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Stock Downgrades: Looks Like Investors Are Finally Starting to See Through Lululemon

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

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Yesterday brought renewed hope that Rembrandt's long-lost Storm on the Sea of Galilee may yet be recovered, but a sea of trouble from Cyprus made for much red ink on Wall Street. (And rest assured that the Russian mafia, who tend not to muck about, will soon be sending the political perpetrators in Nicosia some radioactive sushi freshly plucked from Mediterranean waters.)

Against such a tempest-tossed backdrop, it was no surprise to see the utterly unloved cruise ships of Carnival Corporation (CCL) sink 2.95%. Moscow, acting fast to mitigate the potential loss of its money laundering island paradise, are now asking for Alaska back. (Alaska Air (ALK) promptly jumped 2.26% to the highest level in its history and please, no 'send Sarah Palin' jokes.)

Bates Motel debuted on a day trading was murder on Orient Express Hotels (OEH), a 2.87% tumbler. And printer powerhouse Lexmark International (LXK) rose 2.52%. In Cyprus and elsewhere, it seems that there is no escaping funny money.

The Federal Open Market Committee starts its two-day policy meeting this morning in Washington D.C. In earnings action, AAR Corp. (AIR), Adobe Systems (ADBE), Cintas (CTAS), DSW Inc. (DSW), Francesca Holdings (FRAN), and William-Sonoma (WSM) are all due to report results.

Affymax (AFFY): Citing an investigation of serious hypersensitivity reactions, some deadly, centering on the company's Omontys treatment, MLV & Co slashes the micro-cap to Sell from Hold. Its target price is $0.50.

Bonanza Creek Energy (BCEI): Stifel slashes shares to Hold from Buy.

Chesapeake Energy (CHK): A second downgrade in as many days for the stock, this morning moved to Underperform from Neutral at Sterne Agee.

Commodity Companies: BHP Billiton (BHP) is now Neutral from Buy at Goldman Sachs, which slashes Rio Tinto (RIO) to Conviction Sell from Neutral. Both stocks are trading lower overseas today in a weak metals market as a result.

Cracker Barrel Old Country Store (CBRL): Shares, trading at fresh 52-week peaks, are downgraded to Hold from Buy at Miller Tabak.

Deere (DE): UBS takes the tractor titan to Neutral from Buy.

Electronic Arts (EA): Reeling from last night's surprise departure of its CEO, allied to an earnings warning, the stock is now Hold from Buy at Needham.

Ericsson (ERIC): The Scandinavian telecom firm gets reduced to Hold from Buy at Nordea.

Juniper Networks (JNPR): The tech stock is taken to Sell from Neutral at Goldman, sending it slumping 3.41% ahead of the open. Heightened competition and increased issues around its core routing business are both reasons to avoid the stock, in Goldman's estimation.

Kohl's (KSS): Morgan Stanley moves the shares to Underweight from Equal-Weight.

lululemon athletica (NASDAQ:LULU): The yoga apparel company may soon have more to worry about than transparent pants. Shares, slumping 7.66% before the bell, are now Neutral from Buy at Sterne Agee after it issued decidedly iffy earnings guidance.

Marathon Oil (MRO): MRO is moved to Neutral from Positive at Susquehanna.

Momenta Pharmaceuticals (MNTA): Shares, fresh from Monday's 2.12% tumble, are moved to Underperform from Neutral by Bank of America-Merrill Lynch this morning.

Pike Electric (PKE): Citing a steep current valuation, Stifel reduces its rating to Hold from Buy.

RadioShack (RSH) Shares, having perked up of late, are lowered to Neutral from Buy Bank of America-Merrill Lynch, whose analysts wrote in a note that "many of the positive catalysts are largely priced into the stock." Its fresh price objective is $4.00.

Telekom Austria (PINK:TKAGY): Deutsche Bank downgrades the equity to Hold from Buy.

Unum Group (UNM): The life insurance outfit is moved to Neutral from Buy at Bank of America-Merrill after a strong recent run.

(See also: New Stock Coverage: Google's Search Party Just Getting Started and Stock Upgrades: Don Draper Makes for Some Very Glad Men at AMC Networks.)
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