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Stock Downgrades: ESPN Woes Put The Walt Disney Company in Penalty Box


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

With markets naively anticipating Santa Claus, stocks were instead spooked by a man with a white beard and uncertain employment prospects. But enough about George Zimmer. For it was Fed head Ben Bernanke who sent the S&P 500 (^GSPC) slumping by the most all month the minute he opened his mouth.

Sometimes it is better to write than speak, especially on a day pen-maker AT Cross (ATX) hit a new all-time best. Its products are graduation gift mainstays, but for those who prefer to cut class, For Dummies owner John Wiley & Sons (JWA) bucked a brutal tape to end up after its earnings announcement.

Also swimming profitably against a rising tide of red ink was auction stock Sotheby's (BID), which gained 1.15%. Wall Street may not much care for starving artists, but it loves Monet Monet Monet.

We get a trifecta of economic data today at 10:00 a.m. Eastern, namely May existing home sales, leading indicators, and the Philadelphia Fed Index for June. In earnings action, expect announcement out of Kroger (KR), Oracle (ORCL), Pier 1 Imports (PIR), and Rite Aid (RAD).

Alcatel-Lucent SA (ALU): The French telecom firm - upgraded by more than one broker elsewhere this morning - is cut to Underperform from Hold by compatriot BNP Paribas.

Apparel Stocks: Aeropostale Inc (ARO) and American Eagle Outfitters (AEO) are each downgraded to Perform from Outperform at Oppenheimer.

FedEx Corporation (FDX): No love for the package delivery giant at the House of Morgan this morning. Shares are now Neutral from Overweight at JPMorgan and Equal-Weight from Overweight at Morgan Stanley.

Newmont Mining Corp (NEM): Cowen cuts the commodity company, currently falling 3.92% in today's pre-market trading, to Neutral from Outperform with a price objective of $31.84. Its steep valuation is cited, especially with bullion gaping down to levels not seen since September 2010 this morning.

Sprint Nextel Corporation (S): The telecom stock is taken to Hold from Buy at Argus on news that DISH Network Corp (DISH) will no longer pursue a purchase.

The Walt Disney Company (DIS): Saying an upcoming launch of News Corp's (NWSA) Fox Sports 1 represents a formidable rival to ESPN, Goldman Sachs removes the Dow (^DJI) member from its Conviction Buy List. Subsequently, shares are sliding about 2% ahead of this morning's opening bell. (For more on sports, please see Play These 6 Sports Stocks and You Just May Win Big.)

Unisource Energy Corp (UNS): Jefferies cuts the company to Hold from Buy.

(See also: New Stock Coverage: Urban Outfitters, Inc. Heading Uptown and Stock Upgrades: Wal-Mart Stores, Inc. Is a Bargain.)
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