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Upgrades & Downgrades: Baker Hughes About to Lose More Dough


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

While the world turned its attention anew to a Pacific crash dating to the Great Depression, it was a hard landing unfolding in China that most spooked stocks. The Dow (^DJI) and S&P 500 (^GSPC) each endured their worst week of the year amid concerns Beijing is the new Athens. (If only; the bankrupt Greeks, fresh from strutting their stuff on fancy Fifth Avenue, can proudly claim their native index was Europe's performing best major average last week.) With Asia's economic animal spirits suddenly ailing, President Obama sensibly picked a Korean doctor and rapping president of the college that inspired Animal House to head the World Bank. Elsewhere, getting an early jump on April Fools', New Jersey was declared America's least corrupt state on Monday. Unfortunately by Friday, a former governor may have marred its suddenly shining reputation. At least the firm he used to head, Goldman Sachs (GS), proved it can soar like a Muppet - specifically Sam the Eagle - without him, ending a down week with a good gain of over 2%, even as the wife of Syria's dictator didn't do much to redeem the reputation of investment bankers. Not all financials fared as well, with Bank of Ireland nose-diving 9.92%. Hopefully the fabled sense of humor of its citizens enabled them to look past that controversial "downward facing upchuck" St. Patrick's Day t-shirt and invest instead in cult yoga clothing company Lululemon Athletica (LULU), which rode impressive earnings to take its 12-month advance to 92.56%.

Lions Gate Entertainment (LGF) is now up 73% in 2012 alone after it brought in $155 million at the box office for Hunger Games. Indeed the week was dominated by food and drink, Krispy Kreme (KKD) tumbling 12.33% in posting a performance almost as nauseating as those suddenly popular grilled cheese doughnuts. Meanwhile Starbucks (SBUX) surged to a record high although we sadly lost one half of Mr. Coffee. Apple Inc (AAPL) advanced 1.8% after announcing a dividend, helping keep the Nasdaq (^IXIC) in positive territory. Its shares closed above $600 for the first time ever, before falling 9% in 36 seconds on Friday due to an inauspicious IPO from the singularly misnamed Better Alternative Trading System. And the 1940 census was finally released. Back then hunger wasn't a game and you got a wooden nickel for an apple, if you were lucky. Today in economics, analysts expect an increase in pending home sales for February at 10:00 am Eastern. On the earnings front, Apollo Group (APOL), Cal-Maine Foods (CALM), Landec Corp (LNDC), Presidential Life (PLFE), and Saratoga Resources (SARA) are all due to release results.


HomeStreet (HMST): The money center bank is begun with an Outperform at FBR Capital, which establishes a price objective of $45. Catalysts include an impressive valuation relative to peers and significant progress during the past three years disposing problem assets.

KapStone Paper and Packaging (KS): Shares are initiated with an Outperform at BMO Capital, which sets it a $25.50 target price.

Mitek Systems (MITK): The company is a new Buy at Needham, which sees the proliferation of smartphones driving increased demand for mobile financial services, especially among younger consumers.

WABCO Holdings (WBC): Goldman Sachs gives a Neutral rating to WBC.

Upgrades: (ACOM): Shares are upgraded to Buy from Neutral at Bank of America-Merrill Lynch.

Alliant Energy (LNT): LNT is lifted to Overweight from Equal Weight by Barclays.

BJ Restaurants (BJRI): The company gets increased to Outperform from Neutral with Wedbush.

Cabela's (CAB): JP Morgan moves the seller of shooting and hunting gear to Neutral from Underweight.

Celanese (CE): The chemical company is now Outperform from Neutral at Macquarie.

Cypress Sharpridge Investments (CYS): CYS gets boosted to Buy from Neutral at Nomura.

Electric Utilities: DTE Energy (DTE) is moved to Outperform from Neutral at Macquarie, which takes TECO Energy (TE) to Neutral from Underperform.

Polycom (PLCM): UBS raises its recommendation to Buy from Neutral.

PolyOne (POL): POL is upgraded to Outperform from Market Perform with Wells Fargo.

SAIC Inc (SAIC): Jefferies upgrades the stock to Buy from Hold amid optimism over a new management team. The target is $16.

Tesla Motors (TSLA): TSLA is taken to Buy from Hold with a new higher objective of $49 with Wunderlich after hosting an investor tour.

Utilities: Wisconsin Energy (WEC) is upgraded to Overweight from Equal Weight by Barclays, which lifts Westar Energy (WR) to Overweight from Equal Weight.


Baker Hughes (BHI): Wells Fargo cuts the oil services outfit, which imploded 11% last week, to Market Perform from Outperform as a shift away from gas rigs will hurt earnings.

Lexmark (LXK): LXK is lowered to Market Perform from Outperform by Sanford Bernstein.

Micron (MU): MU gets moved to Perform from Outperform at Oppenheimer, which prefers to stay on the sidelines until profitability becomes apparent.

Pearson Plc (PSO): The Financial Times publisher is now Neutral from Outperform at Macquarie.

Safeway (SWY): The grocery giant gets downgraded to Neutral from Outperform at Credit Suisse.

SVB Financial Group (SIVB): Shares are slashed to Neutral from Buy at Sterne Agee.

ViaSat (VSAT): Macquarie cuts the communications company to Underperform from Neutral.
No positions in stocks mentioned.
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