MOST NOTEWORTHY:

• Jefferies initiated Longtop Financial (NYSE:LFT) with a Buy rating and $29 target, as they expect strong earnings growth over the next several years from an acceleration in P&L performance and the company's attractive secular demand backdrop.
  
• Morgan Stanley resumed coverage of Royal Bank of Scotland (NYSE:RBS) with an Underweight rating, as they believe investors will begin to question the sustainability of the company's dividend as earnings fall.
  
• Oppenheimer views the outlook for W-H Energy Services (NYSE:WHQ) as compelling given its geographic expansion, international growth prospects, technological focus, and strong balance sheet. The firm started shares with a Buy rating and $73 target..

• HSBC initiated Diageo (NYSE:DEO) with an Overweight rating.
  
• Banc of America resumed coverage of the softlines retailing sector, starting shares of Urban Outfitters (NASDAQ:URBN) and Pacific Sunwear (NADAQ:PSUN) with Buy ratings and a $32 target and $20 target, and Aeropostale (NYSE:ARO) with a Neutral rating.

MOST NOTEWORTHY:

• Caris initiated shares of Athenahealth (NASDAQ: ATHN) with an Average rating and $26 target, as they believe an unachievable growth rate is priced into shares at current levels.
• Brocade Communications Systems (NASDAQ: BRCD) was initiated with a Neutral rating at UBS.
  
• Royal Bank of Scotland (NYSE: RBS) was initiated with an Underweight rating at Lehmen.
  
• JP Morgan resumed coverage of Human Genome Sciences (NASDAQ: HGSI) with a Neutral rating.

• Lazard resumed coverage of Zoran (NASDAQ: ZRAN) with a Hold rating and Sigma Designs (NASDAQ: SIGM) with a Buy rating.
  
• Stifel initiated Tortoise Energy Capital (NYSE: TYY) with a Buy rating and $32 target.
  
• HSBC initiated DSG International (OTC: DSITY) with an Overweight rating.

MOST NOTEWORTHY: Clayton, PharmaNet Development, Royal Bank of Scotland, Progressive Gaming and WSFS Financial were today's noteworthy downgrades:

• JMP Securities downgraded shares of Clayton Holdings Inc (NASDAQ: CLAY) to Market Perform from Outperform citing lack of visibility in the non-agency MBS market. William Blair also downgraded shares to Market Perform from Outperform after the company's in-line quarter, to reflect lowered estimates and uncertainty regarding a recovery time.
• Jefferies downgraded shares of PharmaNet Development Group Inc (NASDAQ: PDGI) to Hold from Buy as they believe departures of board and management executives have introduced new risk.
• The Royal Bank of Group PLC (NYSE: RBS) was lowered to Sell from Buy at Citigroup, as they are negative on the company's acquisition of ABN Amro Holding NV (NYSE: ABN).
• ThinkEquity downgraded shares of Progressive Gaming International Corporation (NASDAQ: PGIC) to Accumulate from Buy following Friday's announcement that it lost its post-trial motions and will proceed to appeals court in the Webb lawsuit. PGIC will have to post a $20M bond, which is more than the firm expected.
• B. Riley downgraded shares of WSFS Financial Corporation (NASDAQ: WSFS) to Neutral from Buy after they lowered their estimates to reflect the company's higher projected on-interest expense.

• Goldman removed Hewlett-Packard Company (NYSE: HPQ) from its Conviction Buy List.
• Calyon downgraded VeraSun Energy Corporation (NYSE: VSE) to Add from Buy.
• Merrill Lynch downgraded Aetna Incorporated (NYSE: AET) to Neutral from Buy.
• Friedman Billings downgraded Baker Hughes Incorporated (NYSE: BHI) to Market Perform from Outperform.

