Waters (WAT) (PACB) (CEC) (PMI) (CLR) (COGO) Downgraded

Waters Corporation (NYSE: WAT), Pacific Biosciences of California (NASDAQ: PACB), CEC Entertainment, Inc. (NYSE: CEC), PMI Group Inc (NYSE: PMI), Continental Resources, Inc. (NYSE: CLR) and Cogo Group, Inc. (NASDAQ: COGO) downgraded by analysts.

Waters Corporation (WAT) was downgraded by Goldman Sachs (NYSE:GS) from a “Buy” rating to a “Neutral” rating.

Pacific Biosciences of California (PACB) was downgraded by JPMorgan Chase & Co. (NYSE:JPM) from an “Overweight” rating to a “Neutral” rating.

CEC Entertainment, Inc. (CEC) was downgraded by Sterne Agee from a “Buy” rating to a “Neutral” rating.

PMI Group Inc. (PMI) was downgraded by Keefe, Bruyette & Woods, Inc from an “Outperform” rating to a “Market Perform” rating.

Continental Resources, Inc. (CLR) was downgraded by SunTrust (NYSE:STI) from a “Buy” rating to a “Neutral” rating.

Cogo Group, Inc. (COGO) was downgraded by Needham & Company from a “Strong Buy” rating to a “Hold” rating.

NetSpend (NTSP) (LAMR) (NCIT) (STRI) (PMI) Downgraded

NetSpend (NASDAQ: NTSP), Lamar Advertising Company (NASDAQ: LAMR), NCI Inc. (NASDAQ: NCIT), STR Holdings, Inc. (NASDAQ: STRI) and PMI Group Inc (NYSE: PMI) downgraded by analysts.

Lamar Advertising Company (LAMR) was downgraded by Benchmark Co. to a “Hold” rating. They have a price target of $24.00 on the company.

NCI Inc. (NCIT) was downgraded by Stifel Nicolaus from a “Buy” rating to a “Hold” rating.

NetSpend (NTSP) was downgraded by Barrington Research from an “Outperform” rating to a “Market Perform” rating.

PMI Group Inc. (PMI) was downgraded by Credit Suisse (NYSE:CS) from an “Outperform” rating to a “Neutral” rating.

STR Holdings, Inc. (STRI) was downgraded by Macquarie from a “Neutral” rating to an “Underperform” rating.

Price Targets on (PCLN) (PMI) (PPO) (PRO) (ROST) Updated

Analysts updated their price targets on Priceline (NASDAQ: PCLN), PMI Group Inc (NYSE: PMI), Polypore (NYSE: PPO), PROS Holdings, Inc. (NYSE: PRO) and Ross Stores, Inc. (NASDAQ: ROST) today.

Canaccord Genuity raised their price target on Priceline (PCLN) from $660.00 to $700.00.

FBR Capital cut their price target on PMI Group Inc (PMI) from $5.00 to $2.50. They have a “market perform” rating on the company.

Stifel Nicolaus raised their price target on Polypore (PPO) from $70.00 to $80.00. They have a “buy” rating on the company.

Stifel Nicolaus raised their price target on PROS Holdings, Inc. (PRO) from $14.00 to $18.00. They have a “buy” rating on the company.

Avondale Partners raised their price target on Ross Stores, Inc. (ROST) from $78.00 to $90.00. They have a “market perform” rating on the company.

Assured Guaranty (AGO), MBIA (MBI) Jump on BofA (BAC) Settlement

Shares of bond insurers Assured Guaranty (NYSE:AGO) and MBIA (NYSE:MBI) were soaring on news Bank of America (NYSE:BAC) settled with Assured for $1.1 billion in regard to demands from the company Bank of America buy back faulty mortgages.

Other bond and mortgage insurers like MBIA, PMI Group Inc. (NYSE:PMI), Radian Group Inc. (NYSE:RDN) and MGIC Investment Corp. (NYSE:MTG) were all trading up on the news.

Expectations are these companies and others will probably be successful as well in their pursuit to recover costs from lenders as well.

