|Stock Downgrades: Future Is Up in the Air for Satellite Stock DirecTV|
By Justin Sharon MAY 02, 2014 9:11 AM
Wall Street ratings agencies set the tone for today's stock market.
Yesterday DirecTV (NASDAQ:DTV) stock gained 4.07% to an all-time high amid reports that AT&T Inc. (NYSE:T) is interested in acquiring America's largest satellite TV distributor. DirecTV's approximately 20 million subscribers are undeniably attractive, but it may be back down to Earth for its shares today.
In a curious reverse 21-gun salute -- Dow Industrials (INDEXDJX:.DJI) ended off 21.97 points -- the heartland of capitalism opted to lay down its arms alongside our Communist cousins, whose May Day celebrations made for anemic vacation volume on Wall Street. (I don't mean to mock those Russian comrades who assembled in revolutionary Red Square to shout "Workers of the world, unite!" Their projected "growth" rate -- if it can be so called -- may only be a paltry 0.2%, but even post-sanctions, Putin still puts our puny 0.1% equivalent to shame.) Some stocks did buck a bad tape: Berkshire Hathaway (NYSE:BRK.B) hit an historic high ahead of this weekend's annual meeting, an event that has left Omaha hotels so jammed that one Warren Buffett, clearly not wanting to be a wallflower at the orgy, is proposing investors find themselves alternative accommodation for this "Woodstock for capitalists" on Airbnb, which has lately inspired as much nakedness as the 1969 original. Hyatt Hotels (NYSE:H), at an all-time best of its own after increasing another 2.74%, would surely be a much more respectable choice. Especially on this, the first anniversary of its billionaire heir Penny Pritzker being successfully nominated as our secretary of commerce. Something for Mr. Buffett's secretary to ponder.
Today in economics, factory orders for March are expected to slip slightly from February's pace at 10:00 a.m. E.D.T. On the corporate front, another frenetic week for first-quarter earnings announcements concludes with Chevron (NYSE:CVX), CVS Caremark (NYSE:CVS), Estée Lauder (NYSE:EL), and Madison Square Garden (NASDAQ:MSG) all releasing results.
Now let's look at this morning's rating reductions, an eclectic bunch that includes an energy outfit in addition to our headline stock DirecTV.
Avon Products (NYSE:AVP): The cosmetics company, which tumbled an S&P 500 (INDEXSP:.INX)-worst 10.21% yesterday, is now Neutral from Buy at BTIG Research.
AXIS Capital (NYSE:AXS): BMO Capital Markets cuts the company to Underperform from Perform.
Broadcom (NASDAQ:BRCM): Shares are now Neutral from Buy at Nomura, which also trims its target price to $30 from $33.
Cabot Oil & Gas (NYSE:COG): Sanford Bernstein moves the stock to Market Perform from Outperform.
DCT Industrial (NYSE:DVT): DVT gets downgraded to Neutral from Buy at ISI Group.
DirecTV: Today's headline downgrade is taken to Neutral from Buy at Citigroup. Its price objective actually increases, however, by $3 to $82 from $79.
Merck KGaA (OTCMKTS:MKGAY): The German company -- not to be confused with New Jersey-based Merck (NYSE:MRK) -- is now Neutral from Buy at UBS.
Procera Networks (NASDAQ:PKT): Shares get cut to Sector Perform from Outperform at Pacific Crest.
Public Service (NYSE:PEG): RBC Capital reduces its rating to Sector Perform from Outperform with a $39 price objective amid valuation concerns.
Vocera (NYSE:VCRA): The company is now Neutral from Overweight at JP Morgan.
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