BP (NYSE: BP) is up 2% ahead of the oil inventory report.

AMD (NYSE: AMD) is up almost 2% on news of its introduction of a new graphics technology.

Hooker Furniture (NASDAQ: HOFT) is off over 10% on weak earnings.

Royal Bank of Scotland (NYSE: RBS) is off over 5% on negative comments about its prospects from the bank's CEO.

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

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

MOST NOTEWORTHY: Cortex Pharma, Royal Bank of Scotland and Trex were today's noteworthy upgrades:

• Rodman & Renshaw upgraded Cortex Pharma (AMEX:COR) to Market Perform from Underperform citing the company's progress towards renewing its pipeline and notes that results from two proof-of-concept studies assessing acute administration of COR's lead AMPAKINE molecule are expected in the coming months.
  
• Citigroup upgraded shares of Royal Bank of Scotland (NYSE:RBS) to Buy from Hold on valuation following the recent weakness, as they believe the sell-off has been excessive.
  
• Suntrust raised Trex (NYSE:TWP) to Buy from Neutral based on management's turnaround efforts, expectations for increased market share in composite decking, and valuation, among other reasons.

OTHER UPGRADES:

• Friedman Billings upgraded Hot Topic (NASDAQ:HOTT) to Outperform from Market Perform.
  
• Lehman raised UAL Corp (NASDAQ:UAUA) and Northwest Airlines (NWA) to Overweight from Equal Weight.
  
• Goldman added Eli Lilly (NYSE:LLY) to its Conviction Buy List.

MOST NOTEWORTHY: Morgan Stanley, Royal Bank of Scotland and Prestige Brands were today's noteworthy upgrades:

• Wachovia upgraded Morgan Stanley (NYSE: MS) to Outperform from Market Perform as they expect the retail brokerage unit to be valued higher due to its recurring revenue streams, shrinking competition in prime brokerage, deleveraging and continued strength in commodities.
  
• Morgan Stanley upgraded shares of Royal Bank of Scotland (NYSE: RBS) to Overweight from Underweight following the company's rights offer and higher bad-debt provisions to reflect less concerns about its U.S. operations.
  
• Oppenheimer raised Prestige Brands (NYSE: PBH) to Perform from Underperform on valuation and the early turnaround progress made by the new CEO.

OTHER UPGRADES:

• TranSwitch (NASDAQ: TXCC) was upgraded at Thomas Weisel to Market Weight from Underweight.
  
• Goldman raised Nabors Industries (NYSE: NBR) to Buy from Neutral.
  
• Koppers Holdings (NYSE: KOP) was upgraded to Buy from Neutral at UBS.

Merrill Lynch has reiterated its "underperform" rating on Bank of America (NYSE: BAC) and dropped its price target to $28 from $29, according to MarketWatch.

Wachovia has upgraded Morgan Stanley (NYSE: MS) to "outperform" from "market perform", according to Briefing.com. The news service also reports that Oppenheimer downgraded Marriott (NYSE: MAR) to "perform" from "market perform."

Morgan Stanley has upgraded Royal Bank of Scotland (NYSE: RBS) to "overweight" from "underweight," according to StreetInsider.com.

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

MAJOR PAPERS:

• Chip suppliers for cellphones including Qualcomm Incorporated (NASDAQ: QCOM), Texas Instruments Incorporated (NYSE: TXN) and Nvidia Corporation (NASDAQ: NVDA) are moving aggressively to make products for Intel Corporation's (NASDAQ: INTC) new breed of pocket-size portable devices, called MIDs, the Wall Street Journal reported.

OTHER PAPERS:

• According to the UK Times, Barclays Plc (NYSE: BCS) and The Royal Bank of Scotland Group Plc (NYSE: RBS) were raided by the Office of Fair Trading as part of the investigation into price fixing loans to professional services firms.

WEB SITES:

• Almost three dozen of the largest U.S. companies may have to slash their dividends, since the dividends greatly exceed their cash flow, Bloomberg reported. Large companies in this situation include General Motors Corporation (NYSE: GM), Motorola Inc (NYSE: MOT), and The New York Times Company (NYSE: NYT).
• China Telecom Corporation Limited (NYSE: CHA) may announce today that it has bought the mobile phone assets of China Unicom Limited (NYSE: CHU) and its parent company for more than $14.4B, Bloomberg reported, citing the South China Morning Post. China Unicom could say that it is merging with China Netcom Group Corporation (NYSE: CN) as early as today, the newspaper added.

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.

