More M&A activity this morning helped push U.S. stock index futures higher, suggesting yet another high open for U.S. stocks at the start of this shortened trading week.

U.S. stocks ended last week with losses on a very light economic calendar week. This week will be full of economic data including housing data, non-farm payroll, GDP and housing indicators.
Today, the Conference Board will release its May consumer confidence, which is expected to tick up from last month.

Overseas, Asian stocks closed mostly higher and European stocks climbed for the first time in three days after a sales forecast from Vodafone Group Plc lifted phone companies.

Most of the buzz this morning is in the form of M&A news:

A consortium led by Royal Bank of Scotland launched a €71.1 billion $95.5 billion) offer for ABN Amro (NYSE: ABN). The hostile bid is some 10% higher than that of Barclays (NYSE: BCS) and would block the sale of LaSalle Bank by Bank of America (NYSE: BAC).

Tishman Speyer Properties and Lehman Brothers Holdings Inc. (NYSE: LEH) are close to a deal to acquire real estate investment trust Archstone-Smith Trust (NYSE: ASN), according to The Wall Street Journal in a deal that could top $20 billion, including debt. ASN shares are up over 5% in pre-market trading (6:33 a.m.).

Norsk Hydro and Rio Tinto (NYSE: RTP) declined to confirm or deny reports that they may place separate bids for Alcan (NYSE: AL). Reports, however, claim Rio Tinto has hired Deutsche Bank for help on the possible bid. Meanwhile Alcan is still trying to fight off a hostile bid from Alcoa (NYSE: AA). AL shares are up another 1.6% in pre-market trading (7:19 a.m.).

Avaya Inc. (NYSE: AV) is in talks with private-equity firms and other potential bidders about selling all or part of the company, according to the Wall Street Journal. Specifically Avaya is cited to be in talks with Silver Lake Partners about a possible LBO. AV shares are up 13.4% in pre-market trading ( 7:42 a.m.).

Ford Motor Co. (NYSE: F) is said to be planning the sale of Swedish car maker Volvo to German carmaker BMW according to a Swedish newspaper, The Goteborgs Posten daily.

Shares of British Airways Plc (NYSE: BAB) rose 4.5% on speculation the airline could attract a private-equity bid.

Main market news here.

Microsoft Corp. (NASDAQ: MSFT) announced it is buying online ad agency aQuantive Inc. (NASDAQ: AQNT) in a $6 billion cash deal, in what could be argued as overpaying. The deal is for $66.50 a share, an 85% premium over Thursday's close for aQuantive. It almost seems like a desperate move by Microsoft as it tries to follow the recent deals from Google Inc. (NASDAQ: GOOG) and Yahoo! Inc. (NASDAQ: YHOO). AQNT shares are up 78.4% in pre-market trading (8:36 a.m.).

Shares of ValueClick Inc. (NASDAQ: VCLK) jumped 8.5% in premarket trading (8:41 a.m.) following the deal.

Intuit Inc. (NASDAQ: INTU) shares are up 11.11% in pre-market trading (8:09 a.m.) after it posted a third-quarter profit surge of 23%, cracking $1 billion in quarterly sales. Excluding one-time charges, the company would have reported net income of $1.13 per share or revenues of $1.15 billion (a 21% jump compared to last year's period), beating the $1.08 per share average estimate by analysts surveyed by Thomson Financial and the $1.12 billion in expected revenues.

British Airways (NYSE: BAB) misbehaved and admitted to it. While reporting a net loss of 124 million pounds in its final quarter, the company revealed it has set aside 350 million pounds (US$690 million; €510 million) to pay possible fines for its admitted anticompetitive behavior. The company discussed long-haul fuel surcharges with rivals. Investors, not surprising, weren't happy sending shares down 4% in London.

AppleGate, that's what they now call the false reported delays in the iPhone. Apple Inc. (NASDAQ: AAPL) shares have suffered a momentary lapse due to the report, wiping $4 billion in market cap before the stock recovered following the retraction. Engadget, our sister blog responded to the allegations against it. Not only that but Michael Arrignton of Techcrunch defended Engadget's decision to publish the story, and even bitter rivals Giszmodo did. There are still many unanswered questions regarding the original fake/false email that was sent. Some suspect that more than a harmless prank, it could have been an intentional foul play with vested interest in the outcome. It is eerily odd that a day after the false report, the FCC approval for the iPhone was announced and the stock rose nearly 2% and continues to gain another 0.9% in pre-market trading (8:24 a.m.).

