Analyst Upgrades

• Citigroup upgraded Freeport McMoRan (FCX) to buy from hold to reflect valuation, as well as its increased forecasts for copper and aluminum. The firm raised its price target on shares to $95 from $85.
• Citigroup also upgraded Alcoa (AA) to buy from hold and reiterated a buy rating on Cliffs Natural (CLF).
• William Blair upgraded WESCO International (WCC) to outperform from market perform. The upgrade reflects the firm's belief that WESCO's sales trends will become increasingly positive from easy comparisons over the next 12 months.
• RBC Capital upgraded Thomson Reuters (TRI) to top pick from outperform. The firm sees attractive returns over the next 12 to 18 months as the company's headwinds subside, and it raised its target price on shares to $43 from $41.
• Motorola (MOT) was upgraded to hold from sell at Societe Generale.
• American Express (AXP) was upgraded to buy from neutral at BofA/Merrill.
• Schnitzer Steel (SCHN) was upgraded to buy from neutral at UBS.

After the closing bell Monday, the Board of Directors of Alcoa (AA) announced a quarterly stock dividend of three cents per share payable Feb. 25 to shareholders of record at the close of business on Feb. 5.

The company also announced a quarterly dividend of 93.75 cents per share on its $3.75 cumulative preferred stock, which will be paid on April 1 to shareholders of record at the close of business on March 12.

A rally that began last year has already run up the prices of some stocks, creating small bubbles across the market. Some investors might be pushing prices higher ahead of their time for 62 of the stocks in the S&P 500 index. These companies now have P/E ratios of above 70, up from 23 a year ago. Says Robert Maltbie of Singular Research, "We have to temper some of this crazy bullishness." He tells USA Today that when P/E ratios approach 70, a stock can begin to have problems.

So, why are some prices being run up? As usual, any hope of rational price drivers is the domain of dreamers. Investors have found their favorites and sometimes haven't allowed reality to become a constraint on their excitement. Take a look at five reasons below:

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Aetna Inc. (AET) shares declined after the insurer issued a surprise earnings warning for 2010.
• Alcoa Inc. (AA) swung to a smaller-than-expected Q4 profit even as revenue declined, sending shares lower.
• Carter's Inc. (CRI) posted strong Q3 earnings that topped estimates and same-store sales growth.
• Chevron Corp. (CVX) shares declined slightly after the company issued a surprise earnings warning.
• Con-Way Inc. (CNW) was downgraded due in part to concerns about near-term earnings.

Earnings reports started. Alcoa (AA) came out of the box a little shy of what investors wanted, and according to commentary, sent the stock market into a spin. Hard to believe one stock report could do that. The same day, the U.S. trade deficit was announced, showing that our still strong need for oil imports exceeded all of our exports. The deficit widened, again. That contributed to the weak trading day. But Alcoa's report was a factor.

By the time you read this, many more companies will have announced their results from the last quarter of 2009. Some analysts expect many companies to announce earnings that triple the same quarter of the year before. Certainly the stock market rose in anticipation of better times. Many stock are up more than three times their lows most hit in March of last year. So now stocks better deliver.

Driving the selling pressure was the earnings report, of course. For the fourth quarter, sales decreased 4% compared to the year-ago period. On a reported basis, the company lost 27 cents per share from continuing operations. This was a big improvement over the previous loss of $1.16 per share. Unfortunately, according to Bloomberg, the adjusted profit of a penny per share missed projections by 5 cents.

The Federal Reserve's first Beige Book report of the year is due out this week. The report is a compilation of anecdotal information on current economic conditions from each of the 12 Federal Reserve Bank districts. The data comes from interviews with business contacts, economists, market experts, and other sources. The previous report, released in December, showed modest improvement in eight of the districts, while the October report confirmed that the economy was stabilizing after earlier declines.