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Stock Downgrades: Ominous News Out of Alcoa Inc as Earnings Await

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Wall Street ratings agencies set the tone for today's stock market.

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Fireworks in Tahrir Square meant a damp squib on Wall Street, where Egyptian angst sent stocks lower on anemic volume ahead of July 4. While the Middle East again erupts in fury, investors in America opted instead to raise a Ruckus (RKUS), as that stock bucked red ink elsewhere to jump 4.99% on a broker boost. The first of the BRICs just beat the worst of the PIIGS on the soccer field. Economically, however, the tide may be turning as Spain reported decent data at long last even as Brazil's main bourse fell 4.4% to a more than four-year low. Japan, quite literally flush with cash, saw its suddenly resurgent Nikkei (INDEXNIKKEI225:NI225) rise 1.78% to a five-week high.

Amid worries by the banks of the Nile Noah Holdings (NOAH), up 15.65%, is well prepared for a 1,000-year flood. And iconic English raincoat maker Burberry (BURBY) continued to keep shareholders from getting soaked. The check was in the mail for its famous checkered pattern, after it advanced 1.95% following an analyst upgrade.

This morning in economics, June's Institute for Supply Management non-manufacturing index is expected to tick up slightly at 10:00 a.m. Eastern. There are no quarterly earnings announcements of note, and the New York Stock Exchange and bond markets are scheduled for early finishes of 1:00 p.m. and 2:00 p.m., respectively, ahead of tomorrow's Independence Day holiday, when all US markets will be closed.

ACCO Brands Corporation (ACCO): The company, whose brands include 1980′s icon Trapper Keeper, is now Neutral from Outperform at Credit Suisse.

Adidas AG (ADR) (ADDYY): Deutsche Bank downgrades the stock to Hold from Buy, sending it sharply lower in Europe today. Currency concerns are an issue, the broker believes.

Alcoa Inc (AA): The key Dow (^DJI) component, which will unofficially usher in Q2 earnings season on Monday July 8, gets moved to Neutral from Overweight at JPMorgan. The downgrade is due to the bank's reduced expectations for aluminum prices. Shares are, accordingly, falling before the opening bell as I write.

AllianceBernstein Holding LP (AB): Shares are cut to Neutral from Outperform at Credit Suisse.

BAYERISCHE MOTOREN W (BAMXY): The German auto outfit - better known as BMW - is now Neutral from Buy at JPMorgan.

Belo Corp (BLC): Shares are moved to Market Perform from Outperform with Wells Fargo.

Endurance Specialty Holdings Ltd. (ENH): Keefe Bruyette cuts the company to Perform from Outperform.

First Niagara Financial Group Inc. (FNFG): The regional bank gets reduced to Neutral from Buy at Sterne Agee.

Fresenius Medical Care AG & Co. (ADR) (FMS): Shares, which nose-dived 9.55% on Tuesday, are today taken to Neutral from Outperform by BNP Paribas.

Knight Transportation (KNX): KNX is cut to Hold from Buy at BB&T Capital Markets.

Mead Johnson Nutrition CO (MJN): The stock, a poor performer yesterday, gets moved to Market Perform from Outperform at Wells.

Mindray Medical International Ltd (ADR) (MR): Shares are now Neutral from Overweight at Piper Jaffray.

Oiltanking Partners LP (OILT): Bank of America-Merrill Lynch lowers the equity to Underperform from Neutral.

Overstock.com, Inc. (OSTK): The stock is cut by an unusual 180 degrees, to Underperform from Buy, at Bank of America-Merrill.

Werner Enterprises, Inc. (WERN): Shares are slashed to Hold from Buy with a $25 price target at Wunderlich, as the bank is forecasting negative EPS (Earnings Per Share) growth for a fourth straight quarter.

(See also: Stock Upgrades: AutoNation, Inc. Is Music to Michael Jackson's Ears and New Stock Coverage: Twenty-First Century Fox Inc Is a Stock for the Ages.)
No positions in stocks mentioned.
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