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Eric Buscemi
New York - http://www.theflyonthewall.com

Eric Buscemi, who has worked for the financial news site Theflyonthewall.com for three years, is the head editor of the company's blog. He has a BA and an MA in English from Queens College.

• Theravance, Inc. (NASDAQ: THRX)'s PDUFA date for Telavancin for the treatment of complicated skin infections.
• Merck & Co., Inc. (NYSE: MRK) to report Q2 earnings; conference call at 9:00am.
• Bank of America Corporation (NYSE: BAC) to report Q2 earnings; conference call at 9:30am.
• Apple, Inc. (NASDAQ: AAPL) to report Q3 earnings; conference call at 5:00pm.
• Texas Instruments Incorporated (NYSE: TXN) to report Q2 earnings; conference call at 5:30pm.

• United Parcel Services, Inc. (NYSE: UPS) to report Q3 earnings; conference call at 8:30am.
• Halliburton Company (NYSE: HAL) to report Q2 earnings; conference call at 9:00am.
• Caterpillar Inc. (NYSE: CAT) to report Q2 earnings; conference call at 11:00am.
• Lockheed Martin Corporation (NYSE: LMT) to report Q2 earnings; conference call at 11:00am.
• Yahoo!, Inc. (NASDAQ: YHOO) to report Q2 earnings; conference call at 5:00pm.

MOST NOTEWORTHY:

• Citigroup initiated Wyeth (NYSE: WYE) with a Hold rating and $49 target. The firm believes the upside potential from bapineuzumab is masking the company's unfavorable average EPS and revenue growth forecast versus the industry.
  
• Piper believes 3SBio Inc (NASDAQ: SSRX) is the market leader in a largely underpenetrated EPO market in China and sees limited downside risk. Shares were assumed with a Buy rating and $12 target.
  
• RBC Capital initiated Cellcom Israel (NYSE: CEL) and Partner Communications (NASDAQ: PTNR) with Outperform ratings and targets of $40 and $30, respectively. RBC said they have defensive appeal given their predictable earnings stream.

• HCP (NYSE: HCP), Nationwide Health Properties (NYSE: NHP) and Medical Properties Trust (NYSE: MPW) were initiated with Market Perform ratings at Wachovia.
  
• SanDisk (NASDAQ: SNDK) was assumed with an Above Average rating and $20.50 target at Caris.

MOST NOTEWORTHY:

• Bernstein downgraded the Refining Sector to Market Weight from Overweight based on the weakening earnings outlook for the group. The firm downgraded Sunoco (NYSE: SUN) and Tesoro (NYSE: TSO) to Market Perform from Outperform.
  
• Citigroup downgraded shares of International Game Tech (NYSE: IGT) to Hold from Buy following the company's lower than expected guidance and removed the stock from their Top Picks Live List. The firm lowered their target to $25 from $45. Shares were also downgraded at Oppenheimer to Perform from Outperform following the company's lower-than-expected results.
  
• Jefferies cut Gilead Sciences (NASDAQ: GILD) to Hold from Buy following the company's Q2 results as they see limited upside catalysts and a matured core HIV drug franchise. The firm maintains a $56 target. BMO Capital downgraded GILD to Market Perform from Outperform based on valuation, flattening HIV sales, Letairis growth below expectations, and increased R&D costs.

• Best Buy (NYSE: BBY) was downgraded at RBC Capital to Outperform from Top Pick.
  
• Goldman removed Coca-Cola (NYSE: KO) from the Conviction Buy List.
  
• Progressive (NYSE: PGR) was lowered to Neutral from Outperform at Credit Suisse.

MOST NOTEWORTHY:

• JP Morgan upgraded UAL Corp (NASDAQ: UAUA) to Overweight from Neutral based on valuation and expectations for the company to make a capital announcement on next week's conference call.
  
• Citigroup upgraded shares of WPP Group (NASDAQ: WPPGY) to Buy from Hold as they believe the company's diversification will lead to low earnings volatility.
  
• UBS upgraded Aventine Renewable (NYSE: AVR) and VeraSun Energy (NYSE: VSE) to Buy from Neutral based on expectations for margin improvements following recent corn price declines.

