, and video sales rose +42%. Google (GOOG) Pre-market: 537.39 +8.55 (1.62%)

Downgrades

Advanced Micro (AMD): ThinkEquity lowered their rating from Buy to Hold and lowered their target price from $8.00 to $6.00. Pre-market: 5.58 -0.57 (-9.27%)

Advanced Micro (AMD): Macquarie lowered their rating from Hold to Underperform and placed a target price of $6.15 on the company. Pre-market: 5.58 -0.57 (-9.27%)

Coverage Initiated

Eastman Chemical (EMN): CLSA initiated coverage with a Buy rating and placed a target price of $87.00 on the company.

PPG Industries (PPG): CLSA initiated coverage with an Outperform rating and placed a target price of $85.00 on the company.

Sherwin-Williams (SHW): CLSA initiated coverage with an Underperform rating and placed a target price of $82.00 on the company.

Coverage Reiterated/Price Target Changed 

Advanced Micro (AMD): FBR Capital reiterated their Outperform rating and lowered their target price from $12.00 to $8.50. Pre-market: 5.58 -0.57 (-9.27%)

Earning Reports

Mosaic (MOS): Reported EPS of $1.17 missing estimates by -$0.10. Pre-market: 57.97 +0.78 (1.36%)

Thor Industries (THO): Reported EPS of $0.66 missing estimates by +$0.04. Pre-market: 20.54 +0.23 (1.13%)

Markets
Futures at 8:38: Dow +1.29%. S&P +1.27%. Nasdaq +1.33%. Crude +1.50% to $82.43. Gold +0.14% to $1620.30.

Europe: London +0.22%. Paris +1.50%. Frankfurt +1.45%.

Asia: Japan +0.99%. Hong Kong (closed). China -1.12%. India +1.53%.

MORNING COFFEE

Apple to Announce iPhone 5. Yesterday Apple announced an event on Oct. 4 called "Let's talk iPhone" which many are expecting to be the official launch of the highly anticipated iPhone 5.  The new phone is expected to have a bigger touch screen, a 8-megapixel camera, voice-control features and will be compatible with iCloud.  The new phone will have heavy competition from the recent Android phone releases. Pre-market: 400.65 +1.39 (0.35%)

Downgrades

Colgate-Palmolive (CL): Citigroup lowered their rating from Buy to Hold and lowered their target price from $95.00 to $93.00.

Coverage Initiated

Apple (AAPL): Janney Capital initiated coverage with a Buy rating and target price of $495.00. Pre-market: 400.65 +1.39 (0.35%)

Aflac (AFL): RBC Capital initiated coverage with an Outperform rating and target price of $50.00.

DIRECTV (DTV): JP Morgan initiated coverage with an Overweight rating and target price of $53.00.

Comcast Corp CL A (CMCSA): JP Morgan initiated coverage with an Overweight rating and target price of $30.00. Pre-market: 22.40 +0.07 (0.31%)

Cisco Systems (CSCO): FBN Securities initiated coverage with an Outperform rating and target price of $23.00. Pre-market: 16.17 +0.10 (0.62%)

Huntington Ingalls (HII): Goldman Sachs initiated coverage with a Sell rating and target price of $21.00.

Quest Diagnostics (DGX): Natixis initiated coverage with a Buy rating and target price of $59.00.

Teva Pharmaceuticals (TEVA): Canaccord initiated coverage with a Buy rating and target price of $52.00. Pre-market: 36.95 +0.67 (1.85%)

Coverage Reiterated/Price Target Changed

Laboratory Corp (LH): Deutsche Bank reiterated their Buy rating and lowered their target price from $107.00 to $95.00.

Earning Reports

Darden Restaurants (DRI): Reported EPS of $0.78 in line with estimates. Pre-market: 47.00 +0.02 (0.04%)

Family Dollar (FDO): Reported EPS of $0.66 beating estimates by +$0.02. Pre-market: 53.80 -0.38 

(-0.70%)

McCormick (MKC): Reported EPS of $0.69 beating estimates by +$0.03.

Accenture (ACN): Reported EPS of $0.91 beating estimates by +$0.02. Pre-market: 55.30 +1.65 (3.08%)

Paychex (PAYX): Reported EPS of $0.41 beating estimates by +$0.03. Pre-market: 27.01 +0.32 (1.20%)

Markets
Futures at 8:52: Dow +0.31%. S&P +0.30%. Nasdaq +0.22%. Crude -1.16% to $83.45. Gold -0.34% to $1646.40.

Europe: London -0.56%. Paris -0.46%. Frankfurt 0.0%.

Asia: Japan +0.07%. Hong Kong -0.66%. China -0.95%. India -0.47%.