MORNING COFFEE

Microsoft raises Dividend. Microsoft (MSFT)announced they are raising their dividend by $0.03 to $0.16, and said they will borrow up to $6 billion in short- and long-term debt. In their announcement the company said the move "reflects our commitment to returning capital to our shareholders and our confidence in the long-term growth of the company."

Deutsche Bank Gives Profit Warning. Deutsche Bank, Germany’s largest bank warned it would book a Q3 loss stemming from its purchase of Postbank, and from "the poorer market conditions during the summer months." Shares of the company are getting hit hard in Frankfurt and in the U.S. premarket trading.

Downgrades

Nokia (NOK): Morgan Keegan lowered their rating from Market Perform to Underperform and lowered their target price from $9.70 to $7.80.

Adobe Systems (ADBE): FBR Capital lowered their rating from Outperform to Market Perform and lowered their target price from $41.00 to $31.00.

Adobe Systems (ADBE): ISI Group lowered their rating from Buy to Hold and lowered their target price from $43.00 to $30.00.

Adobe Systems (ADBE): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $44.00 to $36.00.

Coverage Initiated

Tellabs (TLAB): RBC Capital Markets initiated coverage with a Sector Perform rating and target price of $9.00.

NetLogic (NETL): Auriga U.S.A initiated coverage with a Hold rating and target price of $29.00.

Coverage Reiterated/Price Target Changed

Clorox (CLX): Caris & Company reiterated their Average rating and lowered their target price from $67.00 to $65.00.

AutoZone (AZO): Wedbush reiterated their Neutral rating and raised their target price from $200.00 to $228.00.

Adobe Systems (ADBE): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $45.00 to $40.00.

Earning Reports

Adobe (ADBE): Reported FQ3 EPS of $0.54 beating estimates by +0.05 on revenue of $990 million.

Cintas (CTAS): Reported FQ1 EPS of $0.40 beating estimates by +0.02 on revenue of $924 million. 

Darden Restaurants (DRI): Reported FQ1 EPS of $0.80 beating estimates by +0.03 on revenue of $1.8 billion.

CLOSING BELL

Dow 10761.03  +7.41,  Nasdaq 2349.35  -6.48, S&P 1139.78  -2.93 

Stocks finished the day mixed after the release of the latest FOMC rate decision.

Stocks failed to sustain their session highs today after hitting resistance.  Even better than expected housing numbers and the Feds ongoing support for the economy was enough to keep stocks at the day’s highs.

Housing start came in at 598,000 and building permits for August came in at 569,000.  Economists were looking for 550,000 and 560,000 respectively.  This helped construction materials stocks which were up +3.1% for the day.

It was no surprise the Fed kept the Fed Funds rate unchanged at 0.0% - 0.25%.  In their policy statement the Fed again said that current economic conditions, including low rates of resource utilization, inflation trends, and stable inflation expectations, were likely to warrant exceptionally low interest rates for an extended period. This news allowed stocks to rally.

Advancing Sectors: Telecom +0.3%, Industrials +0.2%, Health Care +0.1%
Declining Sectors: Financials -1.0%, Utilities -0.5%, Consumer Discretionary -0.4%, Materials -0.4%, Energy -0.1%, Tech -0.1%, Consumer Staples -0.1%

MORNING COFFEE

The Recession Is Over. The National Bureau of Economic Research, which is responsible for calling when recessions begin and end, has determined that The Great Recession ended in June 2009.  The recession which began December, was the longest downturn since World War II. The decision also eliminates that possibility of a double dip recession, any future downturn in the economy would be considered a new recession.

Microsoft Pushing Zune In Europe. Microsoft (MSFT) said it is rolling out new software that will enhance its Zune music and movie download service to Europe. The strategy is that the Zune will catch on with current Xbox users and tie in its new smartphone operating system, Windows Phone 7.

