MIDDAY LUNCH

Dow 9998.45  -42.00, Nasdaq 2119.47  -4.29, S&P 1046.49  -5.38 

The markets are all in the red but trading off the session lows. It is important to note that the Dow is currently trading below the physiologically important 10,000 level.

Today’s losses came again be blamed on more poor economic data.  Both Durable Orders and New Home sales missed economist estimates.

Durable Orders came in at +0.3% versus the +3.0% gain that economists were looking for, while New Home Sales came in at 276,000 missing estimates of 334,000.

It is interesting to note that shares of home builders are higher today even after terrible new and existing home sales reports.  Toll Brothers (TOL) 16.99 +0.80, +4.94% KB Home (KBH) 10.30 +0.26, +2.59%, Pulte (PHM) 7.98 +0.14, +1.79%.  Some are suggesting that there could be consolidation within the industry.

MORNING COFFEE

Dell Enters Smartphone Market. Dell (DELL) unveiled its first smartphone called the Aero for the U.S. market yesterday.  The new smartphone will use Google’s (GOOG) popular Android operating system.  Dell says it is the lightest phone available that use Android. The new phone will sell for $99 with a contract from AT&T (T), and $299 without one.

Ireland’s Debt Downgraded. S&P lowered the credit rating on Ireland's government debt one notch to AA- from AA, citing the cost of propping up the country's financial sector.  S&P said it projects that Ireland's government debt will rise toward 113% of gross domestic product in 2012.

Upgrades

La-Z-Boy (LZB): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $10.00 on the company.

DR Horton (DHI): Ticonderoga raised their rating from Neutral to Buy and placed a target price of $13.00 on the company.

Corning (GLW): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $20.00 on the company.

Coverage Initiated

Hewlett-Packard (HPQ): Wedbush initiated coverage with a Neutral rating and target price of $44.00.

Coverage Reiterated/Price Target Changed

Medtronic (MDT): Wedbush reiterated their Neutral rating and lowered their target price from $42.00 to $36.00.

Medtronic (MDT): Oppenheimer reiterated their Outperform rating and lowered their target price from $48.00 to $42.00.

Medco Health Solutions (MHS): Argus reiterated their Buy rating and lowered their target price from $74.00 to $60.00.

Big Lots (BIG): Wedbush reiterated their Neutral rating and lowered their target price from $37.00 to $35.00.

Earning Reports

Toll Brothers (TOL): Reported FQ3 EPS of $0.16 beating estimates by +$0.30 on revenue of $454.2 million.

·         Futures: Dow 0.0%. S&P 0.0%. Nasdaq -0.2%. Crude +0.1% to $71.72. Gold +0.4% to $1238.40.

·         Asia: Japan -1.7% to 8845. Hong Kong -0.1% to 20635. China -2.0% to 2597. India -0.7% to 18180.

·         Europe: London -0.5%. Paris -0.5%. Frankfurt -0.3%.

MORNING COFFEE

More Bidders For Potash. New reports say that Rio Tinto (RTP) and an unnamed Chinese partner are considering a joint offer to purchase Potash (POT). BHP Billiton's (BHP) has already made a $38.6B offer, while Vale (VALE), and Sinochem have expressed interest.  Other potential bidders include Agrium (AGU), privately-held Cargill Inc., Monsanto (MON), Mosaic (MOS), and some Chinese companies.

Coverage Initiated

AnnTaylor (ANN): Janney Montgomery Scott initiated coverage with a Buy rating and target price of $19.00.

Zumiez (ZUMZ): Janney Montgomery Scott initiated coverage with a Buy rating and target price of $19.00.

J. Crew (JCG): Janney Montgomery Scott initiated coverage with a Buy rating and target price of $41.00.

Coverage Reiterated/Price Target Changed 

Allscripts-Misys Healthcare (MDRX): Oppenheimer reiterated their Outperform rating and raised their target price from $20.00 to $22.00

Legg Mason (LM): Ticonderoga reiterated their Sell rating and raised their target price from $26.00 to $24.00

Earning Reports

Big Lots (BIG): Reported Q2 EPS of $0.48 beating estimates by +$0.01 on revenue of $1.14 billion.

Trina Solar (TSL): Reported Q2 EPS of $0.52 beating estimates by +$0.03 on revenue of $370.8 million.

·         Futures: Dow -0.7%. S&P -0.75%. Nasdaq -0.7%. Crude -1.2% to $72.24. Gold -0.7% to $1219.50.

·         Asia: Japan -1.3% to 8995. Hong Kong -1.1% to 20659. China +0.4% to 2650. India -0.5% to 18312.

·         Europe: London -1.1%. Paris -1.3%. Frankfurt -1.0%.

MIDDAY LUNCH

Dow 10225.95  +9.31, Nasdaq 2172.85  -7.61, S&P 1073.47  +1.62 

The Dow and S&P have managed to work their way back into positive territory after starting the day to the plus side, but then turning negative. 

The best performing area of the market today are Utilities +0.49% and Healthcare +0.48%.

Shares of Wal-Mart (WMT) 51.32 +1.09, +2.17% are having a nice day, on no real news.

Hewlett-Packard (HPQ) 39.10 -0.75, -1.88% outbid Dell (DELL) 11.95 -0.12, -0.99% for 3PAR Inc (PAR) 25.64 +7.60, +42.13% with a price of $24.00, Dell was offering $18.00 per share.  HP hopes the deal will close by year end.

