Moody's lowers Eaton

Moody's Investors Service said it lowered Eaton Corp.'s long-term rating to A3 from A2 and the company's short-term rating to Prime-2 from Prime-1.

The outlook is stable.

The downgrade reflects expectation that the slowdown in the company's key markets - particularly in the truck, automotive and construction equipment sectors - will cause a significant erosion in its credit metrics, according to the agency.

Despite challenges, Eaton maintains important operational and financial strengths that should enable it to strengthen its credit metrics by 2010, the agency said.

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