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Upgrades & Downgrades: Carnival Steadies the Ship


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

Clocks went forward but blue chip stocks slipped back, the Dow's (^DJI) Daylight Savings being depleted for a second straight week even as the S&P 500 Index (^GSPC) completed a month of gains on a steady improvement in US employment. Cher once wailed about wanting to "turn back time" and, while we would all like to rewind to the Nasdaq's (^IXIC) historic high of 5048.62 hit 12 years ago on Saturday, for now investors will have to be happy with Friday's close of 2988.64. (As for the pop singer herself, when you look like this as a sexagenarian, you should just enjoy the present. While giving all due credit to Allergan (AGN) of course, the Botox maker standing at an all-time peak as we speak.) China projected GDP of "only" 7.5% even as Greece announced an identical figure. Although, alas, its one was preceded by a minus sign. Keeping up with the Dow Joneses was easy enough for Smith & Wesson (SWHC), the shotgun maker moving up 35.5% as it swung to a profit. which will presumably please one particularly twisted teacher.

Telecoms performed best among all industries, paced by Sprint Nextel's (S) 11% surge. Please give all profits to our troops still protecting prosperous Germany, numbering over 50,000 almost 70 years after World War Two ended and being charged $51 for a two minute phone call. A new study said video games are good for your brain in the very week video game sales tumbled 20%. Quite coincidentally, For Dummies publisher John Wiley & Sons (JW-A) announced a 38% increase in quarterly profit. And one Wall Street analyst turned against Green Mountain Coffee (GMCR), which slid 23%, while another - Canaccord's Scott Van Winkle, presumably the more caffeinated cousin of Rip - strongly reiterated his Buy recommendation. It's a quiet day in economics, but earnings announcements are expected out of American States Water (AWR), Carmike Cinemas (CKEC), Majesco Entertainment (COOL), Nautilus (NLS), Resolute Energy (REN), Urban Outfitters (URBN), and Volkswagen (VLKAY.PK).


Package delivery: FedEx (FDX) is a new Neutral at Atlantic Equities, which has an Overweight on rival United Parcel Service (UPS).

HomeAway (AWAY): Shares are begun at Underperform by Bank of America-Merrill Lynch.

Sherwin-Williams (SHW): The paint maker, trading at an all time best, is begun with a Buy at Nomura.

Theravance (THRX): The stock is begun with a Buy recommendation and $24 price objective at Brean Murray, which believes the recent controversy over the Relovair Phase 3 data has led to an attractive risk/reward going into to global regulatory filings in asthma and other therapeutic areas.

SS&C Technologies (SSNC): Shares are begun with a Buy and $26 target price at Needham, which cites solid organic growth prospects.

Bon-Ton Stores (BONT): Imperial Capital assigns an Outperform and $13 target as they are encouraged by new management, the $50 million upfront payment on the new credit card agreement, and potentially stronger earnings traction in 2013 on revenue-driving initiatives.


Walt Disney (DIS): The Dow member is upgraded to Buy from Neutral at Janney Montgomery Scott.

Hershey Foods (HSY): Goldman Sachs gives the maker of sweet treats a Buy-from-Neutral boost.

Lowe's (LOW): Shares are lifted to Buy from Neutral at Nomura, which says strategic store closings, an inventory refresh, and a strengthening economy will improve earnings growth. The target is taken up by $10, to $40.

Carnival PLC (CCL): Shares of the cruise company, looking to rebound from its recent Costa Concordia sinking, are trading higher in London this morning on an unusual 180 degree Outperform-from-Underperform upgrade by BNP Paribas. A positive Wall Street Journal article on bookings also appears to be helping the stock.

China Mobile (CHL): CHL is lifted to Overweight from Equal Weight with HSBC Securities, which believes the integration of chips that support both co's 3G standard (TD-SCDMA) and 4G standard (TD-LTE) in massmarket handsets will level the playing field in China.

Cabot Oil & Gas (CBT): Jefferies juices its rating to Buy from Hold.

Equifax (EFX): EFX gets taken to Buy from Neutral at Suntrust.

Homebuilders: KB Home (KBH) and Pulte Group (PHM) are each upgraded to Overweight from Equal Weight by Barclays.

Home improvement: Armstrong World Industries (AWI) and Mohawk (MHK) are each upgraded to Overweight from Equal Weight at Barclays.

Veolia Environnement (VE): The French firm is moved by Morgan Stanley to Overweight from Equal Weight.

Lender Processing (LPS): Barclays lifts LPS to Overweight from Equal Weight.

Drug stocks: Orexigen Therapeutics (OREX) is now Buy from Neutral at Bank of America-Merrill Lynch, which adds Regeneron Pharmaceuticals (REGN) to its US 1 List of favored equities.

American Capital Agency (AGNC): AGNC is increased to Outperform from Market Perform at JMP Securities.

Solta Medical (SLTM): The small cap is moved to Outperform from Market Perform at Morgan Keegan.

Banco Santander (STD): Shares get hoisted to Buy from Hold at ING Groep.


Nike (NKE): The athletic footwear giant is downgraded to Sell from Hold at McAdams Wright Ragen, which does not believe near-term multiple expansion beyond current levels is justified after a recent rise to record highs.

Oracle (ORCL): Jefferies cuts ORCL, up 17% this year, to Hold from Buy and trims its objective to $32 from $35 on "increased concerns that the relational database is facing multiple threats".

Time Warner (TWX): TWX is taken to Neutral from Buy at Janney Montgomery Scott.

Food stocks: J.M. Smucker (JSM) and General Mills (GIS) are each now Neutral from Buy at Goldman Sachs.

Airlines: United Continental (UAL) and Southwest Airlines (LUV) are each lowered to Neutral from Buy at Bank of America-Merrill Lynch.

Rails: American Railcar Industries (ARII) is downgraded to Hold from Buy at Keybanc, which cuts rival firm Freightcar America (RAIL) to Underweight from Hold.

Under Armour (UA): UA is now Neutral from Buy at Sterne Agee.

Sonoco Products (SON): Shares are slashed to Sell from Neutral at Goldman.

Seadrill Ltd (SDRL): The equity is downgraded to Hold from Buy at Société Générale.

Anthera Pharmaceuticals (ANTH): ANTH is now Neutral from Buy at Citigroup.

Banco Bilbao Vizcaya Argentaria (BBVA): The bank is taken to Hold from Buy at ING Group.

China New Borun (BORN): BORN is downgraded to Perform from Outperform at Oppenheimer.

Danske Bank A/S (DNSKY.PK): Nomura cuts its rating to Reduce from Neutral.

Kimco Realty (KIM): JIM is cut to Outperform from Top Pick at RBC Capital.

Tempur-Pedic (TPX): The mattress maker is moved to Market Perform from Strong Buy at Raymond James.
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