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Upgrades & Downgrades: New Lease on Life for Fossil


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

Scientists at a university in Milan, the country's finance capital, recently showed all that separates us is 4.74 degrees, not the six of popular imagination and Kevin Bacon parlor games. Yesterday Wall Street brought home the bacon by demonstrating that the gap may in fact be considerably wider, certainly between the U.S. and Europe. Even as the continent's common currency imploded to an 11-month low against our greenback, the S&P 500 Index (^GSPC) ended up, impressively decoupling from early Iberian anxiety to gain for a second straight session. Indeed while UniCredit, Italy's biggest bank, tumbled 10.99% to its lowest level in 20 years, Bank of America (BAC) - its equivalent on this side of the Atlantic and the Dow's (^DJI) biggest dog of 2011 - was able to eke out a 0.17% increase. Firearms firm Sturm Ruger (RGR) shot up 118.8% last year but Nike (NKE) is now number one with a bullet, its 1.46% advance good enough for an all-time high. (Ralph Lauren (RL) rose 4.20%, apparently on speculation it may soon offer its iconic polo shirts in this anti-ballistic version.)

Elsewhere Acme Packet (APKT), which makes devices used to transmit phone calls, nosedived 19.21% and telecom titan AT&T (T) incurred a ratings reduction. No comment either from Carol Bartz, fired by phone as CEO of Yahoo (YHOO), but her just-named successor has his work cut out to convince Wall Street, if today's analyst action is any indication. And testosterone-fuelled financial types who turn their noses up at touchy-feely liberal arts majors may want to think again, for it seems Shakespeare imparted impeccable advice on selling short. "Something is rotten in the state of Denmark" wrote Will in Hamlet act 1, scene 4. Tell us about it - Vestas Wind Systems (VWDRY), pride of Copenhagen, slid 16.79% to a new low yesterday. Earlier in the same play the Bard opined about the unfortunate irony of one who was "Hoist with his own petard." Eastman Kodak (EK), inventor of the digital camera that later killed it, learned the wisdom of that particular proverb alas a little late. This morning in economics, consensus calls for an increase in December's ISM services index at 10:00 a.m. Eastern. Expect earnings out of Apollo Group (APOL), Constellation Brands (STZ), Family Dollar (FDO), Helen of Troy (HELE), Monsanto (MON), and Ruby Tuesday (RT).


Apple (AAPL): Shares are begun with a Buy at Auriga.

General Electric (GE): The Dow member is initiated at an Overweight with Morgan Stanley.

3M Co (MMM): Morgan Stanley assigns an Equal Weight on the Post-Its maker, which is also in the Dow.

Fossil (FOSL): The fashion accessories outfit gets begun with a Buy at KeyBanc Capital, which assigns a price objective of $105. Expansion into Asia and a strong brand portfolio should drive earnings growth in excess of 20% in upcoming years.

Steven Madden Ltd (SHOO): KeyBanc has a Hold on the footwear firm. While its integration of new products is impressive, valuation appears full at current levels.

Beazer Homes (BZH): BZH is established with an In-Line rating and $3 price target at Imperial Capital. While near-term share price caution is warranted, in its view, the company does have financial flexibility and therefore ample time to wait for an eventual turnaround in housing.

Corcept Therapeutics (CORT): BioLogic Equity Research starts at a Sell, as an upcoming FDA decision on Korlym to treat recurrent and inoperable cushing's syndrome poses challenges.

VMware (VMW): Shares are started with a Buy at Sterne Agee, which sets an objective of $108.


Barclays PLC (BCS): RBC Capital raises its recommendation on the British bank to Outperform from Sector Perform.

Eldorado Gold (EGO): UBS gives a Buy-from-Neutral increase to EGO.

Pacific Sunwear of California (PSUN): The small cap stock gets a Buy-from-Neutral boost at Janney Montgomery Scott, whose target price is $4. Catalysts include its inventory achieving a positive inflection point late last year, and the potential for sustainable comps over the next 12 months.

First Cash Financial Services (FCFS): Jefferies juices its recommendation to Buy from Hold.

SAP AG (SAP): The German software giant, downgraded yesterday, is today moved to Neutral from Sell by BNP Paribas.

Nokia (NOK): Shares of the Finish telecom titan are sharply higher in Helsinki this morning after Credit Suisse upgraded it by an unusual 180 degrees, to Outperform from Underperform. The broker believes the firm's "focus on Windows will allow for [it] to drive a recovery in 2012."

Nobel Biocare Holding AG (NBHGY): The stock is now Neutral from Underweight at JPMorgan.

Norfolk Southern (NSC): UBS raises the railroad firm to Buy from Neutral.


Google (GOOG): The Internet search pioneer, whose shares have been flying high of late, is lowered to Hold from Buy ($700 target) at The Benchmark Company. Fourth quarter channel checks indicate online advertising, while strong domestically, is slowing severely in Europe. Accordingly, Benchmark reduces its 2012 estimated revenue growth to 19% versus Street consensus of 23%.

Yahoo (YHOO): Shares are reduced to Hold from Buy at Jefferies.

United Parcel Service (UPS): The package delivery giant gets downgraded to Neutral from Overweight at HSBC Securities, which trims its target by $5 to $75. Among the risks are a weak 2012 outlook for logistics earnings amid heightened uncertainty for global freight.

European pharmaceutics: AstraZeneca (AZN) is now Underweight from Neutral at JPMorgan, which moves Sanofi-Aventis (SNY) to Neutral from Overweight.

Ericsson (ERIC): Shares of the Swedish mobile communications company are trading lower in Stockholm as we speak after being cut to Neutral from Outperform at Credit Suisse, which cites lower revenue growth and macroeconomic concerns.

Arbitron (ARB): JPMorgan takes ARB to Neutral from Overweight.

BlackRock (BLK): The asset manager is now Neutral from Buy at Sterne Agee.

Boston Beer (SAM): SAM is slashed to Sell from Neutral at Goldman Sachs.

Choice Hotels (CHH): Robert W. Baird checks out of CHH, now Underperform from Neutral with a $34 objective. Headwinds include a shrinking development pipeline and already-plump valuation.

Corporate Executive Board (EXBD): Bank of America-Merrill Lynch lowers the stock substantially, to Underperform from Buy.

Main Street Capital (MAIN): Shares are moved to Neutral from Outperform with a $21 target by Baird as it currently trades above fair value estimates.

Globe Specialty Metals (GSM): GSM gets moved to Hold from Buy at Jefferies.

Lincare (LNCR): Deutsche Bank lowers the home health care company to Hold from Buy.

Companhia Vale do Rio (VALE): The Brazilian commodity company is now Neutral from Buy at UBS.

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