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Stock Downgrades: United Parcel Service, Inc. Is Returned to Sender


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

A week that ended on Bastille Day produced another storming performance in equities. (Even if Parisians were unable to fully partake of the fireworks, what with Fitch cutting France's credit rating on Friday and national air carrier Air France (AFLYY) incurring a ratings reduction this morning.) As Nasdaq (^IXIC) surged 3.47% Microsoft (MSFT) stock, and apparently also its spies, finally came in from the cold.

The gains weren't limited to the US, for global markets posted their best performance since November. China Cord Blood (CO) gained 18.53%, although the country's slowing growth rate suggests it is economically dangerous to be tied too closely with Beijing. Germany's Daimler (DDAIY) jumped 10.2% and one of its autos broke the bank at auction. One country missing out on all the ebullience was Greece, where unemployment reached a fresh peak. If it's any consolation Helen of Troy (HELE), named after a heroine of Athenian legend, is now up 39.62% in the past year having finished at an historic high on Friday.

This morning in economics, May business inventories are out at 10:00 a.m. Eastern. On the corporate front, the first full week of the Q2 reporting season starts with Cintas Corporation (CTAS), Citigroup (C), Healthcare Services Group (HCSG), JB Hunt Transport Services (JBHT), MB Financial (MBFI), and Taylor Capital (TAYC) all expected to release results.

Accessories/Apparel: Gap Inc. (GPS) and Michael Kors (KORS) are each now Neutral from Buy at Piper Jaffray.

Air France-KLM (AFLYY): Shares are now Neutral from Overweight at HSBC Securities.

Allscripts-Misys Healthcare (MDRX): ISI Group gives the stock a Neutral-from-Buy downgrade amid a full valuation and somewhat uncertain earnings growth. Its price objective is $16.50.

Cypress Semiconductor (CY): Crédit Agricole cuts the company to Underperform.

Discovery Communications (DISCA): Shares, trading atop historic highs, are slashed to Sell from Buy at Pivotal Research amid valuation issues.

Fresenius Medical (FMS): The stock is cut to Hold from Buy at Jefferies.

Gold Stocks: AngloGold (AU) and Harmony Gold (HMY) are each taken to Underperform from Market Perform by BMO Capital, which cuts Kinross Gold (KGC) and Newmont Mining (NEM) to Market Perform from Outperform.

Grand Canyon Education (LOPE): Shares are now Neutral from Buy at Piper Jaffray.

Harley-Davidson (HOG): The motorcycle icon is reduced to Neutral from Buy with Wedbush.

Hartford Financial (HIG): Keefe Bruyette moves the insurance outfit to Market Perform from Outperform.

Linear Technology (LLTC): LLTC gets lowered to Neutral from Buy at Credit Suisse.

MetLife (MET): MET is reduced to Perform from Outperform at Raymond James.

Mosaic (MOS): Shares are moved to Sector Perform from Outperform at CIBC World Markets.

NuVasive (NUVA): NUVA is now Underperform from Market Perform at BMO Capital.

Onyx Pharmaceuticals (ONXX): The stock gets downgraded to Market Perform from Outperform at JMP Securities.

QLogic (QLGC): Morgan Stanley moves the tech stock to Underweight from Equal Weight.

Qualcomm (QCOM): The stock is lowered to Neutral from Buy at Lazard.

Riverbed Technology (RVBD): Shares are reduced to Hold from Buy with Wunderlich.

Shoe Stocks: DSW Inc. (DSW) and Steven Madden (SHOO) are each now Neutral from Buy at Sterne Agee.

Teekay Tankers (TNK): TNK is taken to Underweight from Equal Weight at JP Morgan.

United Parcel Service, Inc. (UPS): Shares, which fell 5.83% on Friday, are now Neutral from Buy at Credit Suisse and Hold from Buy at BB&T Capital. Lower earnings expectations are a concern.

Vivus (VVUS): Credit Suisse cuts the company to Neutral from Buy.

Yelp Inc. (YELP): The stock is now Neutral from Buy at UBS after a strong recent run.

(See also: Stock Upgrades: Looking for a Free Lunch? Breakfast at Tiffany & Co. Today and New Stock Coverage: Bluebird Bio Inc Will Fly High.)
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