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Upgrades & Downgrades: Kellogg Set for Serial Success

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

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"Yes, we have no bananas". So went a famous soundtrack of the Roaring Twenties, the muddled phrase apparently coined by a Greek greengrocer named Jimmy Costas. Chiquita Brands (CQB), fresh off an 8.23% surge, may beg to differ but similar mixed messages emanating out of Athens are doing no favors for equities. Shares slipped after Greece, barely 24 hours after being boosted by a second bailout, saw its credit rating cut by Fitch to 'C' from 'CCC'. Not a great grade in anyone's estimation and that, combined with the National Association of Realtors - itself anything but a straight A student, especially in math - announcing January existing home sales rose less than expected, was enough to snap a three-session winning streak. Admittedly, the losses were as light as the volume and the likes of Destination Maternity (DEST) gained 2.72%. But a pregnant pause in the S&P 500's (^GSPC) recent journey to a nine-month high is now in order, especially with oil stubbornly stuck at an ominous nine-month summit of its own. The birth rate may be holding up even in an iffy economy but the other end of the age spectrum also remains as reliable as ever, with funeral home operator Carriage Services (CSV) reporting its third straight year of record earnings. Clearly - unless you are the Lockerbie bomber - death ultimately comes to us all. As indeed - unless you are the treasury secretary - do taxes, hence Intuit (INTU) advancing 5.91% to an all-time best.

Elsewhere Chico's FAS (CHS), the women's clothing company favored by Michelle Obama, surged 16.63% amid increasing signs an improving economy and stock market is helping her husband. Garmin (GRMN), maker of portable global positioning satellites, gained 9.33% even if an identical product once left shoppers searching for the French city of Lille 100 miles away…in Belgium. (Just as well; Lille is where Dominique Strauss-Kahn was this week holed up in prison, indicative of a once-proud continent that has lost its way.) And even as a brush-and-broom company called it quits, there came a reminder to clean out your closets. What you uncover in the basement can take you to the penthouse. Today's earning announcements are expected to include American International Group (AIG), British American Tobacco (BTI), Crédit Agricole (CRARY.PK), Dish Network (DISH), EchoStar (SATS), Gap Inc (GPS), Royal Bank of Scotland (RBS), Sears Holdings (SHLD), Target (TGT), and World Wrestling Entertainment (WWE).


Initiations:

Boeing (BA): Stifel Nicolaus has a Hold on the blue chip. In light of its extremely impressive order performance in 2011, comparisons are about to become harder and potential for appreciation appears somewhat limited at this time.

JPMorgan Chase (JPM): Mutual admiration over at the House of Morgan this morning, Dow (^DJI) member JPM being named a long Research Tactical Idea by brethren Morgan Stanley.

EZchip (EZCH): Oppenheimer initiates at a Perform, the firm's fast-growing market share being balanced by a 34% share price appreciation in only six weeks.

Insurance stocks: Primerica (PRI) is picked up with an Underperform at Macquarie, which has fresh Outperforms on rivals Reinsurance Group of America (RGA), Principal Financial (PFG) and MetLife (MET). New Neutrals are accorded Aflac (AFL), Lincoln National (LNC) and Unum (UNM).

Auto parts: Dana Holding (DAN) and Borg Warner (BWA) are both begun with Buys at Crédit Agricole.

Fuel-Tech (FTEK): Brokerage Brean Murray has a fresh Buy on FTEK and assigns it a price objective of $8. They say its stationary combustion unit stands to gain tremendously in tandem with the dual worldwide growth of increased power generation and pollution control.

Intuit (INTU): The TurboTax titan is a new Hold at Stifel Nicolaus. While current valuation is lofty, long term they should benefit as customers continue to shift from manual processes to solutions designed to address a full range of financial and management issues.


Upgrades:

Alexion Pharmaceuticals (ALXN): ALXN is taken to Buy from Neutral at UBS.

Bank of Montreal (BMO): Credit Suisse boosts the Canadian financial firm upgraded to Outperform from Neutral.

CEC Entertainment (CEC): The operator of Chuck E. Cheese's quick service restaurants is moved to Outperform from Market Perform with a $44 objective by brokers Morgan Keegan, which says fiscal 2012 will prove a stronger year for the firm.

DIRECTV (DTV): Shares are now Overweight from Neutral at Atlantic Equities.

Kellogg (K): The cereal giant gets a Buy-from-Hold hoist at Deutsche Bank.

France Telecom (FTE): ING Groep takes FTE to Buy from Hold.

LM Ericsson (ERIC): Staying with European telecoms, ERIC is now Overweight from Neutral at JPMorgan.

Level 3 Communications (LVLT): Morgan Stanley lifts the stock to Overweight from Equal Weight.

Lumber Liquidators (LL): Piper Jaffray juices its recommendation to Overweight from Neutral.

Pilgrim's Pride (PPC): The poultry processor gets increased to Outperform from In Line at Imperial Capital, which also takes its price target up by $3 to $9.

Principal Financial (PFG): The asset manager is upgraded to Buy from Neutral at Sterne Agee.

Impala Platinum (IMPUY.PK): Shares are upgraded to Overweight from Neutral at HSBC Securities.

Community Health Systems (CYH): Deutsche Bank boosts the company to Buy from Hold.

Elster Group (ELT): The German scientific instruments outfit is upgraded to Buy from Neutral by Bank of America-Merrill Lynch.

SJW Corp (SJW): SJW gets increased to Buy from Hold with a $29 target price at Brean Murray after impressive earnings and on account of an ever more attractive valuation.

Shanda Games (GAME): GAME gets upgraded to Outperform from Neutral at Macquarie.

Vivus Inc (VVUS): Shares, set to plump up substantially this morning after anti-obesity candidate Qnexa got a key green light yesterday, are raised to Hold from Sell by Brean Murray. They believe the FDA will "probably" grant approval in April and although the diet drug's near-term approvability can still be derailed by a negative CV panel in late March or an independent FDA conclusion, they believe Vivus is safe.


Downgrades:

Anglo Platinum (AGPPY.PK): The commodity company is cut to Underweight from Neutral at HSBC Securities.

Canadian Imperial Bank of Commerce (CM) Credit Suisse lowers the financial firm to Neutral from Outperform.

Fifth Street Finance (FSC): FSC gets downgraded to Hold from Buy at Gilford Securities.

Human Genome Sciences (HGSI): Shares are now Neutral from Buy at brokers Collins Stewart.

Itron Inc (ITRI): Bank of America-Merrill Lynch lowers ITRI to Underperform from Neutral.

Westport Innovations (WPRT): The stock is moved to Underweight from Neutral at JPMorgan.

Ryland Group (RYL): UBS gives a Neutral-from-Buy ratings reduction to RYL, sending shares down sharply ahead of the open.

MercadoLibre (MELI): The Buenos Aires-based online auctioneer, often called "Latin America's eBay Inc (EBAY)", is moved to Neutral from Overweight at JP Morgan.

Kyocera Corp (KYO): Staying abroad, Bank of America-Merrill Lynch cuts Japan's KYO to Neutral from Buy.

Juniper Networks (JNPR): The tech titan is now Market Perform from Outperform at FBR Capital, which takes its target down to $21 from $25. Among its concerns are overwhelming evidence of an increasing number of product delays and performance issues that will weigh on revenue and earnings growth in 2012.

Sina Corp (SINA): The Chinese Internet company gets downgraded to Equal Weight from Overweight by Barclays.
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No positions in stocks mentioned.
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