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Stock Downgrades: Don't Go Bargain Hunting in Dick's Sporting Goods

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

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Dick's Sporting Goods (NYSE:DKS) stock slid 17.98% yesterday, enduring its single worst session since May 2008, after the retailer slashed its full-year outlook. CEO Edward Stack said that the hunting business "was even weaker than expected" while the company's Golf Galaxy chain saw same-store sales tumble 10%.
 
Grammar geeks can debate whether or not "normalcy" is normal English. The effect that word has had on high finance is beyond dispute, however. President Warren Harding's campaign promise of "a return to normalcy" after the carnage of World War One ushered in the Roaring Twenties. Yesterday the noun showed us its nasty side, as Philadelphia Fed head Charles Plosser said, "Now is the time to contemplate restoring some semblance of normalcy to monetary policy." Stocks slid on cue, with equities falling to three-week lows. When informed in 1930 that he made more than Harding's successor Herbert Hoover, Babe Ruth replied: "I know, but I had a better year than him." JPMorgan's (NYSE:JPM) Jamie Dimon certainly had a better year than he did last, as shareholders gave the green light to his 74% pay hike. Moving from The House That Ruth Built -- Janet Yellen owns the joint today, incidentally -- to Home Depot (NYSE:HD), the retailer bested all Dow Industrials (INDEXDJX:.DJI) with its 1.91% advance. This, amid signs that millennials are finally getting off their folks' couches and splurging for places of their own. It's about time, too. As Norman well knows, it ain't great psychologically to live so long with mama. Far better to check into Marriott (NASDAQ:MAR) than the Bates Motel, especially after the accommodation outfit increased 0.48% even amid Tuesday's overall tumble.
 
Today in economics, the Federal Open Market Committee releases minutes to its April 30 meeting at 2:00 p.m. EDT. On the earnings front, expect announcements out of American Eagle Outfitters (NYSE:AEO), Booz Allen Hamilton (NYSE:BAH), Lowe's (NYSE:LOW), PetSmart (NASDAQ:PETM), and Tiffany (NYSE:TIF).
 
Now let's look at this morning's rating reductions, an eclectic bunch that features both a real estate company and British grocery giant, plus headline equity Dick's Sporting Goods.

Dick's Sporting Goods: It's a fearful five of rating reductions for today's headline downgrade. Canaccord Genuity (Hold from Buy), Credit Suisse (Neutral from Outperform), Goldman Sachs (Neutral from Conviction Buy), JPMorgan (Neutral from Overweight), and Piper Jaffray (Neutral from Overweight) all join in the pile on.
 
Digital Realty Trust (NYSE:DLR): MLV & Co cuts the company to Hold from Buy with a $60 price objective amid uncertainty regarding its CEO search.
 
Gentiva Health Services (NASDAQ:GTIV): Shares are now Neutral from Overweight at Piper Jaffray, whose amended target price is $11.
 
Marks and Spencer (OTCMKTS:MAKSY): Citigroup cuts the English supermarket stock to Neutral from Buy.
 
Natural Grocers (NYSE:NGVC): The stock gets downgraded to Neutral from Overweight at Piper Jaffray.
 
NuVasive (NASDAQ:NUVA): Needham reduces its rating to Hold from Buy.
 
Raymond James (NYSE:RJF): Goldman Sachs gives its fellow financial firm a Neutral-from-Buy downgrade.
 
World Wrestling Entertainment (NYSE:WWE): As if last week's Friday Night Smackdown wasn't enough, today shares are lowered to Long-Term Buy from Buy at Hilliard Lyons. Its target is also trimmed, to $19 from $23.

Also see:

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Stock Upgrades: Nimble Storage Set for Quick Rebound




 
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No positions in stocks mentioned.
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