MOST NOTEWORTHY: UCN Inc, Astronics and SunTrust Banks were today's noteworthy initiations:

• Merriman expects UCN Inc (NASDAQ: UCNN) to further expand its contact center product set and believes it is likely to be sold to a larger provider expanding within the hosted contact solution market over the longer term. The firm started shares with a Buy rating.
  
• Jesup & Lamont initiated Astronics (NASDAQ: ATRO) with a Neutral rating. The firm wants to see a change in the backlog visibility and more clarity on the ramp-up schedules of some new programs. For now, they view shares as fairly valued.
  
• Friedman Billings resumed coverage of SunTrust Banks (NYSE: STI) with an Underperform rating and $37 target and cites credit deterioration and uncertainty regarding credit costs.

OTHER INITIATIONS:

• Whiting Petroleum (NYSE: WLL) was initiated at Wachovia with an Outperform rating.
  
• Morgan Stanley assumed Imperial Tobacco (NYSE: ITY) with an Overweight rating.
  
• Suncor (NYSE: SU) was started with an Outperform rating and $80 target at RBC Capital.

Before the bell: Futures lower ahead of PPI, after HD earnings

After announcing a deal with France's Orange last week, and as the June 9 keynote address from Steve Jobs approaches, Apple Inc. (NASDAQ: AAPL) may be finally close to a deal that would add two of Asia's hottest cellphone carriers, Japan and Korea, to its growing list of international partners. According to reports in Asian news services, Apple is planning a special joint release of the next-generation iPhone with Japan's NTT DoCoMo and Korea Telecom Freetel. That would leave China as the last big Asian market without an authorized iPhone carrier.

According to the Telegraph, Barclays (NYSE: BCS) is considering an acquisition of investment banks and looked at Lehman Brothers (NYSE: LEH) and UBS (NYSE: UBS).

The Wall Street Journal reported that Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, possibly affecting one-third of the workers, in an attempt to cut costs and losses at the upscale Swedish brand. The cut comes amid speculation that Ford is priming Volvo for a sale.

MAJOR PAPERS:

• General Motors Corporation (NYSE: GM) plants that were idled during the American Axle & Manufacturing Holdings Inc (NYSE: AXL) strike are set to resume production mow that the strike has been settled, the Wall Street Journal reported.

OTHER PAPERS:

• The Telegraph reported that Halliburton Company (NYSE: HAL) is expected to determine this week whether it will make a GBP1.8B counter bid for its British competitor, Expro International Group (OTC: EXPRF).
• The Telegraph also reported that U.K.-based Imperial Tobacco Group Plc (NYSE: ITY) could conduct a GBP5B rights issue this week. The company has suggested that it needs the funds in order to retain its investment-grade credit rating following its acquisition of Altadis.

WEB SITES:

• According to Bloomberg, regulatory filings show that banks such as Citigroup Incorporated (NYSE: C) are failing to acknowledge at $35B of additional writedowns in their income statements.

MOST NOTEWORTHY: Lincoln Educational, Sonus Networks and Novartis were today's noteworthy upgrades:

• Lehman upgraded Lincoln Educational (NASDAQ: LINC) to Overweight from Equal Weight based on improving student enrollment growth and valuation.
  
• Merriman upgraded Sonus Networks (NASDAQ: SONS) to Buy from Neutral on the company's strong AT&T (NYSE: T) outlook and near-term upside potential from Japan. They believe shares can trade towards the $5-$6 range.
  
• Bernstein raised Novartis (NYSE: NVS) to Outperform from Market Perform as they believe the company's diversification position it well to withstand future generic expiries.

OTHER UPGRADES:

• Goldman Sachs added Burger King (NYSE: BKC) to its Conviction Buy List.
  
• Credit Suisse upgraded Imperial Tobacco (NYSE: ITY) to Outperform from Neutral.
  
• FreightCar America (NASDAQ: RAIL) was upgraded at Jefferies to Buy from Hold.

MOST NOTEWORTHY: Third Wave, DryShips and Hil-Rom Holdings were among today's noteworthy initiations:

• Third Wave (NASDAQ: TWTI) was initiated with a Buy, target $12 at Deutsche which said the company is compelling small-cap opportunity in molecular diagnostics with an $1B-plus opportunity in the HPV market.
  
