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Upgrades & Downgrades: GOL Airlines Set to Score Good Gains


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

Four years to the day after a hitherto unheralded history major gave the markets an almighty fright on Halloween, further proof that the discipline she studied in college rhymes rather than repeats. In 2007 concerns centered merely on company, not country, debt; how innocent such an era now appears after a session in which stocks slumped on Greece's unexpected call for a referendum, Italian bond yields increasing to infinity, and Spain reporting quarterly growth slowed to a standstill. Still, October overall saw the S&P 500 Index surge 10.8%, bouncing back from bear market territory only weeks earlier to post its best month since December 1991. (The very month, incidentally, that the Maastricht Treaty set the stage for European integration and unleashed so much premature euphoria; investors who forget history will indeed be doomed to repeat it.) Among stocks in focus Arcelor Mittal (MT), headed by Europe's richest man, fell 5.35% even after an upbeat analyst initiation. Of course, the fact that Europe's richest man was born - like Earth's 7 billionth citizen yesterday, on the Day of the Dead - in India and not Europe only adds insult to the continent's considerable injuries.

MF Global (MF) slid 16.08%, filing for bankruptcy after making bad bets on sovereign debt across the Atlantic and embarking on an ill-advised attempt to ape Goldman Sachs (GS). That didn't work out too well for Merrill Lynch either; indeed even Goldman, its 5.45% decline concluding a month in which the firm announced a loss of $428 million, now needs to learn to be little less like Goldman. On the bright side a newly liberated ITT Corp (ITT) bucked a dire day to gain 1.92%, demonstrating that breaking up ain't hard to do - although Kim Kardashian could have already told us as much. Ralph Lauren (RL) hit an all-time high and, on the single sweetest day of the year, his daughter Dylan did boffo business at her candy bar. Elsewhere an analyst named Mr. Munster - a spooky Halloween name if ever there was one - sees more good news ahead for Apple Inc (AAPL). And Monster World Wide (MWW) slumped 6.39% on a decidedly scary day. This morning in economics, October's ISM Manufacturing Index and September construction spending are each released at 10:00 a.m. Eastern. It's another full day for third-quarter earnings, with Archer Daniels Midland (ADM), Baker Hughes (BHI), Credit Suisse (CS), Dunkin' Brands (DNKN), Emerson Electric (EMR), FirstEnergy (FE), Pfizer (PFE), Hertz Global Holdings (HTZ), and Watson Pharmaceuticals (WPI) all due to report results.


Gold stocks: Anglogold (AU) and Harmony Gold (HMY) are both begun with a Buy at Deutsche Bank.

Aruba Networks (ARUN): Deutsche Bank has a new Hold on ARUN.

Anthera Pharmaceuticals (ANTH): ANTH is begun with a Buy at Buy at Deutsche Bank.

ARM Holdings (ARMH): Shares are assigned a Hold at Canaccord Genuity.

Latin American airlines: Brazil's GOL Linhas Areas Inteligentes S.A. (GOL) is begun with an Overweight at Barclays, which establishes Underweights on compatriot TAM S.A. (TAM) and Chile's Lan Airlines S.A. (LFL).

Xylem (XYL): The stock is a new Neutral at brokers Robert W. Baird after its tax-free spin off from ITT Corp (ITT). Over the long term, they believe it is uniquely positioned as a pure-play water company focused on infrastructure and usage applications.


Citigroup (C): Shares get an Outperform-from-Neutral upgrade at Credit Suisse.

Amerigroup (AGP): AGP is now Neutral from Underperform by Bank of America-Merrill Lynch.

Electronics stocks: LG Display (LPL) and AU Optronics (AUO) are each upgraded to Overweight from Underweight at HSBC Securities, which says LCD TV demand elasticity is likely to be restored.

Transcept Pharmaceuticals (TSPT): TSPT is taken to Buy from Hold at MLV Capital, which establishes a price target of $21. They note while the stock has made a huge move from its July lows, additional upside is expected upon likely approval of Intermezzo by the end of this month.

Post Properties (PPS): JPMorgan raises its recommendation on the REIT to Neutral from Underweight.


Avon Products (AVP): The beleaguered cosmetics company is downgraded to Hold from Buy at Jefferies.

Accenture (ACN): Shares in the consulting giant get reduced to Equal Weight from Overweight by Barclays.

Alcatel-Lucent (ALU): The Paris-based firm is slumping before the bell after being moved to Neutral from Overweight at JPMorgan.

BNP Paribas: Also in France, shares of the bank - which trades here in the States under stock symbol BNPQY - are slumping this morning amid Greek woes and after being cut to Underperform from Market Perform at Keefe Bruyette.

Barclays PLC (BCS): The British bank is now Neutral from Buy at UBS.

Telefonica S.A.(TEF): Staying in Europe, Deutsche Bank takes the Spanish telecom titan to old from Buy.

Choice Hotels (CHH): Nomura checks out of CHH, its rating now Neutral from Buy.

Legg Mason (LM): LM is lowered to Sell from Neutral with a $22 target at Ticonderoga, which says low rates appear to be taking their toll on active fixed income flows.

NVIDIA (NVDA): NVDA is now Hold from Buy at Canaccord Genuity.

OSI Systems (OSIS): Imperial Capital cuts OSIS to In Line from Outperform with a price objective of $46. There are concerns over current valuation, with the brokerage believing potential stock price volatility could provide an attractive subsequent entry point at lower levels.

ENI S.p.A. (E): The Italian energy outfit is downgraded to Hold from Buy at brokerage Collins Stewart.

Volcano (VOLC): Shares are moved to Market Perform from Outperform at JMP Securities.

Tanger Factory Outlet (SKT): Jefferies takes SKT to Hold from Buy.

Canadian Pacific (CP): CP is cut to Market Perform from Outperform by BMO Capital.

Silver stocks: Hecla Mining (HL) and Silver Standard (SSRI) are both moved to Market Perform from Outperform by BMO Capital.

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