MOST NOTEWORTHY:

• Morgan Stanley initiated Lehman Brothers (NYSE:LEH) with an Overweight rating and $31 target. The firm believes Lehman's discount to book value prices in significant write-downs.
  
• Bernstein believes Nokia (NYSE:NOK) will see a slowdown in demand for devices and could loss market share. Shares were initiated with an Underperform rating.
  
• Merriman assumed Intuitive Surgical (NASDAQ:ISRG) with a Neutral rating and believes the tightened credit markets could impact capital equipment spending for small and mid-sized hospitals. They find shares appropriately valued at current levels.

• Terre Kaufman initiated Terremark Worldwide (NASDAQ:TMRK) with a Buy rating and $8 target.
  
• T-3 Energy (NASDAQ:TTES) was initiated at Jefferies with a Buy rating and $95 target.
  
• Adobe (NASDAQ:ADBE) was assumed with an Outperform rating and $48 target at Friedman Billings.

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Monday, June 16

• Lehman Brothers Holdings Inc. (NYSE: LEH) reporting Q2 earnings; conference call at 10:00 am.
• Nvidia Corporation (NASDAQ: NVDA) to discuss new GPU products at 1:00 pm.
• Lime Energy Co. (NASDAQ: LIME) to discuss acquisition of Applied Energy Management at 4:00 pm.
• Adobe Systems Inc. (NASDAQ: ADBE) reporting Q2 earnings; conference call at 5:00 pm.

Tuesday, June 17

• La-Z-Boy Inc. (NYSE: LZB) to report Q4 earnings; conference call at 8:30 am.
• The Hershey Company (NYSE: HSY) to hold business update conference call at 8:30 am.
• Best Buy Inc. (NYSE: BBY) to report Q1 earnings; conference call at 10:00 am.

Wednesday, June 18

• FedEx Corporation (NYSE: FDX) to report Q4 earnings; conference call at 8:30 am.
• Morgan Stanley (NYSE: MS) to report Q2 earnings; conference call at 11:00 am.
• Healthways Inc. (NASDAQ: HWAY) to report Q3 earnings; conference call at 5:00 pm.

Thursday, June 19

• PDUFA date for Eurand's (NASDAQ: EURX) Zentase.
• PDUFA date for GlaxoSmithKline's (NYSE: GSK) Promacta.
• The J.M. Smucker Company (NYSE: SJM) to report Q4 earnings; conference call at 8:30 am.

Friday, June 20

• PDUFA date for Millenium Pharmaceuticals' (NASDAQ: MLNM) Velcade for treating front-line multiple myeloma.
• Winnebago (NYSE: WGO) to report Q3 earnings; conference call at 10:00 am.

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• Cardinal Health (NYSE: CAH)
• Chevron Corp (NYSE: CVX)
• Exxon Mobil (NYSE: XOM)
• General Dynamics Corp (NYSE: GD)
• Goldman Sachs Group (NYSE: GS)
• JPMorgan Chase (NYSE: JPM)
• Northrop Grumman (NYSE: NOC)
• Pfizer (NYSE: PFE)
• Raytheon Company (NYSE: RTN)

• Automatic Data Processing (NYSE: ADP)
• Adobe Systems (NASDAQ: ADBE)
• Avon Products (NYSE: AVP)
• Black and Decker (NYSE: BDK)
• Cisco Systems (NASDAQ: CSCO)
• Coca-Cola (NYSE: KO)
• Costco Wholesale (NASDAQ: COST)
• Kraft Foods'A' (NYSE: KFT)
• Suntech Power Hldgs ADS (NYSE: STP)

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Jefferies & Co reiterated its "buy" rating on BioMarin (NASDAQ:BMRN) ahead of its analyst meeting, according to the AP.

Oppenheimer downgraded Motorola (NYSE:MOT) to "underperform" from "perform" according to Briefing.com. The news service also reports that Lehman upgraded Northwest (NYSE:NWA) from "equal weight" to "overweight".

