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Stock Downgrades: American Eagle Outfitters Gets Its Wings Clipped


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

Dow Industrials (^DJI) surged by triple-digits as the Fed began meeting behind closed doors. Oh, to be a fly on the wall at that confab. (Then again, given how President Obama treats both flies and Ben Bernanke, perhaps not.) Elsewhere in Washington, our Treasury Secretary tidied up his indecipherable scrawl and - suitably inspired - Signature Bank (SBNY) hit the highest level in its history. The sword was still mightier than the pen, however, as an index of defense stocks surged 1.7%.

Coffee king Starbucks (SBUX) reached a fresh peak, on news it is increasing its forays into food. Similarly rising to a new best was Dunkin Brands (DNKN), on news it is turning ever more attention to caffeinated drinks. And for those java-loving insomniacs who are up all hours, night-vision camera maker FLIR Systems (FLIR) rode a ratings increase to advance an S&P 500 (^GSPC)-best 6.15%.

This afternoon the Federal Open Market Committee concludes its two-day monetary policy meeting, to be followed by Ben Bernanke's press conference. In earnings action, expect announcements from FedEx (FDX), Hennes & Mauritz (HNNMY), Jabil Circuit (JBL), Micron Technology (MU), and Red Hat (RHT).

AGGREKO PLC (ARGKF): Shares in the power generator provider are slumping 3.40% in today's European trading after getting downgraded to Neutral from Buy at UBS. Concerns include foreign currency issues and power project softness.

American Eagle Outfitters (AEO): Citigroup cuts the clothing company to Neutral from Buy.

Brown & Brown, Inc. (BRO): The insurance outfit gets reduced to Market Perform from Outperform by William Blair.

Century Aluminum Co (CENX): The commodity company is lowered to Underperform from Neutral by Bank of America-Merrill Lynch.

Cliffs Natural Resources Inc (CLF): Bank of America-Merrill moves the stock, a strong performer yesterday after an extended period of underperformance, to Underperform from Neutral. The bank's price objective, previously $24, is taken to $16. Accordingly, shares are slumping 1.6% as I write.

KLA-Tencor Corporation (KLAC): Stifel cuts the stock to Hold from Buy mainly due to valuation.

Lincoln National Corporation (LNC): Shares are cut to Market Perform from Outperform by Keefe Bruyette.

News Corp (NWSA): With the company spin-off having been approved, the media name is now Neutral at BTIG Research.

Novo Nordisk A/S (NVO): The Danish drugmaker best known for its diabetes franchise is now Underperform from Neutral at BNP Paribas.

Research In Motion Ltd (RIMM): The tech stock is currently off about 3% after getting moved to Underperform from Perform by Sanford Bernstein, which feels that projections for the BlackBerry 10 could be overly optimistic.

Sonoco Products Company (SON): Shares are reduced to Neutral from Buy with an amended price objective of $37 by Robert W. Baird, which says recent outperformance has left the risk:reward ratio less compelling.

Sprint Nextel Corporation (S): Macquarie takes the telecom stock to Neutral from Outperform.

Tetra Tech, Inc. (TTEK): Brean Capital takes TTEK to Hold from Buy after an earnings pre-announcement that suggests operational improvement is still several quarters away.

(See also: New Stock Coverage: The Coca-Cola Company Poised for Nice Pop and Stock Upgrades: Adobe Systems Incorporated Is No 'Flash' in the Pan.)

Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.
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