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Stock Downgrades: Blame It on Rio -- Brazil's Vale Gets No World Cup Boost


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

Even as the fútbol-crazed land of Carnival prepares to party, the festivities are over for Rio de Janeiro's iron ore giant Vale S.A. (NYSE:VALE). Shares are off sharply before the bell, with China's economic slowdown having negatively impacted commodity prices while the oversupply situation remains dire.
A Ghanaian witch doctor called the "Devil of Wednesday" recently claimed to have put a hex on the planet's best player on the very eve of an eagerly-awaited World Cup. He certainly spooked equities yesterday, with the Dow (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) each enduring their poorest performance in weeks. (Camel owner Reynolds American (NYSE:RAI) did its best to boost Hump Day, rising 0.59% on an analyst upgrade but, alas, all to no avail.) Some stocks did buck a triple-digit blue chip decline. Merck (NYSE:MRK) ended up 0.55% to best all blue chips. In the World Cup year of 2002, the company was memorably given three separate ratings in a single morning by Merrill Lynch. Yesterday the same Bank of America (NYSE:BAC) unit did 180 degree Buy-from-Sell U-turns on a remarkable three different stocks. Take your pick: Micron (NASDAQ:MU), up an S&P 500 (INDEXSP:.INX)-best 5.02%, SanDisk (NASDAQ:SNDK), a 2.09% gainer, and strong>Molson Coors (NYSE:TAP) which rose 1.92% to a historic high, all got a kick out of the flip-flops.
Today in economics, April business inventories are forecast to come in essentially unchanged from the prior month's pace at 10:00 a.m. EDT. On the earnings front, Finisar (NASDAQ:FNSR), Lands' End (NASDAQ:LE), and Lululemon Athletica (NASDAQ:LULU) all release results.
Now let's look at this morning's rating reductions, an eclectic bunch that features both a French airline and Scandinavian energy giant, in addition to headline stock Vale S.A..
Air France-KLM (OTCMKTS:AFLYY) The carrier, whose infamously iffy on-time arrival record has earned it the moniker "Air Chance", gets downgraded to Underperform from Hold at Jefferies.
Anglo American (OTCMKTS:AAUKY): The commodity company, which owns 85% of South African diamond giant De Beers, is falling sharply in overseas trading today. This, after Morgan Stanley moved the miner to Underweight from Equal Weight.
AXIS Capital (NYSE:AXS): Goldman Sachs slashes the stock to Sell from Neutral.
Chesapeake Lodging Trust (NYSE:CHSP): Shares are cut to Perform from Outperform with a $30 price objective at FBR Capital, primarily due to valuation concerns.
Hawaiian Holdings (NASDAQ:HA): The airline outfit is taken to In-line from Outperform at Imperial Capital, whose target price is $16
Lufthansa: Credit Suisse cuts the trouble German airline titan to Neutral from Outperform.
Vale S.A.: Today's headline downgrade gets moved to Equal-Weight from Overweight at Morgan Stanley.
Rose Rock Midstream (NYSE:RRMS): Robert W Baird lowers the limited partnership to Neutral from Outperform.
Royal Bank of Scotland (NYSE:RBS): RBS gets reduced to Sell from Hold at Investec.
Springleaf Holdings (NYSE:LEAF): Shares are now Neutral from Buy at Sterne Agee.
Statoil (NYSE:STO): Deutsche Bank downgrades the Norwegian oil and gas outfit to Hold from Buy.
Theravance (NASDAQ:THRX): The stock gets clipped to Hold from Buy at Stifel, which says present prescription sales trends for Breo do not suggest immediate upside from current levels.

Also see:

New Stock Coverage: Sports Store Cabela's Set to Score as World Cup Starts?

Stock Upgrades: Soccer Sponsor Hewlett-Packard Kicks Off World Cup in Style
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