MAJOR PAPERS:

• Mattel Inc (NYSE: MAT) is expected to soon announce another recall of toys made in China, reported the Wall Street Journal.
• Merck and Co. Inc (NYSE: MRK) CFO Judy Lewent sold 200K shares for $10.3M from July 26 through Aug. 7, at an average price of $51.31 per share, reported Barron's Online's "Inside Scoop" column.
• The Royal Bank of Scotland (OTC: RBSPY)-led consortium seeking to purchase Dutch bank ABN Amro Holdings NV (NYSE: ABN) raised its stake in ABN to more than 3% between Friday and Monday, reported the Financial Times.

• The Independent reported that Barclays' (NYSE: BCS) bid for Dutch bank ABM Amro was approved by the Netherlands' Ministry of Finance yesterday.
• A highly publicized civilian nuclear deal with the U.S. still allows India to test nuclear weapons, according to Prime Minister Manmohan Singh, reported the Associated Press.

MAJOR PAPERS:

• The Wall Street Journal reported that TPG Capital and Silver Lake are poised to buy telecommunications equipment company Avaya Inc (NYSE: AV) for about $17 a share; Nortel Networks Corporation (NYSE: NT) was also said to be interested.
• News Corporation's (NYSE: NWS) Rupert Murdoch said he is willing to go along with tighter editorial independence, but won't give in to a key demand from Dow Jones & Company Inc's (NYSE: DJ) controlling Bancroft family that they control an editorial oversight board that would protect this, the Wall Street Journal reported.
• Barron's Online's Trader section believes Service Corporation International's (NYSE: SCI) 90% surge since August is the result of funeral service companies' virtual immunity to a slowing economy or rising rates – the market's two biggest fears right now.

• The New York Times reported that software maker Cadence Design Systems Inc (NASDAQ: CDNS) is in talks with private-equity players that include Kohlberg Kravis Roberts and the Blackstone Group about a possible sale of the company.
• Technology Web sites have discovered that Apple Inc (NASDAQ: AAPL) embeds customers' personal data into files the company uses to distribute music from its online iTunes music store, creating fears about privacy, the UK Times reported.
• The UK Times also reported that Royal Bank of Scotland Group (OTC: RBSPY) may be looking to sell Southern Water for GBP4B, a move that could lead to many more deals in Britain's privatized water industry.

ABN Amro (NYSE: ABN) received a bid from a group lead by the Royal Bank of Scotland. The offer of $95.6 billion tops that of Barclays (NYSE: BCS).

The offer contemplates breaking the big bank into pieces. Banking companies Fortis and Santander are part of the purchase group and will sell shares to finance the deal.

The three banks would split ABN into several pieces with each of the purchasers taking the operations that best dovetail with their current businesses.

The dismembering of the Dutch bank may be the key to the higher bid. While Barclays would have kept most of ABN intact and perhaps sold off the US La Salle portion of the company, the three banks offering to buy ABN now believe that they can get economies of scale by matching pieces to their own operations. Their thinking is that this will allow them to take out more costs than if the bank was sold intact.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MAJOR PAPERS:

• Google Inc (NASDAQ: GOOG) and online services company Salesforce.com Inc (NYSE: CRM) may form a partnership to better compete with Microsoft Corporation (NASDAQ: MSFT), reported the Wall Street Journal (subscription required).
  

• The U.K. Times reported that Warner Music Group Corporation (NYSE: WMG) is expected to offer EMI Group (OTC: EMIPY) a "£100 million sweetener" to try and keep the company from accepting an offer from private equity.
• According to The Observer, Royal Bank of Scotland (OTC: RBSPY), along with its partners Fortis and Banco Santander Central Hispano (NYSE: STD), hope to "table" a £47 billion offer for ABN Amro Holdings (NYSE: ABN) this week.
• The Observer reported that a private equity consortium is considering a $15 billion offer for Virgin Media Inc (NASDAQ: VMED).
• Cadbury Schweppes ADS (NYSE: CSG) is planning to return £5 billion to shareholders through a special dividend or share buyback, according to The Observer.
• The Sunday Telegraph reported that UBS AG (NYSE: UBS) will offer to buy out the pension schemes of some of the leading FTSE100 companies next week.
• Yahoo! Inc (NASDAQ: YHOO) may be looking to acquire British social networking site Bebo, the Sunday Telegraph reported.
• The Bollywood film producer, Eros International, is expected to announce a partnership with Google Inc's (NASDAQ: GOOG) YouTube, the Sunday Telegraph reported.
• Teva Pharmaceutical Industries Limited's (NASDAQ: TEVA) Copaxone will face generic competition for the first time, but will not see an impact immediately, Ha'aretz reported.

