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Stock Downgrades: Bed Bath & Beyond Inc. Needs a Nap


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

Stocks barely budged, with Dow Industrials (^DJI) eking out an infinitesimal 0.09% increase on anemic volume as utterly "boring" sectors such as utilities dominated the day. For most of us, then, equity action was like watching paint dry, but for The Men Who Stare At Goats (or worse) it was a feast for the eyes. Facebook (FB), suddenly back in favor, surged 29.61% for its single best showing since going public. (Nasdaq (^IXIC), its facilitator for history's most botched IPO, failed to fully share in the joy. Especially yesterday.)

TripAdvisor (TRIP) jumped 16.29%, so maybe it really is Better To Travel, to quote an album from Wall Street's annus horribilis of 1987. Elsewhere Aéropostale (ARO), whose offerings honor that year, advanced 2.15% on a broker boost. And with royal babies all the rage, Destination Maternity (DEST) rose 8.08% to the highest level in its history and the tiny tots of E-Trade (ETFC) also delivered for investors, ending up 7.86% at a fresh 52-week peak.

Today in economics, the University of Michigan's final figure for July consumer confidence arrives at 9:55 a.m. Eastern. On the earnings front, peak week of Q2 reporting season concludes with quarterly announcements expected out of Aon plc (AON), British Sky Broadcasting (BSYBY), Kia Motors (KIMTF), Lear Corporation (LEA), LyondellBasell (LYB), Newell Rubbermaid (NWL), Samsung Electronics (SSNLF), Stanley Black & Decker (SWK), Tyco International (TYC), and Wipro (WIT).

Bed Bath & Beyond Inc. (BBBY): The retailer stock, up 26.64% in the past 12 months having hit an historic high on Monday, is reduced to Hold from Buy at BB&T.

Cerner (CERN): Shares are reduced to Neutral from Outperform at Robert W. Baird.

Deckers Outdoor (DECK): The maker of Ugg boots gets downgraded to Underperform from Neutral by Credit Suisse.

Dolby Labs (DLB): DLB is now Neutral from Buy at Dougherty & Company due to uncertain visibility as to when sustained top-line growth will return.

DXP Enterprises (DXPE): The industrial equipment outfit gets downgraded to Neutral from Buy at Ascendiant.

Expedia (EXPE): The online travel titan, currently tumbling 22% before the bell, is moved to Market Perform from Outperform at Raymond James.

Facebook (FB): The social networking name, fresh from yesterday's 29.61% surge, gets taken to Hold from Buy today at Argus. Valuation issues are inevitably cited. Shares are, accordingly, slipping before the bell.

Freescale Semiconductor (FSL): Shares are clipped to Perform from Outperform at Oppenheimer amid a premium valuation and increased risks from rising rates.

Global Payment (GPN): UBS gives the stock a downgrade to Neutral from Buy.

Kennametal (KMT): JPMorgan moves the equity to Neutral from Buy.

Motorola Solutions (MSI): Shares are cut to Hold from Buy at Argus.

NETGEAR (NTGR): The tech stock is taken to Underperform from Sector Perform at RBC Capital.

Pernix Therapeutics (PTX): The small cap stock is slashed to Sell from Hold at Cantor Fitzgerald, which also trims its target price to $2.50 from $3.00. Weak prescription trends for Pernix are a particular concern.

Potash (POT): Raymond James reduces the fertilizer firm to Market Perform from Outperform.

Regional Banks: Keefe Bruyette cuts BNC Bancorp (BNCN), Lakeland Bancorp (LBAI), and Susquehanna Bank (SUSQ), all now Market Perform from Outperform.

Revlon (REV): The cosmetics company is cut to Market Perform from Outperform by BMO Capital.

Rolls Royce (RYCEY): The stock, which surged 5.1% yesterday to touch its highest level in at least a quarter-century, is today slashed to Sell from Hold at Deutsche Bank.

Seadrill Ltd (SDRL): Shares are now Neutral from Overweight at HSBC Securities.

SolarWinds (SWI): Citing core business concerns and continued license weakness, Needham cuts the company to Hold from Buy.

Southwest Airlines (LUV): LUV is lowered to Market Perform from Outperform at Raymond James.

Stewart Information Services (STC): Due to valuation issues after a strong recent run in the stock, FBR Capital cuts the company to Market Perform from Outperform.

Vertex Pharmaceuticals (VRTX): UBS cuts the company to Neutral from Buy.

Zynga (ZNGA): Shares, slumping some 16.86% ahead of the open after releasing earnings, are now Hold from Buy at Needham. Weakness in its poker franchise and an absence of real money gambling games in America represent genuine risks.

(See also: New Stock Coverage: Cardiovascular Systems Inc Will Win Your Heart and Stock Upgrades: Tesla Motors Inc Hits Top Gear.)
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