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Upgrades & Downgrades: Women's Clothing Makes Michael Kors a Rich Man


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

This weekend's game of freeze tag on Wall Street appears to have set a trend. An eerie quiet descended over the Dow (^DJI) yesterday while the S&P 500 (^GSPC) remained essentially frozen in place, ending up all of 0.05%. Still, even that minuscule advance on anemic volume was good enough for its ninth gain in ten trading sessions - not too shabby a showing on what was officially the most depressing day of the year. (And considering the world will end in 2012, that is really saying something.) Markets traded in a tight range, one eye on earnings announcements and the other on ongoing Greek debt discussions. The latter didn't go gangbusters but the good news for a bankrupt country is that talk is exceptionally cheap, witness yesterday's 18th GOP debate, with number 19 to follow in 48 hours. The Greek's aren't big about paying taxes but one day after Intuit (INTU) hit an all time high and H&R Block (HRB) ended up 2.61%, Mitt Romney just released his returns. Sensibly so, for - George Steinbrenner aside - taxes come to us all as surely as death. The Honolulu native whose job he wants saw Hawaiian Holdings (HA) - founded in 1929, a crash year that seems an especially unfortunate time to start an airline - gain 1.82%. Intel (INTC) advanced 1.25% to a multi-year peak and the 18 year old homeless star of its science contest will have the best seat in the House for the President's State of the Union speech tonight.

With energy the best performing sector Southwestern Energy (SWN) surged 10.30% to top the S&P 500 and Cabot Oil and Gas (COG), the index's only stock to double in 2011, added another 6.46%. This as natural gas bounced off recent 10-year troughs in a big way, posting its best performance since 2010. Eating too many oranges can give you gas of course, but with OJ reaching another record high, that shouldn't be much of an issue at the moment. Petmed Express (PETS) rose 11.00%, posting its best intra-day increase since September 2008, and fittingly the world's oldest pooch just about lived to see the day. Elsewhere, a week after a sinking ship sent Carnival (CCL) stock plunging, Odyssey Marine Exploration (OMEX) jumped 9.57% on news it will plunder sunken-treasure from the British warship H.M.S. Victory that went down in 1744. The Brits most famous naval victory of course came over Napoleon at Waterloo, although that will be of cold comfort to Research in Motion (RIMM) on a day it imploded another 8.47%. No top-tier economic data out today but a frenetic session for fourth quarter earnings sees announcements out of Apple Inc (AAPL), DuPont (DD), Johnson & Johnson (JNJ), McDonald's (MCD), Siemens (SI), Travelers (TRV), Verizon (VZ), and Yahoo (YHOO) among a multitude of others.


Merck (MRK): The Dow member gets a Buy initiation at ISI Group.

Advertising agencies: French firm Publicis Groupe is picked up with a Buy at Jefferies, which assigns an Underperform on British rival WPP Group (WPPGY). Here at home, Jefferies rates Interpublic (IPG) an Underperform and has a Hold on Omnicom (OMC).

Exchange operators: NASDAQ OMX Group (NDAQ) is a new Outperform at JMP Securities, which has a Market Perform on IntercontinentalExchange (ICE).

Michael Kors Holdings (KORS): JPMorgan, Morgan Stanley, and Piper Jaffray all start the women's apparel outfit, a recent IPO, at Overweight while Goldman Sachs, Nomura, and Jefferies begin Buy rated coverage. Wedbush and Robert W. Baird both establish an Outperform, the latter assigning a $34 price objective on a stock it says offers substantial global growth prospects and differentiated positioning in the attractive and growing luxury apparel/accessories category. Shares are subsequently trading higher ahead of the open.

T. Rowe Price (TROW): The equity is assumed with an Outperform at brokers William Blair.

Public Storage (PSA): The REIT is resumed with an In-Line rating and $136 price target at Imperial Capital. Though they believe rents will continue to rise, shares trade at a substantial 30% premium to the Net Asset Value per share estimate of $100.

Bonanza Creek Energy (BCEI): Shares are begun with an Overweight at Morgan Stanley.

Laredo Petroleum (LPI): Goldman and Bank of America-Merrill Lynch both launch Buy rated research on LPI.

Chinese online game stocks: Giant Interactive (GA) and Shanda Games (GAME) are among the new Buys at Lazard.


Bed Bath & Beyond (BBBY): Deutsche Bank gives BBBY a Buy-from-Hold hoist.

ING Group (ING): The European financial firm gets increased to Buy from Neutral at Nomura.

Semiconductor equipment: Citigroup boosts Novellus (NVLS) and KLA-Tencor(KLAC), both now Buy from Neutral.

Western Digital (WDC): Staying in technology, WDC is now Buy from Hold with a $41 target price at Needham after last night's earnings announcement. The unique current supply/demand dynamics in the HDD (Hard Disc Drive) sector, combined with an approaching industry consolidation, are encouraging their optimism.

Harmony Gold Mining (HMY): The commodity company is upgraded to Buy from Neutral at UBS.

Ternium S.A. (TX): The iron and steel outfit is taken to Buy from Neutral at Goldman.


Molson Coors Brewing (TAP): UBS takes TAP to Neutral from Buy.

Barrick Gold (ABX): RBC Capital reduces its rating to Sector Perform from Outperform.

Comstock (CRK): CRK is cut to Neutral from Accumulate at Global Hunter Securities, which takes its target down by $10 to $20 on a company that entered the year with its gas production completely unhedged.

Deutsche Bank (DB): The German financial giant is trading lower in London this morning after a Neutral-from-Overweight downgrade at JP Morgan Cazenove due to valuation. "On an absolute basis, [shares] appear range-bound between €23-33″ according to the investment house.

Nokia (NOK): Danske Bank takes the Finish telecom titan to Sell, sending its stock stock slumping before the bell. Concerns include a fall in shipments of older Symbian phones and doubts that the Windows Phone can pick up the slack.

Unilever NV (UN): The Anglo-Dutch consumer products powerhouse is now Neutral from Buy at Citigroup.

Pearson Plc (PSO): Staying abroad, the British based publisher - which counts theFinancial Times among its titles - is downgraded to Underweight from Equal Weight by Barclays.

Potash (POT): JP Morgan cuts the chemicals company to Neutral from Overweight.

Texas Instruments (TXN): Shares are taken to Hold from Buy with a $35 objective at Kaufman Brothers after earnings. The investment house is reducing its estimates and expects the Street to take similar action.

Cypress Semiconductor (CY): Shares are cut to Hold from Buy at Needham, which sees risks to forward estimates on account of non-Apple tablet inventory correction extending into the first quarter, among other factors.

Cedar Fair (FUN): The fairground operator is lowered to Long-term Buy from Buy with a $29 target at Hilliard Lyons.

Zumiez (ZUMZ): Credit Suisse cuts the clothing company to Neutral from Outperform.

FormFactor (FORM): downgraded to Neutral from Buy at Citigroup.

Inhibitex (INHX): The small cap stock is slashed to Hold from Buy by Deutsche Bank.

Entergy (ETR): The electric utility is reduced to Hold from Buy at Jefferies.

Plains Exploration (PXP): PXP gets downgraded to Neutral from Buy at Goldman.

Veeco Instruments (VECO): The tech firm is taken to Hold from Buy at Kaufman Brothers, which also cuts its target price by $9 to $25. Slower than anticipated end market demand is a concern, especially in light of the stock's 25% increase over the past three weeks.

Stifel Financial (SF): Raymond James reduces its recommendation on the financial firm to Market Perform from Outperform.

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