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Stock Downgrades: Skullcandy Suffers Serious Concussion


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

MINYANVILLE ORIGINAL Equities enter 2013 with the Dow (^DJI) freshly back above 13,000 - thanks to Congress finally reconvening on its fiscal cliff crisis 13 hours before the deadline - the S&P 500 (^GSPC) having just posted a 13% annual increase, and its European equivalent up by an identical amount over the same period. Anyone suffering from Triskaidekaphobia may find it all a bit ominous, especially with the 113th Congress being sworn in (and at) tomorrow, but for now let's just bask in a fabulous 52 weeks that saw investors rack up profits while dodging those Mayan prophets of doom. As for post-election years, Mr. Market is decidedly mixed on that score, with Dow Industrials (^DJI) gaining eight times and falling seven since Ike's first inaugural in 1953. You would thus be just as well flipping a coin, if Hewlett-Packard (HPQ) - which decided on its name by precisely that method - will forgive the analogy after a torrid 12 months in which it fell 44.68% to lead all Dow (^DJI) laggards.

Today in economics, the Institute for Supply Management's December manufacturing index is expected to show improvement at 10:00 a.m. Eastern, and we get minutes to the Federal Open Market Committee's December 11-12 policy meeting at 2:00 p.m. In earnings action, Texas Industries (TXI) is due to report results.

Alliant Energy (LNT): The electric utility is cut to Market Perform from Outperform with Wells Fargo, which now sees fair value in a range of $46 to $47.

Brown-Forman (BF.B): Morgan Stanley moves the spirits stock, maker of Jack Daniels and Southern Comfort, to Underweight from Equal-Weight.

Hovnanian Enterprises (HOV): The home builder, a high-flyer in 2012 with a gain of 382.76%, is now Neutral from Buy at UBS.

LinkedIn (LNKD): LNKD gets lowered to Equal Weight from Overweight by Barclays.

Retailers: Jefferies gives Hold-from-Buy ratings reductions to American Eagle Outfitters (NYSE:AEO) (price target taken to $22 from $26), Ann Inc. (NYSE:ANN) - formerly known as Ann Taylor - ($35 from $40), and Target Corp. (NYSE:TGT) ($59 from $74.) Skullcandy (NASDAQ:SKUL) fares worst of all, lowered two notches to Underperform from Buy amid issues over promotional pressures and rising competition in the headphone market. Its target is slashed to $6 from $17.

Retailers: Ascena Retail Group (ASNA), formerly known as Dress Barn, and Ross Stores (ROST) are each now Neutral from Buy at Citigroup. Its reduced respective price objectives are $20 and $60.

Starwood Hotels & Resorts (HOT): Shares are taken to Neutral from Buy at SunTrust on account of an excessive relative valuation. Its $65 target price is intact.

Tilly's Inc. (TLYS): Troubled by both industry maturation and increased competition form Amazon (AMZN), Piper Jaffray takes the name to Neutral from Overweight. The target is also trimmed, by $3 to $13.

WellPoint (WLP): Potential margin pressure is among the reasons Credit Suisse cuts the company to Neutral from Outperform. Its price target is $65.

(See also: Stock Upgrades: Bowling Giant Brunswick Out of the Gutter and Looking at the Stars and New Stock Coverage: For 2013, Get Into the Habit of Buying Abbott.)
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