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Upgrades & Downgrades: Is Bed Bath & Beyond a Nightmare or an Attractive Sleeper Stock?


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

Amid bear hugs and bear gifts (the latter thankfully borne by Germans, not Greeks) the S&P 500 Index moved in on its biggest monthly gain since the big bear market of 1987. Scratch that - since the big bear market of 1974. If such an overwhelmingly upbeat reaction to a European debt deal that still lacks a multitude of devilish details strikes several market skeptics as a bunch of bull - and fertilizer stocks including Agrium (AGU), boosted by an upbeat analyst initiation, appropriately outperformed even the Dow yesterday - let's at least enjoy the fun while it lasts. Stocks surged after the continent agreed on a bailout fund, bank recapitalization, and Greek haircut. The latter should surely appease Occupy Wall Street protesters, although unlike their own complementary trims, this one is highly unlikely to be free for anyone. Since downtown demonstrators have shown an unexpected desire to put their money where their mouth is, the 10.72% jump in shares of Dentsply (XRAY) must also have met with their approval, even if President Obama was left speechless at the stock price surge.

Avon (AVP) was one notable laggard on a day Europe attempted to put lipstick on its PIIGS, a 17.47% slide propping up the entire S&P 500 amid iffy earnings and an SEC subpoena. A tough day then for the cosmetics company though the gender wars are officially over, and women won. While the two dumbest guys in history are alas back on our screens as of last night, it's a fine time to be female. Following hard on the (high) heels of International Business Machines (IBM) selecting its first ever CEO from the fair sex, the "Grey Lady" known as New York Times Company (NYT) surged some 7.64% yesterday. Today completes the hat trick, with a legendary lassie celebrating her 125th birthday looking better than ever. This morning in economics, the University of Michigan's final figure for October consumer confidence is expected to show a slight uptick at 9:55am Eastern. Peak earnings week concludes with Arch Coal Inc (ACI), Biogen Idec (BIIB),Chevron (CVX), Lear Corp (LEA), Newmont Mining (NEM), Merck (MRK), and Weyerhaeuser (WY) all due to report results.


Soft drink stocks: Key Dow component Coca-Cola (KO) is begun with a Buy at Deutsche Bank, which assigns an identical rating on arch rival PepsiCo (PEP) and has a Hold on Dr Pepper Snapple (DPS).

Bed Bath & Beyond (BBBY): Saying it is both a compelling way to gain exposure to the U.S. consumer and also somewhat underappreciated by the investment community, brokerage Williams Capital begins BBBY with an Outperform rating and assigns it a price objective of $77. Not so fast, says Morgan Stanley, which starts BBBY at a much more underwhelming Underweight.

Lowe's (LOW): Morgan Stanley also launches an Underweight on the home improvement outfit.

RadioShack (RSH): RSH is resumed at an Overweight with Morgan Stanley.

Retailers: Macy's (M): The department store outfit is established with a Buy at Nomura, which has new Neutrals on J.C. Penney (JCP), Nordstrom (JWN) and Kohl's (KSS). See also Retail Sector Technical Breakdown and Report.

Fossil (FOSL): A new lease on life for FOSL, begun with a Buy at Bank of America-Merrill Lynch.

Genpact (G): Kaufman Brothers begins shares with a Buy and sets a $19 price target.

Syntel (SYNT): Kaufman has a Hold and $52 target on SYNT.


Barclays PLC (BCS): The British bank gets an Overweight-from-Neutral boost at JPMorgan.

Eli Lilly (LLY): The pharmaceutical firm is upgraded to Outperform from Market Perform at First Global.

Whole Foods (WFM): The grocery giant gets lifted to Neutral from Underperform at Credit Suisse.

Sprint Nextel (S): Macquarie moves the stock to Outperform from Neutral, sending shares up before the bell.

Panasonic (PC): The Japanese consumer electronics giant is upgraded to Outperform from Neutral at Credit Suisse.

Advanced Micro Devices (AMD): Wells Fargo raises its AMD recommendation to Outperform from Market Perform.

Occidental Petroleum (OXY): OXY is increased to Outperform from Neutral at Credit Suisse.

Aixtron (AIXG): AIXG is increased to Reduce from Sell at WestLB.

Clayton Williams (CWEI): The energy outfit gets hoisted to Buy from Hold with Wunderlich after its third quarter results beat Street expectations due to good gains in both volume and pricing.


Bristol-Myers (BMY): The drug company is downgraded by an unusual 180 degrees, to Underperform from Outperform at Credit Suisse.

Con Edison (ED): The utility giant gets cut to Underperform from Hold at Jefferies.

Intuit (INTU): Jefferies takes the TurboTax owner to Hold from Buy.

Fossil (FOSL): Two differing views on FOSL today, with Benchmark Company cutting it to Hold from Buy on account of valuation concerns after yesterday's 8.76% increase in the shares.

Time Warner Cable (TWC): TWC is taken to Market Perform from Outperform with Wells Fargo.

Virgin Media (VMED): Goldman Sachs removes the stock from its Pan Europe Conviction Buy List.

MetroPCS (PCS): Bank of America-Merrill Lynch lowers the telecom stock all the way to Underperform from Buy.

Goodrich (GR): GR gets lowered to Market Perform from Outperform at Wells Fargo.

Iron Mountain (IRM): The document storage stock is downgraded to Hold from Buy at Stifel Nicolaus, which says core operations of the business are not projected to improve nearly as much as they expected in 2012.

Peugot SA: The French car firm, which trades here in the States under stock symbol PEUGY, is reduces to Hold from Buy at the Royal Bank of Scotland.

Dassault Systems (DASTY): Shares are now Neutral from Buy at UBS.

Industrial stocks: McDermott International (MDR) and Dresser-Rand (DRC) are each moved to Equal Weight from Overweight at Morgan Stanley.

FMC Technologies, Inc. (FTI): Morgan Stanley takes FTI to Underweight from Equal Weight.

PMC-Sierra (PMCS): PMCS is now Neutral from Overweight at JPMorgan.

Community Health (CYH): Shares are moved to Market Perform from Outperform with Wells Fargo.

Nanometrics (NANO): NANO is now Neutral from Overweight at Piper Jaffray.

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No positions in stocks mentioned.
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