Analyst Upgrades

• Applied Materials (AMAT) to overweight from neutral at Piper Jaffray.
• Air Products (APD) to buy from hold at Citigroup.
• Youku.com (YOKU) and Pinnacle West (PNW) to buy from neutral at Goldman.
• Stryker (SYK) and Zimmer (ZMH) to buy from neutral at UBS.
• Zions Bancorp (ZION) to outperform from neutral at Macquarie.
• Alnylam (ALNY) to buy from hold at Needham.
• AK Steel (AKS) to buy from hold at KeyBanc.

Analyst Upgrades

• Air Products (APD) to buy from hold at Deutsche Bank.
• Zimmer (ZMH) to outperform from neutral at RW Baird.
• SunPower (SPWRA) to buy from hold at Jefferies.
• Brocade (BRCD) to buy from hold at Wunderlich and at ThinkEquity.
• Duke Energy (DUK) to neutral from underperform at BofA/Merrill.
• NewStar Financial (NEWS) to outperform from market perform at Keefe Bruyette.
• Hormel Foods (HRL) to hold from sell at Soleil.
• Inspire Pharma (ISPH) to hold from sell at Duncan-Williams.
• Alnylam (ALNY) to buy from neutral at Roth Capital.
• Weight Watchers (WTW) to equal weight from underweight at Morgan Stanley.
• Raytheon (RTN) and Toreador Resources (TRGL) to outperform from sector perform at RBC Capital.

Family Dollar Stores (FDO) confirmed that it has received an unsolicited conditional proposal from Trian Group to acquire the company at a price in the range of $55 to $60 per share in cash. Family Dollar Stores overall option implied volatility of 25 is near its 26-week average of 27, according to Track Data, suggesting non-directional price movement.

Air Products (APD) withdrew its offer to purchase Airgas (ARG). Airgas overall option implied volatility of 33 is above its 12-week average of 28, according to Track Data, suggesting larger price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

There's little question that Automatic Data Processing (ADP) has a solid business. With roughly 570,000 clients of all sizes, the company generates a large amount of recurring revenues and free cash flows. Besides, it is difficult for customers to move to an alternative payroll solution.

Despite all this, the fact remains that persistent unemployment is a drag. In the latest quarter, revenues inched up 3% to $2.44 billion and earnings came to $403.6 million, or $0.80 per share. This compares to $402.5 million, or $0.80 per share in the same period a year ago.

Analyst Upgrades

• Baird upgraded Air Products (APD) to outperform from neutral on valuation following the sell-off after the company's bid for Airgas (ARG). The firm has an $89 price target on shares.
• JPMorgan upgraded Peabody Energy (BTU) to overweight from neutral as it believes the company is well positioned for 2010. The firm has a $50 price target on shares.
• Jefferies raised Adobe (ADBE) to buy from hold and has a $40 target on the stock. The firm believes concerns over the future of Flash are overblown and that shares of Adobe are attractive. Additionally, the firm expects CS5 to have a "decent" product cycle.
• Dell (DELL) was upgraded to buy from neutral at BofA/Merrill.
• SXC Health Solutions (SXCI) was upgraded to buy from hold at ThinkEquity.
• Harman (HAR) was upgraded to neutral from underperform at Credit Suisse.

Analyst Upgrades

• B. Riley upgraded Prosperity Bancshares (PRSP) to buy from neutral after the company acquired 19 Texas branches of Missouri-based First Bank. The firm has a $45 price target on shares.
• JPMorgan upgraded Fortinet (FTNT) to overweight from neutral on valuation following the recent pullback in shares. The firm has a $20 price target on the stock.
• Wells Fargo upgraded Lamar Advertising (LAMR) to outperform from market perform. The firm believes the stock's risk/reward ratio is compelling, as its checks indicate that advertising continues to accelerate in Q1.
• Caterpillar (CAT) was upgraded to overweight from underweight at Morgan Stanley.
• SAP AG (SAP) was upgraded to market perform from underperform at FBR Capital.
• BioMarin (BMRN) was raised to buy from hold at Roth Capital.

