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Upgrades and Downgrades: Google Gets Good News

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

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Stocks slipped slightly to end an ebullient quarter, but neither profit taking nor window dressing came close to overturning what was the best September in equities for over seven decades. The market's historically worst month has now posted gains in six of the past seven years. Staying on the sidelines over these last four weeks proved as costly in 2010 as did a devotion to "Sell in May and go away" in 2009. Perhaps it is time to retire some of Wall Street's more clichéd wisdom, certainly so long as "the trend is your friend." Signs of economic improvement, though still fitfully slow, sent the S&P 500 Index up 8.8% during the quarter. In a week which revealed women say sorry more than men, both genders have been in an especially forgiving mood of late. Erstwhile bad boys that investors were willing to welcome back into the fold included American International Group (AIG) -- a 4.41% gainer yesterday as it looks to extricate itself from Uncle Sam early -- BP Plc (BP) -- 2.93% higher at a 16-week peak -- and Accenture (ACN), which while part of Andersen Consulting many moons ago found its audit reputation much diminished by the Enron debacle. The business services firm is up sharply in the premarket this morning after scoring an analyst upgrade.

The Big Board turned to a clown to ring its opening bell yesterday, but the year could still end in tears as a traditionally spooky October awaits. While Halloween helpfully falls on a trade-free weekend this time, our upcoming 31 days has a historical horror count which includes the infamous market meltdowns of 1929 and 1987. For now however, and rumors to the contrary notwithstanding, the market and Mr. McDonald (MCD) each appear in to be in fine health and adequately insured. Sort of.

Initiations

Internet Stocks: Raymond James rolls out Market Performs on Amazon.com (AMZN) and eBay (EBAY) while Google (GOOG) gets an Outperform. Also read Weekly Web Wrap: The March to Super Wi-Fi.

United Continental (UAL): Newly merged United Continental is initiated with a Buy at Deutsche Bank.

Perrigo (PRGO): JP Morgan picks up Perrigo at a Neutral.

Amdocs (DOX): DOX is initiated with Hold at Think Equity, which assigns it a price objective of $30.

Nuance Communications (NUAN): The stock is a new Hold, also at Think Equity, and they set it a $17 price target.

Broadcom (BRCM): BNP Paribas begins Broadcom at Underperform.

Rubicon Technology (RBCN): Citing recent weakness in LED backlighting along with increased supply, Merriman resumes Rubicon Technology at a Sell.

Symmetry Medical (SMA): SMA is begun with a Buy and $13 target by brokerage firm Duncan Williams, which says an aging population will propel increases in the volume for orthopedic related surgical procedures.

Upgrades

Accenture (ACN): ACN is to Outperform from Market Perform with Wells Fargo.

Plexus (PLXS): The stock is now Strong Buy from Buy with a $38 target at Needham.

Taseko Mines (TGB): Canaccord Genuity takes Taseko Mines to Buy from Hold.

HSBC Holdings (HBC): The bank stock is added to the Conviction Buy List at Goldman Sachs.

QLogic (QLGC): QLGC is upgraded to Neutral from Underweight at JP Morgan with a $19 target.

Downgrades

Limited Brands (LTD): The retailer gets lowered to Sell from Neutral at Goldman. For related content, see Consumers Still Unaware of Impending Doom, Part 1.

Xilinx (XLNX): Goldman also gives Xilinx a Sell-from-Neutral cut.

Rail Stocks: Wells Fargo takes Union Pacific (UNP) and Norfolk Southern (NSC) to Market Perform from Outperform.

Deere (DE): Wells Fargo also moves Deere to Market Perform from Outperform.

JA Solar (JASO): The energy stock is downgraded to Hold from Buy at Auriga U.S.A due to valuation. The broker believes however that long-term investors may still find further upside to the shares as they assign a below-average P/E of just 8x, given JASO's lack of vertical integration within the solar supply chain.

Christopher & Banks (CBK): Piper Jaffray cuts Christopher & Banks to Neutral from Overweight with a $9 target price.

FMC Corp (FMC): FMC is cut to Hold from Buy at BB&T Capital.

Solera (SLH): Needham trims Solera downgraded to Buy from Strong Buy with a $50 price objective.

Beacon Roofing Supply (BECN): Brokerage Robert W. Baird reduces its rating on Beacon Roofing Supply to Neutral from Outperform and takes its target down $3 to $16 as shingle pricing now appears to be a near-term negative.

LodgeNet (LNET): Brokerage Craig Hallum lowers LodgeNet to Accumulate from Buy.

Wright Medical (WMGI): The stock is reduced to Neutral from Outperform by Robert W. Baird as they believe downside risks exist to 2010/2011 Street consensus estimates.

SuccessFactors (SFSF): Janney Montgomery Scott moves SuccessFactors to Neutral from Buy.

Archer Daniels-Midland (ADM): The stock is downgraded to Market Perform from Outperform by BMO Capital. Netflix (NFLX) is now Negative from Neutral at Susquehanna.

Knight Transportation (KNX): KNX is now Neutral from Overweight at JP Morgan.

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No positions in stocks mentioned.
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