• DryShips (NASDAQ: DRYS) was initiated with an Outperform, target $110 at Credit Suisse, which is positive on the company's growth opportunity and is bullish on dry bulk rates into 2009.
  
• Hil-Rom Holdings (NYSE: HRC) was initiated with an Outperform at Oppenheimer which believes 2H08 will be an inflection point for Hill-Rom, with revenue, margin expansion, and earnings growth all beginning to accelerate. The firm believes that the company's performance will improve due to its efforts to complete spending on R&D, reinvigorate its brand, and find low-cost sourcing and manufacturing alternatives.

OTHER INITIATIONS:

• Imperial Tobacco (NYSE: ITY) coverage was resumed with a Buy at Merrill Lynch.
  
• ICU Medical (NASDAQ: ICUI) was initiated with a Buy, target $35 at Jesup & Lamont, which is positive on the company's valuation, strong balance sheet, growth in oncology and expectations for gross margin improvement.

MOST NOTEWORTHY: Ford, Imperial Tobacco and Schlumberger were today's noteworthy upgrades:

• Soleil upgraded Ford Motor Company (NYSE: F) to Buy from Sell as they expect improved sentiment towards shares given new product launches, cost cutting efforts, North American capacity reductions, and better than expected performance on the cash side.
• Imperial Tobacco Group Plc (NYSE: ITY) was raised to Buy from Hold at Citigroup to reflect FX benefits and pricing in continental Europe.
• Morgan Stanley upgraded shares of Schlumberger Limited (NYSE: SLB) to Overweight from Equal Weight following the company's Q1 results, as they expect consensus estimates to move higher over the coming quarters.

OTHER UPGRADES:

• B. Riley raised Wilmington Trust Corporation (NYSE: WL) to Buy from Neutral.
• Morgan Keegan upgraded Healthcare Services Group Inc (NASDAQ: HCSG) to Outperform from Market Perform.
• Bear upgraded MGIC Investment Corporation (NYSE: MTG) to Outperform from Peer Perform.

Imperial Tobacco (NYSE:ITY) was upped to "buy" from "neutral" by Citigroup, according to Marketwatch.

Oppenheimer downgraded Wells Fargo (NYSE:WFC) from "perform" to "under-perform" according to Briefing.com. The financial news service also reports that Soleil upgraded Ford (NYSE:F) from "sell" to "buy".

Credit Suisse writes that it expects Hanesbrands (NYSE:HBI) to post strong earnings for the last quarter, according to the AP.

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

MAJOR PAPERS:

• Carl Icahn has predicted that the private equity market has peaked at the Wall Street Journal's Deal and Deal Makers Conference, reported the Wall Street Journal.
• Imperial Tobacco Group plc (NYSE: ITY) and CVC Capital Partners, a private equity firm, are both looking at Altadis, the leading maker of cigarettes in Spain and France, with a final price of over $17B expected, reported the Wall Street Journal.

OTHER PAPERS:

• Ford Motor Company (NYSE: F) is set to launch a new national incentive program today featuring no-interest financing for 36 months on all 2007 Ford, Lincoln and Mercury vehicles, signalling pressure for the company to sell vehicles, reported the Detroit Free Press.
• Bear Stearns Companies Inc (NYSE: BSC) has appointed Tom Marano, a leading executive and highly regarded mortgage-bond trader, to oversee the bailout of its hedge fund collapse, reported the New York Post.
• Bharti and Wal-Mart Stores Inc (NYSE: WMT) appear to be close to finally sealing a partnership, reported the Economic Times.

MAJOR PAPERS:

• The Wall Street Journal reported that President Bush picked former advisor Robert Zoellick to take over the World Bank from Paul Wolfowitz; Mr. Zoellick, now a vice chairman at Goldman Sachs Group Inc (NYSE: GS), was a trade representative and deputy secretary of state.
• The Institutional Shareholder Service has advised shareholders of medical device maker Biomet Inc (NASDAQ: BMET) to turn down a $10.9B private equity deal for the company, according to the Wall Street Journal.
• The Financial Times reported that the IntercontinentalExchange Inc (NYSE: ICE) has signed an exclusive deal with the CBOT Holdings Inc (NYSE: BOT), a move that could advance ICE's unsolicited bid for the Chicago Board of Trade.
• Rather than focus on potential take-out targets, Barron's Online's "Weekday Trader" said that the smart bet for investors is to focus on companies with rising profits, cash flows and dividends, such as Loews Corp-Carolina Group (NYSE: CG) and Imperial Tobacco Group plc (NYSE: ITY), which boast free cash and dividends.

