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Upgrades & Downgrades: Breakfast With Kellogg, Not at Tiffany's


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

The cradle of democracy wisely decided too much of it can be dangerous, sending shares up for a second straight session and helping push the S&P 500 Index back into the black for 2011. Stocks posted a stellar advance after Greece abandoned plans to put its bailout package to a referendum. This, allied to an unexpected interest rate reduction by the European Central Bank, made for a marginally less-dire-than-feared mood at the opening day of the Group of 20 Summit in Cannes. Ah Cannes, where Michael Moore, noted lover of capitalism first made his mark. (And why shouldn't he be enamored of the free enterprise system? After all it put $50 million in his pocket, which I'm pretty sure places the filmmaker among that 1% he so detests.) Among standout stocks, Dow component Kraft (KFT) rode impressive earnings, gaining 3.29% to a new 52-week peak. The company can count Angela Merkel among its fans. When not imploring her EU counterparts to adopt cheeseparing ways appropriate to these turbulent times, the German chancellor finds herself teased by the president of France for helping herself to second helpings of fromage. A continent implodes and its politicians are reduced to asking, "Who moved my cheese?"

On this side of the Atlantic American Eagle Outfitters (AEO) surged 6.61% on rising retail sales, bringing 15 minutes of fame to a company whose masterful ad campaign at the Crossroads of the World panders to the celebrity in us all. Rival Abercrombie & Fitch (ANF), employer of skimpy models, was an emperor without clothes in nose-diving 19.93% for the S&P 500's poorest performance while CBS Corp (CBS), which also knows all about wardrobe malfunctions, fell 1.72% after earnings even as the Dow rose by triple-digits. Apparel outfit Guess? (GES), whose denim look is much enamored of the Wall Street Occupiers, lost 3.10%. Elsewhere, American Tower (AMT) continued to be a cash machine, gaining 1.27% to hit the highest level in its history. May be a movie in there somewhere. Another manic earnings week wraps up with Alcatel-Lucent (ALU), Church & Dwight (CHD), Olympic Steel (ZEUS), TreeHouse Foods (THS), and Washington Post (WPO) among companies due to report results today. And, although savings are the last thing we should be depleting in this perilous economy of ours, a reminder to turn your clocks back by an hour on Sunday, when Daylight Savings ends in most of the U.S.


Internet sector: Sanford Bernstein starts Outperforms on (AMZN) and Google (GOOG), setting respective price objectives of $271 and $743. It has new Market Performs on Netflix (NFLX) ($79 price target), Yahoo (YHOO) ($17), and eBay (EBAY) ($37). See also Sad Comparison of iPhone and Android's Update History.

Oil service stocks: Weatherford International (WFT): Shares are a new Neutral at Global Hunter Securities, which establishes a price objective of $17. The broker is more bullish on rival Schlumberger (SLB), assigning an Accumulate rating and setting it an $86 target price on a belief there is good upside potential from current levels. Please read Cautious Investors May Find Hope in This Oil ETF.

Charter Communications (CHTR): Citigroup rolls out Buy rated coverage on CHTR.

QEP Resources (QEP): Deutsche Bank begins Buy rated coverage on QEP.


Kellogg (K): The cereal stock, anything but "Grrrrreat!" in sliding some 7.67% yesterday, gets a Hold-from-Underperform upgrade at Jefferies this morning.

Build-A-Bear Workshop (BBW): BBW is boosted to Outperform from Market Perform at BMO Capital.

CVS Caremark (CVS): Morgan Stanley moves CVS to Overweight from Equal Weight.

First Solar (FSLR): FSLR, downgraded elsewhere this morning, are upgraded to Buy from Neutral at Lazard, which has a $75 target.

Orbitz (OWW): The online travel outfit is now Neutral from Underweight at Piper Jaffray.

ITT Industries (ITT): ITT gets a Neutral-from-Underperform lift at Bank of America-Merrill Lynch.

Microchip (MCHP): UBS moves the shares to Buy from Neutral.

Spirit Aerosystems (SPR): Bank of America-Merrill Lynch boosts SPR to Buy from Neutral.

Turkcell (TKC): Barclays takes TKC to Equal Weight from Underweight.

Kirklands (KIRK): Piper Jaffray juices its rating on KIRK to Overweight from Neutral.

Plains All American (PAA): Wunderlich boosts the stock to Buy from Hold and takes its price objective up by $4 to $71 amid solid earnings guidance and a favorable valuation.

Cogent Communications (CCOI): Shares are upgraded to Market Perform from Underperform at FBR Capital, which takes its price target up to $13 from $10. The broker believes the stock has done a better job than most by improving its peering ratios.


Luxury retailers: Tiffany (TIF), Nordstrom (JWN), and Coach (COH) are all taken to Equal Weight from Overweight at Morgan Stanley.

Dollar Tree (DLTR): The discount retailer is downgraded to Equal Weight from Overweight at Morgan Stanley.

Chico's FAS (CHS): Double trouble for the clothing company, reduced to Neutral from Buy by both Citigroup and Suntrust.

KAR Auction Services (KAR): KAR is cut to Market Perform from Outperform by Barrington Research, which says its lack of near term catalysts outweighs a still-compelling valuation.

Kronos Worldwide (KRO): Shares are down sharply before the bell after getting downgraded to Market Perform from Outperform with Wells Fargo).

First Solar (FSLR): The alternative energy play gets downgraded to Sell from Hold at ThinkEquity.

Seattle Genetics (SGEN): SGEN is now Neutral from Overweight at Piper Jaffray. Also read Seattle Genetics Frontline Trial Plans Are Not New -- and Not a Problem, Either.

Sun Life (SLF): Shares are downgraded to Underweight from Equal Weight by Barclays.

Frontier Communications (FRT): FRT gets lowered to Neutral from Overweight at JPMorgan.

First Bancorp (FBP): Shares of the small cap are downgraded to Sell from Hold at Cantor Fitzgerald.

Medifast (MED): The stock is now Neutral from Buy at Janney Montgomery Scott.

Multi-Fineline (MFLX): Needham moves MFLX to Hold from Buy, citing the impact of recent flooding in Thailand and excess inventory from manufacturing overbuild among the negatives.

Mistras Group (MG): MG gets moved to Underperform from Neutral by Bank of America-Merrill Lynch.

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