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Upgrades & Downgrades: Casual Friday Suits the Gap Just Fine


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

The S&P 500 Index (^GSPC) closed inexorably in on its best first quarter since 1998 while over on the NYSE a 92.31% debut gain in Millennial Media (MM) revived memories of skyrocketing stocks at the dawn of the century. As for the Dow (^DJI), on the 13th anniversary of a first ever close above over 10,000, it partied like 1999. Admittedly, blue chips increased only 19.61 points but that still represented an impressive recovery from an earlier 94 point swoon, and ensured they snapped a three-day slump to end the session as the only major average in positive territory. Red Hat (RHT), whose open source operating system was developed by Helsinki-born Linus Torvalds, enjoyed an especially strong Finnish to Q1, advancing 19.54% in reaching its best level in a dozen years. Back then sexy Internet IPOs were all the rage but these days it is decidedly more humdrum products that are lining investors' pockets. Twenty four hours after organic food firm Annie's Inc(BNNY) jumped 89.05%, ball-bearing maker Rexnord (RXN) rose 11.11% in its own first day of trading. Just in time for today's movie opening about women's ongoing love affair with pumps, Payless shoes parent Collective Brands (PSS) added 8.41%. (Of course, in a world where macho quarterback Tom Brady is an Ugg endorser, men have their own equivalent. Rocky Brands (RCKY), maker of footwear for construction workers and law enforcement, ended up 4.46%.)

Princeton National Bancorp (PNBC) added 85.01% to top the Nasdaq (^IXIC), leaving shareholders happy they stayed in the stock. Harvard meanwhile is harder than ever to get into but Mitt Romney may want to start admitting he went there with Obama, especially after Crimson Exploration (CXPO) surged 19.15%. The singularly misnamed Best Buy (BBY) slid 6.95%. The big box retailer now invariably finds itself mocked as "Amazon's (AMZN) showroom", so to see a simultaneous analyst initiation of the latter must have added insult to injury. LED manufacturer Nexxus Lighting (NEXS), was downgraded but actually ended up 1.23%; in a world where Uncle Sam insists $50 is inexpensive for a light bulb, their profit margins must be fat. And America experienced a bout of Mega Millions mania ahead of tonight's record jackpot. The odds of winning, 1 in 176 million, are considerably less than being struck by lightning but hey, you never know. This morning in economics, we get March's Chicago Purchasing Managers Index at 9:45 am Eastern, with the final figure for this month's University of Michigan's consumer sentiment survey following at 9:55 am. Today's earnings announcements are expected to include Birner Dental Management (BDMS), Finish Line (FINL), MFC Industrial (MIL), and Natuzzi SpA (NTZ).


Lululemon Athletica (LULU): Shares are begun with a Buy at UBS.

Peoples Bancorp (PEBO): Keefe Bruyette establishes an Outperform rating and $21 price objective.

Beam Inc (BEAM): The branded distilled spirits producer, a recent spin-off, is initiated with a Buy at Suntrust.

Casual dining: Buffalo Wild Wings (BWLD) is a new Equal Weight at Morgan Stanley, which begins BJ Restaurants (BJRI) at Overweight.

Commodity companies: Pan American Silver (PAAS) is begun with a Buy and $31 target price at Deutsche Bank, which has a Hold on Hecla Mining (HL).

REITs: Kilroy Realty (KRC) is resumed with a Sell at Cantor Fitzgerald amid an uncompelling current valuation. By contrast, the broker begins Buy rated coverage on Boston Properties (BXP), Brandywine Realty (BDN), and SL Green Realty (SLG)

Steel stocks: AK Steel (AKS) is a new Neutral at Nomura, which begins Buys on rivals US Steel (X), and Steel Dynamics (STLD).

Health plan providers: Amerigroup (AGP), Molina Healthcare (MOH), and Centene (CNC) are all begun with Buys at Jefferies

Incyte (INCY): INCY is initiated with a Buy at ThinkEquity.

Lufkin Industries (LUFK): The oil and gas outfit launched with a Buy recommendation and $96 target at Dahlman Rose. They say if efficiencies are successful in 2012, there could be additional margin expansion.

United Natural Foods (UNFI): Shares are started with a Sell and $33 target at Cantor Fitzgerald on concerns the rate of earnings appreciation has become somewhat decoupled from top-line growth trends.

Websense (WBSN): The stock is initiated with a Market Perform at JMP Securities.


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

Discovery Communications (DISCA): Lazard lifts the company to Buy from Neutral.

Gap Inc (GPS): The suddenly fashionable clothing company, which hit a 52-week peak on Monday, is boosted to Buy from Neutral at Janney Scott. The broker, who has a $33 target, sees evidence of product improvement with trend-right color and fashion items.

LinkedIn (LNKD): The stock is lifted to Positive from Neutral at Susquehanna.

CPI Aerostructures (CVU): CVU is upgraded to Buy from Hold at Capstone.

Vivus Inc (VVUS): The company is upgraded to Buy from Hold at Brean Murray.

Wyndham Worldwide (WYN): Shares are higher before the bell after getting upgraded to Buy from Neutral at Goldman Sachs.


Accretive Health (AH): AH is now Neutral from Outperform with a new lower target of $21 at Robert W. Baird, which cites the surprise loss of a large account,

France Telecom (FTE): FTE is taken to Sell from Neutral at Citigroup.

InvenSense (INVN): The company is cut to Perform from Outperform with a $15 objective at Oppenheimer.

Kindred Healthcare (KND): KND is cut to Market Perform from Outperform with Wells Fargo

Raytheon (RTN): RBC Capital reduces RTN to Sector Perform from Outperform.

Select Medical (SEM): Shares are moved to Market Perform from Outperform with Wells.

U.S. Bancorp (USB): The financial firm is downgraded to Market Perform from Outperform at BMO Capital.
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