Wall to Wall Street Coverage: Upgrades and Downgrades
Stocks pared gains into the close, but still snapped a three day skid after China reported better than expected Q2 growth and Ben Bernanke floated the idea of QE3 -- even if, amid our current sea of troubles, it may prove no more effective than Gilligan's dearly departed S. S. Minnow. The Fed head's comments were certainly as good as gold, sending bullion up 1.5% to a new nominal high of $1585.30 an ounce. Moody's soured the market's mood late on, announcing it may cut the country's triple-A status if America defaults. (Unthinkable? Continuing our ship-shape similes, the Titanic was "unsinkable.") The credit rating agency made it obvious that, with August 2nd moving inexorably closer, the fat lady is finally starting to clear her throat. America, in desperate need of every penny, swiftly sang out "Lend me a tenor" but instead got only a Cantor. The U.S. may be a day late and a dollar short -- as indeed was Tuesday Morning, which slid 7.93% -- but some actually opted to see Moody's maneuver as a backhanded compliment of sorts. After all, it assigned Enron an 'investment grade' until four days before bankruptcy.
Among other standout stocks McGraw-Hill (MHP), owner of rival assessor Standard & Poor's, advanced 1.92% to near a new one-year high on an analyst upgrade. News Corp (NWS) rose 1.74% even though the Sky is falling for Mr. Murdoch. Chicken Little had lots to crow about at Yum Brands (YUM), the fast-food firm jumping 2.55% after-hours to a new historic high after the KFC owner announced a 25% surge in quarterly profits from China. Clearly, Colonel Sanders has successfully adapted to the land of General Tso. And -- apologies to any French fans forced to read this on Bastille Day -- Team USA advanced to their first women's soccer World Cup final since winning it in 1999. A year which ended with unemployment at 4% and Nasdaq up 85.59%. Was it really that recently? May as well be another millennium. Today in economics, business inventories are forecast to come in fairly flat at 10:00AM Eastern. On the corporate front, Q2 reporting season starts to percolate with Commerce Bancshares (CBSH), Cubist Pharmaceuticals (CBST), Fairchild Semiconductor (FCS), Google (GOOG), J.B. Hunt (JBHT), JPMorgan Chase (JPM), Texas Industries (TXI), and Washington Federal (WFSL) among companies due to announce earnings.
Initiations
Infosys (INFY): Indian outsourcing giant Infosys is picked up with a Buy rating and $75 price objective at Needham, which notes recent investor concerns around under performance on revenue growth versus its peers and margin compression may be misplaced.
Cognizant Technology (CTSH): Needham also assigns a new Buy on Cognizant Technology, which is assigned a $100 target price.
Tech Stocks: EMC Corp (EMC) and NetApp (NTAP) are both begun with Buys at Merriman.
CBOE Holdings (CBOE): The stock is covered with a Market Perform at Wells Fargo.
Information Services Stocks: iGATE (IGTE) ($23 target), Syntel (SYNT) ($70), and Virtusa (VRTU) ($25) are all new Buys at Needham.
InterMune (ITMN): The stock is begun at an Outperform by brokers William Blair.
Jazz Pharma (JAZZ): JAZZ gets picked up at Overweight by Piper Jaffray.
Pharmasset (VRUS): Wells Fargo launches Pharmasset at Outperform. See also Johnson & Johnson Deal Puts Pharmasset Drug in Spotlight.
Two Harbors Investment (TWO): FBR Capital covers Two Harbors Investment at Outperform and sets it an objective of $11.50.
Fiat SpA: The stock gets picked up with a Buy at Goldman Sachs.
Industrial Stocks: Martin Marietta (MLM) resumed with an Outperform at RBC Capital Markets, which assigns a Sector Perform on Vulcan Materials (VMC).
F5 Networks (FFIV): The stock is a fresh Overweight with Atlantic Equities.
Upgrades
Luxottica (LUX): LUX shares are up sharply before the bell on a Buy-from-Neutral boost at UBS.
Rolls Royce PLC: JPMorgan raises its Rolls Royce PLC recommendation to Overweight from Equal Weight.
Lloyds TSB plc (LYG): Citing stress tests results among other favorable factors, Goldman lifts British bank Lloyds TSB plc to Buy from Neutral.
IMAX Corp (IMAX): The stock is upgraded to Buy from Speculative Buy at Canaccord Genuity.
Emulex (ELX): ELX is increased to Outperform from Market Perform at Morgan Keegan, which says it is well positioned for the second half growth.
Savient Pharmaceuticals (SVNT): SVNT is lifted to Market Perform from Underperform at Leerink Swann.
Protective Life (PL): Calling it a "contrarian call", Bank of America-Merrill Lynch boosts Protective Life to Buy from Neutral.
ASML Holding (ASML): The stock is upgraded to Buy from Hold at Deutsche Bank.
Energen (EGN): Citigroup lifts Energen to Buy from Hold.
Great Plains Energy (GXP): GXP gets upgraded to Outperform from Market Perform with Wells Fargo.
Toll Brothers (TOL): Goldman takes Toll Brothers to Buy from Neutral.
REITs: National Retail Properties (NNN) and BioMed Realty (BMR) are both boosted to Buy from Hold at Jefferies.
Qlik Tech (QLIK): The stock is increased to Outperform from Market Perform at BMO Capital Markets, which also takes its target up to $40 from $29 based on this week's positive channel checks in Europe.
Olympic Steel (ZEUS): The stock is now Neutral from Sell at Goldman.
Williams-Sonoma (WSM): Goldman adds Williams-Sonoma to its Conviction Buy List.
Potash (POT): POT is up ahead of the open after being added to Citigroup's Top Picks list.
Downgrades
3M Co. (MMM): Key Dow component 3M Co. is trading lower ahead of the open after being cut to Underperform from Neutral by Bank of America-Merrill Lynch.
BAE Systems: The stock gets moved to Neutral from Overweight at JP Morgan.
Meritage Homes (MTH): MTH is cut to Neutral from Buy at Goldman. For related content, see On the Business of Being a House Flipper.
Netgear (NTGR): The stock is now Equalweight from Overweight at Barclays Capital.
ProLogis (PLD): PLD is lowered to Underperform from Hold at Jefferies.
RTI International Metals (RTI): RTI gets reduced to Sell from Neutral at Goldman.
Stillwater Mining (SWC): SWC is downgraded to Neutral from Overweight at JPMorgan.
MDU Resources (MDU): MDU is downgraded to Hold from Buy at Citigroup.
Quest Diagnostics (DGX): The stock gets cut to Sector Perform from Outperform at RBC Capital Markets.
Clean Energy Fuels (CLNE): The stock is now Outperform from Strong Buy at Raymond James. Also read Is Hot Air Killing Wind Power?
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