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Stock Downgrades: Horsehead Holding Needs a Sugar Daddy, Not the Godfather


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

(Hat tip to a fine Francis Ford Coppola film for today's title.) Horsehead Holding (NASDAQ:ZINC), which tumbled 2.86% yesterday, may not sleep well today either after incurring a rating reduction. Even after Monday's mauling, the industrial metals outfit has returned shareholders a tidy 41.85% in the past 12 months. Still, a subsequent plump valuation leaves at least one equity analyst with a long face.
Fútbol is all the rage right now, but it was a phrase from football that sent the Dow (INDEXDJX:.DJI) down yesterday. The initially ebullient reaction to June's payroll report looked, as is often the case, like a head fake in the cold light of day, and the reassessment saw both blue chips and the S&P 500 (INDEXSP:.INX) retreat from records. Oliver Stone's paean to pigskin Any Given Sunday, released during the waning days of the market's millennial madness in December 1999, summed up the angst. This, as Goldman Sachs's (NYSE:GS) chief economist Jan Hatzius wrote in a weekend note that the Fed will tighten sooner than he hitherto thought, even as IMF Managing head Christine Lagarde issued cautionary comments on the Sabbath. Still, trading was once again anemic. Indeed, you know it is Wall Street's summer silly season when Taylor Swift takes to the Op-Ed pages of the Wall Street Journal and klan Kardashian sets the agenda on CNBC. As Bowling For Soup sung in 1985, "When did reality become TV?" Delta Air Lines (NYSE:DAL), whose safety videos pay homage to the big-haired decade of Dallas and Dynasty, has no time for fuzzy nostalgia after its stock dropped 4.40%. This, as Yum Brands (NYSE:YUM) fell from a historic high after its Pizza Hut paired with the era's Teenage Mutant Ninja Turtles. And stuck-in-the-'80s RadioShack (NYSE:RSH) slid 7.47% to 89 cents after being robbed by a guy wearing a pink and purple dress.
Today in economics, May consumer credit is expected to contract from April's pace at 3:00 p.m. EDT. On the earnings front, Alcoa (NYSE:AA) unofficially ushers in second-quarter reporting season when it releases results after the close.
Now let's look at this morning's rating reductions, which features a beleaguered Austrian bank as well as our headline stock Horsehead Holding.

Bruker Corp (NASDAQ:BRKR): Shares get downgraded to Neutral from Buy with a $22.50 price objective at ISI Group, which says the risk-reward ratio is now back in balance after a strong recent run-up in the stock.
Erste Group Bank (OTCMKTS:EBKDY): The Austrian bank, which fell 15.83% on Friday after issuing an annual profit warning, gets downgraded by both Deutsche Bank (Hold from Buy) and Goldman Sachs (Neutral from Buy).
Horsehead Holding: FBR Capital cuts today's headline stock to Market Perform from Outperform with a $21 target price.
Karyopharm Therapeutics (NASDAQ:KPTI): Shares are now Perform from Outperform at Oppenheimer.
The Fresh Market (NASDAQ:TFM): Troubled by both food inflation and competitive concerns, Goldman Sachs slashes the grocery stock to Sell from Neutral.
Vertex Pharmaceuticals (NASDAQ:VRTX): The stock gets downgraded to Perform from Outperform at Oppenheimer.
Zebra Technologies (NASDAQ:ZBRA): ZBRA is taken to In-line from Outperform with an $85 objective at Imperial Capital, primarily due to valuation issues.

Also see:

New Stock Coverage: T-Mobile Is Pretty in Pink

Stock Upgrades: Guess Goes Back to the Future
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