• Werner Enterprises (NASDAQ: WERN) was upgraded to Neutral from Underweight at JP Morgan and to Neutral from Underperform at Merrill.
  
• Wachovia raised Yum! Brands (NYSE: YUM) to Outperform from Market Perform.
  
• Entergy (NYSE: ETR) was lifted to Buy from Hold at Jefferies.

MOST NOTEWORTHY:

• Jefferies initiated Solarfun Power (NASDAQ:SOLF) with a Buy rating and $18 target. The firm believes the one-third stake purchased by Good Energies and new management hires could generate operational momentum and that declining silicon costs may help margins.
  
• BioMarin Pharmaceutical (NASDAQ:BMRN) was started at Oppenheimer with a Perform rating. The firm recommends waiting for Street estimates on Kuvan sales to moderate and for positive pipeline signals before adding to positions.
  
• Genentech (NYSE:DNA) was initiated at Citigroup with a Buy rating and $91 target. The firm believes several studies could lead to robust growth and points out the company's Q2 results showed Avastin reaccelerating due to growth in breast cancer.

• Goldman reinstated Staples (NASDAQ:SPLS) with a Neutral rating.
  
• Zebra Tech (NASDAQ:ZBRA) was initiated with a Hold rating at KeyBanc.
  
• Rodman & Renshaw assumed coverage of Corcept Therapeutics (NASDAQ:CORT) with an Outperform rating and $8 target.
  
• AuthenTec (NASDAQ:AUTH) was initiated at JP Morgan with an Overweight rating and at Canaccord Adams with a Hold rating and $10 target.

MOST NOTEWORTHY:

• Baird upgraded Blackboard (NASDAQ:BBBB) to Outperform from Neutral based on two new state-wide deals with New Mexico and North Carolina, K-12 growth, and up-selling and cross-selling opportunities. The firm raised Blackboard's target to $45 from $38.
  
• Wachovia raised Starwood Hotels (NYSE:HOT) to Outperform from Market Perform citing valuation, high international exposure, and secure capital structure and dividend.
  
• Citigroup upgraded shares of ACE Ltd (NYSE:ACE) to Buy from Neutral on valuation, as they believe additional selling from the company's redomestication to Switzerland will be offset by short covering. They view the recent weakness as an attractive buying opportunity and raised their target to $63 from $58.

• UBS upgraded Microchip (NASDAQ:MCHP) and Linear Tech (NASDAQ:LLTC) to Buy from Neutral.
  
• Marshall & Ilsley (NYSE:MI) was raised to Market Perform from Underperform at Keefe Bruyette.
  
• Comcast (NASDAQ:CMCSA) was upgraded to Buy from Neutral at Goldman.

MOST NOTEWORTHY:

• Thomas Weisel downgraded shares of eBay (NASDAQ:EBAY) following the company's Q2 results, as they did not see an improvement in the underlying fundamentals. Goldman lowered eBay to Neutral from Buy and cut its target to $30 from $38.
  
• UBS downgraded Wells Fargo (NYSE:WFC) to Neutral from Buy citing valuation and reduced capital flexibility.
  
• Merrill downgraded shares of ASML Holdings (NASDAQ:ASML) to Underperform from Neutral as they believe the company's demand slowdown could carry into next year.

• Starbucks (NASDAQ:SBUX) was cut to Neutral from Buy at Piper.
  
• Wachovia downgraded Ashford Hospitality Trust (NYSE:AHT) and Strategic Hotels & Resorts (NYSE:BEE) to Underperform from Market Perform.
  
• AMB Property (NYSE:AMB) was lowered at JP Morgan to Neutral from Overweight.

MOST NOTEWORTHY: P.F. Chang's, ViroPharma and CSX Corp were today's noteworthy upgrades:

• Jefferies upgraded shares of P.F. Chang's (NASDAQ: PFCB) to Buy from Hold to reflect the company's capital preservation focus, which they believe will drive a best-in-class free cash flow yield in 2009. Despite upgrading shares, Jefferies lowered their target price to $28 from $31.
  
