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Stock Downgrades: Rue21 Exits Easy Street

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

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A recently surging stock market suddenly backtracked, taking it below 15,000. For the moment, that sentence describes only the Nikkei and not the Dow (^DJI) but equities everywhere seem to be suffering from an acute attack of The Vapors, so before long Wall Street may also start Turning Japanese. On the bright side, Hewlett-Packard (HPQ) surged 17.10% to top the entire S&P 500 (^GSPC) thanks to the turnaround efforts of Cold Spring Harbor native Meg Whitman. If my trusty HP 12c calculator is accurate, that was its best showing since 2001, the year Lindsay Lohan was a freshman at the town's high school. Long Island's North Shore is of course Jay Gatsby country, but our hero's golden halo did not unfortunately extent to Ralph Lauren (RL). The company, whose clothes famously outfitted Robert Redford in the 1974 film, tumbled 2.32% after announcing earnings. Elsewhere the normally sleepy utilities sector saw a wild $33 billion in market cap wiped off of American Electric Power (AEP) and NextEra Energy (NEE), while an insomnia product propelled Merck (MRK) up a Dow-best 1.33%.

Ahead of the long Memorial Day weekend, the bond market is scheduled to close early. On the corporate front, expect quarterly earnings announcements out of Abercrombie & Fitch (ANF), Destination XL Group (DXLG), Foot Locker (FL), Hibbett Sports (HIBB), Tsakos Energy Navigation (TNP), and UTStarcom (UTSI).

BT Group (BT): Shares in the British telecom titan are sharply lower in today's London trading on the back of a Neutral-from-Overweight cut at JPMorgan. Concerns include red tape, issues at its Sport division, and pension plan problems.

Centene (CNC): Shares of the health plan provider are cut to Market Perform from Outperform at Raymond James.

Cirrus Logic (CRUS): The tech stock gets taken to Hold from Buy at Canaccord Genuity.

Cubist Pharmaceuticals (CBST): Janney Capital cuts the company to Neutral from Buy.

Marvell Technology (MRVL): JMP Securities slashes the semiconductor stock to Underperform from Market Perform.

Melco Crown Entertainment (MPEL): Macquarie moves the resort and casino company to Neutral from Outperform.

Next Plc (OTCMKTS:NXGPY): The English fashion firm, up 24% this year at levels not seen in a quarter-century, is tumbling 2.31% overseas this morning after Morgan Stanley slashed the stock to Underweight from Equal Weight. "The multiples are already close to 10-year highs, both absolute and relative, so we think the risk reward looks unattractive at these levels," its analysts wrote in a note.

Nordson (NDSN): Oppenheimer moves the diversified machinery outfit to Perform from Outperform, as it now projects operating margin contraction on the magnitude of 250 to 300 basis points amid declining volumes.

Pinnacle Entertainment (PNK): Crédit Agricole slashes the stock to Sell from Underperform.

Rue21, Inc. (NASDAQ:RUE): The apparel outfit, up 22.98% yesterday on news of a $1.1 billion buyout bid, is now Neutral from Buy with a $42 price objective at Janney. The broker believes that the acquisition offer will indeed conclude at the proposed price.

Saks Inc. (SKS): A plump valuation sees the luxury retailer reduced to Hold from Buy at Argus after it surged sharply in recent days.

Salesforce.com (CRM): Shares are now Neutral from Outperform with Wedbush.

(See also: Stock Upgrades: Changing Tides Makes Procter & Gamble a Better Bet and New Stock Coverage: Look at LeapFrog Jump.)
No positions in stocks mentioned.
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