MORNING COFFEE

Market Looking for Fed Decision. The FOMC is expected to announce their decision on where interest rates should be today at 12:30 ET.  Most economists are expected the Fed to keep interest rates unchanged at 0%-0.25% and confirm that it will end its $600 billion Treasury buying program.  Additionally, economists are expecting the Fed to trim their growth expectations for the U.S. economy.  The market will be looking at the Feds wording for the future direction of interest rates.  Most are expecting the Fed to keep its wording the same.

Upgrades

Forest Labs (FRX): Argus raised their rating from Hold to Buy and placed a target price of $46.00 on the company. Pre-market: 40.80 +0.65 (1.62%)

Newell Rubbermaid (NWL): Raymond James raised their rating from Market Perform to Strong Buy and placed a target price of $19.00 on the company. Pre-market: 15.46 +0.26 (1.71%)

Forest Oil (FST): Stifel Nicolaus raised their rating from Hold to Buy and placed a target price of $34.00 on the company. Pre-market: 26.56 +0.26 (0.99%)

Biogen Idec (BIIB): Credit Suisse raised their rating from Neutral to Outperform and raised their target price from $100.00 to $125.00. Pre-market: 100.15 +1.50 (1.52%)

Coverage Initiated

Polo Ralph Lauren (RL): Wells Fargo initiated coverage with a Buy rating and placed a value range of $138.00 to $145.00 on the company.

Boston Scientific (BSX): Stifel Nicolaus initiated coverage with a Buy rating and target price of $9.00. Pre-market: 7.06 +0.14 (2.02%)

Downgrades

Synovus (SNV): Wunderlich lowered their rating from Buy to Hold and lowered their target price from $3.50 to $2.50.

Earning Reports

Adobe (ADBE): Reported FQ2 EPS of $0.55 beating estimates by +$0.04 on revenue of $1.02 billion, beating estimates by +$0.07 billion.  The company also gave FQ3 EPS guidance of $0.50-0.56. Pre-market: 30.30 -1.71 (-5.34%)

Jabil Circuit (JBL): Reported FQ3 EPS of $0.58 beating estimates by +$0.01 on revenue of $4.2 billion, beating estimates by +$0.06 billion. Pre-market: 19.33 +0.48 (2.55%)

CarMax (KMX): Reported EPS of $0.55 beating estimates by +$0.08. Pre-market: 33.30 +2.78 (9.11%)

FedEx (FDX): Reported EPS of $1.75 beating estimates by +$0.02. Pre-market: 91.48 +2.35 (2.64%)

·         Futures at 8:49: Dow -0.24%. S&P -0.25%. Nasdaq -0.32%. Crude -0.55% to $93.66. Gold -0.04% to $1545.80.

·         Europe: London -0.16%. Paris -0.31%. Frankfurt -0.17%.

·         Asia: Japan +1.8% to 9629. Hong Kong +0.0% to 21860. China+0.1% to 2649. India -0.1% to 17551.

MORNING COFFEE

Fitch Warns of Greek and U.S. Debt Defaults. The rating agency Fitch warned Greece that it would treat a voluntary rollover of Greece's sovereign bonds in any rescue package as a default and would cut the country’s debt rating.   Greek Prime Minister George Papandreou faces a confidence vote today before he can secure support for the austerity package that is a condition for the first installment of $12 billion euros in aid. 

Fitch also said it would place the U.S. sovereign debt rating on watch negative if Congress did not raise the federal government's $14.3 trillion borrowing ceiling by August 2.  The rating agency said that if the government missed an August 15^th coupon payment it would place the U.S debt rating on restricted default.

Upgrades

Progressive (PGR): Ticonderoga raised their rating from Neutral to Buy and placed a target price of $24.00 on the company. Pre-market: 20.93 +0.39 (1.90%)

Sunpower (SPWRA): Wunderlich raised their rating from Sell to Hold and maintained their target price of $16.00 on the company. Pre-market: 18.25 +1.86 (11.35%)

Wendy’s Arby’s Group (WEN): Argus raised their rating from Sell to Hold and placed a target price of $5.40 on the company. Pre-market: 5.10 +0.07 (1.39%)

Biogen Idec (BIIB): Deutsche Bank raised their rating from Hold to Buy and raised their target price from $106.00 to $129.00. Pre-market: 100.51 +1.91 (1.94%)

Downgrades

Gap (GPS): Cowen lowered their rating from Outperform to Neutral. Pre-market: 17.97 -0.16 (-0.88%)

Research In Motion (RIMM): Credit Suisse lowered their rating from Outperform to Neutral and lowered their target price from $70.00 to $30.00. Pre-market: 26.27 +0.38 (1.47%)

Coverage Reiterated/Price Target Changed

Apple (AAPL): Oppenheimer reiterated their Outperform rating and lowered their target price from $450.00 to $420.00. Pre-market: 317.00 +1.68 (0.53%)

Under Armour (UA): FBR Capital reiterated their Market Perform rating and raised their target price from $68.00 to $75.00.