• Thomas Weisel raised ViroPharma (NASDAQ: VPHM) to Overweight from Market Weight on valuation as they believe the sell-off on the Lev Pharmaceuticals (LEVP) acquisition is unwarranted. The firm raised their target price to $15 from $10.
  
• Merrill upgraded CSX Corp. (NYSE: CSX) to Buy from Neutral based on valuation and improved results.

OTHER UPGRADES:

• Borg-Warner (NYSE: BWA) was upgraded to Outperform from Neutral at Baird.
  
• Credit Suiise raised Walgreen (NYSE: WAG) to Outperform from Neutral.
  
• SunTrust upgraded Arena Resources (NYSE: ARD), Bill Barrett (NYSE: BBG) and Concho Resources (NYSE: CXO) to Buy from Neutral.

MOST NOTEWORTHY: Veraz , Cisco Systems and tw telecom were today's noteworthy downgrades:

• Jefferies downgraded shares of Veraz (NASDAQ: VRAZ) to Underperform from Hold after the company pre-announced a Q2 miss, as they are concerned about the company's ability to execute a turnaround. Jefferies lowered their target to 85c from $2.50.
  
• Credit Suisse cut Cisco Systems (NASDAQ: CSCO) to Neutral from Outperform as they believe carriers may reduce spending given the slowing economic growth. Credit Suisse lowered their target price to $24 from $31.
  
• JP Morgan downgraded tw telecom (NASDAQ: TWTC) to Underweight from Overweight on concerns enterprise trends will continue to deteriorate.

OTHER DOWNGRADES:

• Eaton (NYSE: ETN) and Altra Holdings (NASDAQ: AIMC) were lowered to Neutral from Buy at Merrill Lynch.
  
• ASML Holdings (NASDAQ: ASML) was downgraded to Reduce from Hold at Petercam.
  
• Informatica (NASDAQ: INFA) was cut at Piper to Neutral from Buy.
  
• Lev Pharmaceutials (OTC: LEVP) was downgraded to Hold from Buy at Jefferies.

MOST NOTEWORTHY: Cleveland Cliffs, Synthesis Energy and Bookham Tech were today's noteworthy initiations:

• KeyBanc believes the pullback in Cleveland Cliffs (NYSE: CLF) shares is an attractive entry point given acceleration of North American Iron Ore pellet contract pricing and increased pellet production into 2009. Shares were assumed with a Buy rating and $180 target.
  
• Stanford believes the Synthesis Energy's (NASDAQ: SYMX) U-GAS technology offers several advantages, including the ability to use waste/low grade coal and operational cost savings and intitiated shares with a Buy rating and $12 target.
  
• Morgan Keegan started Bookham Tech (NASDAQ: BKHM) with an Outperform rating and said the company continues to benefit from a expanding customer base, timing of new product introductions, and new products.

OTHER INITIATIONS:

• Arris (NASDAQ: ARRS), Garmin (NASDAQ: GRMN) and Harmonic (NASDAQ: HLIT) were initiated at RBC Capital with Sector Perform ratings.
  
• Citigroup assumed Delphi Financial (NYSE: DFG) with a Hold rating and $23 target.
  
• VanceInfo (NYSE: VIT) was initiated with an Outperform rating and $12 target at Oppenheimer.

MOST NOTEWORTHY:

• JMP Securities expects OptionXpress (NASDAQ: OXPS) to continue to benefit from continued retail adoption of options and futures trading and expansion of its platform outside the U.S. Shares were assumed with an Outperform rating and $29 target.
  
• Merriman believes China Precision Steel (NASDAQ: CPSL) should be able to gain market share as it mainly competes against foreign imports and currently has a lower cost to manufacture. The firm started shares with a Buy rating.
  
• Soleil expects WMS Industries (NYSE: WMS) to do well as it benefits from market share gains and continues to boost operating efficiencies. The firm initiated shares with a Buy rating and $34 target.

• Motorola (NYSE: MOT) was initiated at Societe Generale with a Sell rating.
  
• Pacific Growth initiated Cisco Systems (NASDAQ: CSCO) with a Neutral rating.
  
