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Upgrades and Downgrades: AT&T Is Upwardly Mobile

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

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Stocks logged their third loss in four weeks, the S&P 500′s 1.92% swoon briefly talking it into the red for 2011, with utilities and technology the two worst affected sectors on a continuing cacophony of unsettling news out of both Japan and Libya. Here at home, housing data also disappointed and Europe's debt threat materialized again when Moody's downgraded Portugal. (At least the country's top soccer star, newly engaged to a Russian model, is doing his best to bring PIIGS more in line with BRICs.) Russia, which once killed a spy by slipping him some radioactive sushi, learned Karl Marx's motto also works in reverse when history, having first played out as a James Bond farce, reenacted itself as tragedy after Japan's earthquake. Forty eight hours after General Mills (GIS) announced its intention to pay $1.12 billion for a stake in Yoplait, yogurt helped two tsunami survivors stay alive.

In the week of St. Patrick's Day a three year old was declared an alcoholic in England; this morning shares of London-based Guinness maker Diageo PLC (DEO) are up amid a mooted $2 billion bid for José Cuervo tequila. The Guinness world record for a handbag was recently established at $3.8 million but had no halo effect on Coach (COH), the largest US maker of such luxury leather items, which imploded 11%. On Friday the Fed gave the green light for six big banks to resume dividend payments and onetime go-go growth stock Cisco Systems (CSCO) officially entered middle age when its board approved its first ever dividend the same day. And the Federal Communications Commission, which forced AT&T (T) to lower its rates while we waged the Second World War with Germany, will soon weigh in on whether the telecom titan's $39 billion takeover of Deutsche Telekom's (DT) T-Mobile USA is good for prices. Today in economics, existing home sales for February are expected to show a decline at 10:00AM Eastern. On the earnings front Gencorp (GY), KB Home (KBH), Presidential Life (PLFE), and Tiffany (TIF) are all due to report results.

Initiations

Summit Hotel (INN): INN is initiated with an Outperform and $13 price objective at brokers Robert W. Baird.

Nalco (NLC): NLC is now a Buy at Gleacher.

Retailers: Lowe's (LOW) and Home Depot (HD) are initiated with Neutral ratings at Nomura.

Upgrades

Rolls-Royce: Shares of Rolls-Royce are up overseas this morning after Evolution Securities raised its rating to Buy from Add.

EMC Corp (EMC): The stock is also higher before the bell on a Conviction Buy-from-Buy boost at Goldman Sachs.

AT&T (T): T is upgraded to Overweight from Neutral at HSBC, which takes its target to $32 from $30.

Target (TGT): TGT is upgraded to Outperform from Market Perform at BMO Capital.

Autodesk (ADSK): The stock is now Outperform from Neutral at Robert W. Baird, which sets a $46 target.

Evercore (EVR): EVR is taken to Buy from Neutral at Ticonderoga.

Potash (POT): POT is now Buy from Neutral at Goldman.

Qualcomm (QCOM): QCOM is hoisted to Buy from Neutral Sterne Agee.

Textron (TXT): The stock is taken to Buy from Hold with a $32 target price at Stifel Nicolaus.

Bed Bath & Beyond (BBBY): BBBY is boosted to Market Perform from Underperform at FBR Capital.

Deutsche Telekom (DT): Following yesterday's $39 billion merger announcement AT&T is also boosted to Buy from Neutral at Citigroup while HSBC Securities takes Deutsche Telekom up 180 degrees, to Overweight from Underweight.

Leap Wireless (LEAP): Citigroup lifts Leap Wireless to Buy from Hold.

New York Times (NYT): NYT, whose paywall plans were announced last week, is now Buy from Hold, also at Citi.

Dow Chemical
(DOW) is added to the U.S. Key Calls list at UBS.

SanDisk (SNDK) is also added to the U.S. Key Calls list at UBS.

Downgrades

Crown Castle (CCI): CCI is downgraded to Outperform from Strong Buy at Raymond James.

American Tower (AMT): AMT is also downgraded to Outperform from Strong Buy at Raymond James.

Taseko Mines (TGB): TGB is cut to Underperform from Neutral at Credit Suisse. For related content, see Time to Buy Uranium Mining Stocks?

Medco Health Solutions (MHS): The stock is downgraded to Hold from Buy at Deutsche Bank.

Kraft Foods (KFT): KFT is downgraded to Neutral from Overweight at JP Morgan. Also read The Future of Food Prices.

Smithfield Foods (SFD): Goldman gives Smithfield Foods a Neutral-from-Buy ratings recuction.

Ag Stocks: CF Industries (CF) and Agrium (AGU) are both now Sell from Neutral at Goldman.


Lasting through April 15, 100% of the donations made to The Ruby Peck Foundation for Children's Education will be channeled to the children of Japan as they attempt to find their footing following this natural disaster; and to kick off this drive, we'll pledge $5000 to get it started. Please do what you can, as it will add up, and thanks.
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No positions in stocks mentioned.
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