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Stock Downgrades: Taco Bell Owner Yum Brands Heads South

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

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Gwyneth Paltrow is famously a big fan of tacos but, to use her favorite phrase, an analyst has decided to "consciously uncouple" from Taco Bell parent Yum Brands (NYSE:YUM) this morning. The fast food firm, which also owns KFC and Pizza Hut, incurs a downgrade in advance of its earnings announcement tomorrow, sending shares lower ahead of the open. Yum Brands has been bedeviled by issues in its critically important Chinese market for the past couple of years. However, the news isn't all bleak. Today's Wall Street Journal notes that "McDonald's (NYSE:MCD) faces increased competition from Yum Brands' new [Waffle Taco] breakfast menu."
 
We Americans, who live to work whereas Europeans -- off again this Easter Monday -- work to live, are famous for forgoing vacation days. Yet a holiday-shortened week was just the ticket for the S&P 500 Index (INDEXSP:.INX), which jumped 2.71% in only four sessions. Admittedly, Charles Holliday, Chairman of the Board at Bank of America (NYSE:BAC), saw his stock slump after announcing earnings. But a slacker at Yahoo (NASDAQ:YHOO) enjoyed an 11% increase in his preposterously lavish stock options. Thus did markets party, like it's your birthday. Which it really was for CNBC. The network arrived in 1989, the year the Berlin Wall came down to signify the "end" of a Cold War that is now heating up again. Bill Clinton, our first post-Cold War president, went with time-honored tradition and dumped contentious documents on a Friday when everyone had the day off and people weren't paying any attention. One, on Citigroup (NYSE:C), made for mighty intriguing reading.

This morning in economics, March leading indicators are expected to tick up at 10:00 a.m. Eastern. Peak earnings week is here, with Halliburton (NYSE:HAL), Hasbro (NYSE:HAS), Netflix (NASDAQ:NFLX) all due to release results today.
 
Now let's turn to this morning's rating reductions, a group that encompasses a coal company and tech stock as well as our aforementioned Yum Brands.

American Electric Power (NYSE:AEP): The electric utility gets downgraded to Neutral from Buy at ISI Group.
 
Dover Corp (NYSE:DOV): Stifel downgrades DOV to Hold from Buy.
 
Jabil Circuit (NYSE:JBL): The tech name is taken to Sector Perform from Outperform at RBC Capital Markets, which also trims its target price to $20 from $21. The bank's concerns include issues with Apple Inc. (NASDAQ:AAPL), which is Jabil's biggest client.
 
Mack-Cali Realty (NYSE:CLI): Cowen cuts the company, recently trading at a five-year low, to Perform from Outperform.
 
Moneygram (NASDAQ:MGI): Shares, which slid 17.68% on Thursday, get moved to Market Perform from Outperform at JMP Securities
 
PDC Energy (NASDAQ:PDCE): BMO Capital lowers the independent oil and gas outfit to Perform from Outperform.
 
Walter Energy (NYSE:WLT): The coal company gets slashed to Sell from Neutral at Goldman Sachs. Its price objective, previously $9, is now $5.
 
Yum Brands: JPMorgan moves the fast food firm to Neutral from Overweight.

Also see:

New Stock Coverage: Pacira Pharmaceuticals Is Just What the Doctor Ordered

Stock Upgrades: Chipotle Mexican Grill Can Go Mile High






No positions in stocks mentioned.
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