• The Orange County Register blog looked at a transcript from IndyMac Bancorp Inc's (NYSE: IMB) first quarter conference call, where the CEO Michael Perry said: "When you see that delinquency number in the press of 13% subprime delinquencies, it's hugely understated. It is absolutely hugely understated. And the prime delinquencies are overstated. The subprime delinquencies are more like 18, 20, 22% delinquencies and that's where I think you're going to see the problems."

MAJOR PAPERS:

• According to the Wall Street Journal, citing people familiar with the situation, the NY Attorney General and the SEC are both investigating "suspicious trading" in shares and options of Dow Jones and Company Inc (NYSE: DJ) prior to the $5B offer by News Corporation (NYSE: NWS).
• The Wall Street Journal reported that the UK's financial-services regulator has begun a preliminary review of trading by hedge funds in ABN Amro Holdings (NYSE: ABN), according to people familiar with the situation.
• BAE Systems (OTC: BAESY), the British defense contractor, is in the final stages of its $3.5B takeover of Armor Holdings Inc (NYSE: AH), the U.S. manufacturer of military and heavy vehicles, reported the Wall Street Journal.
• The Wall Street Journal reported that a consortium led by the Royal Bank of Scotland Group (OTC: RBSPY) has made a formal $24.5B offer for ABN Amro's LaSalle Bank, according to people familiar with the situation.
• The Financial Times reported that Dutch bank ABN Amro rejected a $24.5B offer for its U.S. bank, LaSalle, from a consortium led by Royal Bank of Scotland today. However, ABN said it would allow its shareholders to vote on the offer.

• Safeway Stores Inc's (NYSE: SWY) CEO, Steven Burd, said that Dominick's is not for sale in an interview with the Chicago Tribune.

• According to TheAlarmClock.com, Global Equities Research analyst Trip Chowdry believes Google Inc (NASDAQ: GOOG) is "stepping up its efforts" to acquire job search engine SimplyHired.

Now that ABN AMRO is "in a buyout limbo" between Barclays Plc. (NYSE:BCS) and a Royal Bank of Scotland Group Plc. (LON: RBS) bid consortium, this brings up a situation: What will become of LaSalle Bank?

As part of the Barclays offer for ABN AMRO Holdings NV (NYSE:ABN), Barclays was going to sell LaSalle Bank to Bank of America Corp. (NYSE:BAC). That was going to finance $21 billion worth of the "record international bank merger" transaction. Since Royal Bank of Scotland (plus Santander and Fortis in the group) has joined in the bidding at a slightly higher price, the second offer is only "inclusive of LaSalle Bank."

The consortium may or may not keep LaSalle Bank in the long run, but it should at least consider the value. Under no circumstances should Bank of America be automatically assumed as the automatic winner, or at least not at the proposed price tag. The "for sale" sign is in the window at LaSalle Bank, so why not see who would be interested. A break-up fee of $200 million would be due to Bank of America if the deal changes. For such a large transaction that is not the end of the world. $200 million just isn't what it used to be.

So, who would step up to the plate outside of Bank of America? The two most obvious names inside the US are JPMorgan Chase & Co. (NYSE:JPM) and Wachovia Corp. (NYSE:WB). North of the border there is also Royal Bank of Canada (NYSE:RY), Bank of Nova Scotia (NYSE:BNS), and Toronto-Dominion Bank (NYSE:TD).