Economic News

Housing starts and Building permits for August both came in higher than economists estimates.  Housing starts for August came in at 598,000 versus the estimates for 550,000 new homes being built.  Additionally, Building permits, which forecast future housing starts came in at 569,000 beating estimates of only 560,000.

Downgrades

Micron (MU): Sterne Agee lowered their rating from Buy to Neural.

SanDisk (SNDK): Sterne Agee lowered their rating from Buy to Neural.

Coverage Initiated

Boston Scientific (BSX): Maxim Group initiated coverage with a Sell rating and a target price of $4.50.

Zimmer Holdings (ZMH): Maxim Group initiated coverage with a Hold rating.

IRobot (IRBT): The Benchmark Company initiated coverage with a Hold rating and a target price of $20.00.

Coverage Reiterated/Price Target Changed 

Coca-Cola (KO): Stifel Nicolaus reiterated their Buy rating and raised their target price from $59.00 to $65.00.

Wells Fargo (WFC): Oppenheimer reiterated their Outperform rating and lowered their target price from $38.00 to $37.00.

Morgan Stanley (MS): Oppenheimer reiterated their Outperform rating and lowered their target price from $35.00 to $32.00.

JP Morgan Chase (JPM): Oppenheimer reiterated their Outperform rating and lowered their target price from $52.00 to $50.00.

Goldman Sachs (GS): Oppenheimer reiterated their Outperform rating and lowered their target price from $200.00 to $185.00.

Cognizant Tech (CTSH): Oppenheimer reiterated their Buy rating and raised their target price from $67.00 to $70.00.

Qualcomm (QCOM): FBR Capital reiterated their Outperform rating and raised their target price from $47.00 to $49.00.

·         Futures: Dow -0.09%. S&P -0.07%. Nasdaq +0.05%. Crude -0.85% to $74.22. Gold +0.22% to $1283.60.

·         Asia: Japan -0.25% to 9602. Hong Kong +0.11% to 22003. China +0.11% to 2592. India +0.48% to 20002.

·         Europe: London +0.30%. Paris +0.45%. Frankfurt +0.39%.

MIDDAY LUNCH

Dow 10707.90  +100.05,  Nasdaq 2339.08  +23.47,  S&P 1136.66  +11.07 

Strong broad based gains remain in the market, but stocks are trading off their session highs.

Today’s, gains could be considered a surprise since it comes ahead of the FOMC rate decision, which is due to be release tomorrow.  Most economists expect interest rates to remain the same, with the most important piece of information being the Feds policy statement.

All ten sectors are in positive territory today with Energy +1.48% and Services +1.32% leading the market.

Shares of Dolby Labs (DLB) 58.54 +2.62, +4.72% are higher today after Avondale raised their rating to Market Outperform.

MORNING COFFEE

Wal-Mart To Open Mini-Marts. Sources say that Wal-Mart (WMT) is gearing up for a move into small convenience stores in large urban markets. Reports say that Wal-Mart is looking at hundreds of locations across the U.S.  Additionally, Wal-Mart has begun a test program for online purchases delivered free to FedEx (FDX) outlets.  The program is designed to increase sales in urban locations like LA and Boston where Wal-Mart has little to no stores.

General Mills May Buy Yoplait. General Mills (GIS) is considering £1 billion takeover bid for Yoplait.  The possible takeover occurred after Yoplait tried to scrap a distribution deal between the companies.

Upgrdes

Best Buy (BBY): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $45.00 on the company.

Consolidated Water (CWCO): Brean Murray raised their rating from Hold to Buy and placed a target price of $12.00 on the company.

ValueClick (VCLK): The Benchmark Company raised their rating from Hold to Buy and raised their target price from $12.00 to $15.00.

Downgrades

Public Storage (PSA): FBR Capital lowered their rating from Market Perform to Underperform.

Coverage Reiterated/Price Target Changed

Apple (AAPL): Kaufman Bros reiterated their Buy rating and raised their target price from $350.00 to $374.00.

