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Upgrades & Downgrades: DuPont Has Teflon Touch


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

Stocks rose for a third session in four, and though the gains were slim and volume anemic, it was enough to send the S&P 500 Index back into the black for 2011. A volatile day ended on an upbeat note after outgoing European Central Bank member Jürgen Stark said the continent's debt debacle should be overcome in "two years at the latest" while speaking in Lucerne. This made it easily the most startling statement from a Big Wig in Switzerland since Bill Gates stood on the ski slopes of Davos in 2004 and similarly assured us "spam will be solved" within 24 months. The less said about that one the better, but since Stark is about to say sayonara to the ECB, he presumably won't be punished should the prediction not pan out. Greece's prime minister called it quits but the world's focus is now firmly on Italy, where the 10-year bond hit a new high of 6.679%. While investor attention turns from the land of Papandreou to a country famous for its mamma's boys, the Wall Street Journal reported a record 18.6% of young men in America are choosing to ride out the recession at home with their parents. (Mock these Peter Pans at your peril; a certain Mr. Jobs found gainful employment only after adopting an identical approach.) On the day 81-year-old Warren Buffett saw each share of his Berkshire Hathaway (BRK-A) fall $191, new data showed the wealth gap between young and old is at an all-time high. A statistic the Census Bureau first began measuring in 1984, the year callow youth Mark Elliot Zuckerberg - net worth $17.5 billion - was born.

On the anniversary of the Bolshevik revolution, American Dental Partners (ADPI) surged 79.00% to top the Nasdaq in a fitting tribute to Lenin, whose incisor just fetched a startling sum at auction. (Sorry, wrong Lennon.) Meanwhile Macy's (M), where Russian covert agents go for a bit of conspicuous consumption, gained 3.16% to a fresh 52-week peak ahead of earnings. Decliners included translation service Rosetta Stone (RST), which imploded 8.81%. (Good thing one only needs to know body language, not Latin, to understand Silvio Berlusconi's views on austerity.) On the day Google's (GOOG) doodle honored the coiner of "radioactivity" and a two-time Nobel Prize winner, Cameco (CCJ) - the world's biggest uranium producer - dropped 6.25%. And, in another indication there are no experts, First Solar (FSLR) fell 3.73% within hours of another Nobel Prize winner lauding solar power. No top-tier macro data out this morning in what is a quite quiet week in economics but earnings season is still with us. Companies due to report results today include Activision Blizzard (ATVI), E.W. Scripps (SSP), Fossil (FOSL), Hecla Mining (HL), Pan American Silver (PAAS), Rockwell Automation (ROK), Scotts Miracle-Gro (SMG), Société Génerale, Steinway Musical Instruments (LVB), Take-Two Interactive Software (TTWO), Toyota Motor (TM), and Vodafone (VOD).


Industrial stocks: Dow member DuPont (DD) is initiated with an Overweight at Piper Jaffray, which has a new Neutral on Deere (DE). The respective price objectives are $62 and $87.

Trimble Navigation (TRMB): Janney Montgomery Scott begins Buy rated coverage on TRMB.

Financial stocks: Morgan Stanley starts AllianceBernstein (AB) and Federated Investors (FII) at Underweight, asset manager Kohlberg Kravis Roberts & Co. (KKR) at Equal Weight, and Franklin Resources (BEN) and Invesco (IVZ) at Overweight. Also read Too Big to Fail System: On Its Way Out?

Bank stocks: UBS begins Buys on City National (CNY), Comerica (CMA), Fifth Third (FITB), and KeyCorp (KEY).


Alcatel-Lucent (ALU): Shares in the French firm, downgraded elsewhere this morning, are upgraded to Market Perform from Underperform by Sanford Bernstein.

Roche Holding: Also in Europe, the pharmaceutical giant gets a Buy-from-Neutral boost by brokers Collins Stewart.

Industrial stocks: Emerson (EMR) and Honeywell (HON) are each upgraded to Buy from Neutral at Citigroup.

St. Jude Medical (STJ): The medical device maker is now Outperform from Neutral at Credit Suisse.

Chesapeake Lodging Trust (CHSP): Deutsche Bank raises its rating on the REIT to Buy from Hold, sending shares up in pre-market trading.

Rackspace (RAX): Kaufman Brothers boosts the stock to Buy from Hold and hoists its objective by $11 to $49 after impressive Q3 earnings. The company continues to enjoy a robust demand environment, helped by sequential revenue growth of approximately 7%.

YPF Sociedad Anonima (YPF) Shares of the Argentine energy outfit are sharply higher ahead of the open on a Buy-from-Neutral boost at Bank of America-Merrill Lynch.


Research In Motion (RIMM): Barclays reduces its recommendation on the BlackBerry maker to Equal Weight from Overweight.

Expedia (EXPE): Shares in the online travel outfit are trading lower before the bell after getting taken to Underweight from Equal Weight at Morgan Stanley.

Buckle (BKE): The apparel retailer is cut to Neutral from Positive at Susquehanna.

American Science & Engineering (ASEI): ASEI is downgraded to Sell from Hold with a $58 price target by The Benchmark Company, citing slowing US military demand and valuation concerns.

Alcatel-Lucent (ALU): Two distinct views on ALU today, for the telecom stock is now Neutral from Buy at Bank of America-Merrill Lynch.

European drug stocks: Sanofi-Aventis (SNY) is cut to Sell from Hold at Collins Stewart, the broker also lowering Swiss rival Novartis AG (NVS) to Hold from Buy.

Vertex Pharmaceuticals (VRTX): Staying in the sector, the pharma firm is now Neutral from Outperform at Robert W. Baird, with the brokerage slashing its target price to $33 from $62. While they remain positive on a treatment for Cystic Fibrosis, there is an air of increased uncertainty coming from company management. For related content, see Pharmasset Winning Hepatitis Drug Race.

OmniVision (OVTI): OVTI is cut to Perform from Outperform at Oppenheimer in the wake of reduced earnings guidance.

Industrial stocks: Illinois Tool Works (ITW) and Cooper Industries (CBE) are both now Neutral from Buy at Citigroup.

Pioneer Natural Resources (PXD): Shares are now Neutral from Positive at Susquehanna.

Hospitality Properties Trust (HPT): The REIT is reduced to Neutral from Buy at Janney Montgomery Scott.

Red Lion Hotels (RLH): JMP Securities moves the accommodation outfit to Market Perform from Outperform.

Alliant Techsystems (ATK): Shares are downgraded by both Suntrust (Neutral from Buy) and RBC Capital (Sector Perform from Outperform).

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