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Upgrades and Downgrades: Elan Starts Week With Some Style

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

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The S&P 500 Index rose four sessions out of five, ending up 1.04% for a third straight weekly increase and doubling its March 2009 devil's bottom of 666.79. Still, even as Americans took Presidents' Day off to celebrate Uncle Sam and mourn Uncle Leo, satisfied in the knowledge that stocks stand at 32-month highs, there were ominous signs that history never takes a holiday. Benchmark Brent crude is now fast approaching its own 2008 peak, up over 2% to above $105 a barrel in London yesterday, which was appropriately enough for the start of previously scheduled International Petroleum Week. Oil futures are up over 9% on the New York Merc this morning on ongoing turmoil in key exporter Libya, which nonetheless appears to have found the Elixir of Life for some of its most notorious citizens. Apple Inc (AAPL) fell 1.8% on concerns, expressed in a newspaper nominated for two Pulitzer Prizes last year, that its founder might not be so lucky. That the newspaper in question is the National Enquirer thankfully diminished the story's credibility.

Moving from the shores of Tripoli to the Halls of Montezuma's revenge, Chipotle Mexican Grill (CMG) lost 3.2%, fast food out of favor in a week when Weight Watchers (WTW) surged 47.2% to an all time high. A move which apparently inspired New Jersey's formerly fairly corpulent Governor Chris Christie, who will propose some serious belt-tightening today in Trenton. And January core producer prices -- which helpfully exclude pesky food and energy prices -- jumped 0.5% in their biggest inflationary uptick since October of '08. That wallet recently returned after 40 years thus comes with precious little purchasing power. Today in economics, December's S&P/Case-Shiller home price index is released at 9:00AM Eastern and the Conference Board's Consumer Confidence survey for February arrives an hour after. It's also a big day for earnings with key Dow components Home Depot (HD) and Walmart (WMT) already each out this morning. Other results are expected to include Barnes & Noble (BKS), Carlsberg, Hewlett-Packard (HPQ), Macy's (M), Medtronic (MDT), Office Depot (ODP), and RadioShack (RSH).

Initiations

Prudential (PRU): PRU is picked up with a Buy and $81 price objective at Goldman Sachs, which also adds it to their Conviction Buy list.

Upgrades

Time Warner (TWX): TWX is taken to Buy from Hold at The Benchmark Company, which raises its target price to $44 from $39 as the accelerating advertising recovery is likely to help sustain high-single digit growth in Networks revenues.

AXA Inc: French insurer AXA Inc is upgraded to Buy from Neutral at UBS, which says "In our opinion, AXA is not a 'broken business' and improving net inflows should be a positive catalyst."

Elan (ELN): Irish drug maker Elan is up sharply before the bell on a Buy-from-Neutral boost at UBS. For a related story, see Top Biotech Takeout Targets in 2011.

Williams Cos (WMB): The stock is upgraded to Buy from Neutral at Goldman, which adds it to their list of Conviction Buys.

Textron (TXT): TXT is taken to Buy from Neutral at UBS.

Chico's FAS (CHS): The stock is upgraded to Neutral from Underweight at Piper Jaffray, which has a target of $12.

New York & Co (NWY): NWY is now Overweight from Neutral at Piper Jaffray. Its target is $10.

Armstrong World Industries (AWI): AWI is boosted to Buy from Hold at BB&T Capital.

Bank of Montreal (BMO): BMO gets moved to Outperform from Neutral at Macquarie.

Molycorp (MCP): MCP is lifted to Overweight from Neutral at JP Morgan, whose price objective is $65.

Healthcare Stocks: Healthspring (HS) is upgraded to Buy from Neutral at UBS, which lifts Humana (HUM) and UnitedHealth Group (UNH) to Buy from Neutral.

UBS AG (UBS): UBS is upgraded to Buy from Neutral at Goldman.

Downgrades

Swiss Reinsurance: The stock is downgraded to Hold from Buy at Jefferies due to valuation.

Western Gas Partners (WES): WES is now Neutral from Buy at UBS.

StanCorp Financial (SFG): The stock gets cut to Sell from Neutral at Goldman.

Nexen (NXY): Raymond James reduces its Nexen recommendation to Market Perform from Outperform.

Enbridge (ENB): ENB is removed from the Conviction Buy List at Goldman.

Virgin Media (VMED): The stock is also pulled from Goldman's list of Conviction Buys.

Akzo Nobel N.V.: The stock is now Neutral from Overweight at HSBC Securities.

Meritage Homes (MTH): MTH is downgraded to Hold from Buy at Citigroup.

Nokia (NOK): NOK is now Sell from Buy at Royal Bank of Scotland. Also read Weekly Web Watch: Bigger Better Bing?


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No positions in stocks mentioned.
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