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Upgrades & Downgrades: Goldman No Muppet This Morning

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

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When it comes to reliability, Chinese financial data is often a little, well, Etch-A-Sketchy. But it is beyond dispute that their factories are critically important to the global economy. Indeed, and notwithstanding its American-as-apple-pie name, even Ohio Art (OART.PK) makes the iconic and suddenly fashionable toy not in the Midwest but Shenzhen. So when Sino manufacturing activity fell for a fifth successive month, it made starving artists of us all. Well, all except shareholders of Ohio Art, up 141.25% on the day. The Dow (^DJI) dropped for a third straight day and S&P 500 (^GSPC) shares fell back below 1400, indices now on course for their worst week of 2012. Europe also added to investor angst. Italy, shaped like a boot, and Spain, world fútbol champions, each saw an ominous increase in bond yields on the sort of day only Imelda Marcos could love. (Shoe Carnival (SCVL) surged 21.17% to top the Nasdaq (^IXIC) and Nike (NKE) stands near another new all-time high after its earnings beat Street expectations; clearly being named after the Greek goddess of victory has done it no harm.) Goldman Sachs (GS), still intent on shooting itself in the foot, could not have picked a better time for it, with Smith & Wesson (SWHC) jumping 11.30% to a fresh 52-week peak. Presumably the firearms firm is unrelated to infamous ex-employee Greg Smith but the bank is still scanning emails for the word "muppet", apparently amid concerns staff are applauding Kermit & Co for this week's Hollywood Walk of Fame accolade.

Montreal-born birthday boy and Priceline.com (PCLN) spokesman Bill Shatner saw his stock take its 12-month return to 52.70% and Vancouver's own Lululemon athletica (LULU) rose 2.54%. Whatever else ailed the market, you can't blame Canada. It was a sad day for bagels and an even worse one for doughnuts, Krispy Kreme (KKD) cratering a further 7.73% following Wednesday's 8.60% implosion. If that's enough to make your stomach growl, be aware Hunger Games maker Lions Gate Entertainment (LGF) slid 7.21% even as their blockbuster movie opened. Furious shareholders should calm down - they also own Charlie Sheen's Anger Management. And on this, the second anniversary of his health care bill, President Obama continues to be all thumbs when it comes to investing. His love of the BlackBerry has already proved the kiss of death for Research in Motion (RIMM). And previously high-flying Apple Inc (AAPL) has tumbled $10 in the short time since our Commander in Chief was spotted with an iPad. At least Ronald Reagan still has the Teflon touch, even from beyond the grave. An analyst upgrade sent his favorite clothing company PVH Corp (PVH), the former Phillips-Van Heusen, up on a down day. This morning in economics, February new home sales are expected to tick up slightly at 10:00 am Eastern. Darden Restaurants (DRI) and KB Home (KBH) highlight a quiet Friday for quarterly earnings announcements.


Initiations:

Zynga (ZNGA): Shares are a new Underperform at Needham as they expect slowing growth and increased competition.

Cubist Pharmaceuticals (CBST): The stock is begun with a Buy at ThinkEquity.

Tech sector: Atmel (ATML) and Cypress Semiconductor (CY) are both new Buys at Nomura.

HCA Holdings (HCA): Cantor Fitzgerald covers the company at a Buy.

Linn Energy (LINE): Bank of America-Merrill Lynch launches Buy rated research on LINE.

Monarch Casino & Resort (MCRI): The equity is initiated with an Outperform recommendation at Imperial Capital, which establishes a price objective of $12.50. The current valuation of only 6.1 times total enterprise value is an attractive discount to most of its gaming peers.

Flow International (FLOW): The small cap stock is a fresh Buy at Dougherty & Company, which sets a $6 target price.

Teavana (TEA): KeyBanc covers the name at a Buy and has a $28 target. Their proprietary field work points to a unique performance management and compensation model.

U.S. Silica (SLCA): Shares are a new Buy at Bank of America-Merrill Lynch.

United Continental (UAL): The newly merged air carrier is a new Outperform at Raymond James, which believes "it should garner revenue and cost synergies via the combination."


Upgrades:

Altria (MO): The tobacco titan is taken to Outperform from Market Perform with Wells Fargo.

WPP Group (WPPGY.PK): On the eve of Mad Men's fifth season, it doesn't get much better than this for everyone's favorite fictional chain smoking advertising executives. The British based marketing giant, which owns Ogilvy & Mather, gets upgraded to Overweight from Equal Weight at Morgan Stanley.

Dollar General (DG): Shares are now Buy from Neutral at Nomura.

Discover Financial Services (DFS): Goldman adds the stock to its Conviction Buy List.

Financials: Goldman Sachs (GS) and Morgan Stanley (MS) are each upgraded to Sector Perform from Underperform at RBC Capital, which boosts Deutsche Bank (DB) to Outperform from Sector Perform.

Monster Worldwide (MWW): The stock is upgraded to Outperform from Perform with a $15 target at Robert Baird, which says the recent announcement of an exploration of strategic options represents a positive.

Mosaic (MOS): JP Morgan moves the fertilizer firm to Overweight from Neutral, sending shares up before the bell.

Medidata Solutions (MDSO): The rating is juiced to Buy from Hold at Jefferies.

Neustar (NSR): NSR is now Outperform from Neutral at Baird.

Cameron International (CAM): The company is upgraded to Top Pick from Outperform at RBC Capital.

Coventry Health Care (CVH): Goldman gives a Buy-from-Hold boost to CVH.

CGGVeritas (CGV): Shares are now Neutral from Underweight at JP Morgan.

Dupont Fabros Tech (DFT): DFT is upgraded to Buy from Neutral at Citigroup.

Volcano (VOLC): The rating is hoisted to Buy from Hold at Jefferies.

Yara International (YARIY.PK): ING Groep boosts the Norwegian chemical company to Buy from Hold.


Downgrades:

Aetna (AET): AET gets downgraded to Neutral from Buy at Goldman Sachs.

Abovenet (ABVT): Shares are now Neutral from Outperform at Cowen & Company.

Bank of America (BAC): The Dow member is moved to Equal Weight from Overweight at Evercore Partners.

Coal companies: CONSOL Energy (CNX), Peabody Energy (BTU) and Alpha Natural Resources (ANR) are all downgraded to Neutral from Buy at Davenport.

Convergys (CVG): CVG is taken to Hold from Buy at Stifel Nicolaus due to valuation concerns.

CoreSite Realty (COR): The stock is now Neutral from Buy at Citigroup.

Nike (NKE): Citi removes the athletic apparel giant from its list of Top Picks Live.

Randgold Resources (GOLD): The stock is lower in London this morning after being cut to Neutral from Buy at Citigroup, which cites the military coup in Mali.

Reynolds American (RAI): Wells Fargo cuts the cigarette company to Market Perform from Outperform.

Sandy Spring Bancorp (SASR): The equity is moved to Neutral from Buy at Janney Montgomery Scott.

Wet Seal (WTSLA): Piper Jaffray reduces its rating to Neutral from Overweight.

Xilinx (XLNX): The tech firm is taken to Hold from Buy at Auriga.
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No positions in stocks mentioned.
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