MORNING COFFEE

Italian Debt Sends Market Lower. After highly visible meetings to solve the EU debt crisis, the crisis is continuing.  Italian yields rose to a new euro-era high of 6.47% in a sale of €3B of five-year bonds.  This surpassed the previous high of 6.29%. In the secondary market, 10-year yields were up midday in Europe after initially falling. Additionally, there are now reports that credit markets in the U.S. are beginning to tighten due to the EU crisis.

Upgrades

Avon Products (AVP): Caris & Company raised their rating from Average to Above Average and raised their target price from $19.00 to $21.00.

Downgrades

Kohl’s (KSS): Deutsche Bank lowered their rating from Buy to Hold and lowered their target price from $57.00 to $53.00.

Best Buy (BBY): RBC Capital lowered their rating from Top Pick to Sector Perform and lowered their target price from $32.00 to $28.00.

Toll Brothers (TOL): Stifel Nicolaus lowered their rating from Hold to Sell.

DR Horton (DHI): Stifel Nicolaus lowered their rating from Hold to Sell.

Altria (MO): Stifel Nicolaus lowered their rating from Buy to Hold.

Coverage Initiated

Cintas (CTAS): KeyBanc Capital Markets initiated coverage with a Buy rating and target price of $36.00.

Netflix (NFLX): Goldman Sachs initiated coverage with a Neutral rating and target price of $82.00.

Earning Reports

Joy Global (JOY): Reported EPS of $1.90 beating estimates by +$0.03.

Markets: 
Futures at 7:00: Dow -0.2%. S&P -0.1%. Nasdaq -0.35%. Crude -1.0% to $99.15. Gold -1.9% to $1630.90.

Europe: London +0.1%. Paris -1.7%. Frankfurt -1.4%. 

Asia: Japan -0.4% to 8519. Hong Kong -0.5% to 18354. China -0.9% to 2229. India -0.76% at 15881.