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Upgrades & Downgrades: Procter & Gamble Head and Shoulders Above the Rest

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

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Leap week began with the market barely budging by an inch but the S&P 500's (^GSPC) scant increase of 0.14%, aided by impressive strength in pending home sales, still sent the benchmark index to its best level since 2008. That year's Best Picture Oscar was won by No Country For Old Men yet that is hardly the case now, where octogenarians abound at every turn. Twenty-four hours after 82 year-old Christopher Plummer won a golden statuette, the market was able to act on the annual letter of 81 year-old Warren Buffett - who would never be caught dead stroking gold - and his 88 year-old business partner Charlie Munger. The 22-page document represents an increasingly rare bit of business for the Postal Service, which counts three 98 year-old employees among its ranks. (Hey, be grateful that the Oracle of Omaha's missive didn't go missing in the mail for 32 years, unlike a recent case from the Cornhusker State.) Priceline.com (PCLN), home to an 80 year old spokesman who was an astronaut many moons ago, is currently going to Pluto, surging 7.53% to $636.48 before the bell. Elsewhere AARP cover boy Gordon Gekko, once sent to the slammer for the same sin, now warns us of the evils of insider trading.

One wonders why, on a day prison operator Corrections of America (CXW) jumped 4.51% and LeapFrog Enterprises (LF) - whose early funding came from cell mate Michael Milken, long suspected of similar corporate hanky panky - took its 12-month gain to some 62.22%. In analyst action Viacom (VIAB), whose Executive Chairman Sumner Redstone is 88 years young, was downgraded but there was an upgrade for News Corp (NWSA), owned by Rupert Murdoch, who really is as old as The Sun. Walt Disney (DIS) ended up after Goldman Sachs (GS) boosted the entertainment outfit whose Herbie children's movies remain beloved by so many. Alas Germany's Beetle also has a darker side and parent company Volkswagen (VLKAY.PK) slumped 1.21% in a weak European car sector. At least the Audi owner can count Rick Santorum, whose campaign slogan is "Made in America," among its customers. Today he will hopefully have the street smarts to show up at the polls in a Buick as America's automotive heartland of Michigan casts its vote. This morning in economics, consensus calls for an increase in The Conference Board's February consumer confidence index at 10:00 a.m. Eastern. On the earnings front AutoZone (AZO), Bayer (BAYRY.PK), Cablevision (CVC), DreamWorks Animation (DWA), Fresh Del Monte (FDP), Office Depot (ODP), and Warnaco (WRC) are all due to report results.


Initiations:

Media & Entertainment: More favorable comments for Dow (^DJI) member Walt Disney (DIS), which along with Discovery Communications (DISCA) is initiated with an Outperform by Sanford Bernstein, which has an Underperform on Time Warner (TWX). Viacom (VIA), News Corp (NWSA), CBS Corp (CBS), and Nielsen (NLSN) are all new Market Performs.

LinkedIn (LNKD): BMO Capital begins the Internet outfit at a Market Perform.

Costco (COST): Shares are begun with a Perform at Oppenheimer, which assigns a price objective of $90. Near-term they see the stock as potentially "out of steam" but its ever-strengthening merchandising acumen to capture market share is a long-term catalyst.

Boyd Gaming (BYD): BYD is assigned an In-Line and $9.00 target price at Imperial Capital, saying share price in 2012 will be largely driven by the performance of the 50%-owned non-recourse Borgata in Atlantic City.

Cerner (CERN): CERN is begun with a Buy and $85 objective at Sterne Agee.

Jive Software (JIVE): JIVE is a new Neutral at Robert W. Baird, whose target is $21.


Upgrades:

Procter & Gamble (PG): A second upgrade in as many days for the key Dow component, whose ubiquitous brands include Bounty, Crest, Dawn, Head & Shoulders, and Tide. Today it gets a Buy-from-Neutral boost at Bank of America-Merrill Lynch. Shares are up before the bell as a result.

Apollo Group (APOL): APOL is upgraded to Overweight from Equal Weight by Barclays.

Oil services: Atwood Oceanics (ATW) is moved to Equal Weight from Underweight by Morgan Stanley, which raises its recommendation on rival Rowan Cos (RDC) to Equal Weight from Underweight.

Berry Petroleum (BRY): Suntrust takes the stock to Buy from Neutral.

Diamond Offshore (DO): DO is upgraded an unusual 180 degrees, to Overweight from Underweight at Morgan Stanley.

OAO Gazprom (OGZPY.PK): The Russian oil giant gets upgraded to Outperform from Neutral at Credit Suisse.

USG Corp (USG): Shares are now Overweight from Neutral at JPMorgan.

Isle of Capri (ISLE): The casino company is upgraded at FBR Capital to Outperform from Market Perform, which also increases its objective by $3 to $8 from $5.

Salix Pharmaceuticals (SLXP): The drugmaker is increased to Buy from Hold with a $54 target at Auriga.


Downgrades:

Nokia (NOK): Shares are now Underperform from Perform at Oppenheimer, reflecting concern about the pace of the Windows transition and growing pressures on the low-end from Android.

Newmont Mining (NEM): The commodity company is cut to Hold from Buy at TD Securities, which trims its target to $73 from $78.

SABMiller plc (SBMRY.PK): The brewing giant gets downgraded to Neutral from Buy at Nomura.

Clear Channel Outdoor (CCO): Shares are cut to Neutral from Outperform with Wedbush.

Cooper Tire (CTB): After yesterday's steep increase, the stock is now Hold from Buy at Deutsche Bank.

Finisar (FNSR): Jefferies reduces its rating to Hold from Buy.

Penn National Gaming (PENN): FBR Capital moves the stock to Market Perform from Outperform with an unchanged price target of $44. Its two promising Ohio projects are already priced in at this point.

Public Service (PEG): PEG is now Neutral from Outperform at Credit Suisse.

Thompson Creek Metals (TC): Shares are taken to Sell from Hold at Deutsche Bank.

Infosys (INFY): The Indian outsourcing giant gets downgraded to Neutral from Buy at Janney Montgomery Scott.

Oil services: Ensco (ESV) and Pacific Drilling (PACD) are each lowered to Equal Weight from Overweight at Morgan Stanley.
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No positions in stocks mentioned.
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