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Upgrades & Downgrades: Unearthing Treasure in eBay's Attic

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

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The king of Spain has already apologized for his elephant-hunting holiday, but markets, much like those mammals, tend not to forget. Stocks gave back much of Tuesday's good gains after Madrid reminded us that Iberia's economic crisis is far from over. The country's bad loans hit their highest level since October 1994, and that, combined with iffy earnings out of key Dow (^DJI) components IBM (IBM) and Intel (INTC), made for an anxious session for investors. With Wall Street once again compelled to send for the men in white coats, Intuitive Surgical (ISRG) surged 7.15% to an all-time high, shareholders making a mint, so to speak. The Iraq war ended on December 31, 2011 yet here was Halliburton (HAL) gaining 4.62% to post its best performance of 2012, strongly suggesting that the conflict may not have been a conspiratorial plot to enrich Dick Cheney after all. Cenveo (CVO), based in Stamford, rose 9.27% to top the NYSE, and United Rentals (URI), which calls Greenwich home, jumped 11.83%; such showings strongly suggest money follows money. (Although spare a thought for Citigroup's (C) CEO, victim of a nasty pay cut, who has now sadly been forced to put his Tony property in the Nutmeg State up for sale.)

American International Group (AIG), which bet big on death, received another analyst upgrade, and Genworth Financial (GNW), which insures lives, tumbled 23.77% to prop up the S&P 500 Index (^GSPC). Groupon (GRPN) fell a further 4.62% to a fresh post-IPO low, and on the 33rd birthday of noted millionaire coupon clipper Kourtney Kardashian. And Chesapeake Energy (CHK), just cut this morning, slid 5.54% to its lowest level since July 2009 amid a CEO scandal involving personal loans. Its top lawyer Henry Hood-presumably Robin's wicked, reverse engineered older brother-continues to maintain "the suggestion of any conflicts of interest is unfounded." To the rest of the world, however, the company, whose head has an expensive antique map habit, appears to be a member of the Flat Earth Society. This morning in economics, March existing home sales and leading indicators are each out at 10:00 a.m. Eastern, as is April's Philadelphia Fed Index. The earnings express rolls on with blue chips Bank of America (BAC), DuPont (DD), Microsoft (MSFT), Travelers (TRV), and Verizon (VZ) all due to report results.


Initiations:

Acadia Healthcare (ACHC): Shares are begun with an Outperform at BMO Capital, which assigns a price objective of $18.

Antares Pharmaceuticals (AIS): Cowen & Company covers the stock at Outperform.

Celanese (CE): Lazard launches Buy rated research on CE.

Money managers: Medley Capital (MCC) and THL Credit (TCRD) are both begun with Outperforms at Wells Fargo, which has a Market Perform on TICC Capital (TICC).

PhotoMedex (PHMD): Shares are begun with a Buy recommendation and $22 target price at Canaccord Genuity, which says near-term growth is expected to be driven by the consumer product segments with geographic expansion.

Power-One Inc (PWER): Bank of America-Merrill Lynch launches the stock at an Underperform.

Real estate stocks: American Realty Capital Properties (ARCP) and American Realty Capital Trust (ARCT) are each assigned Outperforms at JMP Securities.

Roadrunner Transportation (RRTS): RRTS is resumed with an Outperform at Raymond James.


Upgrades:

eBay Inc (EBAY): Shares in the online auctioneer, surging some 10% before the bell on impressive earnings, are upgraded to Overweight from Neutral at Piper Jaffray, to Outperform from Neutral at Macquarie, and to Buy from Hold with a new higher $45 target by The Benchmark Company. Catalysts include accelerating growth in number of payments, rising penetration rates and stronger margins, while PayPal continues to perform strongly.

F5 Networks (FFIV): FFIV is upgraded to Buy from Hold with Wunderlich, whose target is $145.

Badger Meter (BMI): Janney Montgomery Scott moves BMI to Buy from Neutral.

Beiersdorf AG (BDRFF): The German cosmetics company is up in Europe this morning after Exane BNP Paribas lifted it to Outperform from Neutral.

Corinthian Colleges (COCO): Shares are boosted to Equal Weight from Underweight by Barclays.

Mellanox Technologies (MLNX): Shares, surging before the bell after announcing record results, are upgraded to Buy from Hold with Wunderlich.

Safeway (SWY): Highlighting the potential for a leveraged buyout even as fundamentals remain an issue, Deutsche Bank hoists the supermarket to Hold from Sell. The target is also taken up by $4, to $22.

Toll Brothers (TOL): TOL is taken to Buy from Hold at Deutsche Bank, sending shares up ahead of the open.

Zynga (ZNGA): The stock is now Hold from Underperform at Needham, which says its recent sharp sell-off leaves less room for downside risk.


Downgrades:

Qualcomm (QCOM): QCOM is cut from the Top Picks Live list at Citigroup.

Aeroflex (ARX): ARX gets downgraded to Hold from Buy at Stifel Nicolaus.

Catalyst Health Solutions (CHSI): CHSI is downgraded to Sell from Hold at Noble Financial.

Chesapeake Energy (CHK): Sterne Agee slashes the troubled firm to Neutral from Buy.

Navistar (NAV): Shares are now Market Perform from Outperform with Wells.

Perrigo (PRGO): PRGO is cut to Above Average from Buy at Caris, which thinks material upward revision of EPS estimates is unlikely due to the weak flu season vs. last year.

Rofin-Sinar Technologies (RSTI): RSTI is reduced to Hold from Buy at Stifel Nicolaus.

YUM Brands (YUM): The KFC, Pizza Hut, and Taco Bell owner gets cut to Outperform from Buy at Crédit Agricole.
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No positions in stocks mentioned.
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