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Upgrades & Downgrades: Analyst Has Hang-Ups on AT&T


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

Well, that was no way to celebrate the world's oldest stockbroker turning 106. Centurion Irving Kahn, born like Ayn Rand in 1905 - that was one standout year for capitalism - deserved better than a 100-point drop in the Dow (^DJI), blue chips falling for a fourth day in five amid renewed concerns over financials. Bank of America (BAC) declined 4.13%, finishing below its proposed debit fee of $5 for the first time since 2009, back when it first began rearranging the Titanic's deck chairs by removing serial renovator John Thain, he of the $1.2 million office redecoration bill. (On a down day, Hooker Furniture's (HOFT) 2.23% surge suggests shareholders are still getting screwed.) American Greetings (AM) tumbled 2.80% ahead of Thursday's earnings as the Wall Street Journal wondered aloud whether its cards are becoming old hat. The firm was founded in 1906, just in time to send Mr. Kahn a first birthday note. Schnitzer Steel (SCHN) also entered the world that year, though yesterday's nosedive of 9.16% suggests it is showing its age. Of course, no one in their right mind is sending the kin of Kim Jong-il a condolence card, and the 19.88% slide in Eastman Kodak (EK) seemed somehow fitting for a despised dictator who claimed a photographic memory.

He was by all accounts also a big film buff, and one only hopes invested heavily in Regal Entertainment (RGC), the owner of silver screens having just imploded 8.74%. (The drop may have been related to fears that David Beckham, adorable until he opens his mouth, may take Tom Cruise's advice and head to Hollywood. Hey, silent movies are making a comeback, so ya never know.) Winn-Dixie (WINN), which was once worthy of a movie, jumped 70.17% to top the Nasdaq. Planes, Trains, and Automobiles was a particular favorite of the late communist leader - being released in the crash year of 1987, he apparently used it to educate his subjects on the dangers of capitalism. Yesterday, the airline sector slumped and Swedish automaker Saab declared bankruptcy. As for trains, one suspects they won't be remembered fondly by the Kim clan. The session's rare winners included Cablevision Systems (CVC), which rose 1.98% to outpace all S&P 500 advancers after Citigroup (C) added the stock to its Top Picks Live list (presumably, in the spirit of Santa, having first checked it twice). And who says Nancy Pelosi and Barney Frank are anti-business now? Allergan (AGN), maker of both Botox and breast implants, increased 1.22% on a day the Dow declined by triple digits. Today's earnings are expected to include Carnival Corp (CCL), General Mills (GIS), Jabil Circuit (JBL), Nike (NKE), Oracle (ORCL), Paychex (PAYX), and Sanderson Farms (SAFM).


Retail sector: Collins Stewart launches new Neutrals on Victoria's Secret owner Limited Brands (LTD), Urban Outfitters (URBN), Coach (COH), Tiffany & Co (TIF), Dollar Tree (DLTR), Family Dollar (FDO), Home Depot (HD), and Lowe's (LOW). It begins Buy rated coverage on Ross Stores (ROST), TJX Cos (TJX), Aaron's Inc (AAN), Bed Bath & Beyond (BBBY), Big Lots (BIG), Lumber Liquidators (LL), Rent-A-Center (RCII), and Williams-Sonoma (WSM). Lastly, Gap Inc (GPS) gets started at a Sell.

Discount brokers: Charles Schwab Corp (SCHW) and TD Ameritrade Holding (AMTD) are each new Neutrals at Nomura, which sets respective price objectives of $12 and $17. E*TRADE Financial (ETFC) is begun with a Buy and $10 price target.

Internet-related stocks: Credit Suisse has new Neutrals on Buenos Aires-based MercadoLibre (MELI), often called "the eBay Inc (EBAY) of Latin America," and HomeAway Inc (AWAY). It assigns an Outperform on online restaurant reservation outfit OpenTable (OPEN). Also read Three Unexpected Internet Trends for 2012.

REITs: Douglas Emmett Inc (DEI) is initiated with a Buy and $22 target at KeyBanc Capital, which notes that despite a high quality portfolio of West Coast office and multifamily assets, shares trade at an enticing discount to blue chip office peers. KeyBanc covers Kilroy Realty (KRC) at a Hold as the stock appears fairly valued at current levels.

Beam Inc (BEAM): JPMorgan assigns a new Neutral on the recent spin-off, whose brands also include Maker's Mark, Canadian Club, and Courvoisier.

Chipotle Mexican Grill (CMG): Shares are covered with an Outperform by Sanford Bernstein.

CVS Caremark (CVS): The company, which just announced a 30% dividend increase, is initiated with an Outperform at Macquarie.

SeaCube Container Leasing (BOX): Citigroup begins BOX at a Buy.

Zynga (ZNGA): The recent IPO is initiated at an Outperform with Wedbush. See also Facebook Financials Leaked: Could They Hurt the Zynga IPO?


F5 Networks (FFIV): Shares get an Outperform-from-Perform increase at Oppenheimer, which establishes a price objective of $125. The brokerage believes FFIV can increase market share in 2012 and also expand its footprint in the carrier market as more network applications are adopted.

KLA-Tencor (KLAC): JPMorgan upgrades KLAC to Overweight from Neutral, sending shares higher ahead of the opening bell.

Mid-America Apartment Communities (MAA): Shares are moved to Outperform from Market Perform at Keefe Bruyette.

OGE Energy (OGE): Jefferies juices its recommendation to Buy from Hold.


AT&T Inc (T): The Dow component is now Neutral from Overweight at JP Morgan after its proposed $39 billion bid to buy T-Mobile USA from Deutsche Telekom officially ended yesterday.

Baxter International (BAX): The medical device maker gets moved to Outperform from Top Pick at RBC Capital.

Staffing stocks: Robert Half International (RHI) and Manpower (MAN) are both reduced to Neutral from Buy at Bank of America-Merrill Lynch.

Danone: The French yogurt firm is downgraded to Underperform from Neutral at Credit Suisse.

Winn-Dixie Stores (WINN): The grocery giant gets cut to Hold from Buy at Jefferies, with shares no longer trading on fundamentals following yesterday's takeover offer.

REITs: Keefe Bruyette reduces ratings on DCT Industrial Trust (DCT), Hospitality Properties (HPT), and First Potomac Realty (FPO), all now Market Perform from Outperform.

Manulife Financial (MFC): Shares are moved to Sector Perform from Outperform at RBC Capital.

Owens Corning (OC): RBC Capital reduces its OC recommendation to Outperform from Top Pick.

Novellus (NVLS): The tech stock is taken to Neutral from Overweight at JPMorgan. For related content, see Xilinx, Schnitzer Steel Bring Holiday Cheer to the Bears.

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