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Stock Downgrades: Aeropostale Investors Are About to Lose Their Shirts, 1987 Style


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

Shares of adolescent clothing company Aéropostale (NYSE:ARO), whose shirts ill-advisedly honor Wall Street's worst-ever year, are falling 14.82% before the bell. The retailer reported a worse-than-anticipated first-quarter loss, and today an analyst cautions that an expected turnaround is taking considerably longer than expected to materialize.
The Dow (INDEXDJX:.DJI), though it did end up, barely budged amid anemic pre-vacation volume. Indeed, major averages are set for smallest month-of-May movement since 1987. (If you don't want to be reminded of the storm that followed five months after that eerie calm, look away now.) 1987 was, of course, a tale of two Tiffanys (NYSE:TIF), with Ms. Darwish releasing her eponymous album but one month before the crash in the same fateful year that the bling king went public. The upscale retailer has aged a bit better than the former teen queen, to judge by a two-session advance that saw it rise 9.41% to historic highs. A broker boost sent Verizon (NYSE:VZ) up 0.47%. Today the telecom titan shockingly advertises itself on the front cover of a Time magazine issue about preemies. Hewlett-Packard (NYSE:HPQ), which tumbled 2.28% after inadvertently releasing its results early, knows all about the perils of being premature.
Today in economics, an uptick is expected in April new home sales at 10:00 a.m. EDT. On the earnings front, Foot Locker (NYSE:FL) and Hibbett Sporting Goods (NASDAQ:HIBB) each released earlier this morning. On Monday, US markets are closed for Memorial Day.
Now let's turn to this morning's rating reductions, a list that includes food and financial firms in addition to Aéropostale.

Aéropostale: Shares are slashed to Sector Perform from Outperform at RBC Capital. Its price objective is also cut considerably, by $8 to $6.
AFLAC (NYSE:AFL): The stock gets downgraded to Equal Weight from Overweight by Barclays.
Amira Nature Foods (NYSE:ANFI): Jefferies reduces its rating to Hold from Buy.
Covisint (NASDAQ:COVS): COVS is cut to Sector Perform from Outperform at Pacific Crest.
Hain Celestial (NASDAQ:HAIN): Citing a steep valuation, Jefferies cuts its recommendation to Hold from Buy.
Orange (NYSE:ORAN): Societe Generale slashes its fellow French company to Hold from Buy.
Prudential Plc (NYSE:PUK): Goldman Sachs pulls the British financial firm -- not to be confused with America's Prudential Financial (NYSE:PRU) -- from its Buy list.
Remy Cointreau (OTCMKTS:REMYF): The cognac king is now Neutral from Overweight at HSBC Securities.
RetailMeNot (NASDAQ:SALE): Shares are taken to Hold from Buy at Stifel after Google's (NASDAQ:GOOG) search algorithm update, Panda 4.0, resulted in lower traffic to RetailMeNot's site.

Also see:

New Stock Coverage: Bank of New York Mellon Addressed for Success?

Stock Upgrades: L Brands Is Too Good to be Kept a Victoria's Secret
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