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Stock Downgrades: Oracle Has a Profit Problem


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

Yesterday was all about the Fed and FedEx (FDX). The central bank, issuing its latest interest rate verdict in DC, assured investors that the check remains in the mail but Mr. Smith went to Washington much less successfully, and the packaging powerhouse subsequently slumped 6.89%. Ben Bernanke is now making employment projections extending into 2015 yet since he predicted "at worst, an orderly decline in the housing market" in 2006, soothsaying may be best left to others.

At any rate, even his obtuse predecessor the Oracle of Delphi would be a better bet than a slumping Oracle (ORCL) stock this morning. The preeminent net prophets really reside in Atlanta, home of basketballs March Madness. Especially after hometown hero Coca-Cola (KO) jumped 1.37% to top the Dow (^DJI) for a second straight day. Much Domino's Pizza (DPZ) will be consumed during the tourney, one reason why it rose 1.27% to an all-time high. Judging, however, from its six-fingered American Idol box, the company could always use a little Photoshop. Adobe (ADBE), up 4.20% at a fresh 52-week peak, would be only too happy to help.

We get a trifecta of economic data today at 10:00 a.m. Eastern, namely February existing home sales and leading indicators, plus the Philadelphia Fed index for March. On the corporate front, ConAgra Foods (CAG), Foxconn International (PINK: FXCNY), Hennes & Mauritz (PINK:HNNMY), Hermès International (PINK:HESAY), IHS Inc. (IHS), KB Home (KBH), Lululemon Athletica (LULU), Micron Technology (MU), Nike Inc. (NKE), Perry Ellis International (PERY), Ross Stores (ROST), and Scholastic (SCHL) are all due to reveal results.

Actuant (ATU): Noting seasonal hurdles among other issues, Robert W. Baird reduces its rating to Neutral from Outperform. Its price objective is $33.

Burger King (BKW): The fast food firm is lowered to Underperform from Neutral by Bank of America-Merrill Lynch, whose analysts wrote in a note that there is "little chance of cash driven catalysts" over the next 18 months or so. Its price objective, previously $19.50, is now $16.00.

Charter Communications (CHTR): Shares get downgraded to Neutral from Buy at Guggenheim.

China Telecom (CHA): Shares are taken to Neutral from Overweight at JPMorgan.

Cisco Systems (CSCO): The Dow (^DJI) member is moved to Underperform from Market Perform at FBR Capital, which also trims its target to $17 from $22 amid softness in the company's core routers and switches.

CTPartners Executive Search (CTP): CTP gets cut Market Perform from Outperform by William Blair.

Obagi Medical (OMPI): Shares, no longer trading on fundamentals following an acquisition announcement, are cut to Hold from Buy at Cantor Fitzgerald, which isn't expecting any rival offers.

Oracle (NASDAQ:ORCL): The enterprise software outfit, slumping some 7.20% before the opening bell on a third quarter earnings miss, is moved to Equal Weight from Overweight at Evercore and to Underperform from Outperform at Crédit Agricole.

Williams-Sonoma (WSM): Saying shares are set for a spell of back-and-filling after yesterday's 10.26% breakout to historic highs, Deutsche Bank downgrades the Pottery Barn owner to Hold from Buy.

WisdomTree (WETF): Goldman Sachs pulls the stock from its list of Conviction Buys.

(See also: New Stock Coverage: Not Buying Honeywell Would be a Big Boo Boo and Stock Upgrades: Alibaba Stake Makes Yahoo a Steal.)
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