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Stock Downgrades: Chuck Schwab Not Making Money Talk Today


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

Yes, yes, it's the Ides of March - not to mention quadruple witching Friday – but why worry about Caesar's sharp knives when silver spoons are suddenly everywhere? The Dow (^DJI) is now up for 10 straight sessions, setting records in the past eight. That hasn't happened since November 1996, when the Macarena was top of the pops. The ditty was famously voted history's greatest one-hit wonder but this time stocks may make lightening strike twice.

Goldman Sachs (GS), sliding 1.47% before the bell after an especially stressful stress test, may want to leave "God's work" to the Holy Father in the future. After all, the newly elected pope appears to have a magic touch with the markets. His decision to ride in a Volkswagen (PINK:VLKPY) promptly saw the German car giant report record earnings. And his master's degree in chemistry had a halo effect on specialty chemical company LyondellBasell (LYB), which advanced 2.32% to a fresh best. Alas, with markets partying like it's 1999, Time magazine's man of the millennium ironically missed out on all the fun, as an unloved Amazon (AMZN) imploded 3.40%.

This morning in economics, analysts expect the first take on March consumer confidence from the University of Michigan to come in essentially unchanged at 9:55 a.m. Eastern. On the corporate front, Brown Shoe Co. (BWS), Carnival Corporation (CCL), Hibbett Sports (HIBB), and Italy's biggest bank UniCredit S.p.A. (PINK: UNCFF) are all due to release results.

Airlines: Delta Air Lines (DAL) and US Airways (LCC) each get downgraded to Market Perform from Outperform at Raymond James.

Charles Schwab (SCHW): The discount broker, famous for its "Talk to Chuck" ads, is slashed to Sell from Neutral at Compass Point. Valuation issues allied to sluggish retail volumes are dual factors for the downgrade, and its price objective is $15.

Colgate-Palmolive (CL): No smiles today for the stock, recently trading atop all-time highs having just announced its first split since 1999. This morning, Morgan Stanley moves it to Equal-Weight from Overweight, sending shares lower before the bell.

Furniture Stocks: Raymond James reduces ratings on Herman Miller (MLHR), Knoll Inc. (KNL), and Steelcase (SCS), all now Outperform from Strong Buy. Leggett & Platt (LEG), meanwhile, is moved to Market Perform from Outperform.

JB Hunt Transport Services (JBHT): Shares are slipping ahead of the open after getting downgraded to Market Perform from Outperform by Sanford Bernstein.

Kennametal (KMT): KMT is lowered to Neutral from Buy at Longbow.

Progressive (PGR): The insurance outfit famous for its irrepressibly perky spokesperson Flo gets cut to Underperform from Market Perform at Keefe Bruyette.

Regional Banks: BBCN Bancorp (BBCN), East West Bancorp (EWBC), and Sierra Bancorp (BSRR) are all cut to Market Perform from Outperform at Keefe Bruyette.

Royal Dutch Shell (RDS-A): JPMorgan Cazenove reduces the Dutch oil giant to Underweight from Neutral and takes its target price, previously 2,500 British pence, to 2,400.

Spirit AeroSystems (SPR): Shares are taken to Hold from Buy at Topeka.

Transocean (RIG): Still unable to escape the shadow of its Deepwater Horizon explosion almost three years ago, the oil services outfit is today taken to Hold from Buy at Jefferies.

Ulta Salon Cosmetics & Fragrance (ULTA): Oppenheimer cuts the beauty firm to Perform from Outperform. Shares slumped 14% in after-hours action yesterday after the company's first quarter earnings forecast disappointed equity analysts.

(See also: New Stock Coverage: Money Trees Growing in Forest City and Stock Upgrades: Nasdaq Parties Like It's 1999.)
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