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Upgrades & Downgrades: Tempur-Pedic Has More Fun in Bed


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

Dow Industrials ($DJI) gained 1.37%, rising in four of five sessions to close just shy of a six-week peak after eurozone officials agreed to tighter fiscal controls at their summit in Brussels. The initial reaction of investors was ebullient although Germany, which was still fighting the Second World War as of earlier this month, will know better than most that messy conflicts rarely lend themselves to quick fixes. Twenty years to the day after the Maastricht Treaty called for the continent to limit its budget deficits to certain percentages, its member countries essentially agreed to do exactly the same thing once more, though this time with feeling. Twenty-six of 27 EU nations supported the accord, leaving only Britain's David Cameron to enjoy the sort of splendid isolation often taken as a badge of honor by his predecessor as Conservative Prime Minister, Margaret Thatcher. (The Iron Lady certainly can't come back quick enough for Hollywood, which just had its worst weekend in three years.)

Maggie's fellow Cold Warrior also enjoyed retrospective glory. General Electric (GE), closely associated with Ronald Reagan, was the best of the blue chips, advancing 4.66% on a dividend increase, and International Business Machines (IBM), born like Ronnie in 1911, celebrated its centenary in some style by hitting the highest level in its history on Wednesday. The Gipper is clearly still the 'Teflon president,' notwithstanding that Dupont (DD) - inventor of the polymer - fell 4.21% on the week. Lazy assumptions were upended elsewhere. Apple's (AAPL) supposedly unstoppable and newspaper-killing iPad was shown to have feet of clay and newspaper owner Gannett (GCI) surged 12% to top the entire S&P 500 Index. In an up market, yoga apparel darling Lululemon (LULU) ended down 3.8%; good thing practitioners of the discipline tend to be hippie types who have no interest in anything as grubby as money. And scientists discovered the biggest black holes ever. Maybe that's where MF Global's (MFGLQ.PK) missing millions went. No top-tier economic data out today but Biglari Holdings (BH) and Enzo Biochem (ENZ) are both due to announce earnings.


Beam, Inc (BEAM): Nomura rolls out Reduce-rated coverage on the recent alcohol spin-off, whose brands also include Maker's Mark, Courvoisier, and Skinnygirl.

Golden Minerals (AUMN): Shares are initiated at an Outperform by Rodman & Renshaw, which sets a $13.63 price target on its belief that the company could produce more than seven million ounces of silver annually by 2016.

Insurance stocks: Barclays begins Overweights on both Torchmark (TMK) and Reinsurance Group of America (RGA). It assigns Equal Weights on Protective Life (PL) and Symetra Financial (SYA).

CIT Group (CIT): The financial firm is a fresh Buy at BTIG.

El Paso Pipeline Partners (EPB): JPMorgan picks up EPB at an Overweight.

Breitburn Energy (BBEP): Bank of America-Merrill Lynch launches Buy rated coverage on BBEP.

Metabolix (MBLX): Shares are a new Neutral at JPMorgan.

Hallador Energy (HNRG): Dahlman Rose has a Hold on HNRG. Though the Illinois Basin coal property has promise, the broker believes shares are fairly valued at current levels.

First Connecticut Bancorp (FBNX): Sterne Agee starts the stock at a Buy and sets a $14.50 target price.


Boeing (BA): The Dow component gets an Overweight-from-Equal Weight increase at Morgan Stanley.

Bally Technologies (BYI): BYI is taken to Overweight from Neutral at JPMorgan.

Altera (ALTR): BMO Capital boosts the semiconductor stock to Outperform from Market Perform. Also read Texas Instruments, Altera, DuPont: Harbingers of Doom?

MetroPCS (PCS): Credit Suisse moves PCS to Outperform from Neutral.

Tempur-Pedic (TPX): Oppenheimer adjusts its rating on the adjustable mattress maker, taking it up to Outperform from Perform and establishing a price objective of $70. They believe the recent share price pullback provides an attractive entry point for investors. Recent channel checks and a 2014 scenario valuation analysts also augur well for the stock.

Roche Holding (RHHBY): The pharmaceuticals firm gets boosted by both compatriot Credit Suisse (Outperform from Neutral) and Sanford Bernstein (Outperform from Market Perform).

Watson Pharmceuticals (WPI): Staying in the sector, WPI is upgraded to Buy from Outperform at Credit Agricole.

Edwards Lifesciences (EW): Canaccord Genuity lifts the stock to Buy from Hold.

AXIS Capital (AXS): AXS is increased to Outperform from Market Perform at Keefe Bruyette.

EZchip (EZCH): Auriga raises its recommendation to Buy from Hold.

Rubicon Technology (RBCN): Shares are now Neutral from Underperform at Sterne Agee.


SABMiller (SBMRY): The London-based beer behemoth is lowered to Neutral from Outperform by BNP Paribas. (CRM): Cowen & Company cuts CRM to Underperform from Neutral, sending their shares lower ahead of the opening bell.

Semiconductor stocks: Avago Technologies (AVGO) is moved to Equal Weight from Overweight at Morgan Stanley, which takes Aeroflex Holding (ARX) to Underweight from Equal Weight.

E.ON AG (EONGY): Shares of the German energy giant are falling in Frankfurt this morning after Bank of America-Merrill Lynch lowered its rating to Neutral from Buy on account of ongoing European macroeconomic uncertainty.

Statoil ASA (STO): Staying across the Atlantic, the Norwegian oil outfit gets downgraded to Neutral from Buy at Goldman Sachs.

Occidental Petroleum (OXY): Staying in the sector, OXY is now Neutral from Buy at Citigroup. For related content, please see Renewable Energy Crop Production Set to Soar in US.

PNM Resources (PNM): Shares get moved to Market Perform from Outperform with Wells Fargo.

Pinnacle Airlines (PNCL): Dahlman Rose downgrades the small cap stock to Sell from Hold.

Homebuilders: Toll Brothers (TOL): Keybanc takes TOL to Hold from Buy due to valuation. While positives include its gross margin strategy, low fixed costs, and effective capital deployment, the broker believes patience is warranted at current prices. Valuation concerns are also behind its identical Hold-from-Buy cut of rival Lennar (LEN). Also read Long Island Housing Markets Are a Disaster Waiting to Happen.

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