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Stock Downgrades: Apple Is an April Fool


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

Who needs April Fools when fact is so much stranger than fiction? Baseball's richest team, suddenly on an austerity kick, fails to sell out a season opener against their biggest rival. A humble paper card company, American Greetings (AM), surged 12.11% while sexy tech stock Apple Inc. (AAPL) imploded another 3.11%.

And Macy's (M) marked Financial Literacy Month with a typo that resulted in a $1,500 necklace being sold for 47 bucks. Hopefully investors were literate enough to distinguish the difference between Vlasic pickle parent Pinnacle Foods (PF) and coupon clipper Valassis Communications (VCI). The former, fresh from Thursday's 11.05% pop, added on another 4.46% even as the latter, unloved by equity analysts, fell 5.79%.

Today in economics, factory orders for February are released at 10:00 a.m. Eastern. On the corporate front, spice stock McCormick (MKC) is trading lower ahead of the open after announcing earnings earlier this morning.

Air China (AIRYY): HSBC Securities executes a highly unusual mid air u-turn on the stock, slashing it to Underweight from Overweight.

Apple (NASDAQ:AAPL): Its research note is dated April 1, but Goldman Sachs (GS) appears to be deadly serious in pulling the tech titan from its list of Conviction Buys, while keeping an overall Buy rating. The bank laments, "The most recent product cycle has not driven the market share and new user growth we had anticipated." Accordingly its price objective, previously $660, is slashed to $575 and earnings estimates also come down. At the moment it seems that the joke is on Goldman, with Apple shares edging up ever so slightly as I write to recover some of Monday's mauling, even as the financial firm endures a downgrade of its own this morning.

(See also: Why Apple's Reputation Depends on the iPhone 5)

Celadon Group (CGI): The trucking company gets taken to Hold from Buy at BB&T Capital Markets.

CME Group (CME): Credit Suisse cuts the exchange operator to Neutral from Outperform.

DFC Global (DLLR): Shares are now Buy from Neutral at Nomura.

Ericsson (ERIC): The Swedish telecom titan is taken to Sector Perform from Outperform at RBC Capital.

Exxon Mobil (XOM): Oppenheimer cuts the oil giant and key Dow (^DJI) component to Perform from Outperform. Absent an unforeseen acquisition, share price catalysts appear thin on the ground at present.

EZCORP (EZPW): The pawnbroker is moved to Underperform from Market Perform at FBR Capital, which takes its target price to $17.50 from $22.00. Concerns include a disproportionate share of revenue derived domestically relative to peers, aggressive payday lending practices, and considerable exposure to gold.

Financial Stocks: Charles Schwab (SCHW), Morgan Stanley (MS), and SunTrust Banks (STI) are all moved to Neutral from Outperform at Credit Suisse.

Goldman Sachs (GS): On a big day for downgrades, Bank of America-Merrill Lynch lowers its fellow financial firm to Neutral from Buy. A steep valuation is cited.

Hewlett-Packard (HPQ): Goldman slashes the stock, the poorest performing blue chip of 2012 but the best thus far in 2013, to Sell from Neutral. Persistent personal computer and printing softness fails to justify such recent out-performance, the bank believes.

NASDAQ OMX Group (NDAQ): NDAQ is now Equal Weight from Overweight at Evercore.

Penn Virginia (PVR): Shares get downgraded to Equal Weight from Overweight by Barclays.

Rackspace Hosting (RAX): RAX is reduced to Market Perform from Outperform with Wells Fargo.

Texas Instruments (TXN): Troubled by an imminent order slowdown, Stifel takes the semiconductor stock to Hold from Buy.

(See also: New Stock Coverage: Don't Lose Your Shirt in Abercrombie & Fitch and Stock Upgrades: High Fives for F5 Networks.)
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