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Stock Downgrades: General Mills, Inc. Didn't Eat Its Wheaties


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

So whose bright idea was it to have National Relaxation Day coincide with Wall Street's most stressful session in months? The Dow (^DJI) again dropped by triple-digits although, as that newly media savvy 123-year-old kid could tell you, perspective is everything and this too shall pass. (Don't get him started on the Panic of 1890, which our Bolivian friend witnessed firsthand.) USA Today owner Gannett (GCI) bore the brunt of the red ink, falling 5.08% after Warren Buffett's Berkshire Hathaway (BRK.B) dumped it in droves. Don't believe everything you read, then. Especially in its pages, where Omaha's oracle recently gushed, "It's almost unnatural how much I love newspapers."

Today in economics, analysts expect an improvement in the University of Michigan's preliminary August consumer sentiment survey at 9:55 a.m. Eastern. On the earnings front, Ann Inc. (ANN), A.P. Møller–Mærsk (AMKBY), Buckle (BKE), Enstar Group (ESGR), Foot Locker (FL), and Main Street Capital (MAIN) are all due to report results.

Alcoa (AA): Bank of America-Merrill Lynch cuts the key Dow (^DJI) component to Underperform from Neutral.

Aviva (AV): The life insurer is lowered to Neutral from Outperform by BNP Paribas.

Colgate-Palmolive (CL): CL is cut to Hold from Buy at Argus.

Dangdang (DANG): China's Internet company DANG gets downgraded to Equal-Weight from Overweight at Morgan Stanley.

Deutsche Lufthansa (DLAKY): Morgan Stanley moves the air carrier to Equal-Weight from Overweight, sending it down more than 3% overseas this morning.

Dick's Sporting Goods (DKS): Shares, still rated Overweight, are nonetheless pulled from JPMorgan's Focus list of favored equities. Same-store sales are seen as falling short of Street projections for a third straight quarter.

General Mills, Inc. (GIS): The packaged foods powerhouse, whose brands include Cheerios and Wheaties, gets downgraded to Underperform from Hold at Jefferies. (Although as scary cereal stories go, that's still better than finding a mouse jaw in your muesli.) The broker notes that GIS is trying to protect its profit margins by reducing its advertising expenditures.

Noble Energy (NBL): ISI Group gives the oil services outfit a Buy-from-Strong Buy downgrade.

Nordstrom (JWN): Sterne Agee reduces the upscale retailer to Neutral from Buy. Shares are tumbling about 2% as I write, after the company gave disappointing earnings guidance.

Noranda Aluminum (NOR): NOR is now Underperform from Neutral at Bank of America-Merrill.

Portugal Telecom (PT): Shares are sharply lower in today's European trading after getting taken to Neutral from Buy at Goldman Sachs, which says heightened capital requirements are a potential worry.

Red Robin Gourmet Burgers (RRGB): Brokerage boutique B. Riley takes the fast food name to Neutral from Buy.

Royal Bank of Scotland (RBS): The British financial firm is reduced to Sell from Hold at Investec.

Semiconductors: Linear Technology (LLTC) and Maxim Integrated Products (MXIM) are each lowered to Equal-Weight from Overweight at Morgan Stanley.

STMicroelectronics (STM): HSBC Securities slashes the stock to Underweight from Neutral at HSBC.

Transocean (RIG): The oil services stock gets downgraded to Underweight from Overweight at Johnson Rice.

Volterra Semiconductor (VLTR): Shares are now Hold from Buy at both Deutsche Bank and Needham.

(See also: Stock Upgrades: Pandora Media Inc Is Music to Investors' Ears and New Stock Coverage: Movado Group, Inc Has Time on Its Side.)
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