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Stock Downgrades: Casual Friday Doesn't Suit the Gap


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

Seventeen years to the day after Alan Greenspan uttered his immortal "irrational exuberance" warning (which was actually buried deep in paragraph 42, for all the front-page headlines it made) US stock markets were in no danger of repeating their unbridled optimism. Indeed the Dow (INDEXDJX:.DJI) has now dropped for five straight sessions. In that speech, the former Fed head also made mention of the crash of 1987. Tiffany (NYSE:TIF) actually went public that fateful year. Inauspicious? Hardly. Yesterday the diamond ring king hit the highest level in its history after getting upgraded. Alas Aéropostale (NYSE:ARO) was strictly rhinestone in tumbling 2.88%. Its shirts honor the year Wall Street lost its shirt, which surely isn't a smart strategy for a clothing company. And on the day fast-food workers went on strike over pay, investors suddenly exhibited a renewed interest in an issue of Playboy from 1973. Not to ogle over the Amazon women inside, but to read what a 5'0″ economist had to say about the minimum wage.

In terms of economic events that may move US markets today, analysts expect an increase in the preliminary Reuters/University of Michigan consumer confidence figure for December at 9:55 a.m. Eastern. Regarding specific stocks, American Eagle Outfitters (NYSE:AEO), Bank of Nova Scotia (NYSE:BNS), Big Lots (NYSE:BIG), Ferrellgas Partners (NYSE:FGP), and Sears Hometown and Outlet Stores (NASDAQ:SHOS) are all due to release results.

Agnico-Eagle Mines (NYSE:AEM): RBC Capital reduces its rating on the commodity stock to Sector Perform from Outperform. Concerns include the negative free cash flow the broker foresees for 2014. Accordingly, its price objective on Agnico-Eagle Mines is taken to $31 from $38.

C.H. Robinson (NASDAQ:CHRW): The transport stock is now Perform from Outperform at Sanford Bernstein.

Family Dollar (NYSE:FDO): Family Dollar stock gets downgraded to Underperform from Neutral at Sterne Agee.

Gap Inc. (NYSE:GPS): Gap Inc. is lowered to Hold from Buy at Jefferies whose price objective also comes down, to $40 from $51. This even after Gap Inc. reported November same-store sales that beat Street projections.

International Business Machines (NYSE:IBM): The Dow (INDEXDJX:.DJI) member is trading lower today after getting cut to Perform from Outperform at Cowen.

SodaStream (NASDAQ:SODA): Longbow lowers the stock to Neutral from Buy.

Telefónica (NYSE:TEF): BNP Paribas takes the Spanish telecom titan to Underperform from Neutral.

Tyco (NYSE:TYC) Tyco is taken to Hold at Argus due to valuation issues.

Ulta Salon (NASDAQ:ULTA): Shares in the cosmetics company, plunging 17.20% as I pen this article after a third-quarter earnings miss, are now Neutral from Overweight at Piper Jaffray.

(See also: New Stock Coverage: Buy Workday on Jobs Friday? and Stock Upgrades: Bang for Your Buck? Dollar General Blows Bitcoin to Bits)
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