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Check out which companies are making headlines before the bell:

Yahoo — Yahoo is moving ahead with plans to spin off its Alibaba stake even though the Internal Revenue Service has declined to rule that the move will be tax free. Yahoo expects to complete the spin-off during the fourth quarter.

McDonald's — The stock was upgraded to "outperform" from "neutral" at Credit Suisse, which said comparable restaurant sales trends are starting to turn higher at the fast food giant.

Eli Lilly, Incyte — Rheumatoid arthritis drug baricitinib succeeded in meeting its main goal in a late-stage study. The drug being developed by the two companies proved more effective than rival drug methotrexate, which has been used to treat rheumatoid arthritis for several decades.

Raytheon — UBS upgraded Raytheon shares to "buy" from "neutral," citing improved cash flow and profit margins.

Wal-Mart — The retail giant will offer free in-store pickup for customers who purchase groceries online. The service will be available in eight cities to start, and rolled out to more markets in the coming weeks.

Cheniere Energy — Cheniere saw investor Carl Icahn raise his stake in the natural gas producer to 11.43 percent from the prior 9.59 percent, according to a Securities and Exchange Commission filing.

Pepco Holdings, Exelon — The two utility companies have asked the District of Columbia to reconsider its prior rejection of their planned merger. The two sides are currently in discussions about a settlement of the disagreement.

Microsoft — Microsoft and a Chinese partner in an Xbox-related venture have been fined by China officials for violating antitrust rules.The small fines came after the two companies failed to disclose that their market share had exceeded a certain threshold. Separately, Microsoft announced a change in its financial reporting, breaking out results differently to reflect the increasing significance of its mobile and cloud businesses.

Reynolds American — The tobacco producer announced a deal to sell its Natural American Spirit international business to Japan Tobacco Group for $5 billion group. Talks surrounding the deal were first reported last week.

Panera Bread — Panera was rated "outperform" in new coverage at Telsey Advisory Group, pointing to optimism about recent changes in food, marketing, and restaurant design.

Johnson & Johnson — The Dow component was upgraded to "buy" from "hold" at Deutsche Bank, which said it feels confident about J&J's growth prospects across all divisions following meetings with the company's management.

Apple — Sterne Agee CRT rated Apple a "buy" in new coverage of the mobile and consumer technology sector, saying Apple has the ability to keep "pushing out the law-of-large-numbers" with its products.

Advanced Micro Devices — The chipmaker reportedly discussed the sale of a 25 percent stake to Silver Lake Partners, according to a Bloomberg report, but the talks are said to have stalled because of strategic disagreements.