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Upgrades & Downgrades: Everything Coming Up Roses at Madison Square Garden


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

Dow Industrials ($DJI) rose for a third straight session amid muddled messages across the Atlantic. Shares managed to shrug off S&P placing its triple-A rating for the EU on negative credit watch on Wednesday, just as they shrugged off S&P warning that it may cut the rating of the European Financial Stability Facility on Tuesday, just as they shrugged off S&P's threat to lower 15 of 17 continental countries on Monday. Could it be that an outfit which rated Enron 'good' until four days before bankruptcy and has a little $2 trillion trouble with math sometimes has a hard time being taken seriously? Exactly 70 years since the Japanese attacked Pearl Harbor, the fog of war was as thick as ever around Tokyo with a Nikkei news report, later denied, that the G20 was considering a $600 billion IMF lending program for Europe. Such gyrations were an apt reminder, on the day Milan's celebrated La Scala opera house opened for the season that, where Europe is concerned, it ain't ever over until the fat lady sings. Good gainers included São Paulo-based GOL Linhas Aereas Inteligentes (GOL), a 5.02% increase bringing back some joy to a city still in mourning after its Brazilian fútbol great named after a Greek philosopher recently exited center circle aged only 57.

Meanwhile Men's Wearhouse (MW), which apparently doesn't need women, advanced 19.57% after giving good earnings guidance and women's clothing company Talbots (TLB) certainly doesn't need men after its 69.87% surge topped the entire Russell 2000. Cereal stock General Mills (GIS) hit the highest level in its history even as a new study showed some children's cereals have more sugar than Twinkies. NYSE Euronext (NYX) learned firsthand the dangers of European entanglements, falling 3.88% amid a snag with its proposed merger with German's Deutsche Börse. Twenty four hours after a handbag went for a world record at auction, December 7, 2011 was a date that will live in infamy for handbag maker Vera Bradley Inc (VRA), a 2.18% tumbler. And in analyst action, Goldman's (GS) downgrade of Peabody Energy (BTU) sent the coal company sliding 3.37% 24 hours before its ex-head gets raked over the coals on Capitol Hill. Also this morning, October wholesale inventories are expected to tick up at 10:00 a.m. Eastern. On the corporate front Analogic (ALOG), Brown-Forman (BF-B), Costco (COST), Methode Electronics (MEI), and Smithfield Foods (SFD) are all due to announce earnings.


Lululemon Athletica (LULU): The yoga-wear retailer is begun with a Buy and $60 price objective at Sterne Agee.

Oil service stocks: Halliburton (HAL) is resumed with a Conviction Buy at Goldman Sachs. Baker Hughes (BHI) is a Buy and rivals Rowan Cos (RDC), Noble Corp (NE), and Ensco (ESV) are all new Neutrals. Transocean (RIG) and Diamond Offshore (DO) each get started at Sell.

Mortgage REITs: Morgan Stanley has Overweights on American Capital (AGNC) ($32 price target) and MFA Financial (MFA) ($7.50). It assigns Equal Weights on Hatteras Financial (HTS) ($29), Annaly Capital Management (NLY) ($18), Apollo Residential Mortgage (AMTG) ($16), and Invesco Mortgage Capital (IVR) ($16.50).

Sovran Self Storage (SSS): Robert W. Baird starts SSS at an Outperform with a $48 target. The broker says we may see robust rental rate increases in the spring leasing cycle.

TIBCO Software (TIBX): Shares are a new Neutral at Mizuho, which sets a $29 target price. Though the company's product categories are seeing increases across all verticals, a 54% share price rise since August makes for a full valuation.

SunCoke Energy (SXC): Oppenheimer starts the stock at Outperform and assigns it a price objective of $15. Positives include a 10.9% Free Cash Flow yield, multi-year contracts, and good growth opportunities in North America and abroad.

Anthera Pharmaceuticals (ANTH): ANTH is initiated with a Buy at Canaccord Genuity.

Moneygram (MGI): Goldman has a new Neutral on MGI.


Madison Square Garden (MSG): On the eve of basketball's truncated return, MSG is moved up an unusual 180 degrees, to Overweight from Underweight at Morgan Stanley.

Halliburton (HAL): The oil services outfit is named a long Research Tactical Idea, also at Morgan Stanley.

Pacific Sunwear of California (PSUN): Piper Jaffray juices its rating to Neutral from Underweight on the small cap stock.

Central European Distribution Corp (CEDC): The New Jersey-based seller of Polish vodka is upgraded to Buy from Hold at Jefferies, sending shares up sharply before the bell.

Antofagasta plc (ANFGY): The British based-copper mining company is raised substantially, to Buy from Reduce at Nomura.

American Axle (AXL): Deutsche Bank boosts AXL to Buy from Hold.

Munich Re: The German financial giant, whose shares trade here under ticker symbol MURGY, gets a Buy-from-Neutral boost at UBS.

Wipro (WIT): The Indian outsourcing and IT outfit is increased to Buy from Neutral at Bank of America-Merrill Lynch.

PC Mall (MALL): MALL is moved to up Outperform from Underperform with a $7 target at Raymond James.


Philip Morris International (PM): Nomura reduces its recommendation on the tobacco titan to Neutral from Buy.

Expedia (EXPE): The online travel outfit gets downgraded to Neutral from Buy at Citigroup.

Cree Inc (CREE): The LED-lighting play is moved to Equal Weight from Overweight at Morgan Stanley, sending shares lower ahead of the open.

Tesla Motors (TSLA): A hairpin turn from Morgan Stanley on TSLA, taking it all the way to Underweight from Overweight.

Peugot SA (PEUGY): Staying in the sector, the French car company is cut to Neutral from Buy by BNP Paribas.

Sunoco Logistics (SXL): Bank of America-Merrill Lynch lowers the stock to Neutral from Buy.

Hatteras Financial: Shares are now Neutral from Buy at Sterne Agee.

Jazz Pharmaceuticals (JAZZ): The stock is cut to Hold from Buy with a $40 objective at WBB Securities. While the broker says there is likely a broader potential patient population for Xyrem, within the healthcare industry they are observing increased pressure against expanding treated populations due to regulatory uncertainties.

Silicon Labs (SLAB): SLAB is lowered to Neutral from Buy at UBS.

Carmike Cinemas (CKEC): Shares are cut to Below Average from Average at Caris & Company.

Infosys (INFY): INFY is now Neutral from Buy at Bank of America-Merrill Lynch.

Las Vegas Sands (LVS): The casino company is lowered to Neutral from Buy at Janney Montgomery Scott.

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