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Upgrades & Downgrades: Money Under the Mattress at Tempur-Pedic


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

It was such a strong session for stocks one wonders why anyone would want to conclude proceedings prematurely. Shrugging off disappointing data on durable goods, the S&P 500 Index (^GSPC) posted its best back-to-back performance in two weeks on a welcome upturn in trading volume after the Fed left open the possibility of further monetary action. The Nasdaq (^IXIC), snapping a five-session slump in some style, had its finest day of the year, although someone forgot to tell exchange operator Nasdaq OMX Group (NDAQ), which ended down amid an 18% decline in profit. Strength in technology owed everything, as ever, to Apple (AAPL), an 8.87% surge taking it back above $600. Tim Cook, the best paid CEO of 2011 earning $378 million, was given quite a quantum leap from Steve Jobs' $1 annual salary but appears to be earning it. China now accounts for $7.9 billion of company revenue and represents fully one-fifth of iPhone sales. The 14% peak-to-trough sinkhole Apple shares recently slipped through are now forgotten, although one suspects the wounds will take longer to heal for that poor mobile phone user in the Asian nation who just imploded in similar fashion. ATM maker Diebold (DBD) jumped 5.85% to top the Russell 1000. It may surprise some that cash machines were actually invented by a Scotsman - that famously frugal nation isn't the most obvious candidate to more quickly part man from money.

World-class windbag Donald Trump railed against wind farms in the country's capital of Edinburgh and Coca-Cola (KO), based in the Gone With the Wind heartland of Atlanta, advanced 1.09% to a fresh 13-year peak. Flush enough, surely, to buy back those missing Rockwells, if only they could be found. Fellow Dow (^DJI) member Wal-Mart (WMT) took its three-day tumble to over 8% after a ratings reduction. Given that the Bentonville behemoth is the world's largest employer after our own Department of Defense and Beijing's People's Liberation Army, one has to admire any analyst prepared to pick a fight with it. McDonald's (MCD), another blue chip, also incurred a downgrade yet it ended up; clearly Mad Cow is less a threat than Curious Cow. And Iconix Brand (ICON), which makes London Fog raincoats, soaked investors by falling 14.63%. This as the British economy officially entered its first double-dip recession since the 1970s. No wonder its former finance minister, the wonderfully named Ed Balls, recently ran a mile. Or 26.2 to be more precise, retracing a route first run, rather ominously, in Greece. Today in economics, March pending home sales are released at 10:00 a.m. Eastern. On the corporate front, another frenzied session for quarterly earnings includes announcements out of (AMZN), Banco Santander (STD), Colgate-Palmolive (CL), Deutsche Bank (DB), Exxon Mobil (XOM), JetBlue (JBLU), Starbucks (SBUX), Unilever (UN), Volkswagen (VLKAY), and Zimmer (ZMH).


Anthera Pharmaceuticals (ANTH): The small cap is begun with a Buy at MLV & Co., which anticipates topline data from PEARL-SC, a Phase II trial of the company's lead clinical product blisibimod in patients with systemic lupus erythematosus, in the second quarter.

Forest Labs (FRX): Auriga has a fresh Hold on FRX.

Henry Schein Inc (HSIC): The medical equipment company is a new Neutral at Suntrust.

Neptune Technologies (NEPT): Rodman & Renshaw resumes the stock at an Outperform and assigns it a target price of $7.

Patterson Companies (PDCO): PDCO is picked up with a Buy at Suntrust.

Pozen Inc (POZN): Shares are initiated with a Buy at CK Cooper, whose price objective is $11.


Travelers (TRV): The Dow component gets a Hold-from-Sell boost by Deutsche Bank.

Air Products (APD): Morgan Stanley moves the stock to Equal Weight from Underweight.

Akamai Technologies (AKAM): Shares are upgraded to Buy from Hold at Jefferies, which takes its target up to $42.

AutoNation (AN): AN is now Neutral from Sell at UBS.

Cheesecake Factory (CAKE): The stock is moved to Outperform from Market Perform at Raymond James.

ConocoPhillips (COP): The oil giant gets upgraded to Neutral from Underperform at Macquarie.

Citrix Systems (CTXS): Shares are upgraded to Outperform from Perform at FBR Capital, which takes its target up by $20 to $100. Highlights include an impressive product cycle around desktop virtualization.

Harley-Davidson (HOG): HOG is upgraded to Overweight from Equal Weight at Barclays.

Hexcel (HXL): Bank of America-Merrill Lynch hoists HXL to Buy from Neutral.

Knight Transportation (KNX): Shares are increased to Outperform from Market Perform with Wells Fargo.

Marriott International (MAR): Citing a diverse location base and robust development pipeline among other favorable factors, Argus increases the hotel stock to Buy from Hold. Its price target is $48.

O'Reilly Automotive (ORLY): Shares are upgraded to Outperform from Market Perform by brokerage William Blair.

Rockwell Automation (ROK): ROK is raised to Equal Weight from Underweight at Morgan Stanley.

Tempur-Pedic (TPX): The bedding firm is upgraded to Long-term Buy from Neutral at Hilliard Lyons, whose target is $70. Heightened value is seen after a recent steep sell-off.

Titanium Metals (TIE): Citigroup lifts the stock to Buy from Neutral.

Torchmark (TMK): Sterne Agee takes TMK to Neutral from Underperform.

Watson Pharmaceuticals (WPI): Shares are now Buy from Neutral at Citi.


ABB Ltd (ABB): The engineering outfit is now Neutral from Overweight at JPMorgan.

Coca-Cola FEMSA (KOF): Morgan Stanley moves the Mexican soft drink stock to Equal Weight from Overweight.

Dana Holding (DAN): DAN gets downgraded to Neutral from Buy at Goldman Sachs, sending shares lower before the opening bell.

General Dynamics (GD): GD is taken to Equal Weight from Overweight at Morgan Stanley.

Hess Corp (HES): Shares are now Neutral from Overweight at JPMorgan, which cites lower Bakken production volume and capex increases. The target is taken to $68 from $89.

Leap Wireless (LEAP): LEAP is lowered to Neutral from Buy at Guggenheim.

MeadWestvaco (MWV): RBC Capital reduces its rating to Sector Perform from Outperform.

NVR Inc (NVR): Guggenheim gives the residential construction outfit a downgrade to Sell from Neutral.

Penske Automotive (PAG): Shares are downgraded to Hold from Buy at KeyBanc Capital Markets due to valuation.

SAP AG (SAP): The German software giant gets moved to Market Perform from Outperform with Wells.

Silicon Labs (SLAB): Crédit Agricole cuts SLAB to Underperform from Outperform.
No positions in stocks mentioned.
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