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Stock Downgrades: K12 Inc. Goes Dunce Cap in Hand

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

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The glass ceiling, set to be spectacularly shattered by Janet Yellen, will dominate the day, but Wall Street remains more fixated by the debt ceiling. Amid an increasingly dire situation in DC, the S&P 500 Index (INDEXSP:.INX) endured its steepest two-session slide since a late June swoon. Amid stocks on the move, swiftly jettisoned Golden State juice stock Jamba (NASDAQ:JMBA) imploded 18.78%. After such a showing, you'd think it would be pure pulp fiction if someone said Starbucks (NASDAQ:SBUX) would swiftly enter the SoCal smoothie business, but you'd be wrong. Will it be a case of Après moi, le déluge for the coffee king? Well, as Albert Hammond informed us all those years ago, "It never rains in Southern California. Man, it pours." At least on Pacific Sunwear of California (NASDAQ:PSUN), which tumbled 2.33% in last night's after-hours action and today incurs a rating reduction.

This afternoon at 2:00 p.m. Eastern, we will get meeting minutes to the Fed's much-debated September 17-18 policy confab, at which it unexpectedly opted to keep the monetary spigot intact. In corporate earnings action,Costco (NASDAQ:COST), Del Frisco's Restaurant Group (NASDAQ:DFRG), Family Dollar (NYSE:FDO), and Fastenal (NASDAQ:FAST) are all due to release results.

C&J Energy (NYSE:CJES): Shares are cut to Market Perform from Outperform at Cowen amid a large level of oversupply. Its price objective is also trimmed, by $2.70 to $22.30.

Green Dot (NYSE:GDOT): GDOT gets downgraded to Neutral from Overweight at Piper Jaffray, which takes its target price to $26 from $28.

Hess Corp. (NYSE:HES): Citigroup reduces the energy outfit to Neutral from Buy.

IberiaBank (NASDAQ:IBKC): Oppenheimer downgrades IBKC to Perform from Outperform amid softness in mortgage banking.

K12 Inc. (NYSE:LRN): The kindergarten-through-12th grade education outfit does indeed wear the dunce cap today. Shares are tumbling 24% as I write after the company issued disappointing earnings guidance. BMO Capital (Market Perform from Outperform) and Robert W. Baird (Neutral from Outperform, target price taken to $25 from $40) both send the stock to the principal's office.

Patterson-UTI (NASDAQ:PTEN): Shares are cut to Market Perform from Outperform at Cowen.

Pacific Sunwear of California (NASDAQ:PSUN): The stock is now Neutral from Overweight at Piper Jaffray.

Ralph Lauren Corp (NYSE:RL): Troubled by softness in apparel spending, Piper Jaffray reduces RL to Neutral from Overweight.

ViroPharma (NASDAQ:VPHM): The stock is now Neutral from Buy with a $39 price objective at Mizuho.

(See also: Stock Upgrades: Michael Kors Makes a Killing and New Stock Coverage: Ruby Tuesday Neither Day Late Nor Dollar Short.)
No positions in stocks mentioned.
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