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Upgrades & Downgrades: Wiring Money Western Union's Way


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

Spain, whose fútbol players are World and European champions, can kick the can better than any country on Earth so we shouldn't be surprised that its debt debacle has legs. A tepid bond auction in Madrid sent stocks lower for a second successive session, with the Dow (^DJI) dropping by triple digits and Nasdaq (^IXIC) enduring its worst day since December. That day the cause was Italy, before that Greece, and next up will be Portugal. In Europe the names may change but the song remains the same (In its case the unlikely song is Ode to Joy, showing that at least the continent's sense of humor hasn't been lost along with its money.) Sunday's Easter ham will be eaten from the carcass of PIIGS like Bank of Ireland (IRE), which fell 4.61%, and National Bank of Greece (NBG) a 10.59% tumbler in a torrid tape for financials. At least Greek immigrants to America fared better. Jamie Dimon, whose paternal grandfather was one Panos Papademetriou, was revealed to have earned $23 million on a day JP Morgan (JPM) stock slid 2.22%. A pretty penny to be sure, but the bank CEO contends that the real scourge on our society is instead the "just damned outrageous" salaries that journalists can command. (Coincidentally or not, his previously pristine press coverage has lately turned a tad less adulatory.)

Amid the wreckage Avon Products (AVP) did its best to put lipstick on the PIIGS, advancing a further 2.52% following Monday's surge, and a 5.34% increase in American International Group (AIG) made it the most beloved stock in the entire S&P 500 Index (^GSPC), something you could have had some odds against in 2008. Goldman Sachs (GS) finds its coffee cup size being cut in Wall Street's era of belt tightening but it was still benevolent enough to upgrade Starbucks (SBUX), sending its shares to a new high. Twenty four hours earlier the bank raised its rating on a maker of stronger beverages, the world's largest winemaker Constellation Brands (STZ), and it also duly reached a fresh peak yesterday although once an alcoholic industry starts selling to seven year olds, it may be time to rein in their target market. And International Business Machines (IBM) incurred a ratings reduction, sending Big Blue 1.65% in the red. Though that's nothing compared with the PR black eye that awaits in the land of the green jacket this morning. Ahead of the long weekend in equity markets, today's earnings announcements include AZZ Inc (AZZ), CarMax (KMX), Pier 1 Imports (PIR), RPM International (RPM), Schnitzer Steel (SCHN), and WD-40 Co (WDFC).


LinkedIn (LNKD): Shares, downgraded elsewhere this morning, are begun with a Buy and $125 price target at Capstone Investments, which says good growth opportunities offer investors pure-play exposure to a targeted vertical social network.

Pandora Media (P): The stock is picked up with an Underweight by Barclays, which assigns it a price objective of $8.

Panera Bread (PNRA): Credit Suisse covers the company at Outperform.

Aruba Networks (ARUN): ARUN is a new Buy at Needham, whose target price is $28. It should benefit from secular trends toward mobility.

Atmel (ATML): Maxim Group has a Buy and $12 target.

Burberry Group plc (BBRYF.PK): The luxury retailer is bucking a broadly lower London tape this morning despite being assigned only a Neutral at JP Morgan Cazenove, whose per share price target is £14.60.

Cabela's (CAB): Shares are an Outperform at Imperial Capital, whose objective is $45. They say it is well positioned to gain market share with a $650 million and growing branded business.

CNO Financial (CNO): CNO gets begun with a Buy at Goldman Sachs.

HEICO (HEI): Bank of America-Merrill Lynch launches Neutral rated coverage on the aerospace outfit.

Kennametal (MKT): Stifel Nicolaus starts Buy rated research and sets a $54 target.

LyondellBasell (LYB): The stock is picked up with a Neutral at Piper Jaffray.

NVIDIA (NVDA): Cantor Fitzgerald covers the company with a Buy and has a $20 target.

Regional banks: Bank of America-Merrill Lynch begins Susquehanna Bancshares (SUSQ) at a Buy, has a new Neutral on Webster Financial (WBS), and establishes Fulton Financial (FULT) at Underperform.

Regional Banks: Staying in the sector, Citigroup begins a Buy and $10 target on KeyCorp (KEY). It has new Neutrals on, among others, First Niagara Financial (FNFG) and Huntington Bancshares (HBAN).

Sunstone Hotel (SHO): Shares are a new Equal Weight at Barclays.

Uranium Resources (URRE): The small cap is a new Buy at Dahlman Rose.

Ventrus Biosciences (VTUS): VTUS is begun with a Buy at Cantor Fitzgerald.


Arris (ARRS): ARRS is upgraded to Strong Buy from Outperform at Raymond James.

Cenovus Energy (CVE) Shares are increased to Sector Outperform from Sector Perform at CIBC World Markets.

Liquidity Services (LQDT): The stock is lifted to Buy from Hold with a new higher target of $57 at The Benchmark Company, which expects further market penetration gains especially in the Commercial and GovDeals segments.

VeriFone (PAY): Goldman Sachs raises its recommendation to Buy from Neutral on PAY.

Western Union Goldman gives the money transfer outfit a Buy-from-Neutral boost.


LinkedIn (LNKD): Shares are lowered to Market Perform from Outperform at Raymond James.

Acuity Brands (AYI): AYI is downgraded to Hold from Buy at ThinkEquity after yesterday's steep slide.

ADTRAN (ADTN): Raymond James reduces its recommendation to Underperform from Market Perform.

Ciena (CIEN): CIEN is cut to Market Perform from Outperform at Raymond James.

Comerica (CMA): CMA gets slashed to Sell from Neutral at Citi.

Enduro Royalty Trust (NDRO): NDRO is now Neutral from Buy with a new $21 target at Robert W. Baird amid a revised commodity outlook.

MDC Holdings (MDC): MDC is moved to Underweight from Neutral at JP Morgan.

Quality Systems (QSII): Shares are downgraded to Equal Weight from Overweight at Morgan Stanley.

Realty Income (O): UBS reduces its rating to Sell from Neutral.

Regional banks: First Commonwealth Financial (FCF), Flushing Financial (FFIC), and Associated Banc-Corp (ASBC) are all moved to Neutral from Outperform at Macquarie.

Sasol (SSL): The oil and gas company is downgraded to Neutral from Outperform at Credit Suisse.

Veolia Environnement (VE): The French firm is trading off sharply in Europe this morning on a Sell-from-Hold slash by Deutsche Bank.
No positions in stocks mentioned.
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