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Stock Downgrades: The Sky Is Falling on United Continental


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

Warren Buffett, of all people, took a bath last week, with Bank of America (BAC) tumbling 3% to lead all Dow (^DJI) laggards even in a week when the index made yet more record highs. (Actually, Omaha's Oracle getting soaked in the stock is somehow only appropriate and anyway, far better an American bath than the Russian variety.)

More everyday investors were able to count their cash, however, as the S&P 500 (^GSPC) ended a holiday-shortened week having finally recovered all of the damage done during the financial crisis. The quarter's top three performing sectors - health care, consumer staples, and utilities - point to one reason why this may be the most unloved bull market in history, but investors who dared to be boring were well rewarded.

Visa (V) and MasterCard (MA) hit all-time highs, much to the chagrin of our Chief Justice, whose own credit card was hacked at Starbucks (SBUX). He should really have instead shopped at DE Master Blenders (PINK: DEMBF) for his jolt of joe, after the java company jumped 29% to post the best performance of all European equities last week. Now will the continent it calls home, working on an hour's less sleep after yesterday's time change, wake up and smell the coffee at last?

This morning in economics, construction spending for February and the Institute for Supply Management's March manufacturing report are each due out at 10:00 a.m. Eastern. On the earnings front, expect quarterly announcements from Cal-Maine Foods (CALM), Jos. A. Bank Clothiers (JOSB), Oxford Resource Partners (OXF), and Pep Boys – Manny, Moe & Jack (PBY).

AbbVie Inc. (ABBV): BMO Capital cuts the biopharmaceutical firm to Market Perform from Outperform.

Aegion (AEGN): Shares are now Underperform from Neutral with Wedbush in the wake of a disappointing earnings announcement.

American Railcar Industries (ARII): Stephens reduces its recommendation on the stock to Equal Weight from Overweight.

ARMOUR Residential REIT (ARR): ARR is reduced to Equal Weight from Overweight by Barclays.

Buckeye Partners (BPL): The energy limited partnership gets downgraded to Hold from Buy at Deutsche Bank.

Cabot Oil & Gas (COG): Global Hunter gives the equity a Neutral-from-Accumulate ratings reduction.

CapitalSource (CSE): The credit services company is cut to Equal Weight from Overweight by Barclays.

Cimarex Energy (XEC): Shares are now Neutral from Buy at Global Hunter.

Coca-Cola Enterprises (CCE): Goldman Sachs gives the bottling behemoth a Neutral-from-Buy downgrade.

Intel (INTC): The key Dow (^DJI) component, a strong performer last week, is trading lower ahead of the open after being moved to Market Perform from Outperform at JMP Securities.

Regal Entertainment Group (RGC): MKM Partners cuts the cinema stock to Neutral from Buy.

Southcross Energy Partners (SXE): Shares are slashed by both Barclays (Equal Weight from Overweight) and Wells Fargo (Market Perform from Outperform.)

Susquehanna Bancshares (SUSQ): Jefferies reduces the regional bank to Hold from Buy, sending shares slumping before the bell. Issues include valuation and sluggish per share earnings growth projections. Its new price objective is $12.50.

United Continental Holdings (NYSE:UAL): The airline giant is 1.6% lower as I write after getting downgraded to Equal Weight from Overweight at Evercore amid merger integration issues and increasing costs.

Valassis Communications (VCI): Lazard lowers the coupon company to Neutral from Buy.

Weingarten Realty Investors (WRI): Shares are moved to Neutral from Buy at Bank of America-Merrill Lynch.

Yahoo (YHOO): Pivotal Research reduces its recommendation to Hold from Buy after a strong recent run in the stock.

(See also: New Stock Coverage: Gobble Up Brasil Foods and Stock Upgrades: More Good Things on Tap at Molson Coors.)
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