OTHER PAPERS:

• Best Buy Co Inc (NYSE: BBY) is in talks with Vivek for a "foray" into India, the Economic Times reported.
  
• The Washington Post reported that Nigeria filed criminal charges against Pfizer Inc (NYSE: PFE) over child deaths.

MAJOR PAPERS:

• The Wall Street Journal reported that Time Warner Inc's (NYSE: TWX) Time Inc. has sold its interest in Bookspan, a book club, to Bertelsmann for about $150M.
• According to the Financial Times, citing sources, Imperial Tobacco Group plc (NYSE: ITY) raised its bid for French and Spanish tobacco company Altadis SA to EUR47 per share from a previous bid of EUR45 per share. Bloomberg reported that Altadis rejected the sweetened takeover bid.

OTHER PAPERS:

• The Telegraph reported that Dow Jones and Company Inc (NYSE: DJ), the publisher of the Wall Street Journal, is understood to be in advanced talks to buy the London-based Financial News newspaper for about GBP27M, with a deal possibly being announced within days.
• Sanofi-Aventis ADS (NYSE: SNY) and Bristol-Myers Squibb Company (NYSE: BMY) have put there merger negotiations on hold due to a number of obstacles that are stalling the process, the French newspaper Les Echos reported.
• Cablevision Systems Corporation (NYSE: CVC) said it will appeal a court ruling over its digital video recording service, the New York Times reported, citing the Associated Press.
• The New York Times also reported that Citigroup Inc (NYSE: C) may cut nearly 8% of its work force or around 26,000 jobs.

WEBSITES:

• Barron's Online's "Inside Scoop" column reported that Warren Buffett has disclosed that his investment company, Berkshire Hathaway (NYSE: BRK.A), now owns a 10.9% stake Burlington Northern Santa Fe Corporation (NYSE: BNI), according to SEC filings.

MAJOR PAPERS:

• General Motors Corporation (NYSE: GM) is reportedly attempting to tighten its financial reporting procedures, the Wall Street Journal (subscription required) reported. The auto maker is under investigation by the SEC and a federal grand jury for its accounting of transactions as far back as 2000.
• The Financial Times (subscription required) reported that Dow Chemical Company (NYSE: DOW) is in talks with India's Reliance Industries for a joint venture that would enable Dow to reduce its exposure to commodity products and gain access to cheaper raw materials. Indian newspapers report that a deal could lead to a full takeover by Reliance.

OTHER PAPERS:

• According to the Korea Economic Daily, citing an unnamed Posco ADS (NYSE: PKX) executive, a senior Arcelor Mittal Steel Company (NYSE: MT) executive expressed interest in Posco's merger plans. Posco denied the report, saying "There was no discussion on issues related to M&A when the Mittal executive met Posco CEO last month," according to the Economic Times.
• The Independent reported that Imperial Tobacco Group plc (NYSE: ITY) has made a GBP7.6B bid for the Franco-Spanish tobacco company Altadis. The private equity firm Kohlberg Kravis Roberts is also reported to have interest in acquiring Altadis. An Imperial-Altadis merger could derail a hostile bid by Kohlberg Kravis Roberts.
  
• BusinessWeek's "Inside Wall Street" section mentioned Newmont Mining Corp (NYSE: NEM), CB Richard Ellis Group Inc (NYSE: CBG) and Superior Energy Services Inc (NYSE: SPN) positively.
• Which gold producer will shine brightest? Newmont Mining "is the one," says Vincent Carrino, Chief of Brookhaven Capital Management, which has loaded up on its stock.
  
• Douglas Roberts at Channel Capital Research Institute doesn't see the Fed cutting rates soon, and hence he likes CB Richard Ellis Group.
• Superior Energy Services aims to be everything to oil-and-gas explorers in the Gulf of Mexico, and in most cases it is. "Superior can't keep up with the tremendous demand for its repair and recovery services, which will provide strong growth through the end of the decade," says Martin Sass, CEO of MDSass, which owns a 1.2% stake.