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Stock Downgrades: Did Someone Just Say 'Sell' Apple?


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

Unless you were Cuban - the Communist country - or Cuban - the capitalist billionaire- yesterday was a fine time for free markets. Dow Industrials (^DJI) reached an historic peak and the irrational ebullience extended across the Atlantic, where 17 of 18 western European markets also moved up. (The only exception? Greece. A reminder that darker days may yet lie ahead. Just sayin'.)

Equities are defying gravity while real estate rises to dizzying heights. We have of course been here before, and it did not end well, but for now let's just sit back and enjoy. Mortgage insurer MGIC Investment (MTG) rode an analyst upgrade to surge an-NYSE best 27.75%. A nice bookend to the financial crisis, then, for its plunge in 2008 was a canary in the coal mine while storm clouds ominously amassed above ground.

Today at 10:00 a.m. Eastern, forecasts call for a fall in January factory orders, while the Federal Reserve releases its March beige book surveying a dozen regional economic conditions at 2:00 p.m. In earnings action, American Eagle Outfitters (AEO), Big Lots (BIG), Brown-Forman (BF-B), Delek US Holdings (DK), Hovnanian Enterprises (HOV), PetSmart (PETM), Staples (SPLS), and Swatch Group (PINK:SWGAY) are all due to report results.

AeroVironment (AVAV): BB&T Capital cuts the company to Hold from Buy after an iffy earnings announcement. Shares are tumbling more than 20% ahead of the open.

Apple Inc. (NASDAQ:AAPL): Equity analysts rarely ever utter the four-letter word "Sell" out loud, much less on one of its erstwhile icons, but Berenberg Bank is doing just that. The tech titan is slashed 180 degrees from its prior Buy rating due to plateauing profits and margin dilution. Separately this morning, Citigroup is reducing its quarterly iPad estimates and Barclays cuts its price objective to $530 from $575. Shares, already down 19% in 2013, are falling further before the opening bell as a result.

Ferro (FOE): The specialty chemicals company is now Neutral from Overweight at JPMorgan.

Grupo Televisa (TV): UBS gives the Mexican broadcasting giant a Neutral-from-Buy downgrade.

JAKKS Pacific (JAKK): BMO Capital cuts the toy maker to Underperform from Market Perform due to tepid product performance and increased competition. Its price objective is also slashed, to $7 from $12.

JC Penney (JCP): The troubled retail stock is now Neutral from Buy at Citigroup and Perform from Outperform at Oppenheimer, which says that its upcoming quarter may "look as bad" as the prior one. Shares continue to trade at fresh four year lows having tumbled 10.63% on Tuesday.

Harris Corporation (HRS): Citing sequestration concerns among other issues, Oppenheimer cuts the communication equipment company to Underperform from Perform.

Ladbrokes (PINK:LDBKY): The British bookmaker is trading lower in London this morning after being reduced to Neutral from Buy at UBS.

Mindray Medica (MR): MR gets moved to Hold from Buy at Jefferies.

Philippine Long Distance (PHI): Citi lowers the telecom firm to Sell from Neutral.

Qihoo 360 Technology (QIHU): The Beijing-based Internet outfit, sliding more than 3% ahead of the open, is downgraded to Hold from Buy at Jefferies.

Qualcomm (QCOM): Goldman Sachs takes the tech name, a strong performer on Tuesday, off its Conviction Buy list. Chips set market share may peak in 2013.

SLM Corporation (SLM) The student lender better known as "Sallie Mae" is now Neutral from Buy at Janney.

(See also: New Stock Coverage: Check's in the Mail for FedEx and Stock Upgrades: Why You Better Buy Best Buy.)
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