Analyst upgrades:

• Jefferies upgraded CME Group (CME) to Buy from Hold and has a $330 target on the stock. The firm believes increased regulatory concerns have created a buying opportunity and notes that CME Group's fundamentals are stable-to-improving.
• Susquehanna upgraded Priceline.com (PCLN) to Positive from Neutral and has a $230 target on the stock. The firm believes Priceline.com likely outperformed expectations in Q4.
• Citigroup upgraded AutoZone (AZO) to Buy from Hold citing an attractive valuation, favorable industry trends, and the potential for margin expansion. The firm raised its target price on shares to $188 from $176.
• Genzyme (GENZ) was raised to Sell from Conviction Sell at Goldman.
• Disney (DIS) was upgraded to Neutral from Underweight at JP Morgan.
• Exxon Mobil (XOM) was upgraded at Collins Stewart to Buy from Hold.

A late day rally kept the fear mongers from winning hand over fist today. We were down as much as 160 points and a buying spree came in rapidly. The 9.7% unemployment left more questions when you consider that the jobs creation lost another 20,000 jobs. Today's late-day rally seemed like bargain hunting at the end of the day or short sellers closing out of positions ahead of the weekend after big selling all week. The huge loss that it looked like was suddenly a day where the positive or negative close was not going to known until the final minutes.

Here were today's unofficial closing bell levels:

Dow 10,012.23 +10.05 (0.10%)
S&P 500 1,066.18 +3.07 (0.29%)
Nasdaq 2,141.12 +15.69 (0.74%)

Top Stock & Market Rumors
Top Analyst Upgrades/Downgrades

Analyst Upgrades

• Goldman upgraded Potash (POT) to conviction buy from buy and said a "near-worst-case" scenario on 2010 potash pricing is reflected in potash valuations and that they continue to expect a fundamental potash demand recovery in 2010. Note that the firm also upgraded Mosaic (MOS) to buy from neutral. Potash's price target is $138.
• Morgan Stanley upgraded Alcoa (AA) to overweight from equal weight based on expectations for alumina to continue to rally in 2H10. The firm has a $22 target on the stock.
• Baird upgraded Seagate (STX) to outperform from neutral and raised its target to $25 from $22 based on expectations that IT hardware spend will continue to accelerate through 2010, HDD supply conditions will continue to be constrained at least into the March quarter, and that enterprise strength and favorable supply conditions will drive shares higher in 2010.
• Intel (INTC) was upgraded to overweight from equal weight at Barclays.
• Resource Capital (RSO) was raised to outperform from market perform at FBR Capital.
• Palm (PALM) was upgraded to hold from sell at Morgan Joseph.

Analyst Upgrades

• Citigroup upgraded Reynolds American (RAI) to buy from hold to reflect its improved outlook for the company's market share and pricing. Citi also sees a greater chance of British American Tobacco (BTI) bidding for the rest of Reynolds American it doesn't already own. The firm raised its target price on Reynolds to $59 from $52.
• Stephens upgraded Simmons First National (SFNC) to overweight from equal weight to reflect the company's balance sheet and potential for accretive FDIC-assisted acquisitions. The firm raised its target on shares to $32 from $29.
• FBR Capital upgraded Astoria Financial (AF) to market perform from underperform on expectations the company's net charge-offs will peak in the fourth quarter, limiting downside risk. The firm raised its target on shares to $11 from $10.
• First Solar (FSLR) was upgraded to buy from hold at Collins Stewart.
• Brown-Forman (BF.B) was upgraded to neutral from underweight at JPMorgan.
• Juniper (JNPR) was upgraded to conviction buy from buy at Goldman.

Analyst upgrades:

• FBR Capital upgraded Talbots (NYSE: TLB) to Outperform from Market Perform as it believes the company's inventory and SG&A control should help earnings and the stock's risk/reward is compelling at current levels. The firm raised its target on shares to $7 from $5.
• ThinkEquity upgraded Human Genome (NASDAQ: HGSI) to Buy from Accumulate to reflect higher assumptions for the company's Lupus treatment Benlysta. The firm raised its target on shares to $26 from $18.
• KeyBanc upgraded Parkway Properties (NYSE: PKY) to Buy from Hold based on valuation, improving fundamentals, and stable capital position. The firm has a $17 target on the stock.
• HSBC Holdings (NYSE: HBC) was upgraded to Overweight from Neutral at JPMorgan.
• BioScrip (NASDAQ: BIOS) was upgraded to Overweight from Neutral at Piper Jaffray.
• DISH Network (NASDAQ: DISH) was upgraded to Outperform from Neutral at Credit Suisse.

