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Upgrades & Downgrades: Sherwin-Williams Not Ready to Paint the Town Red


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

Many more of these Wall Street rallies and those Wall Street rallies will soon be history. The Dow closed up by triple digits, finishing another volatile trading day comfortably in the green amid increased investor optimism on both sides of the Atlantic. Though she sadly left us 24 hours earlier, word has it Germany's clairvoyant cross-eyed opossum accurately predicted her country's parliament would approve the strengthening of a bailout fund by a 523 to 85 vote margin. This, allied to an upward revision in Q2 GDP here in the U.S. and initial unemployment claims falling to a five-month low, acted as upward catalysts for equities. Let's not be overly optimistic however; many a struggling single mother of eight remains without work in this country. Financials fared best, Bank of America (BAC) advancing 3.08% to $6.35. (Which quickly rises to $11.35 for the privilege of using your own money to purchase its shares.) Massachusetts-based laundry operator Mac-Gray (TUC) gained 5.97% on word it has been picked to solve the mystery of some missing Red Sox.

Target (TGT), a rare success story this quarter, rose again. Michele Obama might be a better stock-picker than her BlackBerry-addict husband, who saw Research in Motion (RIMM) fall 3.37% to near a new low in an underperforming Nasdaq market. Other decliners included Green Mountain Coffee Roasters (GMCR), which didn't get the memo about it being National Coffee Day, and slid 7.21%. And Netflix (NFLX) tumbled 10.97% to post the second poorest performance in the S&P 500. Investors obviously feel that, where Europe is concerned, we have seen this movie before. Last month and last winter and last year. For some strange reason, it never lives up to the trailer. No top-tier corporate earnings out on a day the third quarter comes to a close. This morning in economics, analysts anticipate a slight slippage in September's Chicago Purchasing Managers Index at 9:45 a.m. Eastern. Meanwhile the University of Michigan's final figure for consumer confidence this month is expected to be essentially unchanged.


Dow Chemical (DOW): DOW is initiated with a Hold at Jefferies.

Sherwin-Williams (SHW): The painting company is a Hold at KeyBanc Capital, which believes North American new construction and housing turnover are likely to remain relatively depressed through 2012.

Valspar (VAL): The shares are also a new Hold at KeyBanc Capital.

Spectrum Pharmaceuticals (SPPI): SPPI is begun with a Buy recommendation at Auriga, which assigns it a price objective of $11.50 amid optimism for their two fast-growing cancer drugs on the market, Fusilev and Zevalin.

Drug stocks: Staying in the sector, DepoMed (DEPO) is initiated with a Buy ($10 target price) at Auriga, which also has a Buy rating ($55 target) on Jazz Pharmaceuticals (JAZZ) and starts Salix Pharmaceuticals (SLXP) at a Hold ($30 target price.)

Semiconductor capital equipment stocks:
Piper Jaffray picks up the sector. Its Overweights include ASML (ASML), Micron Technology (MU) ($8 target), Applied Materials (AMAT) ($15), Lam Research (LRCX) ($46), and SanDisk (SNDK) ($58.) The brokerage has a new Neutral and $7 target price on MEMC Electronic Materials (WFR).

Air Lease (AL): Citigroup launches a Buy on AL.

Koppers Holdings (KOP): KOP is covered with a Buy at Janney Montgomery Scott.


Edison International (EIX): Saying the utility is set for attractive growth, Wunderlich gives a Buy-from-Hold hoist to EIX. It also takes its target up by $4 to $43.

Marathon Oil
(MRO): MRO is moved to Hold from Sell at The Benchmark Company, which sets a $23 target. Catalysts include a more favorable valuation.

Glimcher Realty
(GRT): The stock is now Buy from Neutral at Bank of America-Merrill Lynch.

Ceva (CEVA): Shares are boosted to Buy from Hold with a $31 target at Benchmark.

Norsk Hydro: NHYDY is upgraded to Hold from Sell at Citigroup.

Asian airlines: China Eastern Airlines (CEA) is upgraded to Neutral from Underweight at HSBC Securities, which raises China Southern Airlines (ZNH) to Overweight from Neutral.

Dunkin' Brands
(DNKN): The recent IPO is assigned a Hold at Argus. While the brokerage expects it to benefit from a highly profitable franchise business, shares are trading at a steep projected 2012 P/E of 23 times. This compares unfavorably with competitors including McDonald's (MCD) (17.0) and Starbucks (SBUX) (19.8.)

Ryanair (RYAAY): The Irish low-cost carrier is raised to Outperform from Market Perform at Raymond James.


Altera (ALTR): ALTR is downgraded to Hold from Buy at Auriga, which takes its target down to $37 from $42. Their channel checks suggest that inventory correction and weaker orders have continued even after ALTR's mid-quarter update.

C-Cube Micro (CUBE): CUBE is cut by an unusual 180 degrees, to Underperform from Outperform at FBR Capital. The price objective is now $8, down from $12.50.

Societe Generale SA: Shares, which trade in America under stock symbol SCGLY, are slumping in Paris this morning after UBS downgraded the French bank to Neutral from Buy as it is moving to a "stressed" valuation scenario.

Cosan (CZZ): CZZ is cut to Equal Weight from Overweight at Morgan Stanley.

(ITRI): The stock is moved to Underperform from Neutral at Bank of America-Merrill Lynch.

Seadrill Ltd (SDRL): SDRL is lowered to Sector Perform from Outperform at RBC Capital.

Simcere Pharmaceuticals
(SCR): The stock gets downgraded to Perform from Outperform at Oppenheimer, which says near-term headwinds will persist.
No positions in stocks mentioned.
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