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Upgrades & Downgrades: Can J.C. Penney Continue to Buck Up?

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

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When you select someone named Summers to start your day in the dead of winter, don't be surprised when what follows is a little mixed up. The Dow Average (^DJI), after initially hitting its highest level since the Spring of 2008, proceeded to fall and ended down despite the best efforts of our 71st Treasury Secretary to unleash a buying binge from his lofty perch on the white slopes of Switzerland. (Although it must be admitted that the assembled billionaire ski bunnies in Davos didn't do too badly with Arctic Cat (ACAT), the snowmobile maker gaining 20.03% en route to a 22-year peak.) Shares slipped as December real estate data disappointed, capping the housing market's worst year on record. Standouts of a sluggish session included Netflix (NFLX), its upgraded-related 22.06% surge topping the entire S&P 500 Index (^GSPC) as the film outfit opted to show only shorts. Shorts, Bermuda or otherwise, were similarly flying off the shelves at S&P runner up J.C. Penney (JCP), its 18.79% advance surely causing a founder whose middle name was quite literally Cash to crack a celestial smile. South of the border Taco Bell is banking on breakfast but Chipotle Mexican Grill (CMG) continues to eat everyone's lunch, its 0.74% increase enough for an all time high. Now standing at $365.81 a share after jumping some 68% in twelve months, about the only one who can afford to indulge in its junk food is a Slim native son.

Regis Corp (RGS), whose hair salons include Supercuts, advanced 8.49% in a week dominated by the bald plates of Fed head Ben Bernanke and World Economic Forum founder Klaus Schwab. (To be fair, it also operates Hair Club for the follicularly challenged.) Elsewhere Charles Schwab (SCHW), presumably Klaus' poor relation, fell 4.37% with investors deciding not to Talk to Chuck. As Republicans debated for a 19th time talk was also a four letter word for AT&T (T), its earnings-related 2.52% tumble making it the poorest performing blue chip. Fellow Dow member and Post-Its maker 3M Co (MMM) gained 1.27% after reporting results of its own, its Q4 clearly benefiting from the halo effect of Apple (AAPL), which should be some consolation for the tech titan on a day its shares slipped from record levels. And Under Armour (UA), a maker of anti-perspiration apparel, lost 5.28% in a fitting coda for a dearly departed sweathog. Today in economics, we get the University of Michigan's final figure for January consumer confidence at 9:55 a.m. Eastern. Peak week in fourth quarter earnings wraps up with announcements expected out of Altria (MO), Chevron (CVX), Ford (F), Honeywell (HON), Legg Mason (LM), NTT DoCoMo, Procter & Gamble (PG), and T. Rowe Price (TROW).

Initiations:

AT&T (T): Credit Suisse now covers the Dow component at a Neutral.

Best Buy (BBY): The big box retailer gets begun with an Outperform at Credit Suisse.

Monsanto (MON): Macquarie launches Neutral rated research on the agribusiness outfit.

Insurance stocks: Allstate (ALL) is initiated with an Outperform at brokerage William Blair, which assigns an Underperform on peer Progressive (PGR).

Commodity companies: Anglo Platinum is picked up at Underperform by Credit Suisse, which has a new Neutral on competitor Impala Platinum.

Rio Tinto (RIO): Staying in the space, RIO is resumed with an Equal Weight by Barclays.

Oil & Gas: Citigroup has new Neutrals on Goodrich Petroleum (GDP) andQuicksilver Resources (KWK). It starts Buys on SandRidge Energy (SD), Whiting Petroleum (WLL), and Cabot Oil & Gas (COG).

Medicis (MRX): Cantor Fitzgerald has a Hold on MRX.

Targa Resources (TRGP): Morgan Keegan covers the stock at an Outperform and establishes a price objective of $57 on a firm its says offers investors solid yield opportunities.


Upgrades:

J.C. Penney: The retailer is upgraded to Overweight from Neutral at Piper Jaffray, sending shares up ahead of the open.

LM Ericsson (ERIC): The Royal Bank of Scotland raises its recommendation on Sweden's telecom titan to Buy from Hold.

Logitech International (LOGI): The mouse maker gets lifted to Neutral from Sell at Citigroup.

Potash (POT): National Bank hikes the fertilizer firm to Sector Perform from Underperform.

Synaptics (SYNA): The stock, downgraded elsewhere this morning, is hoisted to Buy from Hold with a $41 price target at Needham, which says it is gaining market share in the handset space and maintaining strong momentum in tablets.

Ryanair Holdings: Société Générale boosts the budget airline to Buy from Hold.

U.S. Bancorp (USB): Shares get a Neutral-from-Underweight increase at Atlantic Equities.


Downgrades:

McDonald's (MCD): The Dow member gets downgraded to Market Perform from Outperform by Sanford Bernstein.

Wendy's (WEN): Fellow fast food firm WEN is now Neutral from Buy at UBS.

Anglo American: Barclays moves the miner to Equal Weight from Overweight.

American Electric Power (AEP): The utility is reduced to Hold from Buy by Deutsche Bank.

Boyd Gaming (BYD): Sterne Agee cuts the casino company to Underperform from Neutral.

Celgene (CELG): The biotech is taken to Hold from Buy at Argus on account of a steep valuation.

Cliffs Natural Resources (CLF): Shares are now Neutral from Outperform at Credit Suisse.

Covance (CVD): Citi slashes its rating to Neutral from Buy on CVD.

Siemens AG (SI): German's industrial giant gets downgraded to Hold from Buy at Argus amid slowing orders and significant European exposure.

Deutsche Telekom: The communications outfit gets taken to Underperform from Neutral at Macquarie.

French banks: BNP Paribas is downgraded to Neutral at JP Morgan, which reduces its recommendation in rival Crédit Agricole to Underweight as the country's banks "are still over-leveraged, and there is still 100 billion euros ($131 billion) of further deleveraging required on top of the announced plans". Shares are trading lower in Paris today as a result.

Morgan Stanley (MS): The financial sector literally fares little better on this side of the Atlantic, MS moved to Underweight from Neutral at Atlantic Equities.

Nucor (NUE): The steelmaker is trimmed to Hold from Buy at Deutsche Bank.

Steel Dynamics (STLD): Crédit Agricole cuts the company to Outperform from Buy.

J.C. Penney: Two distinct views on the department store chain today, for it is also downgraded to Underperform from Market Perform by BMO Capital.

Juniper Networks (JNPR): Morgan Keegan moves the tech stock to Market Perform from Outperform with a new lower price target of $20 after the company gave downbeat forward earnings guidance.

REITs: Equity One (EQY) is now Sell from Neutral at Citigroup, which lowers Kimco Realty (KIM) downgraded to Neutral from Buy.

Healthcare Realty (HR): HR is downgraded to Neutral from Outperform with a $22 target at Robert Baird primarily due to valuation after a recent run up. The broker believes additional upside is dependent on accelerating medical office fundamentals as well as successful execution of the management's strategy.

Hartford Financial (HIG): Shares are now Neutral from Overweight at JPMorgan.

Synaptics (SYNA): SYNA is now Neutral from Buy at Sterne Agee.

Travelzoo (TZOO): Benchmark Company takes TZOO to Hold from Buy, reducing its target by $7 to $30 in the process, as recent results point to a 9% sequential decline in gross Local Deals revenue.

Uroplasty (UPI): The small cap stock is moved to Market Perform from Outperform at JMP Securities.
No positions in stocks mentioned.
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