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New Stock Coverage: Time to Hit the Brakes on Tesla Motors Inc?


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

Salman Rushdie for Fed head? Unfortunately, the Bombay native has absolutely no time to spare time right now, what with all his attention understandably focused on the economic crisis currently consuming the subcontinent. Still, as our top central banker, he could certainly be counted on to deliver a much more palatable passage from India than The Satanic Verses that pass for FOMC meeting minutes these days. As a result of the muddled message Dow Industrials (^DJI) dropped for a sixth straight session, its triple-digit decline taking the benchmark back below 15,000 for the first time since the start of July. Winners among the wreckage included Apple Inc. (AAPL), which has thus far enjoyed a stellar August even as other equities implode.

Incyte (INCY) surged 33.48% to a 13-year peak on high hopes regarding its potential treatment for pancreatic cancer, the disease that took Steve Jobs from us far too soon. Elsewhere RadioShack (RSH) and Target (TGT), whose legendary leaders have filled obituary columns of late, fell a respective 5.44% and 3.61% in action that was more indicative of an overall torrid tape. Alcoa (AA) tumbled 2.00% to lead blue chip laggards as the commodity complex continued to crumble. However, putting lipstick on that particular pig may provide an inadvertent boon not just aluminum but also cadmium and chromium.

Today in economics, consensus calls for an increase in The Conference Board's July leading indicators index at 10:00 a.m. Eastern. In earnings action, Abercrombie & Fitch (ANF), Aéropostale (ARO), Autodesk (ADSK), China Zenix Auto (ZX), Dollar Tree (DLTR), GameStop (GME), Gap Inc. (GPS), Gold Fields (GFI), Hormel Foods (HRL), Marvell Technology (MRVL), Pandora Media (P), Patterson Companies (PDCO), Ross Stores (ROST), and Sears Holdings (SHLD) are all due to report results.

BioCryst Pharmaceuticals (BCRX): Shares are begun with an Outperform at Wells Fargo.

Biotechnology: Oppenheimer resumes Outperforms on Regeneron (REGN) and Vertex (VRTX), establishing respective price objectives of $300 and $105. For the former, Eylea is impressing as a treatment for wet AMD (Age-related Macular Degeneration), while VRTX has demonstrated promise with its disease-modifying therapy Kalydeco for cystic fibrosis.

Cimarex (XEC): Citigroup covers the energy outfit at a Neutral.

InvenSense (INVN): Needham has a new Buy on the semiconductor name, assigning a $20 target on a stock it says is well positioned in the smartphone camera OIS (Optical Image Stabilizer) segment.

Movado (MOV): The watchmaker, an analyst darling of late, is started with an Overweight at Stephens.

Sempra Energy (SRE): SRE is started with a Buy at KeyBanc Capital.

Tesla Motors Inc (TSLA): Elon Musk's cult electric car company, shares of which have surged 407.94% in the past year, is assigned a lukewarm Hold at Stifel amid understandable valuation issues. The brokerage believes a tricky transition lies ahead, from being a "one-hit wonder" to achieving "long-term sustainability." (This apparently unstoppable stock is nonetheless edging up as I write, hence the question mark in today's title.)

Zynga (ZNGA): The Benchmark Company has a Hold on the gaming firm whose offerings include FarmVille and Words With Friends. Although exponential expansion in smartphones and tablets offers promise, other risks remain. Its target price is $2.98.

(See also: Stock Upgrades: If It's Thursday, Microsoft Corporation Must be Back in Favor and Stock Downgrades: Target Corporation Is in the Crosshairs.)
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