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Upgrades & Downgrades: True Religion Needs a Miracle


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

"Do not consider painful what is good for you." So said noted playwright and son of Athens Euripides in approximately 450 B.C. and, two and a half millennia later, his countrymen appeared at last to agree as they reluctantly acquiesced to an austerity agreement the world was waiting for, which helped send the S&P 500 Index (^GSPC) up for a third straight day. Although its less than spectacular 0.15% gain and renewed rioting at the home of the Acropolis this morning suggests that it ain't ever over until the fat lady sings. A key date remains March 20, when the country will face a critical 14.5 billion-euro bond payment. In a delicious piece of irony that is the birthday of Dame Vera Lynn, a splendid World War Two singer who could never be called fat and was best known for her stirring rendition of We'll Meet Again. Looking at the futures this morning, off amid yet more delays with the debt deal, we will clearly be required to revisit this calamity at regular intervals. Standouts of a sluggish session included tobacco titan Philip Morris International (PM), which rose 2.80% to hit its highest level since March 2008, the month purported pot-smoking Bear Stearns CEO Jimmy Cayne was off playing bridge while his firm and the financial system collapsed. Apple Inc (AAPL), up 3.46% to another all time best, certainly got high yesterday, which may please Steve Jobs more than we ever thought.

Positive analyst comments helped both it and competitor Dell Inc (DELL), itself now at a new multi-year high. (Let's hope its iconic stoner dude spokesman Steven kept his stock options.) Apple was also boosted by speculation the third iteration of its enormously popular iPad is imminent. That so-called expert who once opined "It turns out people want keyboards. So we look at the tablet and we think it's gonna fail" would be feeling pretty silly right now were his name not… Steve Jobs. Elsewhere, hours after the House voted 417-2 to ban insider trading it came to light that the curiously named Office of Congressional Ethics has opened an investigation into the chairman of the Financial Services Committee over possible…insider-trading. Diamond Foods (DMND), which made its name in walnuts, slid 36.91% after announcing it is restating earnings for the past two years amid apparent accounting errors; to think the tasty treat is shaped like a brain. And in tennis love - and money - truly means nothing. K-Swiss (KSWS), closely associated with a Russian hottie who won many male hearts but not a single tournament in a 12-year career, fell 5.91% even as a winner of 14 Grand Slams lost $60 million. A eerily quiet week in economic data finally picks up with consensus calling for a slight slippage in the University of Michigan's preliminary consumer sentiment survey for February at 9:55 a.m. Eastern, while Fed head Ben Bernanke speaks on the housing market at 12:30 p.m. Another frenzied week for fourth quarter earnings comes to a close with Alcatel Lucent (ALU), Laboratory Corp of America (LH), NYSE Euronext (NYX), PPL Corp (PPL), and Total SA (TOT) all due to report results.


Biotechs: Morgan Stanley starts Equal Weights on Amgen (AMGN) and AVEO Pharmaceuticals (AVEO), assigns Overweights on Biogen Idec (BIIB), Celgene (CELG), and Gilead Sciences (GILD), and establishes Onyx Pharmaceuticals (ONXX) at Underweight.

BE Aerospace (BEAV): Shares are begun with an Equal Weight at Morgan Stanley.

Coach Inc (COH): Citigroup launches the luxury retailer with a Buy.

Rock-Tenn Co (RKT): The packaging powerhouse is picked up with a Buy at Citi.

Online business services: ReachLocal (RLOC): and comScore (SCOR) are each covered at Market Perform by Raymond James.


Activision Blizzard (ATVI): Goldman Sachs adds the video gaming company to its Conviction Buy List.

Alexion Pharmaceuticals (ALXN): The stock is now Outperform from Neutral at Robert W. Baird, which increases its price objective to $100 as it sees sizable upside to consensus estimates and several meaningful pipeline updates this year.

ConocoPhillips (COP): Deutsche Bank boosts the oil giant to Buy from Hold.

Credit Suisse (CS): Shares are upgraded to Hold from Sell at Société Générale.

Equifax (EFX): Goldman gives EFX an unusual 180 degree increase, to Buy from Sell.

JDS Uniphase (JDSU): Credit Suisse juices its JDSU recommendation to Outperform from Neutral, taking the stock up slightly before the bell.

Regions Financial (RF): RF is raised to Outperform from Neutral, also at Credit Suisse.

Sally Beauty: The stock gets an Outperform-from-Sector Perform boost at RBC Capital.

Sealed Air (SEE): The maker of Bubble Wrap may be poised for a pop after getting upgraded to Outperform from Neutral at Robert W. Baird, which takes its target price up to $26. Although integration risks remain, they see significant shareholder value accruing over time.


AK Steel (AKS): The commodity company is cut to Neutral from Buy at Citigroup.

Danske Bank A/S (DNSKY.PK): Citi downgrades the Danish financial firm to Neutral from Buy.

Exco Resources (XCO) The energy outfit is now Neutral from Outperform at Robert W. Baird, which takes its target to $8 from $13.

Federated Investors (FII): Bank of America-Merrill Lynch lowers its rating to Neutral from Buy.

First Solar (FSLR): Shares are slashed to Neutral from Buy at brokers Collins Stewart due to a construction permit rejection.

ING Groep (ING): The equity is now Neutral from Buy at UBS.

Masimo (MASI): Citi moves MASI to Sell from Neutral.

NCR Corp (NCR): NCR gets a Neutral-from-Buy downgrade at Goldman, sending shares lower ahead of the open.

Nobel Biocare Holding (NBHGY.PK): The healthcare company is taken to Underweight from Neutral at JPMorgan.

Oil & Gas: FBR Capital downgrades Devon Energy (DVN), Chesapeake Energy (CHK), and PetroQuest Energy (PQ) to Market Perform from Outperform amid concerns over pricing pressure amid the shale gas boom.

O'Charley's (CHUX): Shares no longer trading on fundamentals following its proposed acquisition, Morgan Keegan reduces the restaurant chain to Market Perform from Outperform.

O'Reilly Automotive (ORLY): The stock is cut by both Deutsche Bank (Hold from Buy) and Robert W. Baird (Neutral from Outperform, with the target trimmed by $8 to $80 due falling same-store-sales and conservative earnings guidance.)

Realty Income (O): RBC Capital reduces its recommendation to Sector Perform from Outperform.

Rolls-Royce (RYCEY.PK): The stock is lowered to Neutral from Outperform by BNP Paribas.

Sigma-Aldrich (SIAL): SIAL is slashed to Neutral from Buy by Bank of America-Merrill Lynch.

Silgan Holdings (SLGN): The container company gets cut to Neutral from Outperform with a $45 target at Robert Baird.

Taleo (TLEO): Baird takes TLEO to Neutral from Outperform ($46 target) after its merger announcement.

Thomson Reuters (TRI): The financial information firm is taken to Buy from Action List Buy at TD Securities.

True Religion Apparel (TRLG): Shares, tumbling some 22% in pre-market trading, are taken to Hold from Buy by both Benchmark Company (which has a new lower objective of $38) and Brean Murray after yesterday's substantial earnings shortfall.
No positions in stocks mentioned.
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