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Upgrades & Downgrades: Apple Gets Polished

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Maybe the experts know something we don't know.

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Buyers beware the beginning of a month. Taking their cue from yesterday's sixtieth birthday celebrations in Beijing, stocks opened October amid a sea of red, the Dow's decline eclipsing a September 1st swoon for its steepest slide since the start of July. As investors -- and IMF executives -- anxiously await the next shoe to drop, US Airways (LCC) (-9.36%) was among many in its industry to lose altitude even as its most famous pilot took off again after an absence. Microsoft (MSFT) declined 3.27% on a downgrade, though their founder can afford it after topping the Forbes 400 rich list for a sixteenth successive year. Pensive, and Penske Automotive (PAG) (-15.95%), shareholders driven to drink could at least take solace in strong showings from alcoholic beverage outfit Constellation Brands (STZ) (up 5.41% on impressive earnings) and beer behemoth AMBEV (+1.22%).

Today all attention turns to September nonfarm payrolls at 8:30 AM Eastern, with digits firmly crossed that the unemployment rate doesn't cross into double digits for the first time in over a quarter of a century.

Initiations

Financials: Citigroup (C) is initiated with a Market Perform and $4.20 target price at Keefe Bruyette while Sanford Bernstein picks up Bank of America (BAC) (Outperform; price objective of $25). For more on the banks, see John Mack, Ken Lewis... Who Will Fall Next?

PetSmart (PETM): William Blair starts PetSmart with a Market Perform.

BlackRock (BLK): The stock is reinstated (Neutral; $240) at Credit Suisse after its acquisition of Barclays Global Investors.

Online Brokers: Charles Schwab (SCHW), TD AmeriTrade (AMTD) (both Buys) and E-Trade (ETFC) (Hold) are among the online brokers initiated at Collins Stewart.

Upgrades

Apple (AAPL): The company is upgraded to Buy from Neutral at UBS, which takes its target to $265 from $170, on increased conviction of recurring iPhone revenue. This was also discussed in today's Two Ways: UBS Upgrades Apple.

Intel (INTC): Oppenheimer upgrades Intel (Outperform from Perform; $28 target) believing it's well positioned to benefit from continued PC growth.

Costco (COST): The company is increased Outperform from Neutral by Robert W. Baird, which also increases its price objective $12 to $65 on easing comparisons and more solid margins. See also Four Reasons to Pass on Costco.

Comcast (CMCSA): The cable company gets an Outperform-from-Market Perform upgrade at Wells Fargo. For info on the company's rumored M&A, see Why GE Should Sell NBC Universal to Comcast.

Accenture (ACN): Goldman Sachs boosts Accenture to Conviction Buy from Buy.

Dreamworks Animation (DWA): The stock also wakes up to a Conviction Buy from Buy upgrade at Goldman.

Wynn Resorts (WYNN): The casino company is now a Buy (from Hold) at Soleil, which sets an objective of $80 due to a more compelling valuation after yesterday's sector sell off.

Downgrades

Amdocs (DOX): The company is lowered to Buy from Neutral at Bank of America/Merrill Lynch, though the target is raised to $28 from $25.

Rio Tinto (RTP): Blame it on Rio as Rio Tinto gets its rating reduced (Hold from Buy) at Canaccord Adams due to abating iron ore benefits.

PNC Financial (PNC): The financial stock is cut Underperform from Market Perform at Keefe Bruyette on valuation.



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