Green gets in your eyes? Exxon Mobil Corp. (NYSE: XOM) gave more than $2 million in 2006 to groups, that Greenpeace says, are global warming skeptics. Yet, ExxonMobil constantly tries to convince us it is becoming more climate-unfriendly. While the company cut its donations to such groups by more than 40% from 2005, it still funds about 40 "skeptic groups."

Hoorah, now that this earnings period is starting to wind down, I can highlight some non-earnings events to look out for next week.

Monday May 14

• Hitachi Ltd (NYSE: HIT) Strategic Storage Announcement conference call at 8am.
• Aircastle Limited (NYSE: AYR) to report Q1 earnings; conference call at 11am.
• Another Vioxx trial starts for Merck and Co Inc (NYSE: MRK) in Texas.

Tuesday May 15

• Motorola Inc (NYSE: MOT) mobile experience at 10am.
• Yamana Gold Inc (NYSE: AUY) to report Q1 earnings; conference call at 11am.

Wednesday May 16

• Southwest Airlines (NYSE: LUV) shareholder meeting at 11am.
• Hewlett-Packard Company (NYSE: HPQ) to report Q2 earnings; conference call at 5pm.

Thursday May 17

• JC Penney Company Co Inc (NYSE: JCP) to report Q1 earnings; conference call at 9:30am.
• Liz Claiborne Inc (NYSE: LIZ) annual shareholder meeting at 10am.
• Biogen Idec (NASDAQ: BIIB) research and development day at 8:30am.

Friday May 18

• British Airways (NYSE: BAB) to report preliminary Q4 earnings; conference call at 9am.
• Federated Department Stores Inc (NYSE: FD) shareholder meeting at 11am.

MOST NOTEWORTHY: British Airways plc (BAB), Ryanair Holdings plc (RYAAY), Cox Radio, Inc (CXR) and Autoliv Inc (ALV) were today's noteworthy initiations:

• Deutsche Bank upgraded shares of both British Airways (NYSE: BAB) and Ryanair Holdings plc (NASDAQ: RYAAY) to Hold from Sell on valuation.

• Credit Suisse upgraded shares of Cox Radio Inc (NYSE: CXR) to Neutral form Underperform on valuation following the stock's recent pullback. Bear Stearns also upgraded Cox Radio to Outperform from Peer Perform on valuation.

• Merrill Lynch upgraded shares of Autoliv Inc (NYSE: ALV) to Neutral from sell.

OTHER UPGRADES:

• Wachovia upgraded Heelys, Inc (NASDAQ: HLYS) to Outperform from Market Perform following positive channel checks, which could lead to upside to the Street's Q1 EPS estimate of 18c, and valuation.

• Stifel upgraded VistaPrint Ltd (NASDAQ: VPRT) to Buy from Hold with a $43 target. The firm said risks from taxes and non-transaction revenue have been diminished to levels that allow them to focus on the core printing business.

• Ameristar Casinos, Inc (NASDAQ: ASCA) was upgraded to Buy from Hold at Jefferies.

• Bear Stearns upgraded Waddell & Reed Financial, Inc (NYSE: WDR) to Outperform from Peer Perform based on strong operating leverage and valuation.

• Potash Corp (NYSE: POT) was upgraded to Buy from Neutral at UBS.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Insituform Technologies, Inc (INSU), Ameristar Casinos, Inc (ASCA) and Christopher & Banks Corp (CBK) were some of today's more noteworthy downgrades:

• Canaccord Adams downgraded shares of Insituform Technologies (NASDAQ: INSU) to Underweight from Neutral following the company's reduced outlook and announcement to exit the tunneling business.

• Prudential downgraded shares of Ameristar Casinos (NASDAQ: ASCA) to Underweight from Neutral on valuation following the recent run-up due to speculation the company will be sold; based on management statements, Prudential believes a company sale is unlikely.

• Buckingham cut Christopher & Banks (NYSE: CBK) to Underperform from Neutral.

OTHER DOWNGRADES:

• ABN AMRO downgraded shares of British Airways plc (NYSE: BAB) to Sell from Hold as the firm believes profits on trans-Atlantic routes may drop from increased competition due to the "open skies" agreement between the European Union and the U.S.