Amazon (NASDAQ: AMZN) is up 3% on an analyst upgrade.

Lowe's (NYSE: LOW) is off over 3% on weak earnings.

RBS (NYSE: RBS) is off 7%, perhaps on news of potential lawsuits over the Bell Canada (NYSE: BCE) buyout.

Mastec (NYSE: MTZ) is up 11%, perhaps on comments on Cramer.

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

MAJOR PAPERS:

• According to people familiar with American International Group Inc's (NYSE: AIG) board, some directors feel that another big loss in the current quarter could prompt them to re-evaluate their support for CEO Martin Sullivan. The sources said a decision on Sullivan's fate isn't likely to be made until the company sees results over the next several months, the Wall Street Journal reported.
• The Financial Times reported that Kohlberg Kravis Roberts, The Blackstone Group LP (NYSE: BX) and Apax Partners are among the private equity groups that have been blocked from bidding int he first round of the GBP7B auction of The Royal Bank of Scotland Group Plc's (NYSE: RBS) insurance business.

OTHER PAPERS:

• The Boeing Company (NYSE: BA) closed a helicopter production line for several hours yesterday due to possible irregularities found in two military helicopters, the Seattle Times reported. The company did not disclose exactly why it shut down the production of the H-47 Chinooks.

WEB SITES:

• According to Mac Rumors, citing French LeMatin.ch, a source in Swisscom AG (OTC: SCMWY) said Switzerland will be getting the iPhone device from Apple Inc (NASDAQ: AAPL) this summer, and it will feature GPS, Video Conferencing and Mobile TV.

Before the bell: Futures lower after Microsoft's Yahoo deal fails

Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) reported a 64% drop in quarterly profit late Friday. At the company's annual meeting this past weekend, the legendary investor said that while a Berkshire unit has bought portfolios of subprime mortgages (and has frozen resets that were due to send interest rates on those loans higher) he warned investors that housing-market weakness isn't over yet and predicted more losses for banks. At the same time, Buffett said Sunday he will consider investing in the insurance business of U.K. banking giant Royal Bank of Scotland (NYSE: RBS) and is close to buying a medium-sized company in the country.

Hovnanian Enterprises Inc. (NYSE: HOV) estimated on Monday it would take $225 million to $275 million of land-related charges for the that fiscal second-quarter and said that home deliveries dropped 21% to 2,494 homes in the period. The company also turned cash-flow positive faster than it expected and tripled its full-year estimate of cash flow.

After being rejected by Continental Airlines Inc. (NYSE: CAL) last month, United Airlines parent UAL Corp. (NYSE: UAUA) is intensifying merger talks with US Airways Group Inc. (NYSE: LCC), according to The Wall Street Journal. A deal is said could emerge in as soon as 10 days. In light of rising fuel costs, the more than $1.5 billion in potential cost savings and revenue enhancements the companies see from joining forces is no doubt appealing more and more.

Some investors are starting to believe that the worst of the credit crunch is behind us, and European banks including UBS (NYSE: UBS) and Royal Bank of Scotland (NYSE: RBS) are leading a bullish move in the markets.

The dollar stabilized and oil weakened, giving a boost to many blue chip stocks. Home Depot (NYSE: HD) rose nearly 4% in trading on Thursday, and American Express (NYSE: AXP) was up nearly 7%.

Not all news is positive, however. U.S. futures are flat as the markets await the Labor Department's official employment report, due today. According to Bloomberg's calculation, unemployment in the U.S. continues to rise as employers shed more than 75,000 jobs in April. The unemployment rate is now probably at 5.2%, a three-year high. And real unemployment is probably worse that that, since the Labor Department's calculation method, which Bloomberg uses, significantly undercounts unemployment and underemployment.

And the Microsoft-Yahoo! saga continues. The AP reports that Microsoft (NASDAQ: MSFT) may go hostile in its bid to buy Yahoo! (NASDAQ: YHOO) today. Should be entertaining, so say tuned.

UPDATE: Job numbers better than expected, unemployment falls to 5.0%.

RBS (NYSE: RBS), the United Kingdom's second-largest bank, said the move is consistent with earlier stated intentions to cut costs as it merged its two wholesale banking businesses and also is warranted "in light of current conditions in some parts of the global credit markets."

Shares of RBS gained 12 cents to $7.19 on the news in midday Monday trading.