• Sonus Networks (NASDAQ: SONS) was started at JP Morgan with a Neutral rating.

MOST NOTEWORTHY:

• Oppenheimer downgraded shares of Wachovia (NYSE: WB) to Underperform from Perform as they believe the outlook is "bleak" for equity shareholders. The firm thinks Wachovia's expenses can't come down fast enough too offset earnings erosion.
  
• Wachovia downgraded shares of American International Group (NYSE: AIG) to Market Perform from Outperform as they believe AIG's CDO valuations worsened in Q2, which could result in a $2B-$7B after tax "valuation adjustment." Wachovia expects the value of AIG's core insurance franchise to be obscured by its credit exposure.
  
• Collins Stewart cut BT Group (NYSE: BT) to Hold from Buy on concerns surrounding the company's fiber network expansion.

• Nokia (NYSE: NOK) was downgraded to Add from Buy at WestLB; the firm also lowered Ericsson (NASDAQ: ERIC) to Hold from Buy and Alcatel-Lucent (NYSE: ALU) to Sell from Hold.
  
• Third Wave (NASDAQ: TWTI) was cut to Hold from Buy at Deutsche Bank.
  
• AT&T (NYSE: T) was removed from Goldman's Conviction Buy List.

MOST NOTEWORTHY:

• Citigroup upgraded shares of CSG Systems (NASDAQ: CSGS) following the company's Comcast (NASDAQ: CMCSA) contract renewal to reflect increased visibility and an attractive cash flow yield. The firm raised their target price to $18.50 from $15.
  
• Roth Capital upgraded Bankrate (NASDAQ: RATE) to Buy from Hold citing valuation, the company's announced stock repurchase program, and expectations for some gross margin expansion in 2H08.
  
• BMO Capital upgraded Intercontinental Exchange (NYSE: ICE) to Outperform from Market Perform as they believes the threat of negative legislation to ICE's business has declined sharply in recent days and that current valuation is factoring a much worse outcome than is likely.

• Lennar (NYSE: LEN) was upgraded at UBS to Neutral from Sell.
  
• eHealth (NASDAQ: EHTH) was raised to Perform from Underperform at Oppenheimer.
  
• Nike (NYSE: NKE) was raised to Positive from Neutral at Susquehanna.

MOST NOTEWORTHY:

• Merriman believes Super Micro Computer (NASDAQ: SMCI) is a unique value in the Data Center sector and thinks it could trade to a range of $10-$12 in the near-term. Shares were initiated with a Buy rating.
  
• Citigroup started Corning (NYSE: GLW) with a Hold rating and $23.50 target. The firm sees limited upside given the risks to LCD glass demand.
  
• Vertex Pharmaceuticals (NASDAQ: VRTX) was assumed with an Overweight rating and $57 target at Thomas Weisel, as they are positive on its telaprevir opportunity.

• Lehman reinitiated Cablevision (NYSE: CVC) with an Equal Weight rating.
  
• Silicon Motion (NASDAQ: SIMO) was initiated at Cowen with an Outperform rating.
  
• Brinks (NYSE: BCO) was initiated with a Positive rating at Susquehanna.

MOST NOTEWORTHY:

• UBS believes it is increasingly likely that Wachovia Bank (NYSE: WB) will need to raise capital. The firm said the company may need to raise $5B in equity and cuts its dividend to 1c, which will save $3B annually. UBS cut shares to Neutral from Buy and lowered its 2008 EPS estimate to ($1.98).
  
• Morgan Stanley downgraded shares of Deutsche Bank (NYSE: DB) to Underweight from Equal Weight as they believe DB may have to increase its tier 1 ratio, which could lead to dividend cuts or asset sales.
  
• Deutsche Bank downgraded Pearson (NYSE: PSO) to Sell from Hold as they believe the weak funding environment for Education will slow earnings growth.

• UBS lowered Thomson Reuters (NASDAQ: TRIN) to Sell from Neutral.
  
• Starwood Hotels (NYSE: HOT) and Gaylord Entertainment (NYSE: GET) were downgraded to Sell from Neutral at Goldman Sachs.