Molycorp (MCP): Dahlman Rose reiterated their Buy rating and lowered their target price from $125.00 to $120.00. Pre-market: 53.30 +0.86 (1.64%)

Earning Reports

Walgreens (WAG): Reported EPS of $0.66 beating estimates by +$0.03. Pre-market: 42.10 -3.08 (-6.82%)

·         Futures at 8:51: Dow +0.45%. S&P +0.41%. Nasdaq +0.56%. Crude +1.17% to $94.35. Gold +0.17% to $1544.00.

·         Europe: London +0.84%. Paris +1.19%. Frankfurt +0.84%.

·         Asia: Japan +1.13% to 9459. Hong Kong +1.16% to 21850. China +0.96% to 2646. India +0.31% to 17560.

MORNING COFFEE

Ford To Invest $1billion into Lincoln.  News reports say that Ford (F) will spend $1 billion on Lincoln and have seven all-new or significantly upgraded Lincolns that they will release over the next four years.  At one time Lincoln was the top selling luxury car sold in the U.S, but has fallen well behind other luxury brands.  Ford hopes to almost double Lincoln sales to 162,000 by 2015. Pre-market: 12.67 -0.10 (-0.78%)

Upgrades

Caterpillar (CAT): Raymond James raised their rating from Outperform to Strong Buy. Pre-market: 96.13 +0.18 (0.19%)

Coverage Initiated

Mosaic (MOS): UBS initiated coverage with a Buy rating and target price of $75.00. Pre-market: 60.50 +1.18 (1.99%)

Downgrades

Oshkosh Truck (OSK): The Benchmark Company lowered their rating from Hold to Sell and lowered their target price from $45.00 to $20.00. Pre-market: 25.65 -0.70 (-2.66%)

Almost Family (AFAM): Robert W. Baird lowered their rating from Neutral to Underperform and lowered their target price from $32.00 to $21.00. Pre-market: 26.36 -1.41 (-5.08%)

PF Chang’s (PFCB): Morgan Stanley lowered their rating from Overweight to Equal Weight.

Research In Motion (RIMM): Bernstein lowered their rating from Market Perform to Underperform and lowered their target price from $40.00 to $20.00. Pre-market: 27.25 -0.50 (-1.80%)

Dominion Resources (D): Deutsche Bank lowered their rating from Buy to Hold and lowered their target price from $48.50 to $46.50. Pre-market: 47.10 -0.56 (-1.17%)

·         Futures at 8:34: Dow -0.49%. S&P -0.45%. Nasdaq -0.48%. Crude -1.3% to $91.30. Gold -0.22 to $1535.80.

·         Europe: London -0.75%. Paris -1.26%. Frankfurt -1.10%.

·         Asia: Japan +0.03% to 9354. Hong Kong -0.44% to 21600. China -0.82% to 2623. India -2.04% to 17507.

MORNING COFFEE

Oracle to Sue Google.  Oracle (ORCL) has filed court papers saying that Google (GOOG) infringed on Oracle’s Java patents and copyrights with their Android software.  Oracle is seeking billions in damages.  Google responded by saying that Oracle’s method of calculating damages "is based on fundamental legal errors and improperly inflates their estimates,” and that their patents are not infringed.  Additionally, they said that Android users have a license to any patents.

Upgrades

Ensco (ESV): Goldman Sachs raised their rating from Not Rated to Neutral and placed a target price of $68.00 on the company. Pre-market: 51.60 +0.21 (0.41%)

Coverage Initiated

Medtronic (MDT): Morgan Keegan initiated coverage with a Market Perform rating and target price of $43.00.

Johnson & Johnson (JNJ): Morgan Keegan initiated coverage with a Market Perform rating and target price of $70.00. Pre-market: 66.66 +0.34 (0.51%)

Abbott Labs (ABT): Morgan Keegan initiated coverage with an Outperform rating and target price of $61.00. Pre-market: 51.70 +0.39 (0.76%)

ITT Corp (ITT): William Blair initiated coverage with a Market Perform rating.

Coverage Reiterated/Price Target Changed

Research In Motion (RIMM): Wedbush reiterated their Neutral rating and lowered their target price from $42.00 to $35.00. Pre-market: 29.61 -5.72 (-16.19%)

Research In Motion (RIMM): Canaccord Genuity reiterated their Hold rating and lowered their target price from $40.00 to $35.00.

Research In Motion (RIMM): Wunderlich reiterated their Hold rating and lowered their target price from $46.00 to $35.00.

Research In Motion (RIMM): Wunderlich reiterated their Hold rating and lowered their target price from $46.00 to $35.00.

Research In Motion (RIMM): ISI Group reiterated their Hold rating and lowered their target price from $50.00 to $40.00.

Transocean (RIG): Canaccord Genuity reiterated their Hold rating and lowered their target price from $85.00 to $82.00. Pre-market: 62.46 +0.71 (1.15%)

Earning Reports

Research In Motion (RIMM): Reported Q1 EPS of $1.33 beating estimates by +$0.01 on revenue of $4.9 billion, missing estimates by -$0.2 billion. Pre-market: 29.61 -5.72 (-16.19%)

·         Futures at 9:10: Dow +0.69%. S&P +0.86%. Nasdaq +0.73%. Crude -1.1% to $93.92. Gold +0.03% to $1530.20    .

