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Analyst Upgrades/Downgrades

Sprint shares getting crushed on capital needs

(Reuters) – Sprint Nextel shares (NYSE:S – News) fell 8 percent on Monday as analysts slashed their forecasts for the No. 3 U.S. mobile operator, which said last week that would have to raise new capital.

Sprint shares fell 20 cents to $2.21 after analysts cut their price targets for the stock and forecast free cash flow losses. S&P gave Sprint debt a “watch negative” rating.

The company discussed a costly network upgrade plan at a conference on Friday, telling investors that it would need to tap capital markets, even before accounting for big additional costs it expects from subsidizing sales of the new Apple Inc (NasdaqGS:AAPL – News) iPhone. (ID:nN1E7960J0)

UBS analyst John Hodulik estimated that Sprint would incur a free cash flow loss of $2.5 billion over the next two years and worried how it would pay for upcoming debts.

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FLASH: FITCH CUTS SPAIN AND ITALY’S CREDIT RATINGS

Stocks turned lower Friday after Moody’s downgraded Italy and Spain’s debt ratings, adding to ongoing jitters over the euro zone debt crisis.

The Dow Jones Industrial Average turned negative, led by BofA [BAC  5.9599   -0.3201  (-5.1%)   ] and JPMorgan [JPM  31.16    -1.22  (-3.77%)   ], afterlogging a three-day rally in the previous session.

The S&P 500 and the tech-heavy Nasdaq were also lower. The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded near 35.

Among the key S&P sectors, financials lagged, while telecom gained.

Fitch slashed Spain’s rating to AA- from AA+, citing risks of slow growth and high regional debt, and Italy’s to A+ from AA-, adding the outlook on its long-term ratings is negative.

In Europe, German Chancellor Angela Merkel and French President Nicolas Sarkozy were split ahead of crucial summit talks over the weekend over how to strengthen European banks and fight financial market contagion to prepare for a possible Greek default.

Meanwhile, Moody’s downgraded 12 UK financial institutions, saying it sees a decreased likelihood of government support for smaller institutions in particular but specifying the move does not reflect a deterioration in the financial strength of the banking system.

READ MORE AT CNBC 

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