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Stock Downgrades: American Eagle -- An Earthbound Big Bird


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

MINYANVILLE ORIGINAL Owens Corning (OC), downgraded this morning, imploded 8.34% yesterday and blamed good weather, saying fewer severe storms meant less repairs were required for its roofing products. Chevron (CVX) fell 1.88% after the close and blamed bad weather, saying Hurricane Isaac will hit its profit. By using meteorological excuses, each are starting to sound like economists.

Only Lindsay Lohan, it seems, is always unequivocally correct. Long before Ben Bernanke was even on Twitter, she took to the medium to presciently predict the current ominous increase in gas prices. On September 21, the day Apple Inc. (AAPL) hit an all time high from which it has since tumbled 10%, her sober statement that the iPhone is sold out everywhere!!! eerily presaged a dire shortage of the device on store shelves. And the star's recent contention that Girls Love Shoes!!! duly sent Shoe Carnival (SCVL) surging 5.12%.

The pace of economic data picks up after a quiet start to the week, with August wholesale inventories out at 10:00 a.m. Eastern and the Fed's beige book due at 2:00 p.m. In earnings action, Costco (COST), Google (GOOG), Helen of Troy (HELE), Host Hotels (HST), and Progressive Corp. (PGR) are all due to report results.

American Eagle Outfitters (NYSE: AEO) Shares are now Neutral from Overweight at Piper Jaffray.

Automotive Dealerships: Concerned by what it sees as excessive valuation, Sterne Agee gives Neutral-from-Buy ratings reductions to both Group 1 Automotive (GPI) and Penske Automotive (PAG).

Avalonbay (AVB): The residential REIT is reduced to Outperform from Top Pick at RBC Capital, whose price objective is $158.

Banks: Fifth Third (FITB) and US Bancorp (USB) are both now Neutral from Buy at Bank of America-Merrill Lynch.

Booz Allen Hamilton (BAH): Lazard lowers the consulting company to Sell from Hold.

Coca-Cola Enterprises (CCE): CCE gets cut to Outperform from Buy at Crédit Agricole.

Concur Technologies (CNQR): Shares are downgraded to Hold from Buy at Wunderlich, whose price objective is $84.

Diamondrock Hospitality (DRH): DRH gets downgraded to Underperform from Sector Perform at RBC Capital due to headwinds from renovation and repositioning activity.

Gold Stocks: Barrick Gold (ABX) is moved to Equal-Weight from Overweight at Morgan Stanley, which slashes Kinross Gold (KGC) to Underweight from Equal-Weight.

Home Depot (HD): The Dow (^DJI) member is downgraded to Perform from Outperform at Oppenheimer due to valuation after recent share price strength.

Kansas City Southern (KSU): KSU is cut to Neutral from Positive at Susquehanna due to weak Q3 results, valuation, and challenges in coal.

Monster Beverage (MNST): Stifel Nicolaus moves MNST to Hold from Buy.

Oil Services: FBR Capital cuts both Diamond Offshore Drilling (DO) and Rowan Cos (RDC) to Market Perform from Outperform, cutting their respective price objectives to $74 and $38.

Owens Corning (OC): OC is cut to Neutral from Overweight at JPMorgan to reflect reduced roofing composites visibility.

Randgold Resources (GOLD): GOLD gets reduced to Hold from Buy at Canaccord.

SAP AG (SAP): Shares in the German software stock are taken to Equal Weight from Overweight by Barclays.

Tyco International (TYC): Credit Suisse takes TYC to Neutral from Outperform due to valuation. The price target is $30.

Viacom (VIAB): The MTV owner, subject of an upbeat article in this week's Barron's, is nonetheless moved to Underperform from Market Perform by Sanford Bernstein.

WABCO Holdings (WBC): WBC is now Neutral from Outperform at Robert W. Baird.

(See also: Stock Upgrades: Yum Brands Puts Its Money Where Its Mouth Is and New Stock Coverage: Don't Stuff All Your Money Under the Select Comfort Mattress.)
No positions in stocks mentioned.
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