Analyst upgrades:

• Citigroup upgraded Adtran (NASDAQ: ADTN) to Buy from Hold on expectations the company will benefit from the broadband Stimulus funds.
• Morgan Stanley upgraded Continental Airlines (NYSE: CAL) to Overweight from Equal Weight based on relative valuation and views the company as a "survivor." Additionally, the analyst lowered 2009 industry estimates but believes it is the last cut for the year and is incrementally more positive on the sector.
• Morgan Stanley also upgraded EXFO Electro-Optical (NASDAQ: EXFO) to Overweight from Market Weight based on valuation.
• Tata Motors (NYSE: TTM) was upgraded to Buy from Hold at Deutsche Bank.
• Ascent Solar (NASDAQ: ASTI) was upgraded to Neutral from Underweight at JP Morgan.
• Mechel Steel (NYSE: MTL) was upgraded to Neutral from Underperform at Credit Suisse.

Continental Airlines (NYSE: CAL) is seeking immunity from antitrust laws to work more closely with United Airlines (NASDAQ: UAUA) and others on international routes. And, since airlines operate in a state of seemingly perpetual turmoil, what's the harm? According to the Justice Department: plenty.

The airline sought broad immunity as part of an effort to join Star Alliance, which includes US Airways, Lufthansa (OTC: DLAKY), and Air Canada -- along with United. Continental believes that it needs to join Star Alliance in order to remain competitive, especially with airlines that have this type of immunity already.

Analyst upgrades:

• Jefferies upgraded MDS Inc. (NYSE: MDZ) to Buy from Hold on valuation as it believes shares are pricing in a "worst case" scenario at current levels. The firm keeps a $6.50 target on the stock.
  
• JP Morgan upgraded Continental (NYSE: CAL) to Overweight from Neutral on valuation as it believes the recent sell-off is overdone. The firm keeps a $13 price target on the stock.
• Thomas Weisel is positive on Allergan's (NYSE: AGN) diverse product portfolio, global infrastructure, vertical integration, and deep pipeline. The firm upgraded shares to Overweight from Market Weight and has a $54 target on the stock.
• NetLogic (NASDAQ: NETL) was upgraded to Buy from Neutral at Piper.
  
• Dover (NYSE: DOV) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Map Pharmaceuticals (NASDAQ: MAPP) was upgraded at Argus to Hold from Sell.

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

• American Express Co. (NYSE: AXP) Q1 profit blew away estimates, sending shares soaring.
• Apple Inc. (NASDAQ: AAPL) topped analysts expectations and offered conservative guidance.
• Boeing Co. (NYSE: BA) reported better-than-expected results but warned that if faced challenges.
• Coach Inc. (NYSE: COH) topped Q3 profit estimates and announced the start of quarterly dividends.
• Continental Airlines Inc. (NYSE: CAL) widened is net loss in Q1 but still beat low Wall Street estimates.

Despite the market being up the last hour, today's stock market made six changes between being up and down. Oil inventories continued their building to record or near-record levels. It was very light on the economic calendar today so traders had to use the cumulative earnings as the directional report. Even very weak global recovery targets from the IMF were ignored.

Here are today's unofficial closing bell levels:

Dow 7,886.41 -83.15 (-1.04%)
S&P 500 843.56 -6.52 (-0.77%)
Nasdaq 1,645.85 +2.00 (0.12%)

Top Analyst Upgrades
Top Analyst Downgrades

It was a rough first quarter for Continental Airlines (NYSE: CAL), as the air carrier announced that it lost $136 million thanks to falling traffic. In addition, CAL saw a large amount of business travelers switching out of first class to save a few bucks in coach. During the quarter, CAL lost $1.10 per share. Excluding charges, CAL would have lost $1.07 per share. While the loss was larger than last year's first-quarter loss of 82 cents per share, CAL did manage to beat the Street's expected loss of $1.19 per share.

