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Stock Downgrades: Another Kick in the Pants for Lululemon


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

Yesterday an upstart yoga-apparel outfit announced big expansion plans, even as investors spent the entire session saying, "Yoga, schmoga" to longtime industry leader Lululemon Athletica (NASDAQ:LULU). Shares fell 15.91% to lows last seen in March 2011 amid uncertain second-quarter earnings prospects and an ongoing soap opera in the C-Suite. In reducing its rating this morning, analysts at Robert W. Baird warn of a "choppy transition year" ahead.
Remember that innocent age of, oh, 72 hours ago, back when Dow Industrials (INDEXDJX:.DJI) were racking up historic highs en route to five straight winning sessions? Those were the days, my friend. All of a sudden blue chips have dropped by triple-digits twice in quick succession, with oil skyrocketing and Iraq aflame. Still, cheer up -- today is not only a full moon, but Friday the 13th to boot. On an identical date that will long live in market infamy, October 1989, the S&P 500 (INDEXSP:.INX) skidded 6.12% amid a crisis at United Airlines. Yesterday Delta Air Lines (NYSE:DAL), which fell 5.43% on a petroleum price panic, was the benchmark bourse's single poorest performer. So no change there, then. Some stocks did buck a brutal tape. Pharmaceutical firm Novo Nordisk (NYSE:NVO), a pioneer in insulin pens, advanced 2.41% even as calorie king Paula Deen -- who once made the most preposterous possible spokesperson for its anti-diabetes drugs -- cooks up a comeback. And, on a day the World Cup kicked off in the world's largest coffee-producing country, with Christ the Redeemer gazing down from on high, coffee cups were on the money as Keurig Green Mountain (NASDAQ:GMCR) jumped an S&P 500-best 4.11%.
Today in economics, the University of Michigan's preliminary June consumer sentiment survey is expected to tick up from May's final figure at 9:55 a.m. Eastern.

Now let's look at this morning's rating reductions, an eclectic bunch featuring pawnbroker and petroleum plays plus headline stock Lululemon Athletica.

AptarGroup (NYSE:ATR): Bank of America Merrill Lynch lowers its rating to Underperform from Neutral.
Campus Crest Communities (NYSE:CCG): Shares are cut to Underperform from Neutral, again by Bank of America Merrill.
Cash America (NYSE:CSH): FBR Capital moves the stock to Market Perform from Outperform with a $46 target price due to upcoming earnings pressure.
Lululemon Athletica: Robert W. Baird reduces today's headline equity to Neutral from Outperform. Its price objective, previously $60, is slashed by $16.
Marathon Oil (NYSE:MRO): MRO gets moved to Market Perform from Outperform with Wells Fargo. Shares rose sharply in yesterday's terrible tape amid unrest in Iraq.
Marvell (NASDAQ:MRVL): The tech name is now Neutral from Positive at Susquehanna.
Scorpio Tankers (NYSE:STNG): DNB Markets takes the shipping stock to Sell from Hold.

Also see:

New Stock Coverage: With Iraq Aflame, Oil's Well at Occidental Petroleum

Stock Upgrades: World Cup a Messi Business? Adidas Can Clean Up
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No positions in stocks mentioned.
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