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that Fred Anderson, the former Apple (NASDAQ: AAPL) CFO, said through his lawyer that Apple CEO Steve Jobs misled him regarding board actions on stock-option awards.
• The Wall Street Journal reported that The Royal Bank of Scotland-led consortium of banks fighting Barclays (NYSE: BCS) in an attempt to acquire ABN Amro (NYSE: ABN) indicated it would pay EUR39 per share, or $98.5B, for the Dutch bank.
• The next CEO of Royal Dutch Shell (NYSE: RDS.A) will probably be promoted from within the company, Royal Dutch Shell chairman Jorma Ollila said yesterday, reported the Financial Times (subscription required).
  

• The New York Times reported that Jarden Corp. (NYSE: JAH) will acquire K2 Inc. (NYSE: KTO) for about $1.2 billion in cash and stock, or $15.50 per share.
• According to a New York Post exclusive, WPP Group (NASDAQ: WPPGY) is among the suitors for 24/7 Real Media, which is on the auction block.
• The U.K. Times has reported that US Airways (NYSE: LCC) has pulled out of a $3.7 billion deal with Airbus, for Boeing (NYSE: BA), which US Air will order 20 to 30 787 Dreamliners from, worth between $3.2 billion and $4.9 billion.

MAJOR PAPERS:

• On Friday, the Wall Street Journal reported that a number of firms have been eyeing Kroger Co (NYSE: KR) on the expectation that the company will soon begin exploring a leveraged buyout with the help of investment bank Goldman Sachs Group Inc (NYSE: GS).

• The New York Post reported that Warner Music Group Corp (NYSE: WMG) may look to merge with EMI Group plc ADR (OTC: EMIPY) by appealing directly to the music labels shareholders.
• According to the Sunday Express, Dow Chemical Company (NYSE: DOW) is set to receive a bid of $52-$58 per share, valuing the company at $50B, from a consortium of Middle Eastern investors and American buyout firms.
• The U.K. Telegraph reported that the Royal Bank of Scotland is preparing to delay any rival offer for ABN Amro Holdings (NYSE: ABN) until after Barclays plc ADS (NYSE: BCS) reveals its bid for the company.
• From BusinessWeek's "Inside Wall Street" section:
• Oppenheimer oil guru Fadel Gheit says rumors have resurfaced that Exxon Mobil Corporation (NYSE: XOM) may go after oil and gas company Devon Energy Corporation (NYSE: DVN).
• Napco Security Systems Inc (NASDAQ: NSSC) is hoping GatewayX, a new product introduced in January, will spark a rebound.
• Seed and crop-protection company Syngenta AG ADS (NYSE: SYT) looks to have upside ahead, due to brisk demand for corn to make ethanol is boosting farmers' need for Syngenta's products to fight field pests.

I've just returned from the World Money Show in Orlando where more than 10,000 investors gathered to learn about global investing. I had a chance to meet with many of the U.S. and foreign financial experts featured at the show, and over the next week I will share some of their top investment ideas. To view all of the stocks featured in this special global report, click here.

Richard Lehmann, editor of The Forbes/Lehmann Income Securities Investor, is a long-standing expert in assessing income-oriented stocks. Here, he reviews a pair of global preferreds that he recommends for low-risk investors.

"Aegon N.V (NYSE:AEG) is one of the world's largest global life insurance and pension companies. Their major markets are the United States, the Netherlands, and the United Kingdom. The Aegon N.V. 6.375% perpetual preferreds (NYSE:AEH) were recommended in October 2005 at a price of $25.50 for a then-current yield of 6.25% and a yield to call of 6.15%.

"Aegon recently expanded its operations by partnering with Ranbaxy Promoter Group to jointly enter the life insurance and asset management business in India. This A-rated preferred is currently trading at $25.97 for a current yield of 6.14%.

"The preferred is not callable until 2015 and qualifies for the 15% tax rate. This security is a good investment for low-risk investors and has been added to our Low-Risk Portfolio. Our recommendation is to buy this issue at or below $26.