Quarterly revenue dropped to $3 billion from $3.57 billion last year, slightly higher than the expected $2.98 billion. CAL saw sales drop across all regions, with the U.S. and trans-Atlantic routes falling the most. CAL saw traffic drop 11.2% compared to a year ago, with empty planes outweighing the flights CAL cut. The company noted that it was helped by dropping fuel prices, as it spent nearly 42% less on fuel compared to a year ago.

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Today was almost as fitting as you could get for a Friday ahead of a 3-day weekend. It felt quiet and directionless, despite a huge late-day recovery just the day before. It was as if the markets had no serious direction ahead of a long weekend even though the stimulus package essentially looks like a done deal and even with banks halting all foreclosure activities for a brief period of time.

Here are today's unofficial closing bell levels:

Dow 7,849.13 -83.63 (-1.05%)
S&P 500 826.70 -8.49 (-1.02%)
Nasdaq 1,534.36 -7.35 (-0.48%)

10YR T-NOTE 2.88% (+0.12%)
Top Analyst Upgrades

At about 10:20 EST, Continental Flight 3407 (also reported as 1304), a commuter plane out of Newark, crashed into a home in Buffalo, New York. According to reports, all 48 people aboard -- 44 passengers and four crew members -- and one person on the ground were killed.

The scene is currently engulfed in flames. The plane had been quite late departing Newark was arriving two hours past its scheduled time when it crashed about 10 miles from Buffalo Niagara International Airport. The Q400 Bombardier aircraft was flying in fog, snow and wind.

After last month's crash landing of a US Airways flight, airline stocks have taken quite a hit, all down as much as 50% since their highs in early January. Good news for the crew of flight 1549 did not translate into good news for US Airways (NYSE: LCC), and certainly not for Continental Airlines Inc. (NYSE: CAL). Though the airline's stock will likely see big volatility at the start of trading on Friday, I don't expect this news to majorly impact the fortunes of either Continental or US Airways over the next 30 days.

The stock market may continue its record-setting plunge today as the drumbeat of negative sentiment drowns out what little good news there is to be had.

Markets in Europe and Asia were sharply lower as fears of a lingering recession continued to heighten. Japan's Prime Minister Taro Aso told members of Parliament that the U.S. bank bailout was "insufficient" to quell the fears of investors, according to the Associated Press. Meanwhile, the government of Switzerland is pumping billions into ailing UBS AG (NYSE: UBS) which gorged itself on mortgage-backed securities. Oil prices also fell to a 14 month low is Asia. U.S. stock futures were mixed.

Here is a look at other stories which may interest investors.

• Merrill Lynch & Co. (NYSE:MER) reported its fifth straight quarterly loss including write-downs of at least $9.5 billion. Bank of New York Mellon Corp. (NYSE: BK) reported a 53 percent drop in third-quarter earnings. Citigroup Inc. (NYSE: C) reported $13.2 billion in credit losses in its earnings because of reserves for bad loans and writedowns for mortgage-related securities.
• Continental Airlines Inc. (NYSE:CAL), Peabody Energy Corp. (NYSE: BTU) and Nucor Corp. (NYSE: NUE) are among the other companies reporting earnings today.
  
• eBay Inc. (NASDAQ: EBAY) gave a disappointing outlook yesterday after posting better-than-expected earnings. Its shares tumbled.
• FDIC Chair Shelia Bair criticized the federal government for not doing enough to help homeowners facing forecloseure.

In the News:
Trading Strategies for October
Following the most volatile September in memory, here are 10 ways to play the year's scariest month.
http://www.marketwatch.com/newscommentary/tradingstrategies

Payout Jackpots for Credit Crunch CEOs
Though they were at the helm of companies that were bruised or broken by the credit crunch, these 12 CEOs were still offered big severance packages when they were shown the door. They include Merrill Lynch's Stan O'Neal who got $161 million, Citi's Chuck Prince $105 million and Countrywide's Angelo Mozilo $100 million to name a few.
http://www.cnbc.com/id/26959512

Analyst upgrades:

• UBS believes US airlines estimates are too low and will move higher. The firm upgraded AirTran (NYSE: AAI), AMR Corp (NYSE: AMR), Continental (NYSE: CAL), Delta (NYSE: DAL) and Northwest (NYSE: NWA) to Buy from Neutral and JetBlue (NASDAQ: JBLU) to Neutral from Sell.
  