Adobe Systems (NASDAQ:ADBE) cut to Neutral at Cowen & Co, according to 2Briefing.com. The news service also reports that Caterpillar (NYSE:CAT) cut to Sell at UBS

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MOST NOTEWORTHY: Alaska Communications, Royal Bank of Scotland and Frontier Oil were today's noteworthy upgrades:

• Banc of America upgraded shares of Alaska Communications (NASDAQ: ALSK) to Buy from Neutral as they believe the company will return to a dividend growth focus after completing its strategic initiatives.
  
• Credit Suisse raised Royal Bank of Scotland (NYSE: RBS) to Neutral from Underperform as they believe the company has already taken "prudent" write-downs.
  
• Bear upgraded Frontier Oil (NYSE: FTO) to Peer Perform from Underperform as they believe the company is better positioned to withstand this period of margin weakness.

OTHER UPGRADES:

• Jefferies upgraded Adobe Systems (NASDAQ: ADBE) to Hold from Underperform.
  
• RBC Capital lifted Medarex Inc. (NASDAQ: MEDX) to Sector Perform from Underperform.
  
• United Parcel Service (NYSE: UPS) was upgraded at Merrill to Buy from Neutral.

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Before the bell: Futures higher after Fed move and ahead of data, Exxon

According to The Wall Street Journal, Microsoft Corp. (NASDAQ: MSFT), attempting to avoid a huge hostile takeover bid, indicated it may be willing to raise its bid to as much as $33 per Yahoo Inc. (NASDAQ: YHOO) share. Microsoft's board had failed to reach a final decision on how to proceed with its bid for the Internet search group. Yahoo!, though, may want $35-37 per share. And I thought Ballmer said he would lower the bid ... Don't they know by now these negotiating tactics are well known? In any event, it's starting to look more and more like the deal is closer than ever and the parties are willing, despite each showing off some muscle first.

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Defense contractor Lockheed Martin (NYSE: LMT) posted strong earnings this morning for its first quarter of $1.75 per share, well ahead of the $1.63 analysts had been expecting.

Looking at the quarter's revenue figures, we see a nice year-over-year jump, climbing to

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The majority of high school seniors answered basic questions about finance incorrectly in a nationwide poll conducted by the Federal Reserve. Fed chairman Ben Bernanke called for better financial education, and linked the woeful state of basic economic knowledge to the housing crisis.

Bernanke said, "In light of the problems that have arisen in the subprime mortgage market, we are reminded of how critically important it is for individuals to become financially literate at an early age so that they are better prepared to make decisions and navigate an increasingly complex financial marketplace."

It's hard to disagree with him on this point, but a cynic might wonder if a poorly educated population is really the source of the housing crisis. Sure, Americans don't know much about the power of compound interest or how to calculate net present value, but that's not why the economy is in trouble. The housing bubble was produced by people who knew what they were doing -- mortgage brokers who winked at "liar's loans" and sophisticated bankers who created new financial instruments to get rid of the bad debt. All of these people were highly educated in economics and finance. The problem isn't ignorance but a lack of integrity and regulation.

Whatever the cause of the housing crisis, it's hard not to be concerned about how poorly educated many Americans are. Here are some of the findings from this year's survey:

• On average, high school seniors answered correctly only 48% of questions about personal finance and economics -- this is down from 52% last year.
• Only 16.8% knew that stocks likely would offer the higher growth over 18 years of saving for a child's education, while 37.3% thought a U.S. savings bond -- one of the most conservative investments -- would offer the highest growth.
• Nearly 53% said they would have no liability if their credit card was stolen and a thief ran up $1,000 worth of debt. (Liability is limited to $50 after the credit-card issuer is notified.) Only 13% knew they might have to be responsible for $50.

Bernanke is certainly right when he calls for better education for American high school students. Fortunately, we have a national election coming up, and education policy is a good thing to pay attention to as you head to the polls.

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We have seen this play before, and there are two scenarios as to how it could end. Starbucks Corporation (NASDAQ: SBUX) is being challenged like never before, having saturated the market place in some locations it is now facing the challenges of selling expensive coffee in a slowing economy.

Would you rather pay $4 for a cup of coffee or a gallon of gas? You can find cheaper coffee but you have few options to find cheaper fuel. Amid the already difficult operating environment Starbucks is faced with competition from the largest restaurant chain in the world, McDonald's Corporation (NYSE: MCD). McDonald's is looking to steal its morning thunder with competitive offerings at a far lower pricing structure. The threat is very real no matter what spin Starbucks puts on it.

