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Upgrades & Downgrades: Whole Foods Set to Plump Up


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

We now know why the letter "G" mysteriously went walkabout at the recent World Scrabble Championships: An astute investor was holding it hostage, knowing it could command a sizable ransom in the current climate. On Monday "G" was for Germany. Yesterday, it stood for the Guardian newspaper - with an honorable mention for Goldman Sachs (GS). (Today will it be all about Greece? One can only guess.) Stocks surged late after the British broadsheet reported that a Franco-Teutonic agreement to address Europe's debt debacle is imminent. Paced by an 11.22% increase in PulteGroup (PHM), home builders enjoyed their best single session gains since the equity market bottomed in March 2009; clearly those optimistic on the group have yet to see Dream House. Better than expected earnings saw Bank of America (BAC) jump 10.12% to top the Dow on the big board's heaviest volume. Though the firm reported a 71% reduction in trading revenue, its Merrill Lynch unit again saved the day. Its capture of the Thundering Herd remains controversial some three years on but Taylor Swift correctly expressed the views of the bank's senior management to the moneymaking division in insisting "You Belong With Me!", especially since her father happens to be stockbroker with Mother Merrill.

Rival Goldman Sachs gained 5.52% despite posting a $428 million third quarter loss on the day their downgrade of Hasbro (HAS) demonstrated a welcome rejection of Wall Street's whoever-dies-with-the-most-toys-wins ethos. (That said, the demonstrators currently occupying lower Manhattan may not see the humor in this cartoon.) And Starbucks (SBUX), not content with recently subjecting an innocent brunette to an unfortunate roasting, proved it is an equal opportunity offender by proposing to do the same to blondes. Today in economics, the Fed releases its beige book of regional economic conditions at 2:00 p.m. Eastern. On the corporate front, hump day of the first full week for earnings season sees American Express (AXP), BlackRock (BX), British Sky Broadcasting, eBay Inc (EBAY), Etrade (ETFC), Morgan Stanley (MS), and Wynn Resorts (WYNN) all due to report results.


LinkedIn (LNKD): The recent IPO is initiated with a Neutral at Lazard. For related content, see Twitter Valued at $8 Billion in Latest Funding Round.

Anadarko Petroleum (APC): APC is assigned an Overweight at Morgan Stanley.

Steel stocks: Wells Fago starts Market Performs on AK Steel (AKS), Steel Dynamics (STLD) and United States Steel (X). It has a new Outperform on Nucor (NUE).

Retailers: Citigroup begins Buys on Vera Bradley Inc (VRA) ($51 price target), Steven Madden Ltd. (SHOO) ($41), and Fossil (FOSL).

Sotheby's (BID): The auctioneer is a new Neutral at Citigroup.

Pharmacy stocks: CVS Caremark (CVS) is begun with a Buy at Mizuho, which has a new Neutral on Walgreen (WAG).

Chipotle Mexican Grill (CMG): CMG is a new Neutral at UBS.

Metals & Mining: Sterne Agee has Buys on Alpha Natural Resources (ANR), Consol Energy (CNX), James River (JRCC), and Peabody Energy (BTU) ($60 target). It assigns new Neutrals on Arch Coal (ACI) and Patriot Coal (PCX), while Walter Energy (WLT) is an Underperform. See also Are Gold Miners on a Roll Right Now?


Coca-Cola (KO): The Dow component is upgraded to Overweight from Neutral at HSBC Securities.

Whole Foods (WFM): The stock gets boosted to Buy from Hold at Jefferies.

Zale (ZLC): The diamond seller is now Buy from Neutral at Bank of America-Merrill Lynch.

Las Vegas Sands (LVS): LVS is added to the Key Call List at UBS.

Citrix Systems (CTXS): CTXS is now Buy from Hold with an $85 price objective at Needham, which views it as more resilient than other vendors in the current macro environment due to the strategic nature of their technologies.

Auxilium Pharmaceuticals (AUXL): AUXL is upgraded to Buy from Neutral at Collins Stewart, which sets target price at $23 as the firm views the risk/reward for Xiaflex in Peyronie's disease favorable at current levels.

UniFirst (UNF): The stock is upgraded to Outperform from Neutral at brokers Robert W. Baird, which takes its target price up to $60 from $57.

Retailers: Ross Stores (RST) and TJX Cos (TJX) are both hoisted to Buy from Hold at ISI Group.


Goldman Sachs: GS gets downgraded to Outperform from Buy at Credit Agricole.

Alcatel-Lucent (ALU): The French firm is downgraded to Underperform at Jefferies.

Juniper Networks (JNPR): JNPR is cut to Market Perform from Outperform with Wells Fargo.

Akzo Nobel N.V.: The pharma stock is reduced to Hold from Buy at the Royal Bank of Scotland.

AmeriGas Partners (APU): APU is downgraded to Sell from Neutral at Citigroup.

Oil drillers: Atwood Oceanics (ATW) is downgraded to Underweight from Overweight at Morgan Stanley, which reduces Rowan Cos (RDC) to Underweight from Equal Weight.

CGGVeritas (CGV): The stock is moved to Equal Weight from Overweight at Morgan Stanley.

American Public Education (APEI): APEI is now Neutral from Buy at Sterne Agee.

Range Resources (RRC): RRC is reduced to Sell from Hold at Canaccord Genuity.

Hospira (HSP): The company is downgraded to Hold from Buy at Capstone.

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