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Upgrades & Downgrades: Hershey's Not So Sweet

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Maybe the experts know something we don't know.

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The gains were slim, the volume slight, and the finish sluggish but stocks did manage to Kiss their three-day slump goodbye with a little help from Gene Simmons. A day after Big Apple bravado proved premature, Cupertino's Apple (AAPL) showed that speaking softly more often carries a big uptick. The firm famous for its conservative forecasts once again handily beat the Street, even if it erred in failing to issue Apples-to-Apples accounting. With Big Mac sales (up 33%) boosting its bottom line; McDonald's (MCD) -- in the red on the day -- was green only with envy. Steak place Benihana (BNHN) also failed to sizzle, sliding 11.84%, but Ben Bernanke enjoyed a better day with his renomination as Fed head seemingly secure. See also What I Would Do as Fed Chairman.

That his job is to burst bubbles before they begin was made clear as Sealed Air (SEE) deflated 1.81% on the day its plastic pops turned 50. The FOMC begins its two day policy meeting today and improvements are expected in November's Case-Shiller home price survey at 9:00AM Eastern and the Conference Board's January consumer confidence index at 10:00AM. Peak earnings week continues with Corning (GLW), Delta Air Lines (DAL), DuPont (DD), EMC Corp (EMC), Gilead (GILD), Johnson & Johnson (JNJ), Novartis (NVS), Siemens (SI), Sun Microsystems (JAVA), Travelers (TRV), US Steel (X), Verizon (VZ), and Yahoo (YHOO) all reporting results.

Initiations

Wal-Mart (WMT): The retail giant is assumed with a Strong Buy and $63 target price at Raymond James.

Sirius XM Radio (SIRI): The stock is started with a Buy at Lazard, which cites its falling costs and over 18.5 million subscribers.

Liberty Starz (LSTZA): The broker also picks up Liberty Starz (Buy; $73 target).

American Water Works (AWK): The stock is begun with a Buy and $26 price objective at Morgan Joseph as the stimulus package is an opportunity for the firm.

Blue Nile (NILE): The stock is now covered with a Hold by Benchmark.

Thomas & Betts (TNB): Robert Baird bets on Thomas & Betts (Outperform and $42 target) as it says the company is well positioned for resumed growth in electricity consumption.

Utility Stocks: In the electric and utilities space, SunTrust starts American Electric Power (AEP), CMS Energy (CMS), and Edison International (EIX) with Buys.

Upgrades

American Express (AXP): The credit card stock is upgraded to Neutral at from Sell with a $40 target at Ladenburg Thalmann, which cites the company's solid positioning for a rebound in growth and credit.

Morgan Stanley (MS): The bank is moved to Outperform from Market Perform by William Blair. See also All Banks Facing Increased Scrutiny.

Texas Instruments (TXN): Robert Baird boosts Texas Instruments to Outperform from Neutral after a fourth quarter which exceeded consensus expectations.

Alcoa (AA): BMO Capital raises Alcoa to Market Perform from Underperform.

Lexmark International (LXK): Barclays upgrades Lexmark International (Overweight from Equal-weight).

Limited (LTD): The retailer gets lifted to Outperform from Market Perform by BMO Capital with a target of $25.

TheStreet.com (TSCM): The stock gets an Outperform-from-Market Perform boost by JMP Securities, which takes its target to $5.

State Street (STT): The financial stock is now Buy from Hold at Argus with a $60 target price.

KB Home (KBH): The homebuilder is up to Outperform from Market Perform at Raymond James with an $18 price objective.

China Sunergy (CSUN): The stock is up sharply ahead of the open after it was among the solar stocks upgraded (Hold from Underperform) at Jefferies.

Amylin Pharmaceuticals (AMLN): Citigroup raises its Amylin Pharmaceuticals rating to Buy from Hold. For a related story, see Which Annoying Pharma Ads Work Best.

Applied Materials (AMAT): Oppenheimer increases Applied Materials to Outperform from Perform with a $20 target on promising channel checks.

Downgrades

Hershey Foods (HSY): The stock gets added to the Conviction Sell list at Goldman Sachs, which expects below-consensus 5% growth in EPS in 2010.

St. Jude Medical (STJ): The stock is now Hold from Buy at Lazard.

Anixter International (AXE): AXE is cut to Underperform from Neutral at Credit Suisse, reflecting a lower risk/reward profile relative to the group.

CIGNA (CI): CIGNA is downgraded to Perform from Outperform at Oppenheimer ($38 price objective) as its analysis suggests the company significantly underpriced its Medicare PFFS products in 2010.

Johnson Controls (JCI): UBS downgrades Johnson Controls, now Neutral from Buy.

No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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