Research In Motion (RIMM) 47.94 -0.78, -1.60% the maker of Blackberry phones had their target price lowered by Wunderlich Securities.  The company reiterated their Buy rating but lowered their target price from $85.00 to $67.00. 

MORNING COFFEE

More Companies Eyeing Potash. Reports say that both Sinochem, a Chinese-state owned chemical group, and Vale (VALE), have contacted Potash (POT) with initial inquiries about holding merger talks. Other companies have also expressed interest including BHP Billiton's (BHP).

Upgrades

Bank of America (BAC): Standpoint Research raised their rating from Hold to Accumulate.

Coverage Reiterated/Price Target Changed

Allstate (ALL): Stifel Nicolaus reiterated their Buy rating and raised their target price from $43.00 to $45.00.

Exxon Mobil (XOM): Argus reiterated their Buy rating and lowered their target price from $80.00 to $76.00.

·         Futures: Dow +0.4%. S&P +0.6%. Nasdaq +0.7%. Crude +0.2% to $73.98. Gold 0.0% at $1228.70.

·         Asia: Japan -0.7% to 9117. Hong Kong -0.4% to 20889. China -0.1% to 2639. India 0.0% at 18409.

·         Europe: London  +0.8%. Paris +1.0%. Frankfurt +0.5%.

CLOSING BELL

Dow 10213.62  -57.59, Nasdaq 2179.76  +0.81, S&P 1071.69  -3.94 

Stocks bottomed around midday and were able to rally off the bottom to end the day in mixed fashion.

Energy stocks were the worst performers today down -1.2%, while Semiconductors closed up +0.4% after Marvell (MRVL) 16.16 +1.25, +8.38% after the company reported earnings in-line earnings and announced a $500 million share repurchase program. 

Volume was strong for a due to options expiration with more than 1.12 billion shares traded.

The 10 year Treasury closed today with a yield of 2.609%.

MIDDAY LUNCH

Dow 10167.60  -103.61, Nasdaq 2164.82  -14.13, S&P 1066.22  -9.41 

Stocks continue to trade lower, but they are off their session lows.  Action is light as traders seem to be taking a wait and see approach going into next week.  Additionally, with the Iranian nuclear facility going live on Saturday, some military analysts are suggesting that if Israel is going to take out the facility, it needs to occur before the reactor goes live.

Conglomerates and Energy are leading the market lower, down -1.50% and -1.29% respectively as traders question the health of the economy.

Bucking the down trend today Salesforce.com (CRM) 110.36 +13.95, +14.47% and Intuit (INTU) 43.46, +4.73, +12.20%.  Saleforce.com is higher after the company reported earnings after the close yesterday the beat estimates.  Intuit also beat estimates and raised their guidance.

MORNING COFFEE

CBO Expects $1.3 Trillion Budget Deficit. The Congressional Budget Office announced in their latest report on the economy that it expects the U.S. deficit to reach $1.34 trillion, which would be the second-largest shortfall in the last 65 years. The 2011 deficit is expected to come in at $1.07 trillion, up from the CBO's previous estimate of $980 billion. The CBO also said that the economic recovery will continue at a "modest pace" over the next few years.

Make Purchases Using Your Cell Phone. Bank of America (BAC) and Visa (V) announced a plan to begin a test program in September that lets customers use their smartphones to make purchases in stores. Visa has plans to conduct a similar test with U.S. Bancorp (USB). AT&T (T), Verizon (VZ) and T-Mobile USA (DTEGY) are also working on a mobile payment system for smartphones; Discover Financial (DFS) and Barclays (BCS) are said to be part of the venture.

Downgrades

Brocade (BRCD): Argus lowered their rating from Buy to Hold.

McAfee (MFE): FBR Capital lowered their rating from Outperform to Market Perform and raised their target price from $44.00 to $48.00.

Coverage Resumed

Amazon.com (AMZN): Kaufman Bros resumed coverage with a Hold rating and target price of $135.00.

Coverage Reiterated/Price Target Changed

Intuit (INTU): Oppenheimer reiterated their Outperform rating and raised their target price of$39.00 to $45.00

Salesforce.com (CRM): Kaufman Bros reiterated their Buy rating and raised their target price of$110.00 to $120.00.

Earning Reports

Aeropostale (ARO): Reported Q2 EPS of $0.46 in-line on revenue of $495 million.

Dell (DELL): Reported Q2 EPS of $0.32 beating estimates by +$0.02 on revenue of $15.5 billion.

Foot Locker (FL): Reported Q2 EPS of $0.04 beating estimates by +$0.01 on revenue of $1.1 billion.

Gap (GPS): Reported Q2 EPS of $0.36 beating estimates by +$0.01 on revenue of $3.3 billion. 

Hewlett-Packard (HPQ): Reported FQ3 EPS of $1.08 in-line on revenue of $30.7 billion.

Intuit (INTU): Reported FQ4 EPS of -$0.05 beating estimates by +$0.05 on revenue of $537 million.

Salesforce.com (CRM): ReportedQ2 EPS of $0.29 beating estimates by +$0.02 on revenue of $394 million.

·         Futures: Dow -0.5%. S&P -0.5%. Nasdaq -0.4%. Crude -1.3% to $73.46. Gold -0.3% to $1231.50.

·         Asia: Japan -2.0% to 9179. Hong Kong -0.4% to 20982. China -1.7% to 2642. India -0.3% to 18402.

·         Europe: London -0.7%. Paris -1.4%. Frankfurt -1.0%.