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Stock Upgrades: Blockbuster Day for Netflix


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

Stocks scored fresh five year highs after politicians opted to kick the can on our debt ceiling debacle until May 18. (Or May 19, for it would be just like the government to be a day late and $16 trillion short.) "Atari fans are so upset, they're organizing a massive letter-writing campaign…to President Reagan." So said Conan O'Brien earlier this week after the iconic outfit filed for chapter 11. Far better to instead invest in another iconic tech name, one which entered the world as did Ronnie in 1911.

An upgraded International Business Machines (IBM) jumped 4.41% to top the Dow (^DJI), which was utterly reliant on Big Blue to stay green. Canadian Pacific Railway (CP) hit an all time high and industry peer CSX Corp. (CSX) rose 4.18% for its best gain since last March. Training beats Coaching (COH), you could say, especially after the handbag maker slumped 16.36%. Longtime Tory leader Margaret Thatcher loved handbags of course, but like many she likely now prefers Tory Burch to Coach. Her successor as Conservative Prime Minister said in a speech yesterday that Britain's backing for Europe is "wafer thin." Which is not such a bad thing to be, after Advanced Micro Devices (AMD) advanced 11.43% to top the entire S&P 500 Index (^GSPC).

French foreign minister Laurent Fabius replied by claiming his country would "roll out the red carpet" if London left. Thus one smells a rat across the English Channel, but Mouse House Walt Disney (DIS) hit an all-time high, computer mouse maker Logitech gained 4.82%, and EntreMed (ENMD) added on 15.93% after promise in its drug trials involving mice.

Today in economics, December leading indicators are expected to tick up at 10:00 a.m. Eastern. In corporate action the quarterly earnings express rolls on, with AT&T Inc. (T), Bristol-Myers Squibb (BMY), E*Trade Financial (ETFC), Lockheed Martin (LMT), Microsoft (MSFT), Nokia (NOK) Raytheon (RTN), Southwest Airlines (LUV), Starbucks (SBUX), 3M Company (MMM), United Continental (UAL), and Xerox (XRX) all due to release results.

Akzo Nobel N.V. (PINK:AKZOY) The stock is now Neutral from Underweight at JPMorgan.

ASML Holding (ASML): Bank of America-Merrill Lynch lifts ASML to Buy from Neutral.

Autodesk (ADSK): Impressed by both margin expansion and increased adoption of suites and Cloud, RBC Capital raises its recommendation to Outperform from Perform. The price objective is also increased, to $50 from $33.

Bed Bath & Beyond (BBBY): Calling it one of the best-run companies in all hardline retailing, Oppenheimer raises its rating to Outperform from Perform and takes its target to $71 from $67.

Cubist Pharmaceuticals (CBST): Cantor Fitzgerald hoists the company to Hold from Sell.

Emerson (EMR): Deutsche Bank boosts the industrial outfit to Buy from Hold.

GOL Linhas Aéreas Inteligentes (GOL): The Brazilian air carrier gets upgraded to Buy from Neutral at Goldman Sachs.

Netflix (NASDAQ:NFLX): Shares, surging some 35.39% before this morning's opening bell after last night's impressive earnings, are moved to Overweight from Neutral at JPMorgan, raised to Market Perform from Underperform at Raymond James, and lifted to Buy from Hold at Lazard. Catalysts include solid subscriber growth and an improved margin outlook. (Note that Credit Suisse downgraded the name to Neutral from Outperform today.)

Pearson (PSO): The British publisher is trading higher in London today after being lifted to Equal-Weight from Underweight by Barclays.

Randgold Resources (GOLD): GOLD gets upgraded to Buy from Neutral at Bank of America-Merrill.

Retailers: Credit Suisse gives Outperform-from-Neutral upgrades to Dillard's (DDS) and Ross Stores (ROST).

SanDisk (SNDK): Needham boosts the tech company to Buy from Hold with a $60 target after fourth quarter earnings beat Street estimates, with impressive gross margins of 40%.

Torchmark (TMK): The insurance outfit is taken to Buy from Neutral at SunTrust Robinson Humphrey.

United Parcel Service (UPS): Shares are now Buy from Neutral at Bank of America-Merrill.

(See also: New Stock Coverage: Colgate Is All Smiles but Kimberly-Clark Cries Into Its Kleenex and Stock Downgrades: Apple Looks Like a Lemon.)
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