MBIA (whose shares were also soaring) Chief Financial Officer Chuck Chaplin said in a statement the Assured Guaranty settlement “is yet another affirmation of the validity of both our claims and expected recoveries related to improperly originated mortgage loans in insured securitizations.”

MGIC was trading at $8.78, up $0.26, or 3.11 percent, as of 1:44 PM EDT. Radian Group was at $6.31, rising $0.09, 1.45 percent. PMI Group was at $2.24, jumping $0.06, or 2.75 percent. MBIA was trading at $10.73, gaining $1.80, or 20.16 percent. Assured Guaranty was at $17.72, soaring $3.55, or 25.05 percent.

Radian (RDN), PMI (PMI), MGIC Investment (MTG) Jump on QRM Deal

Shares of Radian Group, Inc. (NYSE:RDN), PMI Group, Inc. (NYSE:PMI) and MGIC Investment Corp. (NYSE:MTG) all finished higher Wednesday on news they had reached a deal with banking regulators on a definition of what a "qualified residential mortgage," or QRM, is.

Now a QRM will be defined as a loan which includes a 20 percent down payment on a loan considered less risky.

The significance of the agreement, which will still have to be agreed to by SEC, Federal Reserve, and FHFA, along with the FDIC and Office of the Comptroller, which have already approved of the deal, will be that those adhering to the new rules would be exempt from the Dodd-Frank rules, which require a bank to keep a minimum of 5 percent of a loan's risk on the balance sheet before packaging and selling the rest off.

This will result in a battle because of the historical importance of low-down payment mortgages in the banking industry.

Radian closed Wednesday at $7.03, gaining $0.33, or 4.93 percent. PMI closed at $2.95, up $0.08, or 2.79 percent. MGIC closed at $8.30, increasing $0.14, or 1.72 percent.

MGIC Investment (NYSE:MTG), The PMI Group (NYSE:PMI), Radian Group (NYSE:RDN), Wells Fargo (NYSE:WFC) Affected Most by New QRM Definition

The new definition of a qualified residential mortgage (QRM) will have the greatest impact on MGIC Investment (NYSE:MTG), The PMI Group (NYSE:PMI), Radian Group (NYSE:RDN) or Wells Fargo (NYSE:WFC), depending on if it's a broad or narrow definition, according to FBR Capital.

FBR noted, "The Dodd-Frank Wall Street Reform Act requires securitizers to retain an economic interest in the credit risk of any asset they securitize. While the act establishes a 5% risk retention requirement, it also gives the regulators considerable flexibility implementing these rules, including the ability to exempt certain loans. The area of greatest flexibility is in the securitization of residential mortgages, where regulators are instructed to come up with a definition of a “qualified residential mortgage” (QRM) and exempt the loans from any risk retention. For a residential mortgage to qualify as a QRM, it must have features that lower the risk of default; however, with the final definition left to the regulators, there is considerable debate on how QRM will be defined. Ultimately, we believe QRM will be broadly defined and serve as a net positive for the mortgage insurance industry; however, the rulemaking process could produce some significant headline risk for the industry (should regulators propose a narrow definition). Beyond mortgage insurance, we believe these rules will help determine which mortgages are originated in the United States and how all assets are securitized.

FBR added this points: 1) Expect draft rules soon; 2) Qualified residential mortgage is key definition; 3) Broad versus narrow; 4) Impact to the MI industry; and 5) Who this impacts. A broad definition of QRM would most benefit MGIC Investment Corporation (MTG)(Outperform), The PMI Group (PMI)(Market Perform), then Radian Group (RDN)(Market Perform). A narrow definition would have the most positive impact on large mortgage originators, with Wells Fargo & Company (WFC)(Market Perform) leading the pack.

MGIC Investment was trading at $11.42, up $0.12, or 1.06 percent, as of 12:48 PM EST. PMI Group was trading at $3.90, up $0.05, or 1.30 percent. Radian Group was at $9.38, down $0.02, or 0.16 percent. Wells Fargo was trading at $31.98, down $0.03, or 0.09 percent.