Thinning the ranks

Independent stock analyst C. Leonard Bauer told BloggingStocks Monday investors / traders should not be overly alarmed by RBS's likely upcoming staff adjustment. "I interpret this as more deal-related than credit markets-related," Bauer said. "RBS added considerable positions during the strong years for investment banking, and the bank wasn't understaffed at the start of the boom in 2003, so some job cuts were expected on those grounds. The ABN Amro deal simply meant that there would be more wholesale banking positions to consolidate." Bauer added that he does not have a rating on, nor own, RBS's shares.

Further, Bauer said the likely RBS cuts does not change his outlook on the credit market / bond market recovery.The worst of the mortgage and related asset-backed write-offs are over, he argued, and he expects the size and frequency of investment bank write-off announcements to taper in Q3 and Q4 2008.

MAJOR PAPERS:

• Warren Buffett's Berkshire Hathaway Inc (NYSE: BRK.A) and Mars are in talks to purchase Wm. Wrigley Jr. Co. (NYSE: WWY) for over $22B, the Wall Street Journal reported. An announcement may come as soon as today.
• The Royal Bank of Scotland Group Plc (NYSE: RBS) will start the integration of ABN Amro Holding's (NYSE: ABN) investment bank into its global markets division, the Financial Times reported. This process will most likely result in the paring of 7,000 jobs.

OTHER PAPERS:

• According to the New York Post, IAC/InterActiveCorp. (NASDAQ: IACI) Chairman Barry Diller is expected to meet with his board this week to restart the process of breaking up his company into five separate pieces, sources said. At the same time, Diller and Liberty Media Corporation (NASDAQ: LMDIA) Chairman John Malone are continuing to talk about a deal that would trade one or more of IAC's assets for Liberty's ownership stake in IAC.
• The UK Times has learned that Numis Securities, the stockbroking group headed by Michael Spencer, is in "advanced talks" to buy the UK equities business of The Bear Stearns Companies Inc (NYSE: BSC). Numis may look to hire a team of 25 from Bear.

MAJOR PAPERS:

• In an effort to refocus on coffee, the Wall Street Journal reported that Starbucks Corporation (NASDAQ: SBUX) will attempt overhaul its entertainment business.
• Private equity players Apax Partners and Kohlberg Kravis Roberts, along with Lehman Brothers Holdings Inc (NYSE: LEH) in a supporting role, are looking to form a consortium to examine a bid for the insurance assets of The Royal Bank of Scotland Group Plc (NYSE: RBS), the Financial Times reported.

OTHER PAPERS:

• Yahoo! Inc (NASDAQ: YHOO) is going to let outside developers create applications across its network of sites, the New York Times contended. The search engine is also going to combine its online services under the social profile concept in an attempt to allow its users to replicate the social experience that social networks like News Corporation's (NYSE: NWS) MySpace and Facebook have made so popular.

WEB SITES:

• Research In Motion Limited (NASDAQ: RIMM) will reportedly delay the launch of its new hotly anticipated 3G BlackBerry phone, Fortune reported, which the company is developing for AT&T Inc (NYSE: T). The phone, originally supposed to be launched in June, may not be released until as late as August, inside sources said.

It looks like European banks have been hit much harder by the subprime crisis than U.S. banks. Last week, UBS (NYSE: UBS) wrote off about $19 billion, and today we have news that Royal Bank of Scotland (NYSE: RBS) suffered an $11.7 billion loss. We haven't seen numbers like that in the U.S. and this may be a story that needs to get more play. The European banking system is in far worse shape than the banks on our side of the Atlantic, and the impact that will have on global growth should not be underestimated.

Keep in mind that nothing like the FDIC or SIPC exists in Europe, so a major bank failure could be catastrophic for consumers. Banks have started tightening credit, and the once red-hot real estate sector has cooled, especially in places like Poland. I have friends who are in the real estate business in Eastern Europe and they say things have really slowed down.

Royal Bank of Scotland said it will sell 12 billion pounds or $23.9 billion worth of new shares to boost capital, Bloomberg News reported Tuesday.

RBS (NYSE: RBS) has suffered from capital depletion following loan and related credit mark-downs, and as a result of its $114 billion purchase with Banco Santander (NYSE: SAN) and Fortis of ABN Amro.

Shares of RBS fell 30 cents to $7.19 on the news in Tuesday morning trading. Shares have declined more than 45% since October 2007.

RBS said it expects a large increase in the expected losses it faces on its portfolio of poorly performing loans and assets, including U.S. subprime mortgages and leveraged loans to private equity deals, The Financial Times reported Tuesday. The bank said these additional writedowns would reach about $11.8 billion -- three times the losses the bank has already recorded.

Worst not behind banks?