Pall Corp (PLL): Wedbush reiterated their Neutral and raised their target price from $38.00 to $43.00.

Earning Reports

Lennar (LEN): Reported FQ3 EPS of $0.16 beating estimates by +$0.11 on revenue of $825 million.

·         Futures: S&P +0.51%. 10-yr +0.05%. Crude +0.43% to $75.24. Gold +0.3% to $1281.30.

·         Asia: Japan +1.2%. Hong Kong 0.0%. China -0.4%. India +1.6%.

·         Europe: London +1.2%. Paris +0.8%. Frankfurt +0.6%.

MIDDAY LUNCH

Dow 10595.29  +0.53, Nasdaq 2312.57  +9.28, S&P 1125.32  +0.66 

The market seems to be stuck in a tight trading range today with the bulls and bears fighting back in forth having the market trade with slight gains and losses.

The fight is not restricted to stocks today; bonds are also in a tug of war.  The 10 year Treasury yield has bounce from 2.80% to 2.69% and now stands at 2.74%.

In economic news today the CPI came in at 0.3% and the core rate was 0.0% showing that inflation is well under control.

The University of Michigan Consumer Confidence Index fell from 68.9  in August to 66.6 in September.  Economists were looking for a reading of 70.0.  This indicated that consumers are losing faith in the economy and the recovery.  This caused stocks to trade lower after the release.

Oracle (ORCL) 27.46 +2.11, +8.29% shares are higher today after the company posted better than expected earnings and strong future guidance.

The ten major sectors are mixed today with Capital Goods leading the market up +1.09%.  In the sector today’s most active are Caterpillar (CAT) 73.23 +1.23, +1.71%, Boeing (BA) 63.21 +0.63, +1.01% and Deere (DE)72.36 +2.72, +3.91%.

MORNING COFFEE

J&J to buy Crucell. Johnson & Johnson (JNJ) announced that they are in advanced talks to buy the remaining shares of Crucell (CRXL) the company doesn’t already own. J&J currently owns 18% of the company and the purchase would strengthen J&J's ability to discover, make and sell vaccines. The deal is valued around €1.75B ($2.3B) in cash, or €24.75/share.

Upgrades

Oshkosh Truck (OSK): Robert W. Baird raised their rating from Neutral to Outperform and placed a target price of $42.00 on the company.

Downgrades

BHP Billiton (BHP): HSBC Securities lowered their rating from Overweight to Neutral.

Coverage Reiterated/Price Target Changed

Massey Energy (MEE): Howard Weil reiterated their Market Perform rating and lowered their target price from $50.00 to $40.00.

Oracle (ORCL): RBC Capital Markets reiterated their Outperform rating and raised their target price from $28.00 to $32.00.

Oracle (ORCL): FBR Capital reiterated their Outperform rating and raised their target price from $30.00 to $32.00.

Research In Motion (RIMM): Wedbush reiterated their Market Perform rating and lowered their target price from $57.00 to $51.00.

Microsoft (MSFT): Oppenheimer reiterated their Market Perform rating and lowered their target price from $35.00 to $30.00.

Nike (NKE): FBR Capital reiterated their Outperform rating and raised their target price from $79.00 to $80.00.

Earning Reports

Oracle (ORCL): Reported FQ1 EPS of $0.42 beating estimates by +$0.05 on revenue of $7.6 billion. 

Research In Motion (RIMM): Reported Q2 EPS of $1.46 beating estimates by +0.11 on revenue of $4.6 billion. 

·         Futures: Dow +0.7%. S&P +0.6%. Nasdaq +0.5%. Crude +0.8% to $75.17. Gold +0.6% to $1281.50.

·         Asia: Japan +1.2% to 9626. Hong Kong +1.3% to 21971. China -0.1% to 2599. India +0.9% to 19595.

·         Europe: London +0.9%. Paris +1.0%. Frankfurt +0.8%.