This brings to mind two similar situations both involving Microsoft Corporation (NASDAQ: MSFT) and past competitors. Early on there were two word processing programs that together probably had 90% market share. Those were Wordperfect and Wordstar. Both of them were fine programs offering strong features, and now they are nowhere. Microsoft displaced both of them with MS-Word integrated with their Office suite of products, and is now king.

McDonalds is attempting to do to Starbucks coffee (and others) what Microsoft did to WordStar. And like MSFT, MCD is packaging it's coffee with its existing bundle of food products and experiences to gain market share. Besides offering lower prices and one stop shopping, they are wisely refurbishing stores in a mock-Starbucks motif, softening colors from bright yellow and red to beige and brown. They have added new furniture and also started to provide for Wi-Fi Internet access. They are very good at what they are doing and early signs are that they will be successful and take market share from the specialty coffee houses.

There is however hope for Starbucks and others because there are other historic models that have resisted Microsoft's tidal wave. Adobe Software (NASDAQ: ADBE) has maintained 90%+ market share in the graphics world with its suite of products and free Internet PDF standard. They did this by getting a high quality product to market early, pricing it right, and having free offerings that became a standard. This has proven easier to maintain then $4 coffee will be, so I anticipate that Starbucks is going to take a huge hit to its profit margins, even if it can continue to be a successful growing enterprise.

Another example of success is Apple Inc. (NASDAQ: AAPL), led by Steve Jobs. Apple has created many leading edge products and such a unique culture that it is growing market share and holding it's margins in numerous areas. It has also grown dramatically over the past few years. Howard Shultz has returned to grab the reigns of Starbucks, but can he reinvigorate the company and hold off the competition a la Steve Jobs? That is a very large task indeed.

Starbucks needs to expand the strength of experience, offer more competitive products, and remain different enough to matter. They remain with some advantages in that they are suitable to smaller outlets and more unique locations and there are fewer screaming children to disturb one when doing homework, or meeting a date. Although Starbucks is the biggest target for McDonalds and has been receiving the most ink, it is by no means the only one. There is room for more than one player in the market and it may be third and fourth tier chains that suffer much more and perhaps disappear.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of SBUX.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• AAR Corp. (NYSE: AIR) posted record third-quarter earnings and revenue.
• Adobe Systems Inc. (NASDAQ: ADBE) posted better-than-estimated first-quarter results and raised its outlook.
• CKE Restaurants Inc. (NYSE: CKR) posted third-quarter results that missed estimates.
• ConAgra Foods Inc. (NYSE: CAG) third-quarter profit surged as strong sales offset commodity prices.
• Darden Restaurants Inc. (NYSE: DRI) beat third-quarter expectations and offered guidance.
• FactSet Research Systems Inc. (NYSE: FDS) second-quarter results beat estimates and it raised its outlook.
• Fortress Investment Group (NYSE: FIG) remained upbeat despite a fourth-quarter loss.
• Guess Inc. (NYSE: GES) record fourth-quarter results beat Wall Street expectations.
• Inter Parfums Inc. (NASDAQ: IPAR) posted better-than-estimated fourth-quarter results and raised its outlook.
• Jabil Circuit Inc. (NYSE: JBL) beat second-quarter expectations but lowered its guidance.
• JC Penney Co. Inc. (NYSE: JCP) lowered its first-quarter outlook on weaker-than-expected sales.
• KB Home (NYSE: KBH) swung to a larger-than-expected first-quarter loss on write-downs.
• Lennar Corp. (NYSE: LEN) posted a smaller-than-expected first-quarter loss.
• Monsanto Co. (NYSE: MON) raised its second-quarter and full-year guidance.
• Oracle Corp. (NASDAQ: ORCL) merely met earnings expectations, sending shares lower.
• Tiffany & Co. (NYSE: TIF) posted better-than-estimated fourth-quarter results and raised its outlook.
• Usana Health Sciences Inc. (NASDAQ: USNA) posted lower-than-expected first-quarter results.
• Walgreen Co. (NYSE: WAG) posted solid second-quarter results, including same-store sales growth.

