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Upgrades & Downgrades: Dr Pepper Being Nursed Back to Health


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

Ben Bernanke may not be the best investor but yesterday the Fed head certainly earned his $197,600 annual salary. Stocks rose to levels not seen since last summer after he pledged to keep interest rates at exceptionally low levels until at least late 2014 amid its satisfaction inflation remains "subdued". Apple Inc (AAPL), that noted inflation slayer, surged 6.24% to an all time high, becoming the world's largest company by market cap in the process. Perhaps it's time to admit its retail stores may just work out after all? On the day the moguls of industry assembled on the moguls of Davos, rival Microsoft (MSFT) advanced 0.75% after hitting a fresh 52-week peak on Monday. Still, given that - eight years ago - Bill Gates declared on those same ski slopes that "spam will soon be a thing of the past" he will not have happy memories of the annual shindig in Switzerland. In such a low rate environment, stuffing money in mattresses is the way to bet, and as if on cue Tempur-Pedic International (TPX) duly advanced 8.93% as the memory foam maker enjoyed an unforgettable day. Topeka based Collective Brands (PSS), parent of Payless Shoes, proved we're not in Kansas any more, a 3.02% advance cementing its reputation as the Sunflower State's most profitable piece of footwear since those iconic ruby red slippers went for multi millions at auction.

Elsewhere, on the day Scots honored Robert Burns, DNA analysis equipment maker Illumina (ILMN) surged 46.34% to top the Russell 1000 Index. Its claims to fame apparently include being able to demonstrate he was unrelated to Ursula Burns, breaker of glass ceilings and CEO of Xerox (XRX). Certainly the two shares were entirely unrelated, the photocopy firm nose-diving 9.92% in posting the S&P 500's (^GSPC) second poorest performance. The worst showing on that index belonged to glass maker Corning (GLW), a 10.74% tumbler, but the bagpiper's of Robert's birthplace will presumably be equally perturbed by the 14.41% fall in Piper Jaffray (PJC). In analyst action Michael Kors (KORS) rode another upbeat initiation to gain 3.39%, shares now standing at a post-IPO peak. A quantum physicist named Hawking apparently can't figure women out but they are certainly buying what Mike is hawking. And French firm Crédit Agricole downgraded McDonald's (MCD). Presumably they are still miffed at the whole freedom fries fiasco. Although evidently no one told the French, for one of the chain's most popular locations on Earth is…in Paris. Today in economics, December 2011 new home sales and leading indicators are each out at 10:00 a.m. Eastern. Another frenetic day for fourth earnings runs the gamut from A to Z with announcements expected out of AT&T Inc (T), Caterpillar (CAT), Hennes & Mauritz, Lockheed Martin (LMT), 3M Co (MMM), Juniper Networks (JNPR), Nintendo, Nokia (NOK), Raytheon (RTN), Starbucks (SBUX), and Zimmer Holdings (ZMH).

Initiations: (ACOM): Shares are assigned a Buy at Imperial Capital, which establishes a price objective of $35. They say ACOM is the market leader and note season three of Who Do You Think You Are? will be the longest to date and is the largest driver of subscriber acquisitions.

Green Mountain Coffee Roasters (GMCR): GMCR is initiated with a Perform rating and $50 price target at Williams Capital Group. While the company boasts good growth and a long-term track record of success, the broker believes shares are fully valued at current levels.

Sally Beauty (SBH): Goldman Sachs starts Neutral rated coverage on SBH.

Met-Pro Corp (MPR): The stock is picked up with an Outperform and $12 target at Boenning & Scattergood.


Consolidated Edison (ED): The electric utility is upgraded to Hold from Underperform at Jefferies.

Deutsche Lufthansa: Nomura boosts the airline to Buy from Neutral.

Delta Air Lines (DAL): Staying in the sector, DAL is increased to Equal Weight from Underweight at Evercore.

Dr Pepper Snapple (DPS): Shares are now Neutral from Sell at Goldman.

Electronics For Imaging (EFII): EFII gets upgraded to Outperform from Market Perform by BMO Capital.

Equity Residential (EQR): Barclays raises its rating on the REIT to Overweight from Equal Weight.

Greenhill (GHI): GHI gets a Neutral-from-Sell lift at Goldman.

Illinois Tool Works (ITW): Bank of America-Merrill Lynch takes ITW to Buy from Neutral.

Netflix (NFLX): Never a dull moment with NFLX, surging some 21% before the bell on the back of better than expected earnings and now Buy from Neutral at Citigroup.

NVIDIA Corp (NVDA): The tech company is taken to Positive from Neutral at Susquehanna.

Knight Transportation (KNX): Bank of America-Merrill Lynch moves the stock to Buy from Neutral.

St. Jude Medical (STJ): Canaccord Genuity moves the medical device maker to Buy from Hold. Management's 2012 earnings guidance of between $3.43 and 3.48 per share seems conservative in light of some signs of stabilization in certain end markets.

Textron (TXT): The stock gets hoisted to Buy from Hold at EarlyBirdCapital.


Automatic Data Processing (ADP): ADP gets downgraded to Market Perform from Outperform with Wells Fargo.

Charles Schwab Corp (SCHW): The discount broker is now Neutral from Overweight at JP Morgan.

E*TRADE (ETFC): ETFC is downgraded to Neutral from Buy at Goldman, sending shares slumping ahead of the open.

Corning (GLW): Shares are cut to Underweight from Equal Weight with Morgan Stanley.

Covance (CVD): Goldman gives CVD a Neutral-from-Buy downgrade.

Chesapeake Energy (CHK): The stock is moved to Underweight from Equal Weight at JPMorgan.

Regional banks: First Horizon (FHN) and SunTrust Banks (STI) are each reduced to Hold from Buy by Deutsche Bank.

Antofagasta : The miner is moved to Sell from Hold by Société Générale amid concerns over Chinese imports and disappointing copper supply.

Royal Bank of Scotland (RBS): WestLB reduces its recommendation to Add from Buy.

Randgold Resources (GOLD): Shares are now Neutral from Overweight at JP Morgan.

Ryanair Holdings: The carrier is cut to Neutral from Buy at Nomura

BASF AG: The chemicals company is now Neutral from Overweight at HSBC Securities, which says "Following a rally of more than 25% in the sector since early October, we believe the risk is now to the downside as earings still have further to fall."

Siemens AG (SI): Staying in Germany, the industrial giant gets downgraded to Market Perform from Outperform by Sanford Bernstein.

Associated Banc-Corp (ASBC): ASBC is taken to Neutral from Outperform with a $14 target by Robert W. Baird. With interest rates expected to remain low through the end of 2014, forward earnings estimates are at greater risk.

Thomson Reuters (TRI): Goldman Sachs slashes shares to Sell from Neutral.

WellPoint (WLP): The managed care company gets moved to Hold from Buy at Jefferies.

Valeant Pharmaceuticals (VRX): The stock is now Neutral from Overweight at Piper Jaffray.

Progressive (PGR): Goldman downgrades the insurance outfit to Sell from Neutral.

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No positions in stocks mentioned.
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