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Upgrades & Downgrades: Time to Hit Play on Activision Blizzard?


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

For a guy whose idea of fun is kicking back on the beach with a copy of his Essays on the Great Depression, all the while resting on an omnipresent wet blanket from which he is doggedly determined to view our economy, Ben Bernanke sure knows how to unleash a little irrational exuberance. Stocks surged, bouncing back from their worst week of the year in some style, after the Fed head said "accommodative monetary policy" is a possibility "if certain conditions, such as employment, do not improve." With the S&P 500 Index (^GSPC) standing at its highest close since May 2008, healthcare shares performed best as the Supreme Court started hearing oral arguments on a landmark and contentious two-year old bill. Aetna (AET), swiftly shrugging off Friday's downgrade from Goldman Sachs (GS), jumped 3.07% to near a new multi-year high. Kicking the debt can remains as popular as ever on either side of the Atlantic; just don't expect the insurer to pay for those $66,100 bunions that result. President Obama took heat for a hot mike while discussing nuclear missiles with Medvedev but he needn't have worried. After all, Russians poisoning their enemies with radioactive sushi is so 2006; these days they bump off bankers with guns. One reason why firearms firm Sturm Ruger (RGR) soared 4.24% to a fresh historic high.

Speaking of shootings, Berkshire Hathaway's (BRK-A) Warren Buffett may recently be best known for extolling the virtues of an "elephant gun" but before that he said "If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down." Times change, and yesterday Omaha's oracle bet big on NetJets. Elsewhere Arena Pharmaceuticals (ARNA) rose 24.90% to top the Russell 2000 (^RUT) on high hopes for its diet drug, even if it may soon experience unlikely competition from chocolate. As Rick Santorum's barnyard epithet continued to reverberate, hopefully he invested in Tractor Supply (TSCO), which increased 5.67%, and indeed Rick's Cabaret (RICK) after it ended up 4.72%. And anyway, don't knock agricultural poop - the Inca Empire was build on it. Alas latter-day Peruvians aren't faring as well, Lima's own Fortuna Silver Mines (FSM) sliding some 7.98% on a difficult day for Latin American equities. Argentines, often described as "Italians who speak Spanish and want to be British", combined the worst of those two PIIGS with England's current austerity, their shares slumping after the US suspended trade benefits. And the iconic 1929 headline of Variety- a magazine that finds itself on the auction block again - remains uncomfortably fresh for Cal-Maine Foods (CALM) after America's largest egg producer imploded 6.05%. This morning in economics, March consumer confidence is expected to slip slightly at 10:00 am Eastern. On the earnings front, China Life Insurance (LFC), Lennar (LEN), McCormick (MKC), Oxford Industries (OXM), PVH Corp (PVH), UniCredit (UNCIF.PK), U.S. Home Systems (USHS), and Walgreen (WAG) are all due to report results.


Video games: Activision Blizzard (ATVI) is begun with a Buy recommendation and $16 price objective at Stifel Nicolaus, which cites a robust pipeline and potential upside for Skylanders. Rival Electronic Arts (ERTS) is also resumed with a Buy rating and $21 target as its Star Wars MMO is poised to prove a share price catalyst.

First Republic Bank (FRC): Shares are a fresh Outperform at BMO Capital.

Cinema stocks: Regal Entertainment (RGC) is a new Neutral at Nomura, which begins a Buy on Cinemark (CNK).

Shoe stocks: Steven Madden Ltd (SHOO) is a new Neutral with Wedbush, which starts Skechers USA (SKX) at an Underperform and covers Crocs Inc (CROX) with Outperform.

Tech stocks: Micron (MU) is begun initiated with a Buy at Jefferies, which starts SanDisk (SNDK) at a Hold.

OncoGenex Pharmaceuticals (OGXI): The equity is initiated with an Outperform at Leerink Swann, whose target is $19.

ProLogis (PLD): PLD is picked up with an Underperform at Imperial Capital, which says valuation is stretched.

Greenway Medical (GWAY): GWAY gets picked up with a Neutral at Sterne Agee.


American Eagle Outfitters (AEO): The clothing company is lifted to Buy from Neutral at Lazard.

Dangdang (DANG): The Chinese Internet firm gets upgraded to Outperform from Perform with a $9.50 objective at Oppenheimer, which cites its market leadership in the country's fast growing Business to Consumer e-commerce space.

Deutsche Lufthansa (DLAKY.PK): Shares are sharply higher in London this morning after JP Morgan Cazenove upgraded the air carrier to Overweight from Neutral.

Delek US Holdings (DK): DK is increased to Overweight from Equal Weight by Barclays.

Hatteras Financial (HTS): Sterne Agee takes the stock to Buy from Neutral.

Imperial Tobacco (ITYBY.PK): The company gets upgraded to Buy from Hold at Société Générale.

Rent-A-Center (RCII): The rating is raised to Buy from Hold with a $48 target at Stifel Nicolaus, which highlights a stabilizing core business and faster maturation of its Acceptance kiosks.

Schiff Nutrition (WNI): The stock is now Outperform from In-Line at Imperial Capital.

Sterling Construction (STRL): Shares are boosted to Outperform from Market Perform by BMO Capital.

Mining sector: Southern Copper (SCCO) is upgraded to Overweight from Equal Weight at Morgan Stanley, which similarly lifts Brazil's Vale S.A. (VALE).

Williams Companies (WMB): UBS boosts its rating on the energy outfit to Buy from Neutral. An anticipated acquisition positions it "to be one of the top players in the Marcellus and Utica shales, considered to be the fastest growing shale plays."


Bank of America (BAC): A second downgrade in three days for the Dow member, now Neutral from Outperform with a $10 target at Robert W. Baird. The recent rapid share price appreciation does not, Baird believes, justify putting new money to work in the stock.

Apollo Group (APOL): Shares, slumping before the bell on earnings, are now Neutral from Outperform at Credit Suisse.

Buffalo Wild Wings (BWLD): BWLD gets downgraded to Hold from Buy at Deutsche Bank after yesterday's 6.76% surge.

Comverge (COMV): COMV is cut to Hold from Buy at Needham.

First Commonwealth Financial (FCF): Shares are now Neutral from Buy at Sterne Agee.

International Power (IPRPY.PK): The energy outfit is lower in London today after Deutsche Bank downgraded it to Hold from Buy.

STMicroelectronics (STM): Société Générale slashes the equity to Hold from Buy.

U.S. Bancorp (USB): The financial firm is downgraded to Hold from Buy at ISI Group.
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