·         Europe: London +0.36%. Paris +1.2%. Frankfurt +1.36%.

·         Asia: Japan -0.6% to 9351.4. Hong Kong -1.2% to 21695. China -0.8% to 2,643.65. India -0.6% to 17871.

MORNING COFFEE

Stocks Fall On Greece Debt Worries.  Stocks around the world fell yesterday on worries that Greece will default on their debt and cause a domino effect in the EU.  Greece is just one of the PIGS, which include Portugal, Ireland, Greece and Spain.  Greek Prime Minister George Papandreou is attempting to reshuffle his government due to several resignations and pass austerity plans to prevent a default.  Currently the credit default swaps are saying that there is a 78% chance that Greece will not pay its debts.  If this occurs, some of the other PIG nations could decide to take the same rout and default on their debt.  

Upgrades

Mettler-Toledo (MTD): Auriga raised their rating from Hold to Buy and placed a target price of $185.00 on the company.

Advanced Micro (AMD): FBR Capital their rating from Market Perform to Outperform and placed a target price of $185.00 on the company. Pre-market: 7.60 +0.10 (1.33%)

Downgrades

Intel (INTC): FBR Capital their rating from Outperform to Market Perform and lowered their target price from $26.00 to $25.00. Pre-market: 21.31 -0.11 (-0.51%)

General Mills (GIS): Goldman Sachs lowered their rating from Buy to Neutral and lowered their target price from $44.00 to $42.00. Pre-market: 37.15 -0.58 (-1.54%)

Coverage Initiated

MGM Resorts (MGM): FBR Capital initiated coverage with an Outperform rating and a target price of $17.00. Pre-market: 12.44 -0.02 (-0.16%)

Dicks Sporting Goods (DKS): UBS initiated coverage with a Buy rating and a target price of $44.00.

Bed Bath & Beyond (BBBY): UBS initiated coverage with a Neutral rating and a target price of $44.00.

Earning Reports

Pier 1 Imports (PIR): Reported Q1 EPS of $0.12 beating estimates by +$0.01 on revenue of $334.6 million, in-line. Pre-market: 11.25 +0.07 (0.63%)

Smithfield Foods (SFD): Reported FQ4 EPS of $0.85 beating estimates by +$0.03 on revenue of $3.12 billion, missing estimates by -$0.08 billion. Pre-market: 20.70 +0.31 (1.52%)

·         Futures at 7:54: Dow -0.33%. S&P -0.30%. Nasdaq -0.11%. Crude +0.7% to $9.84. Gold +0.01% to $1526.60.

·         Europe: London -1.6%. Paris -1.43%. Frankfurt -1.17%.

·         Asia: Japan -1.7% to 9411. Hong Kong -1.8% to 21953. India -0.8% to 17986.

MORNING COFFEE

The SEC Investigates Merrill Lynch.  Reported say that the SEC is taking a look at a $1.5 billion CDO created for a hedge fund manager.  The CDO was created for the hedge fund Magnetar and they are questioning whether Merrill told investors that Magnetar helped select the assets included in the CDO and then bet against those same assets. Additionally, the SEC is looking into whether Merrill also mispriced those assets in the CDO.

Upgrades

Western Digital (WDC): Standpoint Research raised their rating from Hold to Buy.

Coverage Initiated

Medtronic (MDT): Brean Murray initiated coverage with a Buy rating and target price of $44.00.

Johnson & Johnson (JNJ): Brean Murray initiated coverage with a Buy rating and target price of $77.00.

Abbott Labs (ABT): Brean Murray initiated coverage with a Hold rating.

St. Jude Medical (STJ): Brean Murray initiated coverage with a Hold rating.

Boston Scientific (BSX): Brean Murray initiated coverage with a Hold rating.

Baxter (BAX): Brean Murray initiated coverage with a Buy rating and target price of $68.00.

Kellogg (K): Jefferies initiated coverage with an Underperform rating and target price of $47.00.

Coverage Reiterated/Price Target Changed

Herbalife (HLF):  Argus reiterated their Buy rating and raised their target price from $61.00 to $63.00.

Scotts Miracle-Gro (SMG): RBC Capital Markets reiterated their Sector Perform rating and lowered their target price from $61.00 to $50.00.

Earning Reports

Korn Ferry (KFY): Reported EPS of $0.43 beating estimates by +$0.11.

·         Futures at 7:00: Dow -0.5%. S&P -0.5%. Nasdaq -0.5%. Crude -0.6% to $98.78. Gold -0.3% to $1520.10

·         Asia: Japan +0.3% to 9574. Hong Kong -0.7% to 22344. China -0.9% to 2705. India -1.0% to 18132.

·         Europe: London -0.2%. Paris -0.4%. Frankfurt -0.4%.