• JMP Securities upgraded DealerTrack (NASDAQ: TRAK) to OUtperform from Market Perform as they believe 2H08 guidance represents a floor and that 2009 estimates are achievable, among other reasons.
• Potash (NYSE: POT) and Mosaic (NYSE: MOS) were raised to Buy from Hold at Soleil.
  
• Argus upgraded Seagate (NYSE: STX) to Buy from Hold on Friday.

Analyst downgrades:

• Jefferies downgraded Citrix Systems (NASDAQ: CTXS) to Underperform from Hold as they do not see a catalyst for the company to grow into 2009 consensus estimates. The firm lowered their target price to $25 from $32.
  
• Citigroup said following Lehman's (NYSE: LEH) bankruptcy, they expect a distressed-sale of American International's (NYSE: AIG) MBS portfolio, resulting in the worst quarter yet for the company. Shares were cut to Hold from Buy.
• D.R. Horton (NYSE: DHI) was downgraded to Sell from Hold and Pulte Homes (NYSE: PHM) was downgraded to Hold from Sell at Citigroup.
  
• Merrill downgraded Goldman Sachs (NYSE: GS) to Neutral from Buy and JP Morgan (NYSE: JPM) to Underperform from Neutral.

Continental Airlines (NYSE: CAL - option chain) shares are soaring higher today after the company announced that it expects more than $100 million a year in fees and savings by charging travelers to check luggage. Obviously, checked luggage fees irritate travelers, but it is good for the company, then it should be good for the stock, and if you make a little money on the stock then you can afford to pay the extra fees and maybe even a mini-bottle of whiskey too. CAL is also getting a lift today from the drastic slide in oil prices, which have almost dropped below $100. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.

CAL opened this morning at $15.52. So far today the stock has hit a low of $15.13 and a high of $17.90. As of 12:10, cAL is trading at $17.62, up $1.55 (9.6%). The chart for CAL looks neutral and S&P gives CAL a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $10 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just five weeks as long as CAL is above $10 at October expiration. Continental would have to fall by more than 43% before we would start to lose money. Learn more about this type of trade here.

CAL hasn't been below $10 since mid-July and has shown support around $15 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in CAL.

TheStreet.com's Jim Cramer says with gas coming down further, the coming rally could be broad and fierce.

The great hurricane fakeout leaves us with oil much lower than it began, having launched itself from $112. Now that the $110 level's been breached and natural gas has gone as low as $7.50, we can begin to put together a holiday scenario that might -- just might -- explain the incredible run in retail that's been going on.

The presumption in retail, if you use Wal-Mart (NYSE: WMT) (Cramer's Take) as retail, was that once the stimulus wore off, presumably last month, the stocks would get hammered. On Aug. 7, Wal-Mart as much as told you that, and the stock dropped to $57 from $60.90.

Ever since then, it has been creeping up. Kohl's (NYSE: KSS) (Cramer's Take) dropped a point from that warning, going from $45 to $44. It is now at $49. Macy's (NYSE: M) (Cramer's Take) went from $19.80 to $18.90 before bouncing to $20.82. Jones (NYSE: JNY) (Cramer's Take) went from $17.40 to $17.20 before roaring to $19.80. Ralph Lauren (NYSE: RL) (Cramer's Take), because of a great quarter, didn't even get hurt, rallying from $67 to $75.

McDonald's (NYSE: MCD) was cut to Neutral at UBS, according to MarketWatch.

JP Morgan upgraded AMR (NYSE: AMR), Continental (NYSE: CAL), and US Air (NYSE: LCC) to Overweight from Underweight, according to Briefing.com. The news service also writes that Deutsche Bank downgraded Goldman Sachs (NYSE: GS) to Hold from Buy.

JPMorgan Chase (NYSE: JPM) was started as Outperform at Bernstein, according to 24/7 Wall St.