• JP Morgan downgraded China Unicom Limited (NYSE: CHU) to Underweight from Neutral.

• RBC cut Paychex, Inc (NASDAQ: PAYX) to Sector Perform from Outperform.

• Matrix USA downgraded EarthLink, Inc (NASDAQ: ELNK) to Sell from Hold and WCI Communities, Inc (NYSE: WCI) to Strong Sell from Hold on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MAJOR PAPERS:

• Online ad firm DoubleClick is exploring a sale, and is in talks with Microsoft Corporation (NASDAQ: MSFT), among others, reported the Wall Street Journal (subscription required).
• The Financial Times (subscription required) reported that BP plc ADS's (NYSE: BP) Russia venture, TNK-BP, abandoned its bid for a stake in Rosneft less than ten minutes into bidding, leaving Rosneft able to buy its own shares back at a 10% discount.
• According to the Financial Times, Tyco International Ltd (NYSE: TYC) bondholders are worried the company may try to avoid paying them in full when the company completes its break-up later in the year.
• The Financial Times reported that Cadbury Schweppes ADS (NYSE: CSG) CEO Todd Stitzer said a merger with Hershey (HSY) would make "commercial, strategic and financial sense" for Cadbury, which is preparing to split into two divisions.

OTHER PAPERS:

• The U.K. Times reported that British Airways ADS (NYSE: BAB) is considering making a GBP1B bid for bmi, a competing British airline.

WEBSITES:

• BusinessWeek Online reported that Beazer Homes USA Inc (NYSE: BZH) is being investigated for potential mortgage fraud by the FBI.
• CNet.com reported that Yahoo! Inc (NASDAQ: YHOO) will offer unlimited email storage beginning in May, according to an announcement by the company.

MOST NOTEWORTHY: Travelzoo Inc (TZOO) and Cisco Systems Inc (CSCO) topped today's list of noteworthy upgrades:

• Travelzoo Inc (NASDAQ: TZOO) was upgraded to Strong Buy from Underperform with a $38 target at First Albany based on valuation and the potential for significant upside in first quarter. Stifel upgraded Travelzoo to Hold from Sell, also on valuation.

• Following the company's Q2 results and guidance, Baird upgraded shares of Cisco Systems Inc (NASDAQ: CSCO) to Outperform from Neutral with a $32 target.

OTHER UPGRADES:

• AG Edwards upgraded shares of Marriott Int'l Inc (NYSE: MAR) to Buy from Hold with a $56 target. The firm believes that given recent indications of sulid industry fundamentals, Marriott is being overlooked. In addition, AG Edwards believes Marriot is poised to report strong earnings on Thursday.

• Broadcom Corp (NASDAQ: BRCM) was upgraded to Overweight from Equal Weight with a $40 target at Morgan Stanley.

• FEI Company (NASDAQ: FEIC) was upgraded by Credit Suisse to Neutral from Underperform following its Q4 report and outlook.

• Goldman added Gilead Sciences Inc (NASDAQ: GILD) to the America's Buy List based on its HIV franchise and pipeline. Goldman also upgraded Earthlink (ELNK) to Neutral from Sell on valuation.

• Baird upgraded Business Objects ADS (NASDAQ: BOBJ) to Outperform from Neutral following the company's solid Q4 report.

• Merrill Lynch upgraded British Airways ADS (NYSE: BAB) to Buy from Neutral.

• Digene Corp (NASDAQ: DIGE) was upgraded to Outperform from Market Perform at Piper Jaffray.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: The Major European Pharmaceutical Sector was the most notable downgrade this morning.

• Lehman Bros. downgraded the Major European Pharmaceutical Sector based on its 2007 outlook.
  
• The firm downgraded Sanofi-Aventis ADS (NYSE: SNY) and Glaxosmithkline plc ADS (NYSE: GSK) to Equal Weight from Overweight.

OTHER DOWNGRADES:

• Deutsche Bank is cautious on British Airways' ADS (NYSE: BAB) 2007 outlook and downgraded the airliner to Sell from Hold, citing valuation.

• Goldman Sachs downgraded Hornbeck Offshore Svc (NYSE: HOS) to Sell from Neutral following the driller's disappointing fourth quarter outlook.

• Wachovia downgraded CACI Int'l (NYSE: CAI) to Market Perform from Outperform following the sudden announcement last night that CFO Waechter has resigned from the company.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).