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Stock Downgrades: Band Aid Giant Johnson & Johnson Gets a Nasty Cut


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

An ill wind blew through Wall Street last week, and at the worst possible time. Friday's swoon saw S&P 500 (^GSPC) stocks endure their worst week of the year, and just as an army of kilted Scots - who hate losing money above all - were assembling for New York's Tartan Day parade. (One only hopes that the Celts were wearing something underneath. Really, with underwear company Hanesbrands (HBI) hitting the highest level in its history on Tuesday to take its 12 month gain to 62.13%, there was no excuse not to.)

To complete a bad weekend for Bravehearts, while the country that gave the world the "father of economics" Adam Smith was forced to walk down workaday Sixth Avenue, the bankrupt Greeks strutted up fancy Fifth. Markets lost their way amid more pain in Portugal, home to legendary explorers Magellan and Vasco da Gama.

Meanwhile Chesapeake Energy (CHK) told its antique cartography aficionado CEO to get lost and promptly slid 3.2%. This as North Korea - presumably using "Don't Be Evil" Google's (GOOG) location coordinates - plotted more mayhem.

No top-tier but economic data due today but Alcoa (AA) unofficially ushers in what is expected to be a decidedly mediocre first quarter reporting season when it releases results after the close.

Air France-KLM (PINK:AFLYY): Bank of America-Merrill Lynch cuts the air carrier to Underperform from Neutral.

CA Technologies (CA): The application software company tainted by accounting scandals when known as Computer Associates is cut to Neutral from Buy at Mizuho, which also trims its target price to $25 from $28. Aggressive earnings estimates and the integration of a new Chief Executive remain risks, the broker believes.

Gazprom (PINK:OGZPY): The Russian oil giant gets downgraded to Neutral from Buy at Goldman Sachs.

Johnson & Johnson (NYSE:JNJ): JPMorgan cuts the key Dow (^DJI) component, whose brands include Band-Aid, Sudafed, and Tylenol, to Neutral from Overweight. Shares, up 25.56% in the past year having hit their highest level ever on Wednesday are now due a breather, in the broker's assessment.

L-3 Communications (LLL): JP Morgan lowers LLL to Underweight from Neutral.

Linn Energy (LINE): The stock gets downgraded to Neutral from Accumulate at Global Hunter.

Magnum Hunter Resources (MHR): Shares are moved to Hold from Buy at Stifel.

Penn Virginia (PVA): Stifel reduces its recommendation to Hold from Buy.

Public Service Enterprise Group (PEG): The energy outfit is now Hold from Buy at Argus.

Radware (RDWR): Shares are downgraded to Hold from Buy at Needham, which notes its recent earnings miss revealed a troubling slowdown in Enterprise sales, especially in Europe.

Vail Resorts (MTN): With the weather warming, Credit Suisse slashes the ski stock to Neutral from Outperform.

(See also: New Stock Coverage: Belt-Tightening Not Over at Buckle and Stock Upgrades: Analyst Falls for First Niagara.)
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