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Upgrades & Downgrades: Frontline Suffers Further Setback


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

Just in time for today's opening of The Muppets, proof that indeed it ain't easy being green. The S&P 500 and Nasdaq index each ended in the red for a fifth straight session, stocks buffeted by ongoing European anxiety and a downward revision to third-quarter Gross Domestic Product here at home. While equities are still suffering, the bond rally continues apace with Uncle Sam selling $35 billion in five-year notes at a record low yield of 0.937% as investors flee to the perceived safety of fixed income. (Or CDs, in Silvio's case.) Campbell Soup (CPB) slid 5.27%, though "No soup for you!" may actually be beneficial for both shareholders and stomachs after a study showed such canned products to be chock full of chemicals. Perfect World (PWRD), as aptly named as the "Super Committee," fell 14.50% in its worst single-day showing since the bear market bottom of March 2009. Chico's FAS (CHS), which sells to affluent women aged between 35 and 55, made stockholders poor in sinking 14.38% for the Russell 1000's worst performance, and females of a certain age didn't fare much better at Goldman Sachs (GS). Wisconsin, whose protesting teachers made waves way before Occupy Wall Street, saw hometown hero School Specialty (SCHS) tumble 26.35% to prop up the Nasdaq.

Central European Distribution Corp (CEDC), seller of Polish vodka, slumped 4.45%, even if alcohol consumption remains robust as ever among the country's Russian diplomats. Turning from drink to food, Dole (DOLE) dropped 1.00% to a new low after an analyst downgrade. (Fear not, for German soccer fans - in a display of European harmony that augurs so well for bigger battles ahead - remain admirably committed to the company's principal product.) Elsewhere, a day after Pilgrim's Pride (PPC) ended up in a down market, Mayflower Bancorp (MFLR) moved 2.49% higher; is someone trying to tell us to be grateful for small mercies ahead of tomorrow? And cosmetics leader Estee Lauder (EL) similarly bucked a bad tape by gaining 1.87%. The rugby manager recently fined 100 sows for misbehaving can at least profitably put lipstick on his pigs. This morning in economics, analysts expect an uptick in the University of Michigan's final figure for November consumer confidence at 9:55 a.m. Eastern. Standouts of a slow pre-Thanksgiving earnings day include Deere (DE), Diana Shipping (DSX), New Jersey Resources (NJR), and Yingli Green Energy (YGE).


Goldman Sachs (GS): The financial giant is a new Neutral at Macquarie.

American Axle (AXL): Citigroup picks up AXL at a Buy.

Century Aluminum (CENX): Shares are covered with a Hold at Stifel Nicolaus, which sees low aluminum prices as a headwind for earnings.

Wyndham Worldwide (WYN): Shares are begun with a Buy at Jefferies.

Finance stocks: CIT Group (CIT): CIT is initiated with a Hold at Jefferies, which begins Buy rated coverage on CapitalSource (CSE).

Ubiquiti Networks (UBNT): The wireless networking outfit is assigned a Buy at Deutsche Bank, UBS, and ThinkEquity.


JA Solar (JASO): The alternative energy play, downgraded elsewhere today, is upgraded to Market Perform from Underperform with Wells Fargo. The upgrade currently seems to be carrying more weight, with shares trading higher in the pre-market.

Medtronic (MDT): The medical device maker gets moved to Buy from Neutral at Bank of America-Merrill Lynch after reporting fiscal Q2 earnings were up 54%.

Informatica (INFA): The stock is a new Neutral at Robert W. Baird, which establishes a price objective of $50. Though the broker is encouraged by INFA's long-term prospects, valuation is full at current levels.

Veolia Environnement (VE): HSBC Securities hoists the French waste management firm to Overweight from Neutral.


Gilead Sciences (GILD): GILD gets downgraded to Hold from Buy at Argus after the announcement of a major acquisition that is expected to depress earnings growth for the next three years.

Big Lots (BIG): The discount retailer gets downgraded to Equal Weight from Overweight at Barclays.

Frontline (FRO): The shipping stock, fresh off yesterday's fall of 41.04%, is slumping further before the bell after being moved to Underperform from Market Perform this morning at FBR Capital. Major concerns include management's concession that both a restructuring and additional capital will be necessary.

Diana Containerships (DCIX): Staying in the sector, Bank of America-Merrill Lynch downgrades DCIX to Neutral from Buy.

Solar stocks: LDK Solar (LDK) and JA Solar (JASO) are each taken to Sell from Hold at ThinkEquity.

Valspar (VAL): The specialty chemical company is now Neutral from Overweight at JPMorgan.

Cubic Corp (CUB): CUB is cut to Neutral from Overweight at JPMorgan.

WGL Holdings (WGL): The gas utility gets lowered to Underperform from Neutral by Bank of America-Merrill Lynch.

ECA Marcellus Trust (ECT): Citi reduces its rating to Neutral from Buy.

Lufkin Industries (LUFK): LUFK is lowered to Neutral from Buy at Suntrust.

Resolute Forest Products (ABH): Shares are cut to Sector Perform from Outperform at RBC Capital.

The Jones Group (JNY): Shares of the apparel outfit are sharply lower ahead of the open after getting downgraded to Neutral from Buy at Lazard.

Patterson Companies (PDCO): The dental play is downgraded to Market Perform from Outperform by brokers William Blair.

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