AFL slipped 1.17% Wednesday after UBS Investment Research downgraded the company to "neutral" from buy," saying the insurer's shares are optimistically valued. With the stock up 48% since the beginning of 2007, UBS thinks a rosy outlook is already priced into the stock. UBS thinks it is likely AFL will hit its targets for profit and sales growth, but believes the stock is so expensive it leaves little room to climb higher. BK sank 4.83% after Friedman, Billings, Ramsey said some banks may be forced to raise capital quickly to offset asset quality declines and avoid regulatory review. RBC Capital Markets cut its 2008 profit projections for WFC on expectations that further credit deterioration and higher loan-loss provisions will hamper the bank. WFC fell 3.05%. "Given the weakening housing market and softening consumer trends," RBC opined, "we expect to see further deterioration in WFC's $75.6 billion home equity portfolio, and to a lesser extent its $18.8 billion credit-card portfolio and WF Financial's $63.6 billion nonprime consumer lending business." RBC added that the difficult environment could create some merger-and-acquisition opportunities for WFC, and maintained an "outperform" rating on the shares and raised its target price $3 to $33, saying the bank should fare better than most during this downturn, based on its well-diversified business model. MRK shed 3.18%, still feeling the effects of a study released earlier this week that cast doubt on the effectiveness of its cholesterol drug Vytorin. AAPL fell 1.36% on reports on a widespread shortage in the availability of iPhones at AAPL stores in the U.S. The shortage could be due to a disruption in the company's production process or because AAPL may be drawing down on inventory as it prepares to launch a new 3G version of the phone. PEP, one of the two LCCP stocks to fall yesterday, fell again today, this time by .98%.
Gasoline and oil futures rose sharply after the Energy Department's Energy Information Administration (EIA) reported an unexpected increase in gasoline demand and a big drop in supplies. Crude oil futures for May delivery jumped $3.85 to settle at $104.83 a barrel. Crude's rise came despite EIA data showing oil inventories grew by 7.4 million barrels last week, more than three times the increase analysts expected. Energy stocks rose, including XOM (1.72%), RIG (1.52%), NOV (3.41%), CVX (.89%), SLB (1.75%), SU (3.24%) and SE (.7%). COL, up 1.83%, said it has received a $64.6 million contract modification from the U.S. Air Force to install more global air traffic management equipment in KC-135 aerial tanker aircraft. The modification is in addition to previously ordered avionics hardware kits and installations. With the latest modification, the total contract value exceeds $555 million. NOK, higher .63%, unveiled four new phone models on Wednesday, targeting consumers in emerging markets who are about to replace their first phones. NOK's new phones are priced between 50 euros and 90 euros, aiming for the cheapest offerings from its main rivals, all of whom have so far not competed with NOK's scale-benefits in making even cheaper phones.