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Upgrades & Downgrades: Google Still Searching for Answers


Maybe the experts know something we don't know.

It's a bright green Big Apple as the city's Jets aim to follow in the famous footsteps of their forebears from the New York Sack Exchange. Alas over on the New York Stock Exchange there is an ocean of red. A frightful day for financials erased all of this year's gains with the Dow enduring its steepest two-day percentage skid since the summer. Volume and volatility each shot up but down arrows abounded almost everywhere else and a 5.50% slide in navigation provider Garmin (GRMN) is indicative of a market which appears to lose its way with each passing day. Meredith Corp (MDP), which beat the Street on a 51% rise in Q2 revenue, had a better day than Meredith Whitney, the guru du jour whose increasingly bearish stance on Goldman Sachs (GS) wasn't justified by its biggest ever increase in quarterly earnings. See also Will Wall Street Ever Be the Same?

To be fair she has always appropriately advised against putting all your investment eggs in one basket, and wasn't the only highly compensated analyst left with one on their face; "way below consensus" was the forecast of Dick Bove shortly before the investment bank blew consensus out of the water, again. Dick and Bove weren't the only four letter words to fill yesterday's airwaves, as Obama announced American taxpayers would never again be "held" hostage by a "bank" that is too big to "fail". Rumor has it Wall Street responded with some syllables of similar length. It's all quiet in economics but earnings season continues with BB&T Corp (BBT), General Electric (GE), Harley-Davidson (HOG), Kimberly-Clark (KMB), McDonald's (MCD), Schlumberger (SLB), and SunTrust (STI) all releasing results.


Retailers: Deutsche Bank begins retailers Abercrombie & Fitch (ANF) (Hold; $30 price target), Gap (GPS) (Sell; $17), Urban Outfitters (URBN) (Buy; $36.50), Ross Stores (ROST) (Hold; $47), and TJX Companies (TJX) (Buy; $43). For a related story, see Retailers Must Get Onboard With Online Sales.

Teva Pharmaceuticals (TEVA): The Royal Bank of Scotland starts Teva Pharmaceutical at Buy and $70 target.

NCI Building Systems (NCS): The stock is up sharply before the bell after being initiated with a Buy at Canaccord Adams.

RINO International (RINO): Thin skinned investors may be tempted to try on RINO International for size after Standpoint Research starts it at a Buy and $35 price objective.

Duke Energy (DUK): Wells Fargo resumes coverage on Duke Energy at Market Perform.

Potash (POT): The ag stock is picked up at a Hold by Morgan Joseph as it sees steady, though not flashy, growth ahead.

Charles Schwab (SCHW): The stock is started at Outperform by Credit Suisse.


Tyson Foods (TSN): The stock is taken to Buy from Hold by BB&T Capital Markets with a target price of $17.

CONSOL Energy (CNX): The energy stock gets upgraded to Buy from Neutral at Goldman Sachs.

Petrohawk Energy (HK): Credit Suisse raises its rating on Petrohawk Energy (Outperform from Neutral).

Veeco Instruments (VECO): The stock is added to Focus List at JP Morgan.

JP Morgan (JPM): JP Morgan itself is increased at Citigroup to Buy from Hold with a $48 target as current levels represent an excellent entry point on the shares.

Del Monte Foods (DLM): Deutsche Bank upgrades Del Monte Foods to Buy from Hold as its transition is poised to reap rewards.

International Game Technology (IGT): Oppenheimer upgrades International Game Technology to Outperform from Perform.

Retailers: Bank of America/Merrill Lynch lifts Limited (LTD) and Nordstrom (JWN), each now Neutral from Underperform.

Rio Tinto (RTP): HSBC takes Rio Tinto to Overweight from Neutral.

Southwest Air (LUV): The airliner is upgraded to Outperform from Market Perform at Raymond James.


Google (GOOG): The tech giant gets cut to Hold from Buy by Collins Stewart, which also takes its target to $615 from $635 after yesterday's earnings. The broker believes Google is increasingly a show-me story and material upside to valuation rests on the company's ability to increase its non core-search business. See also YouTube's Rental Service Intensifies Three-Way War.

Valley National (VLY): The regional bank could struggle to scale prior peaks after being lowered to Sell-from-Neutral at UBS.

UBS (UBS): Not that UBS itself can crow; it is cut to Underperform from Neutral by BNP Paribas, which thinks the new rules on capital will be more negative first thought. Also read Glass-Steagall? Be Careful What You Wish For.

Watson Pharmceuticals (WPI): The stock is now Underperform from Hold at Needham mainly due to valuation.

Massey Energy (MEE): The stock gets taken to Neutral from Buy at Goldman.

Zale (ZLC): Bank of America/Merrill Lynch lowers Zale to Underperform from Neutral.

Miners: Goldman downgrades Joy Global (JOYG) (Neutral from Buy), Freeport McMoRan (FCX) (Neutral from Buy), and removes US Steel (X) from its Conviction Buy list.

Advanced Micro Devices (AMD): Auriga reduces Advanced Micro Devices to Sell from Hold following earnings. See Advanced Micro Devices Remains Behind the Eight Ball.

Royal Caribbean (RCL): The cruise company gets cut to Neutral from Outperform at Wedbush Morgan; $24 target.

Apple (AAPL): The stock is removed from the Buy list at Deutsche Bank.
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