Also, auction-rate securities issues may hurt some tech company results. Analysts keep cutting earings estimates for the big banks, but some are eyeing Yum! Brands (NYSE: YUM) earnings prospects as it expands in China, as well as Archer Daniels Midland (NYSE: ADM) on soaring demand for commodities.

Upcoming results to watch for include Best Buy (NYSE: BBY), Monsanto (NYSE: MON), and Research in Motion (NASDAQ: RIMM).

Visit AOL Money & Finance for more earnings coverage.

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Adobe Systems (NASDAQ: ADBE) offers business and mobile software and services. The firm's products include tools for professional publishing, Web design, video production, business process automation, and mobile device interfacing. Its well-known Acrobat Reader displays portable document format (PDF) files on the Internet. Its Web and print publishing products include the widely-used Photoshop, Illustrator, and PageMaker programs. Adobe's InDesign publishing package provides professional layout and design applications. Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are competitors.

The company pleased investors last week, when it reported Q1 EPS of 48 cents and revenues of $890.4 million. The Street had been expecting 45 cents and $875.8 million. Management also guided Q2 EPS to 45-47 cents (44 cent consensus), Q2 revenues to $855-$885 million ($874.69M consensus) and FY08 EPS to $1.86-$1.92 ($1.82 consensus).

The stock popped through 30-day and 50-day moving average resistance on the news and then began consolidating the gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with nine "strong buys", seven "buys", eight "holds" and three "underperforms". Analysts expect a 14% growth rate, through the next year. The ADBE Price to Free Cash Flow ratio (13.02), Sales Growth rate (37.11%), EPS Growth rate (77.78%), Operating Margin (29.03%) and Net Profit Margin (23.52%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 88% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $30.70 and $48.47. A stop-loss of $31.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Adobe Systems Inc. (NASDAQ: ADBE) first-quarter profit soared and it offered an encouraging outlook.
• AgFeed Industries Inc. (NASDAQ: FEED) full-year results were in line with expectations.
• Credit Suisse Group (NYSE: CS) warned that it expects a first-quarter loss due to write-downs.
• Discover Financial Services (NYSE: DFS) first-quarter profit plunged on the unloading of Goldfish
• FedEx Corp. (NYSE: FDX) posted lower-that-expected third-quarter earnings on rising fuel prices.
• 4Kids Entertainment Inc. (NYSE: KDE) posted dismal fourth-quarter and full-year results.
• GameStop Corp. (NYSE: GME) posted strong fourth-quarter earnings on Guitar Hero and other games.
• General Mills Inc. (NYSE: GIS) third-quarter profit surged on increased demand for Cheerios, yogurt, etc.
• Goldman Sachs Group Inc. (NYSE: GS) posted better-than-expected first-quarter earnings.
• Lehman Brothers Holdings Inc. (NYSE: LEH) posted better-than-expected first-quarter earnings.
• Lumber Liquidators Inc. (NYSE: LL) beat estimates on infrastructure investments and merchandise variety.
• Morgan Stanley (NYSE: MS) posted better-than-expected first-quarter earnings.
• Nike Inc. (NYSE: NKE) third-quarter profits soared on strong international demand.
• Shuffle Master Inc. (NASDAQ: SHFL) missed expectations for the first quarter.
• Siemens AG (NYSE: SI) lowered its earnings outlook on delays and order cancellations.

Also, Google Inc. (NASDAQ: GOOG) is recession proof? Ted Allrich wonders if there are any safe stocks. Jim Cramer doesn't expect much from tech stocks. And Aaron Katzman looks at the effect of rising grain prices.

Upcoming results to watch for include Walgreen Co. (NYSE: WAG), Tiffany & Co. (NYSE: TIF), Oracle Corp. (NASDAQ: ORCL), ConAgra (NYSE: CAG), and KB Home (NYSE: KBH).

Visit AOL Money & Finance for more earnings coverage.

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For the quarter, Adobe Systems reported that its profit climbed to $219.4 million, or 38 cents a share, boosted by strong sales from its software tools like Photoshop, Illustrator, Dreamweaver and Acrobat. Excluding special items, the company's earnings came in at 48 cents a share, topping analysts' estimations for quarterly earnings of 45 cents a share.

