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Stock Downgrades: Ominous New Wrinkle at Allergan


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

These days there is never a dull moment at Botox owner Allergan (NYSE:AGN). Only last Wednesday it was the poorest performer on the entire S&P 500 Index (INDEXSP:.INX), yet yesterday the stock jumped 2.86% to a historic high. The company is currently at the center of a contentious, and unusually structured, hostile bidding war involving both Valeant Pharmaceuticals (NYSE:VRX) and activist investor Bill Ackman.
In the stock market, corrections really are like London buses. You wait two years for one and then a bunch arrive on the same day. Thus did the Dow (INDEXDJX:.DJI) and the S&P 500 (INDEXSP:.INX) each reach fresh peaks even after US manufacturing data was badly botched. (Equities also got a boost by Beijing's Politburo proudly announcing the fastest increase of the year in manufacturing output in China, where the data is of course always above reproach.) Among equities on the move, Google (NASDAQ:GOOG) gapped down 1.06% after announcing it intends to spend more than $1 billion on satellites for those poor souls who still lack Internet access. Soo old school. Gannett (NYSE:GCI), whose USA Today has been printed by satellite ever since 1982, gained 3.96% after being boosted by Barron's. Elsewhere Apple Inc. (NASDAQ:AAPL) slipped 0.69% as investors ended their recent infatuation with the equity even amid its annual Worldwide Developers Conference. Hey, Dre did say: "I can't make you love me." Hip-hop did indeed deserve a bad rap yesterday as 50 Cent -- the singer with less than perfect pitch -- in concert with a broker boost both proved powerless to prevent Starz (NASDAQ:STRZA) falling 0.10%.
Today in economics, factory orders for April are expected to contract from the prior month's pace at 10:00 a.m. EDT. On the earnings front, Ascena Retail (NASDAQ:ASNA), Dollar General (NYSE:DG), and FuelCell Energy (NASDAQ:FCEL) all release results.
Now let's look at this morning's rating reductions, an eclectic bunch that features a Dutch beer giant and French yogurt firm, plus headline stock Allergan.

Allergan: Shares are now Neutral from Outperform at Credit Suisse.
Cash America International (NYSE:CSH): Janney cuts the company to Neutral from Buy.
Centene Corp (NYSE:CNC): The stock gets slashed to Sell from Neutral at Citigroup.
Clovis Oncology (NASDAQ:CLVS): Citi reduces its rating to Neutral from Buy.
Danone (OTCMKTS:DANOY): Shares are slipping in today's European trading after getting downgraded to Sell from Neutral at Goldman Sachs.
Heineken (OTCMKTS:HEINY): Goldman gives the Dutch brewing behemoth a Sell-from-Neutral slash, sending its stock lower in this morning's overseas action.
Oil States International (NYSE:OIS): OIS is lowered to Neutral from Positive at Susquehanna. Its price objective, previously $114, falls all the way to $67.
Quiksilver (NYSE:ZQK): The stock, slumping some 35.23% ahead of the open after an earnings miss, gets downgraded to Hold from Buy at Stifel.
W.R. Grace (NYSE:GRA): Goldman Sachs pulls shares from their list of Conviction Buys.

Also see:

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