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Stock Downgrades: Time to Run From American Express?


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

Markets and mercury are both heating up, with Dow Industrials (^DJI) adding on another 0.40% to start 2013 with its second straight weekly increase. An American Express (AXP) survey showed 21% of Americans hope to win the lottery, but the exhumation of a jackpot winner suggests you should be careful what you wish for. Herbalife (HLF) jumped 8.2%. It is headquartered in the Cayman Islands, where Mitt keeps all his money, but give the guy a break - he suddenly finds himself playing poor relation to Al Gore. Trapper Keeper owner ACCO Brands (ACCO) surged 6.41% on Friday amid signs President Obama may belatedly take the advice of his vanquished foe and order up binders full of women. Elsewhere Apollo Group (APOL), which runs Phoenix University, imploded another 11.71% after posting the S&P 500's (^GSPC) single poorest performance last year. Investors clearly have a big beef with it, but the founder of Hamburger University is already much missed.

Today in economics, November 2012 business inventories are expected to slip slightly from the previous month's pace at 10:00 a.m. Eastern. The first full week of fourth quarter earnings season starts with announcements expected out of Consolidated Edison (ED), Linear Technology (LLTC), Majesco Entertainment (COOL), PPG Industries (PPG), and Rocky Mountain Chocolate Factory (RMCF).

American Express (AXP): Goldman Sachs downgrades the key Dow (^DJI) component to Neutral from Buy due to valuation issues and limited revenue growth. Its $65 price objective remains intact.

ARM Holdings (ARMH): Shares are now Neutral from Overweight at Piper Jaffray.

ArQule (ARQL): The small cap gets cut to Hold from Buy at MLV & Co, which takes its target price to $2.25 from $4.00. Results of a randomized, double-blind Phase II trial of tivantinib for the treatment of refractory colorectal cancer were not the success that had been hoped for.

AXA (PINK:AXAHY): Barclays reduces its rating on the French insurance outfit to Underweight from Equal Weight.

EMC Corporation (EMC): EMC is now Neutral from Overweight at JPMorgan.

Huntsman (HUN): Wells Fargo lowers the chemical company to Market Perform from Outperfom.

Infosys (INFY): Shares, upgraded elsewhere today, are reduced to Underperform from Market Perform by Sanford Bernstein.

International Business Machines (IBM): The Dow member is moved to Neutral from Overweight at JPMorgan, which cites limited upside potential and a relatively anemic revenue growth profile. Its price objective is trimmed to $197 from $215.

JDS Uniphase (JDSU): The tech outfit is lower before the bell after getting downgraded to Neutral from Buy at Goldman Sachs, whose target is $14.

LVMH Moët Hennessy Louis Vuitton (PINK:LVMUY): Deutsche Bank lowers the French luxury goods giant to Hold from Buy.

Maxim Integrated (MXIM): MXIM gets moved to Neutral from Outperform at Credit Suisse.

Nokia (NOK): The Finish firm, whose shares have surged at the start of 2013, is now Underweight from Equal Weight at Barclays.

Rush Enterprises (RUSHA): Shares are taken to Hold from Buy with a new $23 price objective at Wunderlich, which cites uncertainty surrounding the company's Class 8 retail sales.

Scripps Networks Interactive (SNI): SNI gets downgraded to Hold from Buy at Deutsche Bank.

Signet Jewelers (SIG): JPMorgan moves the stock, which touched all-time highs last week, to Neutral from Overweight.

SunPower (SPWR): Troubled by both valuation issues and balance sheet concerns, Crédit Agricole slashes the stock to Sell from Underperform.

Telecom Stocks: Sprint Nextel (S) and Dow stock Verizon (VZ) are each now Neutral from Buy at UBS, which sets respective price objectives of $6 and $44 .

Vera Bradley Inc. (VRA): The fashion firm is lowered to Neutral from Buy at Lazard.

Wells Fargo (WFC): Oppenheimer downgrades the financial firm to Perform from Outperform following Friday's earnings announcement.

Xilinx (XLNX): Credit Suisse cuts the semiconductor stock to Outperform from Neutral.

Zimmer (ZMH): The medical device maker gets moved to Neutral from Buy at Lazard.

(See also: Stock Upgrades: Facebook Finds Another Friend and New Stock Coverage: High Fives for Rock-Tenn.)
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