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Upgrades & Downgrades: JPMorgan Taken to the Woodshed


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

MINYANVILLE ORIGINAL Economic armageddon by the Aegean Sea? So 48-hours ago. No, now the greatest threat to equities comes from a Greek-American many mistakenly believed walked on water. The previously pristine reputation of Jamie Dimon - whose family name was Papademetriou until being changed by his paternal grandfather, an employee at the Bank of Athens - took a huge hit after his after-hours announcement that JPMorgan (JPM) lost $2 billion. That kind of cash ain't easily found down the back of the couch, and is the reason why yesterday's minor market rally is likely to prove painfully short lived. Before the bombshell disclosure, Dow Industrials (^DJI) did snap a six-session slump, with stocks rebounding from two-month lows as initial unemployment claims decreased and the US posted its first budget surplus since 2008. Greece still struggles to form a government however, though the fact that the same British bookmakers who quoted the country's soccer team as 150-1 no hopers in a tournament they ended up winning have now stopped taking bets on the beleaguered nation exiting the euro provides a perverse reason for optimism. Our letter carriers lost $3.2 billion last quarter but before going postal, its employees should please note that the check is in the mail for firearms firm Smith & Wesson (SWHC), which rode a research recommendation to advance 8.08% and end at $7.36. Impressive, although still some $7 million short of what Andy Warhol's "Gun" from 1981 went for at auction hours later.

News Corp (NWSA) gained 4.85% and stands at its highest level since 2007 even as one of its former editors went before a commission, oxymoronic in its case, on media ethics to explain their role in the hacking of a murdered 13-year-old school girl's mobile phone. Another of Mr. Murdoch's newspapers, The Wall Street Journal, asked, "Where are they now?" of Henry Blodget, the ex-Internet analyst who once called InfoSpace (INSP) a "piece of junk" in private while rating it a Buy to the wider world. He may have been right, just 12 years late - its shares surged 21.68% to top the Nasdaq (^IXIC) as a touch of millennial madness returned to tech stocks. (Though not for another high flier of that era, with Cisco Systems (CSCO) tumbling 10.49%.) And Kohl's Corp (KSS) fell 4.33% after issuing a disappointing earnings outlook. Let's hope the company can still see the funny side of its role in an unintentionally hilarious shopping mall sign. Today in economics, consensus calls for an increase in the University of Michigan's preliminary consumer sentiment survey for May at 9:55 am Eastern. On the corporate front, Cache Inc (CACH), Gordmans Stores (GMAN), Nvidia (NVDA), and US Concrete (USCR) are all due to release results.


Apparel companies: Buckle (BKE) begun with an Underperform at Bank of America-Merrill Lynch, which rates Zumiez (ZUMZ) a Buy with price objective of $40. Its strong comparative sales trends should "drive earnings beats."

C.H. Robinson (CHRW): Shares are a Perform at Oppenheimer.

Heckman (HEK): Credit Suisse has an Outperform on HEK.

Restaurant stocks: Wells Fargo resumes Market Performs on BJ's Restaurants (BJRI), DineEquity (DIN), and Cheesecake Factory (CAKE). It assigns Outperfoms on Buffalo Wild Wings (BWLD), Texas Roadhouse (TXRH), Bravo Brio Restaurant (BBRG), Cracker Barrel Old Country Store (CBRL), Red Robin Gourmet Burgers (RRGB), Brinker International (EAT), Ruby Tuesday (RT), and Darden Restaurants (DRI).

Ultimate Software (ULTI): ULTI is a Perform at Barrington Research.

MYR Group (MYRG): Bank of America-Merrill Lynch launches Neutral rated research on the industrial outfit.


Telecoms: Dow members AT&T Inc (T) and Verizon (VZ) are each upgraded to Outperform from Neutral at Credit Suisse.

Arena Pharmaceuticals (ARNA): Shares are surging before the bell after being upgraded to Buy from Underperform at Jefferies.

Bed Bath & Beyond (BBBY): BBBY is boosted to Outperform from Neutral at Credit Suisse.

Dycom (DY): Raymond James raises its recommendation to Strong Buy from Outperform.

Ericsson (ERIC): ERIC is upgraded to Buy from Neutral at UBS.

Hovnanian (HOV): UBS hoists the homebuilder to Buy from Neutral at UBS.

Marks & Spencer (MAKSY.PK): The retailer is rising in London this morning after Bank of America-Merrill Lynch upgraded it to Buy from Neutral, citing lower input-cost inflation this year.

Incyte (INCY): INCY is upgraded to Buy from Neutral at Goldman Sachs.

Shire plc (SHPGY): The firm is moved to Outperform at Exane BNP Paribas.

Stage Stores (SSI): SSI is now Buy from Neutral at Suntrust.


JPMorgan Chase (JPM): Shares, slumping 7% before the opening bell, are moved to Market Perform from Outperform at FBR Capital, which takes its target price to $37 from $50. Though the core business lines remain strong and intact, they worry about the potential risk the credit derivatives portfolio poses to earnings going forward.

Ardea Biosciences (RDEA): Shares are downgraded to Neutral from Buy at UBS.

Best Buy (BBY): BBY is now Neutral from Outperform at Credit Suisse.

GeoEye (GEOY): GEOY gets downgraded to Neutral from Outperform at Macquarie.

KEMET (KEM): Bank of America-Merrill Lynch cuts KEM to Underperform from Buy.

Macerich (MAC): MAC is moved to Hold from Buy at Jefferies.

PSS World Medical (PSSI): The equity is reduced to Neutral from Outperform at Robert W. Baird.

Roundy's (RNDY): Shares are now Neutral from Outperform at Robert W. Baird, whose target is $12.

Schiff Nutrition (WNI): Shares are downgraded to Neutral from Buy at DA Davidson.

Talisman Energy (TLM): TLM is taken to Buy from Action List Buy at TD Securities.

Windstream (WIN): The stock is now Neutral from Buy at Citigroup.
No positions in stocks mentioned.
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