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Upgrades & Downgrades: Dark Days for First Solar


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

When you select several starving artists to ring the opening bell at the cathedral of capitalism - standing next to a backdrop bleeding red ink and emblazoned with what, to the untrained eye, looked like a big fat "zero" - don't be surprised to see shares subsequently slump. The Dow (^DJI) dropped for a third straight day, closing at a two-week low in light trading amid yet more anxiety over Europe. That continent remains the kiss of death yet investors had no problems puckering up to Avon Products (AVP) after a CEO change and analyst upgrade sent their shares surging 5.08% to top the S&P 500 Index. Love was also in the air for Southwest Airlines (LUV), a rare gainer in a desultory session (though they tend to look less kindly on lip locks). Groupon (GRPN) fell 3.30%, as a slew of research initiations contained many new Neutrals. Although interestingly enough two of its more bullish Buys were bestowed from Goldman Sachs (GS) and Bank of America-Merrill Lynch (BAC), both of whom may soon need to resort to coupon clipping should their share slide continue.

Goldman also added eBay Inc (EBAY) to its "Conviction Buy List" as its ex-head prepares to put his faith in the power of convictions in additional congressional testimony today. Right on cue, Christmas miracles came early this year, with serial convict Lindsay Lohan being praised for good behavior. Cemetery stock Carriage Services (CSV) ended up 1.48%, bucking an otherwise dire day after buying a New York funeral home operator. Meanwhile a woman in New Hampshire (Motto: "Live Free or Die") had her mother's ashes brought to Bingo for good luck and lost last week, unexpectedly returned. And Time Magazine anointed The Protester its Person of the Year. A decision that elicited much spilling of tears on Milk Street, if not yet on Wall. Today in economics, November industrial production and capacity utilization are each out at 9:15 a.m. Eastern, with December's Philadelphia Fed Index following at 10:00 a.m. The pace of earnings picks up with Accenture (ACN), Adobe (ADBE), Discover Financial (DFS), FedEx (FDX), Heico (HEI), Hovnanian (HOV), Pier 1 Imports (PIR), Research In Motion (RIMM), Rite Aid (RAD), Scholastic (SCHL), and Winnebago Industries (WGO) all due to report results.


Router stocks: Dow component Cisco Systems (CSCO) is begun with a Buy at Nomura, sending shares higher ahead of the open. The broker has new Neutrals on rivals Riverbed Technology (RVBD) and Juniper Networks (JNPR).

China Internet & E-Commerce: Brean Murray has Holds on Dangdang Inc (DANG) and (YOKU). (AMZN): Morgan Keegan resumes coverage with an Outperform recommendation and $210 price objective. They say investors in the Internet giant will be rewarded with material revenue growth, margin expansion, and free cash flow generation.

AMC Networks (AMCX): The broadcaster of Mad Men and much else is initiated with an Overweight at JP Morgan.

Advertising agencies: And speaking of Don Draper, Barclays begins covering Interpublic (IPG) at Overweight and assigns an Equal Weight on Omnicom (OMC).

Acme Packet (APKT): JP Morgan has a new Neutral on APKT.

Energy stocks: Swift Energy (SFY) is started with a Buy and $40 target price at KeyBanc Capital, which has a Hold on Forest Oil (FST).

Engineering and Construction: Sterne Agee begins Buy rated coverage on, among others, Jacobs Engineering (JEC) and Fluor Corp (FLR). Its respective price objectives are $53 and $65.

LED stocks: Maxim begins Cree Inc (CREE) with a Buy ($45 target) and starts Sells on Aixtron (AIXG) ($15 target) and Veeco Instruments (VECO) ($8).

Hospira (HSP): UBS has a fresh Sell on the stock.


Apple (AAPL): AAPL is named a long Research Tactical Idea at Morgan Stanley.

Broadcom (BRCM): The tech stock is taken to Outperform from Market Perform with Wells Fargo.

Wireless stocks: Leap Wireless (LEAP) and MetroPCS (PCS) are both upgraded to Buy from Neutral at Mizuho. For the former, channel and industry checks indicate strong fourth quarter sales for its unlimited prepaid packages. For the latter, which is also assigned a new higher price target of $10.50, Q4 subscriber growth is tracking ahead of expectations.

Elan (ELN): The Irish drug maker is increased to Buy from Hold at Deutsche Bank.

MeadWestvaco (MWV): BMO Capital moves MWV to Outperform from Market Perform.

Lam Research (LRCX): Shares are lifted to Buy from Hold with an objective at Needham after its announced the acquisition of Novellus (NVLS).

Cintas (CTAS): Shares of the uniform manufacturer are upgraded to Equal Weight from Underweight by Barclays.

PerkinElmer (PKI): Goldman Sachs gives PKI a Buy-from-Neutral boost.

Onyx Pharmaceuticals (ONXX): ONXX gets added to the Conviction Buy List at Goldman. Also read Onyx Fails to Get Speedy Review for Cancer Drug.

ViroPharma (VPHM): Staying in the space, shares are upgraded to Strong Buy from Buy at WBB Securities, which takes their target price up to $31.25 from $24.50. This follows the FDA's announcement that they have approved its supplemental New Drug Application for labeling modernization of Vancocin.

Aixtron (AIXG): AIXG is now Neutral from Reduce at WestLB.

TECO Energy (TE): Shares are hoisted to Hold from Sell by Deutsche Bank.

KiOR, Inc (KIOR): Robert W. Baird boosts shares to Neutral from Underperform with a $10 target.


AT&T (T): The Dow member is moved to Underperform from Neutral at Macquarie.

DIRECTV (DTV): Nomura downgrades the name to Reduce from Neutral.

Deckers Outdoor (DECK): The Ugg maker, so beloved of Tom Brady, is slashed to Underperform from Buy at Sterne Agee, sending shares slumping before the bell.

First Solar (FSLR): The stock, whose 21.42% tumble yesterday made it the S&P 500's poorest perfromer, is now Neutral from Outperform at Robert Baird, which takes its target to $35 from $80. The ratings reduction comes on the back of FSLR management lowering earnings guidance for both this year and next. See also First Solar Capitulates, Sort Of.

Medical device stocks: Baxter (BAX) gets pulled from Goldman's list of Conviction Buys. The bank also cuts Stryker (SYK) to Neutral from Buy and Boston Scientific (BSX) to Sell from Neutral.

Borg Warner (BWA): Shares are cut to Neutral from Buy at UBS.

BioSante (BPAX): The small cap stock is lowered by both Leerink Swann (Market Perform from Outperform) and JMP Securities (Market Perform from Outperform.)

Credit Agricole SA: You know it's bad when two French banks begin to turn on each other: Credit Agricole is cut at BNP Paribas.

Novellus: Shares are now Sector Perform from Outperform at RBC Capital.

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