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Stock Downgrades: Carl Icahn Could Spell Trouble for Apple in 2014


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

Talk about salad days on Wall Street. (Unless you work at the Wall Street Journal, where finding a frog in your salad is enough to make anyone croak. And, come to think of it, Waldorf salads - whose key component is a chopped Apple (NASDAQ:AAPL) - may be in for an equally rough day, but I digress.) Would you trust these guys with your money on New Year's Eve? Probably not, but goofy looks can be deceiving, and the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500 Index (INDEXSP:.INX) each ended 2013 at all-time peaks. Old Father Time could thus hand off to the E*Trade Financial (NASDAQ:ETFC) baby safe in the knowledge that he enters 2014 in excellent shape, having surged some 119.44% over the prior 12 months. Also flying high was Delta Air Lines (NYSE:DAL), whose no-cell signal shouldn't be a sell signal, not after it advanced 131.26%. And you can keep the change.

In terms of economic events that may move US markets today, November construction spending and December's Institute for Supply Management data are each released at 10:00 a.m. Eastern. Regarding specific stocks, expect earnings announcements out of DryShips (NASDAQ:DRYS), Landec Corporation (NASDAQ:LNDC), and Resources Connection (NASDAQ:RECN).

Abercrombie & Fitch (NYSE:ANF): 2013 was an annus horribilis for both Abercrombie & Fitch stock and its endlessly controversial CEO. 2014 is off to an equally inauspicious start, as shares are slashed to Hold from Buy at Jefferies.

Analog Devices (NASDAQ:ADI): Analog Devices stock is moved to Market Perform from Outperform with Wells Fargo.

Apple (NASDAQ:AAPL): Apple, whose battle with Uncle Carl shows signs of turning nasty, is lowered to Market Perform from Outperform with Wells Fargo. Its analyst Maynard Um wrote in a note that, "While we still have conviction in the gross margin thesis (and the potential for iPad/iPhone unit upside), we believe this may be largely embedded into the valuation." Separately, Apple was named the Top Large-Cap Pick for 2014 at Cantor Fitzgerald, but Wells currently appears to be carrying more weight, with the shares currently slipping before the opening bell.

Elbit Systems (NASDAQ:ESLT): Shares are now Neutral from Buy at Citigroup.

Endo Health (NASDAQ:ENDP): Cantor Fitzgerald slashes the stock to Sell from Hold.

Flushing Financial (NASDAQ:FFIC): Down the drain for Flushing Financial, cut by Keefe Bruyette to Market Perform from Outperform.

Health Care: Ventas (NYSE:VTR) and Health Care REIT (NYSE:HCN) are each downgraded to Underperform from Market Perform at BMO Capital Markets.

Semiconductor Stocks: Altera (NASDAQ:ALTR), NXP Semiconductors (NASDAQ:NXPI), and ON Semiconductor (NASDAQ:ONNN) get downgraded to Neutral from Buy at Goldman Sachs. All are, accordingly, ahead of this morning's opening bell.

Sprint (NYSE:S): Sprint stock gets downgraded to Market Perform from Outperform at Cowen.

Texas Industries (NYSE:TXI): Longbow takes TXI to Neutral from Buy.

T-Mobile US (NYSE:TMUS): Shares get downgraded to Buy from Conviction Buy at Goldman Sachs, which says the risk:reward ratio is now roughly in balance. Its amended price objective is $37.

US Bancorp (NYSE:USB): Macquarie moves the stock to Neutral from Outperform.

Disclosure: Minyanville Media has a business relationship with E*Trade.

(See also: Stock Upgrades: Be Bullish on Bank of America and New Stock Coverage: Going Gaga for Live Nation)
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