|Upgrades & Downgrades: Party Time for Carnival|
By Justin Sharon DEC 16, 2009 9:25 AM
Maybe the experts know something we don't know.
Stocks snapped a four day winning streak as investors (excepting an understandably anonymous person who parted with almost $10,000 for a 150 year old toothpick) expressed a reluctance to put their money where their mouth is ahead of the Fed. Best Buy (BBY) proved the S&P 500’s worst purchase, plunging 8.46% on worries over margins but on an otherwise down day Ancestry.com (ACOM) bore no relation to the rest of the market, moving 2.41% higher on an upbeat analyst outlook. Any entity able to unearth common kinship between Barack and both Brad and Buffett surely deserves to sell at a premium. The dollar is at an eight-week high as the Euro sinks to the sound of Goodnight Vienna. Oil rose for the first time in ten trading days to take it back over $70, a threshold which apparently compelled Tiger Woods’ wife to pawn her wedding ring to pay for gas.
In a major morning for macro data, at 8:30AM Eastern November’s Consumer Price Index was up an in-line 0.4% overall while the “core” rate came in flat. Separately, housing starts increased to an annually adjusted 574,000 rate last month, also as anticipated, and the third quarter current account deficit widened to $108 billion. And 2:15PM is the Time newly appointed man of the hour Ben Bernanke breaks up an FOMC meeting which is widely expected to leave interest rates unchanged. The accompanying policy statement will however be closely studied by linguists and economists alike for future intent. Herman Miller (MLHR), Hovnanian Enterprises (HOV), Joy Global (JOYG), and Paychex (PAYX) all announce earnings.
Pharmaceuticals: In large cap US pharma, UBS initiates Pfizer (PFE) and Merck (MRK) with Buys while Bristol Myers (BMY) and Eli Lilly (LLY) are each at Neutral. See also Big Pharma and the Profit Problem of Rare Diseases.
Credit Cards: Wells Fargo assumes coverage of American Express (AXP) (Outperform) and Capital One (COF) (Market Perform). For more, see Credit Card Stocks Worth Paying For.
Dollar Tree (DLTR): Money might not grow on trees today for Dollar Tree, started at Neutral with a $54 price target at Credit Suisse.
Dollar General (DG): The stock is assigned an identical rating with an objective of $25.
Family Dollar (FDO): Jefferies picks up Family Dollar with a Hold.
Sunpower (SPWRA): The solar stock is initiated at Outperform by JMP Securities.
Reliance Steel (RS): JP Morgan begins Reliance Steel at a Neutral.
Dick’s Sporting Goods (DKS): Robert Baird initiates Dick’s Sporting Goods with an Outperform $27 target.
Chico’s FAS (CHS): KeyBanc starts Chico’s FAS at a Hold.
Investment Brokerage: Maxim initiates Raymond James (RJF) with Hold while Piper Jaffray (PJC) is a Buy.
Insurance Stocks: Oppenheimer initiates insurance stocks Chubb (CB) (Outperform) and Progressive (PGN) (Underperform).
Cruise Stocks: JP Morgan jacks up cruise companies Carnival (CCL) ($43 target) and Royal Caribbean (RCL) ($34), both now Overweight from Neutral.
Corning (GLW): The stock gets a Buy-from-Outperform boost by Calyon Securities.
Intel (INTC): The chipmaker is added to the Top Picks Live List at Citigroup.
US Steel (X): X marks the sweet spot for US Steel, up before the bell after a Buy-from-hold upgrade at Keybanc, which assigns a $65 target on a relatively stable domestic cost structure.
AmerisourceBergen (ABC): Barclays boosts AmerisourceBergen, now Overweight from Equal Weight.
Darden Restaurants (DRI): UBS increases its Darden Restaurants rating to Buy from Neutral.
Charles Schwab (SCHW): Deutsche Bank takes Charles Schwab to Buy from Hold and ups its objective by $7 to $25 as the broker has maneuvered effectively during the downturn.
T. Rowe Price (TROW): Deutsche Bank also upgrades T. Rowe Price (Buy from Hold) as it sees share price outperformance over the upcoming 12 months.
ReneSola (SOL): The stock is upgraded to Overweight from Equal Weight at Morgan Stanley.
BJ’s Wholesale (BJ) is removed from the Americas Conviction Sell List at Goldman Sachs.
Best Buy (BBY): The stock is lowered to Sell from Buy at Societe Generale after earnings characterized as “low quality”. See also Best Buy’s Double Hit: Outlook and Lawsuit.
Qualcomm (QCOM): Citigroup cuts Qualcomm from its Top Picks Live List.
Real Estate: Robert Baird cuts Kimco Realty (KIM) and Realty Income (O) to Underperform from Neutral.
Steel Dynamics (STLD): Keybanc downgrades Steel Dynamics (Hold from Buy) on an anticipated easing of metal spread momentum.
Energy Stocks: Credit Suisse reduces ratings on utilities FirstEnergy (FE), Edison International (EIX), and Allegheny Energy (AYE), all now Neutral from Outperform.
British Sky Broadcasting (BSY): Nomura risks the wrath of Rupert Murdoch after reducing British Sky Broadcasting to Neutral from Buy.
Constellation Brands (STZ): The stock gets downgraded to Hold from Buy at Stifel Nicolaus.