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Upgrades & Downgrades: Analyst Throws the Book at Amazon


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

Minutes and months added up to the market's worst day of the year. The FOMC's written record of its January 25 meeting, showing a disinclination towards more quantitative easing, and indications that $171 billion in Greek aid may be postponed until as late as elections in April twinned to take the S&P 500 (^GSPC) down for a second straight session. Shares were also pressured by a sharp 180 degree drop in Apple (AAPL), which fell 2.3% after earlier rising 3.3% in reaching the sort of fresh daily historic high that is starting to sound like a broken record. (Kids, ask your grandparents about the origins of that ancient expression; it belongs to a pre-iPod age.) It thus appears even the cult Cupertino company can't keep defying Gravity (GRVY) - neither the concept nor the stock, which gained 17.24% - a fact that actually shouldn't be all that surprising since Steve Jobs selected Sir Isaac Newton, who knew a thing or two about that particular scientific principle, to grace the firm's first logo. While Apple's win streak was snapped at eight amid a Chinese export threat, it's now seven straight victories for pride of Taiwan Jeremy Shu-How Lin, who must count as one of the country's better exports. The tale of the Harvard economics graduate turned unlikely basketball star may sound crazy but it certainly makes cents for many. That said, comparisons with Michael Jordan are surely somewhat premature at this still-early stage of his career, especially since the retired superstar apparently enjoyed the advantage of one extra finger to accompany an uncanny sixth sense on the court.

Beijing's basketball-loving heir apparent arrived in Iowa, his unexpected interest in America's agricultural heartland proving the kiss of death for tractor titan Deere (DE), downgraded today after falling 5.36% to a five-week low, and indeed FarmVille developer Zynga (ZNGA), which slid 17.77% on a trio of ratings reductions. A second downgrade in as many days ensured Bank of America (BAC), a 2.51% tumbler, lagged all Dow (^DJI) Industrials for a second consecutive session. The financial firm was also 2011′s poorest performing blue chip, although hitherto this year it had risen impressively from the ashes to pace all such stocks on the upside. Not that it needed any lessons in how its equity, or indeed in one case its customers, can quickly bounce back from the dead. Wednesday's good gainers included Genesco (GCO), the owner of Journeys shoe stores adding 4.74% to hit its highest level since 1980, although we weren't traveling to such lofty heights in the transportation sector, which posted the steepest plunge among all 24 industry groups. And Dean Foods (DF) jumped 10.30% to top the S&P after impressive results from America's biggest dairy producer, whose principal product was of course once a key part of a murderous milkshake concocted by a wife to kill her investment banker husband. Don't get any ideas now, especially with the ink barely dry on those Valentine's cards. Today in economics, forecasts call for an increase in February's Philadelphia Fed Index at 10:00 a.m. Eastern. On the earnings front, expect quarterly results from Applied Materials (AMAT), BAE Systems, DirecTV (DTV), General Motors (GM), J.M. Smucker (SJM), Molson Coors (TAP), Nestlé, Nordstrom (JWN), Renault, Société Générale, and Waste Management (WM).


Amylin Pharmaceuticals (AMLN): Shares are reinstated with an Outperform at Credit Suisse.

Tobacco stocks: Jefferies has Holds on Altria (MO) and Reynolds American (RAI), beginning Lorillard (LO) at a Buy.

REITs: Cantor Fitzgerald launches Hold rated coverage on Equity Lifestyle Properties (ELS) and Post Properties (PPS).

Home improvement related stocks: Owens Corning (OC) and Armstrong World Industries (AWI) are each new Neutrals at Macquarie, which starts Stanley Black & Decker (SWK) at an Outperform.

Celsion (CLSN): The small cap stock is sharply higher before the bell after being begun with a Buy at Brean Murray, which assigns it a price objective of $7. A positive outcome is expected for its Phase III ThermoDox trial in the fourth quarter.

Digital Realty Trust (DLR): Morgan Stanley resumes Overweight rated research on DLR.


Polo Ralph Lauren (RL): The high-flying clothing company gets a Buy-from-Hold boost at Argus, whose target price is a hefty $202. Catalysts include geographic expansion, new products, and an effective pricing strategy.

Expeditors International (EXPD): Jefferies juices its recommendation to Buy from Hold.

Grand Canyon Education (LOPE): Shares are lifted to Buy from Neutral at Citigroup.

Itron (ITRI): ITRI is upgraded to Outperform from Neutral by Robert W. Baird, which takes its price target up to $53. The broker believes the Smart Synch acquisition fills a technology gap in its product portfolio.

MEMC Electronics (WFR): Jefferies moves the stock to Hold from Underperform.

Northeast Utilities (NU): NU is now Neutral from Underperform at Macquarie.

FirstService (FSRV): Raymond James raises its rating to Outperform from Market Perform.

Teekay Tankers (TNK): TNK is taken to Outperform from Market Perform with Wells Fargo.

Zillow (Z): The recent online real estate IPO is hoisted to Hold from Sell by brokerage Craig Hallum.

Downgrades: (AMZN): What goes around, comes around? A year to the day after brick-and-mortar bookseller Borders filed for bankruptcy because of increased Internet competition, its online bête noire is itself downgraded to Equal Weight from Overweight at Morgan Stanley. As a result shares, off 3.57% yesterday, are again trading lower ahead of the open.

Internet-related equities: (ACOM) is now Neutral from Buy at Bank of America-Merrill Lynch, which lowers ReachLocal (RLOC) to Underperform from Neutral.

Atlas Air Worldwide (AAWW): Dahlman Rose drops the stock to Hold from Buy as earnings momentum is slowing. Accordingly, it appears fully valued.

BASF AG (BASFY.PK): The German chemical company gets cut to Add from Buy at WestLB.

BNP Paribas (BNPQY.PK): No love lost as Société Générale slashes its rival French financial firm to Hold from Buy.

CNOOC (CEO): The Chinese oil giant gets downgraded to Underperform from Market Perform at Jefferies.

Comcast (CMCSA): Argus cuts the cable company to Hold from Buy due primarily to valuation. In addition, NBC/Universal continues to drag on results and may do so for the foreseeable future.

Chiquita Brands (CQB): The banana behemoth slips to Hold from Buy by BB&T Capital.

Cimarex (XEC): Shares get cut Hold from Buy at Canaccord Genuity.

Deere (DE): The farm equipment outfit is moved to Market Perform from Outperform with Wells Fargo.

Denny's (DENN): The fast food firm is downgraded to Buy from Strong Buy at Feltl & Co after earnings, its shares having already gained 14% this year.

Fresenius Medical (FMS): Shares are now Neutral from Buy at Citi.

Incyte (INCY): Morgan Stanley moves the stock to Equal Weight from Overweight.

Select Medical (SEM): SEM is taken to Market Perform from Outperform at JMP Securities.

Masco (MAS): Citi moves MAS to Neutral from Buy.

Natural Resource (NRP): NRP is now Market Perform from Outperform with Wells.

NVIDIA (NVDA): The tech firm is taken to Neutral from Buy at Bank of America-Merrill Lynch.

Watsco (WSO): BB&T Capital lowers the electronics wholesaler to Hold from Buy.
No positions in stocks mentioned.
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