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Upgrades & Downgrades: Party Over for Petrobras?


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

If Tuesday was all about romantic devotion, Thursday demonstrated the benefits of decoupling. Across the Atlantic, Spain heads inexorably into recession, Italy is already in one, and Greece still stares at the abyss no matter how artfully its Titanic deck chairs are shuffled. Yet in America, ignoring all those dire developments appears as easy as 123, the amount Dow Industrials (^DJI) rose to take it to a near four-year peak. The Nasdaq (^IXIC) now stands at its loftiest level since December 2000 and the S&P 500 Index (^GSPC) is at a nine-month best. Stocks rebounded from their worst showing of 2012 to post their best day in two weeks after helpful housing data, a sunny Philadelphia Fed Index, and initial unemployment claims partying like it was 2008. (The early part of that year, let me quickly add.) Standouts included installment loan provider Advance America Cash Advance Centers (AEA), whose advance of 31.98% topped the entire Russell 2000, although the fact that it is being bought by a Mexican company arguably shows just who now owns who economically. The feel good factor from Valentine's Day continued to be felt. Zale Corp (ZLC), which bills itself as "America's diamond store since 1924,″ ended up 8.01% and Harry Winston (HWD) took its two-day gain to 10.89%. Hopefully those two audience members who unconscionably tweeted while an iconic and Alzheimer's afflicted Rhinestone Cowboy sang at the Grammys on Sunday own neither, but are instead long CBS Corp (CBS), the "Tiffany Network" falling after announcing earnings, and especially Blue Nile (NILE), the rock retailer tumbling 10.30%.

Simpson Manufacturing (SSD) - presumably no relation to Homer of Athens – increased 3.20% but J.M. Smucker (SJM), whose principal peanut butter product is much loved by America's most dysfunctional family, imploded 8.38% in the S&P 500′s worst performance ahead of this weekend's 500th episode. The first President Bush once famously said he wants us to be "a lot more like the Waltons and a lot less like the Simpsons" but (ACOM), which claims even his son and Obama are related, can probably find a connection between both clans. Its stock still slid after getting downgraded by Merrill Lynch, which itself likely wants to disown parent Bank of America (BAC). And for those culture vultures spending Sunday watching not Bart & Co. but the aristocrats of Downton Abbey for the final time this season, sorry. Nobility Homes (NOBH) nose-dived 14.90%. It's an options expiration Friday ahead of the long weekend. In economics, January leading indicators are expected to tick up slightly at 10:00 a.m. Eastern. On the earnings front Anglo American (AAUKY.PK), Barnes Group (B), Campbell Soup (CPB), Enbridge Inc (ENB), H.J. Heinz (HNZ), Lafarge (LFRGY.PK), Pilgrim's Pride (PPC), and Ventas (VTR) are all due to release results.


Athletic apparel: In the midst of Jeremy Lin mania, Deutsche Bank has a fresh hold on Foot Locker (FL) and begins a Buy on Finish Line (FL), assigning it a $28 price target.

Mindspeed (MSPD): Cantor Fitzgerald begins Buy rated coverage on the small cap stock.

Jefferies Group (JEF): Shares are resumed with a Market Perform at Raymond James.

CNinsure (CISG): Oppenheimer establishes a Perform, saying good long term grown prospects and an attractive valuation are mitigated by a relative lack of imminent catalysts.

Xylem (XYL): Citigroup has a new Neutral on XYL.


ARM Holdings (ARMH): The stock is increased to Neutral from Reduce at Natixis.

Blue Nile (NILE): RBC Capital Markets boosts the beleaguered diamond retailer to Outperform from Sector Perform.

Frontier Communications (FRT): Shares are moved to Neutral from Underperform at Macquarie.

PF Chang's (PFCB): The restaurant chain, which announced a new Chief Operating Officer this morning, gets raised to Outperform from Sector Perform at RBC Capital.

Nexen (NXY): NXY is now Outperform from Market Perform at Raymond James.

Suncor Energy (SU): Shares are hoisted to Buy from Hold with a $42 target at Stifel Nicolaus, which cites positive free cash flow and no hedges to limit its exposure to recent oil moves among other favorable factors.


Petrobras Brasileiro (PBR): Talk about a party pooper. On the very day Rio's world famous carnival celebration starts, Barclays downgrades the oil giant and pride of the city to Equal Weight from Overweight.

Tech stocks: Dell Inc (DELL) and Maxwell Technologies (MXWL) are both taken to Neutral from Outperform by Robert W. Baird, with new respective price objectives of $20 and $21. For the former, it expects a solid quarter next week but now sees a balanced risk/reward profile after a recent run up to multi-year highs. In the case of MXWL, they are moving to the sidelines until visibility into automotive and new growth markets improves.

ABB Ltd (ABB): The European industrial giant gets cut to Hold from Buy at ING Groep.

Akzo Nobel N.V. (AKZOY.PK): Macquarie moves the Dutch specialty chemical company to Neutral from Outperform.

ArthroCare (ARTC): ARTC is reduced to Hold from Buy at Jefferies.

Leap Wireless (LEAP): Brokers Collins Stewart lowers LEAP to Neutral from Buy after earnings, taking $6 off their target to $12. Risks for the entire U.S. Wireless industry have increased.

Medco Health Solutions (MHS): Morgan Stanley moves MHS to Equal Weight from Overweight.

Nordstrom (JWN): The luxury retailer gets lowered to Underperform from Buy at Crédit Agricole.

Statoil ASA (STO): The Norwegian oil and gas firm is now Underperform from Neutral at Credit Suisse, sending shares slipping before the bell.

Ultra Petroleum (UPL): Staying in the sector, Jefferies trims the stock to Hold from Buy.

Oil & gas: Valero Energy (VLO) and HollyFrontier (HFC) are each now Neutral from Buy at UBS.

VCA Antech (WOOF): WOOF is in the doghouse, downgraded to Equal Weight from Overweight with First Analysis.
No positions in stocks mentioned.
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