Analyst upgrades:

• Jefferies upgraded Autodesk (NASDAQ: ADSK) to Buy from Hold after the firm's channel checks indicated the company's business is stabilizing. Jefferies raised its target on shares to $27 from $20.
• Citigroup upgraded Veeco (NASDAQ: VECO) to Buy from Hold on expectations LED order momentum will continue and cost discipline will help margin leverage. Citi raised its target on shares to $24 from $8.
• Deutsche Bank upgraded Domtar (NYSE: UFS) to Buy from Hold on expectations earnings will improve meaningfully over the next year. The firm keeps a $24 price target on the stock.
• Varian (NASDAQ: VARI) was upgraded to Equal Weight from Underweight at Barclays.
• Air Products (NYSE: APD) was upgraded to Overweight from Neutral at JPMorgan.
• U.S. Steel (NYSE: X) was upgraded to Buy from Neutral at Goldman.

"Any company that can consistently create revenue out of air is worth a look," says Jim Stack, referring to Air Products & Chemicals (NYSE: APD).

In his InvesTech Market Analyst, the advisor and money manager explains, "We especially like a company that can create over $10 billion a year in sales ... from air (actually industrial gases)." Here, he explains the reasons he rates the shares a 'buy' in his model portfolio.

"For APD, much of that 'air' revenue comes from the sale of tonnage gases. Tonnage gas delivery involves the on-site or pipeline delivery of hydrogen and other chemicals to oil refineries.

Analyst upgrades:

• Oppenheimer upgraded FTI Consulting (NYSE:FCN) to Outperform from Perform on expectations the stock will outperform in the second half of 2009 due to easier comparisons and a "deeper and longer" restructuring cycle. The firm has a $62 target on shares.
• Citigroup upgraded Cigna (NYSE:CI) to Hold from Sell to reflect reduced balance sheet risk following the company's capital raise and the potential for a PBM sale. The firm raised its target price to $23 from $13.
• Goldman expects Coca-Cola Enterprises (NYSE:CCE) to benefit from favorable soda demand and lower commodity costs. The firm upgraded shares to Conviction Buy from Buy and has a $20 target on the stock.
• Novellus (NASDAQ:NVLS) was raised to Buy from Neutral at Bank of America/Merrill.
• CME Group (NASDAQ:CME) was upgraded at JP Morgan to Neutral from Underweight.
• Allegiant (NASDAQ:ALGT) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  

Analyst upgrades:

• Jefferies upgraded Brocade (NASDAQ: BRCD) to Buy from Hold on expectations expanding OEM partnerships, new products and entry into new markets will drive long-term growth. The firm's channel checks indicate the first phase of an IBM (NYSE: IBM) deal for ethernet products will be announced next week. Jefferies raised its target price on the stock to $6 from $3.50.
  
• JMP Securities upgraded Broadcom (NASDAQ: BRCM) to Market Perform from Underperform citing the potential settlement with Qualcomm (NASDAQ: QCOM). The firm said Broadcom has far more to gain than Qualcomm has to lose.
  
• Citigroup upgraded Air Products (NYSE: APD) and Praxair (NYSE: PX) to Buy from Hold on expectations that an improvement in customer operating rates will benefit gas companies. The firm raised its target price on Air Products to $70 from $55 and on Praxair to $79 from $63.
  
• Royal Bank of Scotland upgraded BP Plc (NYSE: BP) to Buy from Hold to reflect its dividend yield at current levels.
• Apple (NASDAQ: AAPL) was raised to Outperform from Underperform at RBC Capital.
  
• T. Rowe Price (NYSE: TROW) was upgraded at Sandler O'Neill to Hold from Sell.
  
• Morgan Stanley (NYSE: MS) was lifted to Neutral from Underperform at Banc of America/Merrill.