Adobe Systems also announced a respectable 37% growth in revenues, to $890.4 million, up from $649.4 million a year earlier. Revenue during the period was helped by a 57% increase in its Creative Suite 3 solutions sales which rose up to $543.5 million in the quarter. Analysts, on average, were expecting the company show $876 million in revenue, according to Thomson Financial.

Looking ahead, the software maker said it expects a growth of 13 for its 2008 revenue as it plans to continue to make significant investments in research and development. Adobe also forecast second quarter earnings in a range of 45 and 47 cents a share with revenue between $855 million and $885 million. Analysts predicted second-quarter earnings of 44 cents a share on revenue of $875 million.

Adobe's surprising earnings and its optimistic outlook impressed traders, who pushed the stock higher over 13%.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

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Adobe (NASDAQ: ADBE)'s Flash player is used for most videos available on the internet. Almost all PCs use it for content play-back. Now, Adobe will use Apple (NASDAQ: AAPL)'s software development kit to develop the product for the iPhone.

According to The Wall Street Journal, "In comments widely reported last month, Apple Chief Executive Steve Jobs said the company's iPhone hadn't adopted Adobe's mobile version of its Flash program because of technical and performance concerns."

Adobe obviously think Jobs is full of beans. It means to prove that by getting its Flash player on Apple hardware so that customers can watch video from tens of thousand of websites. The Flash player is on about 700 million PCs worldwide, which is why content companies use it.

What is curious is that Jobs would resist allowing iPhone customers the ability to watch a wide variety of content. It would seem that would make the iPhone an even more popular item.

Maybe Apple wanted some cash from Adobe for the privilege of being on the hot handset product, and the media player company said "no."

Douglas A. McIntyre is an editor at 247wallst.com.

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Adobe (NASDAQ:ADBE) is up over 6% on strong earnings.

Morgan Stanley (NYSE:MS) is up over 5% on better-than-expected earnings.

Nokia (NYSE:NOK) is off over 7% on word of slow handset sales from rival Sony Ericsson.

Monster (NASDAQ:MNST) is down 7% on comments that its expenses may be higher than anticipated.

Shares may trade differently in the pre-market than they do in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

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After hitting a one-year high of $48.47 in October, the stock hit a one-year low of $32.08 last month. This morning, ADBE opened at $33.00. So far today the stock has hit a low of $32.01 and a high of $33.08. As of 12:45, ADBE is trading at $32.34, down $0.73 (-2.2%). The chart for ADBE looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider an April bear-call credit spread above the $37.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in one and a half months as long as ADBE is below $37.50 at April expiration. Adobe would have to rise by more than 15% before we would start to lose money.

ADBE hasn't been above $37.50 since early January and has shown resistance around $36 recently. This trade could be risky if the US economy turns around strongly in the next month, but even if that happens, this position could be protected by resistance ADBE might find at its 50 day moving average, which is currently around $37 and falling.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MSFT or NOK. He does control a bullish position in ADBE.

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I have a bitter-sweet relationship with Adobe Systems Incorporated (Nasdaq: ADBE). I think they build great technology. In fact, I've been a customer of their Dreamweaver product since 2000. It's an awesome offering -- and gets better and better.

Yet, when it comes to Adobe's upgrade policies, they often fall short -- at least for me. For example today they wanted to charge me full price for a product that I've bought and upgraded several times over the years.

Oh, well. End of my rant.

The fact remains that Adobe continues to innovate. Interestingly, the company has recently announced a variety of initiatives. For example, Adobe is sponsoring the SQLite database open source project (according to the company's open source thought-leader, Dave McAllister). The company also has new open source destination.

And yes, there are already some big-time users of AIR, such as EBay, Inc. (Nasdaq: EBAY), salesforce.com, inc. (NYSE: CRM), and FedEx Corporation (NYSE: FDX).

To get some perspective on this, I interviewed Tien Tzuo, who is veteran of web technologies and is the CEO of Zuora. According to him:

"At salesforce.com, we were one of the first enterprise software companies to champion the use of Flash, but primarily as a communication tool on our web site. Since then, Flash has come a long way -- especially with Flex -- and appears to be ready for prime time as a tool for developing data-entry intensive applications.

"The key benefits are: productivity, portability and offline-online capability. AIR is also a cool name, like my MacBook Air."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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