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New Stock Coverage: CIT Group Gets the $87,000 Rug Pulled Out From Under It


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

While in charge of Merrill Lynch, CIT Group (NYSE:CIT) CEO John Thain was taken to task for an expensive office redecoration that included splurging on an $87,000 rug during the depths of the Great Recession. (Hey, looking at the horror show that awaits hardwood flooring firm Lumber Liquidators (NYSE:LL) today, who is to say carpets aren't far better value for money?) This morning, financial firm CIT, which lends money to small- and medium-sized businesses, is assigned the equivalent of a dreaded "Sell" rating. The company has posted consecutive disappointing quarterly results, although it did just announce a hefty dividend increase.
Wall Street -- which is normally all about "What have you done for me lately?" -- has been unusually backward-looking recently. CNBC seems to have been celebrating its 25th birthday for at least a quarter-century at this point, and the Journal just bettered that by a hundred years. Thus it was that the rear-view mirror report of month-old Fed meeting minutes saw both Dow Industrials (INDEXDJX:.DJI) and the S&P 500 Index (INDEXSP:.INX) snap a two-session skid. The heirs of Henry Ford (NYSE:F), who had no time for history, enjoyed a 1.87% jump in that stock. Mr. Ford, a brilliant businessman but something of a country bumpkin in his parochial geopolitical outlook, was famously a farmer's son. Today Tractor Supply (NASDAQ:TSCO) is tumbling and yesterday Bob Evans Farms (NASDAQ:BOBE) fell 4.44%, but, as an iPhone farmer can freshly attest, in the agriculture industry good things often eventually come to those who wait. The Germans were doubtless spitting mad that they were denied a World Cup rematch against the Dutch, but the Fatherland's own Deutsche Bank (NYSE:DB) -- which could afford to be generous after advancing 2.18% on a broker boost -- was unusually gracious toward its arch enemy by itself upgrading Royal Dutch Shell (NYSE:RDS.A). Cruelly twisting the knife after its national soccer team's 7-1 mauling, pride of São Paulo Gol Linhas Aéreas Inteligentes (NYSE:GOL) jumped 6.68% on similarly ebullient analyst action. Brazil's stock exchange was closed for a holiday so its citizens could watch in horror as noisy neighbor Argentina beat Holland in the most high-profile match between the two countries since 1978′s final. That year the boys from Buenos Aires took the trophy against the Netherlands while showered with the equity market's original method of communication, and under the steely gaze of the military junta. From the "Dirty War" to Mr. Messi -- my, how far we've come in four decades.
Today in economics, May wholesale inventories are forecast to slip from the prior month's pace at 10:00 a.m. EDT. On the earnings front, expect announcements by Barracuda Networks (NYSE:CUDA), Family Dollar (NYSE:FDO), and PriceSmart (NASDAQ:PSMT).
Now let's turn to this morning's new stock coverage, a list that includes a credit card company in addition to CIT Group.

Alstom (OTCMKTS:ALSMY): Shares are begun with a Buy at Berenberg.
Aon (NYSE:AON): Evercore assigns an Overweight, and $99 price objective, on the insurance outfit.
CIT Group: Today's headline stock is an Underperform at Macquarie, whose target price is $44.
Discover Financial Services (NYSE:DFS): Shares are an Outperform, also at Macquarie.
Exterran (NASDAQ:EXLP): Goldman Sachs gives the stock a new Neutral rating.
Now (NYSE:DNOW): The stock is launched at a Neutral by Bank of America Merrill Lynch, whose objective is $36.
Time Inc (NYSE:TIME): Evercore establishes the recent spin off at Overweight. Its price target is $28.

Also see:

Stock Downgrades: Lumber Liquidators Magic Carpet Ride Ends With Trading Floor Thud

Stock Upgrades: Even Investors With a Tin Ear Hear Alcoa Making Money Talk
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No positions in stocks mentioned.
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