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Stock Downgrades: It's Time to Stop Pampering Procter & Gamble


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

Blue chip Procter & Gamble (NYSE:PG) may be a drag on the Dow (INDEXDJX:.DJI) today after the consumer products powerhouse incurred a rating reduction. The company, whose ubiquitous household brands include Bounty, Pampers, Gillette, and Tide, gets downgraded primarily due to a stubbornly slow improvement in its underlying fundamentals.
"Buffalo" Bill Hillman, who ironically helped author How to Survive the Bulls of Pamplona, was just rendered semi-conscious in San Fermin. As such he knows better than most that, as any matador can tell you, the animal is almost always at its most dangerous when mortally wounded and facing the end. Thanks to events in Spain's next-door neighbor, this remarkable run in equities does indeed look like a boom on its last legs. Yesterday billionaire Carl Icahn, who knows a bit about the end of bulls, was even more of a party pooper than Portugal after opining in an interview "it is time to be cautious about the US stock markets." Thus did both blue chips and S&P 500 (INDEXSP:.INX) shares continue their recent slide. In a week when a Prohibition-era president, hitherto believed to be prim and proper, was shown to have an extremely lively love life and the usually dry pages of Accounting Today read like the gossip rags, it was only fair that Wall Street should finally awake from its summer slumber and finally give us some excitement. Were he alive in the 21st Century, Warren Harding would doubtless have been a devotee of Sex and the City and yesterday the show, off the air for a decade, could claim credit for two standout showings. Crumbs Bake Shop (OTCMKTS:CRMB), inspired by Carrie and Co.'s Magnolia Bakery endorsement, said "let them eat cupcake" in surging some 1,197.10%. And TiVo Inc. (NASDAQ:TIVO), the true love of Miranda's life, jumped 3.29%, admittedly somewhat less impressive but still a stellar showing in light of the awful overall tape. Faring far less well was a disowned Lumber Liquidators (NYSE:LL), which dropped an NYSE-worst 21.54% in its single worst showing since 2011. Way back when Europe's debt threat was still an issue. Good thing those days are over, eh?
There aren't any top-tier economic reports due today but, in earnings action, Infosys (NYSE:INFY) and Wells Fargo (NYSE:WFC) each released results earlier this morning.
Now let's look at this morning's rating reductions, an eclectic bunch that features both a problem-plagued Portuguese bank and American athletic apparel outfit, plus headline stock Procter & Gamble.

Alon USA Partners (NYSE:ALDW): Shares are now Neutral from Buy at Citigroup.
Banco Espírito Santo (OTCMKTS:BKESY): Okay. This might have been marginally more helpful before yesterday's 17.24% slide, but better late than never I guess. The poster child for Portugal's financial crisis gets slashed to Neutral from Buy at Goldman Sachs.
Finish Line (NASDAQ:FINL): Sterne Agee cuts the company to Neutral from Buy.
Procter & Gamble: Today's headline stock gets taken to Market Perform from Outperform with Wells Fargo.
Qualcomm (NASDAQ:QCOM): Goldman pulls the tech firm from its list of Conviction Buys.
Teck Resources (NYSE:TCK): The Canadian commodity company is lowered to Underperform from Neutral by Bank of America Merrill Lynch.
Vestas Wind (OTCMKTS:VWDRY): HSBC Securities slashes the Danish turbine titan to Neutral from Overweight.
Also see:

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No positions in stocks mentioned.
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