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Upgrades & Downgrades: Checking Into Chinese Hotel Stocks


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

If it's Tuesday, this must be Belgium? With respect to the 1969 continental comedy caper, not exactly. No, if it's Tuesday 15 November or Tuesday 8 November, this must be equities advancing on Italian optimism. As opposed to Monday 14 November or Wednesday 9 November, in which case this must be equities plunging on Italian pessimism. Now, if only Mr. Market could ascertain what happens on alternate Friday's in non-leap year Februarys, we will finally have Europe all figured out. A marginally more positive tone across the Atlantic combined with encouraging data on October wholesale prices and retail sales here at home to send the S&P 500 Index higher, although volume was once again anemic and many of the gains given up going into the close. Still, in a session which saw Saks Inc. (SKS) advance 1.67% after reporting an increase in sales and coming only twenty-four hours after Tiffany (TIF) ended up 1.80% in a down market, yesterday will go down as the day 57th Street finally fought back. (Sweetie darling that would be East 57th Street and Fifth Avenue, not the Sanitation Department facility over on 650 West 57th Street where the Wall Street occupiers can pick up their possessions.) Meanwhile, Dean Foods (DF), America's largest dairy producer, dropped 1.00% in a fitting coda for the financial district's Milk Street Cafe, which had to fire 21 employees during the demonstration.

Elsewhere Apple Inc (AAPL) and Lululemon Athletica (LULU), two companies currently conjoined in a gruesome murder trial, advanced 2.52% and 3.70%, respectively. And Green Mountain Coffee Roasters (GMCR) bounced back from Monday's downgrade-related mauling with a 12.98% surge. Maybe analyst Scott Van Winkle – presumably Rip's more caffeinated cousin - was right to call the current uncertainty a "great time" to buy the stock. This morning in economics, October industrial production and capacity utilization are each out at 9:15 a.m. Eastern. On the earnings front Abercrombie & Fitch (ANF), Hot Topic (HOTT), Limited Brands (LTD), NetApp (NTAP), PetSmart (PETM), Spectrum Brand (SPB), Target (TGT), and Zoll Medical (ZOLL) all release results.


Consumer Internet sector: Raymond James rolls out Strong Buys on Active Network (ACTV) and Baidu (BIDU). It starts Outperforms on Shutterfly (SFLY), (PCLN) and MercadoLibre (MELI). The broker's Market Performs are OpenTable (OPEN), Expedia (EXPE), Ctrip (CTRP), Netflix (NFLX), and Zillow (Z). See also What the Bull Market in Digital Content Means for Consumers (Hint: Get Your Wallet Out).

Spanish banks: ING Group has a fresh Hold on Madrid-based financial firm Banco Santander (STD). They are more bullish on Basque rival Banco Bilbao Vizcaya (BBVA), beginning it at a Buy.

Chinese hotel stocks: China Lodging (HTHT) and 7 Days Group (SVN) are both begun with Buys at Deutsche Bank.

Chemical companies: Dow Chemical (DOW) is initiated with an Equal Weight at Morgan Stanley, which assigns an Overweight on LyondellBasell (LYB).

Electronics stocks: Brokerage Collins Stewart establishes Neutrals on Ingram Micro (IM), Arrow Electronics (ARW), and Avnet (AVT).

Akamai Technologies (AKAM): Shares are started at Outperform by JMP Securities.

Arthur J. Gallagher (AJG): The insurance brokerage is begun with a Hold at Deutsche Bank.

TIBCO Software (TIBX): BMO Capital begins Market Perform rated coverage and establishes a price objective of $33. Although customer checks suggest that modernizing systems to cut costs remains a top CIO priority, banking vertical trends represent a risk.

Vitamin Shoppe (VSI): VSI is a new Neutral with Wedbush.


Research In Motion (RIMM): Goldman Sachs gives the BlackBerry maker a Neutral-from-Sell boost, sending shares up before the bell.

Dick's Sporting Goods (DKS): DKS gets added to the Conviction Buy List, also at Goldman. For related content, see US Retail Sales Report Not Nearly as Bullish as It Seems.

Munich Re (MURGY): The German insurance giant is now Buy from Neutral at Nomura.

KeyCorp (KEY): Shares are moved Outperform from Market Perform at Raymond James.


Dell Inc (DELL): The computer company is cut to Sector Perform from Outperform at FBN Securities after last night's revenue miss.

Geron (GERN): The beleaguered biotech, fresh from Tuesday's 20.45% tumble, is falling further ahead of the open after being to Neutral from Overweight at JPMorgan this morning. Also read Geron Falls After Scrapping Stem Cell Program.

Tenet Healthcare (THC): Leerink Swann lowers THC to Market Perform from Outperform.

Solar Capital (SLRC): SLRC gets cut to Market Perform from Outperform with Wells Fargo.

NBT Bancorp (NBTB): Shares are now Neutral from Buy at Guggenheim.


No positions in stocks mentioned.
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