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Stock Downgrades: Lululemon Looks Like a Downward Dog

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

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Ironic, as it prepares to unveil a plan to preview the decidedly upscale Downton Abbey on its iTunes, but all of a sudden Apple Inc. (AAPL) finds itself barely able to afford the poorhouse. Shares slumped a further 3.57% yesterday, and this morning Nomura reduced its price objective on the tech titan to $530 from $660. Investors would be far better advised to follow the investment advice of Marilyn Monroe, and not merely because Marlin Business Services (MRLN) and Monroe Capital (MRCC) rose a respective 2.96% and 3.78%.

"Talk to me, Harry Winston (HWD). Tell me all about it!." So said Norma Jean, and after the bling king jumped 4.29% to an 18-month high, he made money talk quite eloquently. When Ms. Monroe sang about "big baguettes," she was presumably referring to rocks, but baker Flowers Foods (FLO) didn't do too badly either. It surged 9.63% to the highest level in its history.

Today's fourth quarter earnings announcements are due to include Forest Labs (FRX), Interactive Brokers (IBKR), and Lennar Corp. (LEN).

AFLAC (AFL): The insurance outfit gets a downgrade, not its first of late. This time it is taken to Neutral from Buy at Sterne Agee.

Airlines: United Continental (UAL) and US Airways (LCC) are each moved to Neutral from Overweight at JPMorgan.

Altera (ALTR): Lazard lowers the stock to Neutral from Buy.

American Express (AXP): A second downgrade in as many days for the key Dow (^DJI) component, this time cut to Underweight from Neutral at JPMorgan due to operating leverage challenges. Its $60 price objective is intact.

Ares Capital (ARCC): Shares are now Neutral from Overweight at JPMorgan.

ARM Holdings (ARMH): The ugly Apple (NASDAQ:AAPL) fallout continues. ARMH, whose chips are a key component in iPhones, is sharply lower in today's London trading after getting cut by both Morgan Stanley (Equal-Weight from Overweight) and Investec (Hold from Buy). Morgan Stanley is concerned that the present valuation presumes a "near-perfect trajectory in [its] market share and royalty rate for the next two years." (Note that the stock was also cut yesterday at Piper Jaffray.)

Bazaarvoice (BV): The stock, which starts trading today at an all-time low, is taken to Hold from Buy at Deutsche Bank.

BE Aerospace (BEAV): Deutsche downgrades the firm to Hold from Buy.

Biogen Idec (BIIB): The biotech is lowered to Neutral from Buy at Bank of America-Merrill Lynch.

Commodity Companies: Dahlman Rose downgrades BHP Billiton (BHP) to Hold from Buy and cuts Cliffs Natural Resources (CLF) to Sell from Hold with a $20 price target.

Commodity Companies: Hecla Mining (HL) and Silver Standard (SSRI) are each slashed to Sell from Hold at Deutsche Bank, which takes Pan American Silver (PAAS) to Hold from Buy.

Consolidated Edison (ED): The electric utility is cut to Sell from Neutral at UBS, which cites regulatory uncertainty and declining earnings among other issues. The price target is also lowered, to $53 from $58.

Dell Inc. (DELL): DELL is downgraded to Neutral at Monness Crespi & Hardt due to valuation.

Dental Stocks: Patterson Companies (PDCO) gets slashed to Sell from Neutral at Goldman Sachs. Meanwhile Sirona Dental Systems (SIRO), recently trading at historic highs, is now Neutral from Buy.

Lululemon Athletica (NASDAQ:LULU): The maker of yoga apparel is downgraded to Underperform from Perform at Buckingham Research.

Regeneron Pharmceuticals (REGN): Jefferies reduces REGN to Hold from Buy.

TD Ameritrade (AMTD): The discount broker is taken to Neutral from Buy at Sterne Agee.

TNT Express (PINK:TNTEY): Following the failure of its link up with United Parcel Service (UPS), the Dutch delivery company gets downgraded to Neutral from Buy at Citigroup. (Note that the stock scored a simultaneously scored an upgrade this morning.)

Watsco (WSO): The stock is now Neutral from Outperform with a new $77 target price at Robert W. Baird, which says the risk/reward ratio is less compelling after a strong recent run.

WPP Group plc (PINK:WPPGY): Shares of the British advertising giant get cut to Market Perform from Outperform with Wells Fargo.

(See also: New Stock Coverage: Check In to Hyatt Hotels and Stock Upgrades: Symantec's Future Is Secure.)
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No positions in stocks mentioned.
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