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Upgrades & Downgrades: Handbag Fight Erupts Over Vera Bradley

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

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Stocks fell for a third session in four, contrarians turning cocky as the brokerage firm best known for being bullish in a pottery store became less bearish on equities just as the first cracks started to appear in previously fine China. News that the country now expects growth of 'only' 7.5% sent stocks down, although a day before Super Tuesday we did have a Turnaround Monday of sorts with the Dow (^DJI), down 85 at its worst, recovering to end off only 14.76. Nonetheless, the Nasdaq (^IXIC) experienced its worst drop of the year as Zynga (ZNGA), creator of Words With Friends, fell 4.90% after getting downgraded by JP Morgan (JPM), whose multi-millionaire CEO says what journalists make is just "damned outrageous." (Writers responded with two unfriendly words totaling seven letters for Jamie Dimon, the first of which is unprintable in a family publication.) As an erstwhile Asian tiger slowed and Europe reported more dire economic data, our interconnected world was once again reminded that no man is an island, although Archipelago Learning (ARCL), up 22.68%, wouldn't have it any other way. Big Blue International Business Machines (IBM) hit $200 for the first time in its 101-year history and wedding ring king Tiffany's (TIF) little blue boxes gained 0.83% on Saturday's Barron's boost. The same day its sister publication reported 50-somethings are divorcing at record rates but Baby Boomers forever fail to realize that the world does not revolve only around their still-callow generation. So long as 98 year olds marry 95 year olds, as they did just last week, the luxury jeweler will always enjoy willing buyers.

BP Plc (BP), which banished its head to Siberia, advanced 0.97% to a new 52-week peak on a $7.8 billion Gulf spill settlement. Vladimir Putin should also spend some time in that frozen tundra after stealing the election but, suitably inspired by "the softer side of Sears (SHLD)" - 2012′s top S&P 500 (^GSPC) stock - he showed that even ex-KGB hard men aren't afraid to show emotion. Buenos Aires-based oil and gas outfit Sociedad Anonima (YPF) was crying for Argentina along with him after falling 5.81%. As the world mourned the man who snapped the final poignant picture of Camelot, Camelot Information Systems (CIS) jumped 11.11%. The era now appears a lot less pure of course, complete with sordid presidential-student affairs; presumably JFK was warning Bill to "stay away from interns, kid" in that other iconic photo. Meanwhile Gap Inc (GPS), whose blue dress almost toppled Bill Clinton from office, gained 0.82% in a down market, adding to last week's 8.2% increase. As Russell Baker once memorably remarked during the Lewinsky scandal, oh for a more innocent age, the Reagan era, when sleeping with the president meant attending cabinet meetings. (Mattress maker Select Comfort Corp (SCSS), it should be said, ended up 2.42% at a record high yesterday.) And Yahoo (YHOO) unveiled its first season of comedy programs. Shareholders, who have seen their stock fall 14.42% in the past year, and employees - facing large scale layoffs by all accounts - may not see the funny side. No top-tier economic data out today but AeroVironment (AVAV), Bridgepoint Education (BPI), Chefs' Warehouse (CHEF), Dick's Sporting Goods (DKS), Kronos Worldwide (KRO), United Natural Foods (UNFI), and Vail Resorts (MTN) are all due to announce earnings.


Initiations:

Vera Bradley Inc (VRA): The cult handbag company, downgraded elsewhere this morning, is also initiated with a bullish Outperform by brokers William Blair.

Internet sector: Google (GOOG) is begun with a Buy at Nomura, which assigns a new Neutral on Yahoo (YHOO).

Assorted Instrument/Equipment stocks: Agilent (A), Thermo Fisher (TMO), and Waters (WAT) are all new Overweights at Morgan Stanley, which establishes Equal Weights on Illumina (ILMN), PerkinElmer (PKI), and Life Technologies (LIFE).

Software-related space: Neustar (NSR) and Nuance Communications (NUAN) are fresh Market Performs with Wells Fargo, which starts Outperforms on Synchronoss Technologies (SNCR) and Amdocs (DOX).


Deutsche Bank (DB): The financial firm is begun with a Buy at ING Groep.

DUSA Pharmaceuticals (DUSA): The small cap stock is started with a Buy at C.K. Cooper, which establishes a price objective of $8. A strong fourth quarter is anticipated, benefiting from strong seasonal demand combined with stocking orders resulting from an announced price increase.

Sunesis Pharmaceuticals (SNSS): Canaccord Genuity covers shares at a Buy.

Yandex (YNDX): YNDX is a new Neutral at UBS.


Upgrades:

Monster Worldwide (MWW): The online employment search firm is upgraded to Overweight from Equal Weight at Evercore.

Canon (CAJ): Crédit Agricole takes the Japanese tech titan to Buy from Outperform.

Akzo Nobel (AKZOY.PK): Shares get a Buy-from-Hold boost at Société Générale.

Sanofi-Aventis (SNY): JP Morgan moves the stock to Overweight from Neutral.

Lifepoint Hospitals (LPNT): LPNT is lifted to Neutral from Underperform at Credit Suisse.

Worthington Industries (WOR): Jefferies juices its recommendation to Buy from Hold.

OmniVision (OVTI): The stock is upgraded to Outperform from Neutral at Robert W. Baird, which takes its target price up by $4 to $23. Recent field research supports the broker's belief it supplies a 5mp sensor for Apple's (AAPL) the iPad3, which has positive ASP (Average Selling Price) implications. Shares are sharply higher ahead of the open as a result.

PDC Energy (PETD): PETD is hoisted to Buy from Hold at Brean Murray amid "encouraging" results from a recent vertical well.

Covanta (CVA): CVA is increased to Overweight from Equal Weight by Barclays.

Hatteras Financial (HF): Wells Fargo hoists HF to Market Perform from Underperform.

Manning & Napier Advisors (MN): MN gets moved Outperform from Market Perform at Keefe Bruyette.


Downgrades:

Vera Bradley (VRA): Shares are cut to Hold from Buy at Keybanc, which says near-term margin concerns compel them to the sidelines.

Lululemon athletic (LULU): Citing valuation concerns after a recent break out to record highs, Argus cuts the yoga apparel outfit to Hold from Buy.

Amgen (AMGN): The world's biggest biotech is moved to Market Perform from Outperform by Sanford Bernstein.

Annaly Capital Management (NLY): NLY is now Market Perform from Outperform with Wells Fargo.

Aviva (AV): The stock is trading lower in Europe this morning after being downgraded to Underperform from Neutral by BNP Paribas, whose concerns include future pressure on earnings and cash flows.

Clear Channel Outdoor (CCO) CCO gets cut to Market Perform from Outperform with Wells Fargo.

Commerzbank AG (CRZBY.PK): The giant German financial firm gets downgraded to Hold from Buy at ING Groep.

Express (EXPR): The clothing company is lowered to Equal Weight from Overweight by Barclays.

Novartis (NVS): JP Morgan downgrades the drug-maker to Neutral from Overweight.

Jiayuan.com (DATE): China's largest online dating site is lowered to Underperform from Neutral by Bank of America-Merrill Lynch.
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No positions in stocks mentioned.
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