Analyst Upgrades

• Yingli Green (YGE) to outperform from market perform at Wells Fargo.
• National Semiconductor (NSM) to outperform from market perform at FBR Capital.
• DuPont (DD) to buy from hold at Citigroup.
• Blackboard (BBBB) to overweight from neutral at JPMorgan.
• Kindred Healthcare (KND) to buy from hold at Jefferies.
• Peabody Energy (BTU) to outperform from market perform at BMO Capital.
• Savvis (SVVS) to buy from neutral and InterActiveCorp (IACI) to neutral from underperform at BofA/Merrill.

Massey Energy (MEE) closed up $4.80 to $46.94 on reports that Alpha Natural (ANR) may buy the company, DJ says. December and January 55 calls are active on total call volume of 58K contracts, compared to put volume of 23K puts. November call option implied volatility is at 53 and January is at 48, compared to its 26-week average of 52. Increasing option volume suggests traders are positioning for price movement.

CBOE Volatility Index (VIX) closed down 29 cents to $18.23, near a six-month low after EPS, elections, FOMC meeting and October employment report.

CBOE option volume leaders today: Bank of America (BAC), Las Vegas Sands (LVS) JPMorgan (JPM) and Citigroup (C).

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

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

• Activision Blizzard Inc. (NASDAQ: ATVI) Q1 results beat expectations and raised its guidance.
• Alpha Natural Resources Inc. (NYSE: ANR) shares surged after the it reported strong Q1 earnings.
• Archer Daniels Midland Co. (NYSE: ADM) just missed swinging to a loss due to to hefty investment losses.
• CBS Corp. (NYSE: CBS) surprised with a net loss in Q1 as revenue and cash flow declined.
• Chesapeake Energy Corp. (NYSE: CHK) shares fell after it reported disappointing results for the quarter.

Along with the May flowers, the coming week will bring plenty more disappointing earnings reports. Analysts surveyed by Thomson Reuters anticipate that Archer Daniels Midland Co. (NYSE: ADM), CBS Corp. (NYSE: CBS), Cisco Systems Inc. (NASDAQ: CSCO), CVS Caremark Corp. (NYSE: CVS), Kraft Foods Inc. (NYSE: KFT), and Walt Disney Co. (NYSE: DIS) will all post lower earnings for the most recent quarter. American International Group Inc. (NYSE: AIG) and Sprint Nextel Corp. (NYSE: S) are expected to report losses.

But which companies are doing well? Here are a few reporting this week that analysts are optimistic about.

Arch Coal (NYSE: ACI) closed at $18.50 Friday. ACI January and February option implied volatility of 87 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Massey Energy (NYSE: MEE), a coal miner, closed at $16.19 Friday. MEE is scheduled to report Q4 EPS in the February option cycle. MEE February option implied volatility of 108 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

Consol Energy (NYSE: CNX) closed at $32.15 Friday. CNX has two principle business units: coal and gas. CNX February option implied volatility of 90 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Alpha Natural (NYSE: ANR), an Appalachian coal producer, closed at $18.38 Friday. ANR February option implied volatility of 107 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Peabody Energy (NYSE: BTU), a coal company, closed at $25.06 Friday. BTU is expected to report Q4 EPS in late January. January and February option implied volatility of 97 is above its 26-week average of 89, according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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

• Aeropostale Inc. (NYSE: ARO) strong Q3 results beat estimates despite the dismal retail environment.
• Alpha Natural Resources Inc. (NYSE: ANR) lowered its full-year forecast due to lower demand for coal.
• America's Car-Mart Inc. (NASDAQ: CRMT) reported higher Q2 earnings and higher same-store sales.
• Beazer Homes USA Inc. (NYSE: BZH) losses in Q4 more than tripled as revenue declined.
• Collective Brands Inc. (NYSE: PSS) Q3 profits were in line with estimates, enough to send shares higher.
• General Electric Co. (NYSE: GE) cut its Q4 earnings forecast, which now falls in line with estimates.
• Goldman Sachs Group Inc. (NYSE: GS) warned that it may see its first quarterly loss ever in Q4.
• Guess? Inc. (NYSE: GES) strong Q3 results beat estimates but offered a conservative outlook.
• Infineon Technologies AG (NYSE: IFX) posted a wider Q4 loss on restructuring and warned of further losses.
• Johnson & Johnson (NYSE: JNJ) 2009 earnings are expected to be diluted by an acquisition.
• Marvell Technology Group Ltd. (NASDAQ: MRVL) reported strong Q3 numbers, sending shares higher.
• Medicis Pharmaceutical Corp. (NYSE: MRX) earnings prospects after a settlement led to an analyst's upgrade.
• Merck & Co. Inc. (NYSE: MRK) lowered its 2009 earnings guidance below analysts' expectations.
• Palm Inc. (NASDAQ: PALM) said that it expects Q2 revenues to come in below analysts' estimates.

Whether it's a recession or an economic boom, one thing doesn't change, the need for energy. And until technology leaps ahead, coal is the largest producer of fuel for the generation of electricity in the world. It's also the most abundant fossil fuel in the United States. Coal is obviously not recession immune as people tighten the reigns on their lives and cut back on electricity consumption, but the shear necessity of electricity makes the coal industry fairly resistant. An investment in an exchange traded fund (ETF) that is centered on the coal industry is a great way to hedge your bets by investing in a pool of successful companies in the coal field.

Market Vectors Coal ETF (NYSE: KOL) seeks to replicate the price and yield performance of the Stowe Coal index, which provides exposure to publicly traded companies worldwide that derive greater than 50% of their revenues from the coal industry. With KOL you'll own shares of some of the most noted coal companies in the world, including Arch Coal Inc. (NYSE: ACI), which specializes in steam and metallurgical coal; CONSOL Energy Inc. (NYSE: CNX), a large provider of fuel for electricity in the United States; Alpha Natural Resources Inc. (NYSE: ANR), another leader in steam and metallurgical coal; and Peabody Energy Corp. (NYSE: BTU), an exploration miner and coal producer worldwide, as well as several other highly rated coal companies across the globe.

Market Vector charges only a 0.65% fee, a fraction what a professional money manager would charge you to analyze research and pick coal mining stocks with this level of global reach. Recently KOL has gone through a typical correction for this commodity sector, but then suffered a greater hit as Asia saw a 20% decline in spot prices for thermal coal. The result? A better deal for those currently willing to dive into coal as an investment. KOL is up 14%, so maybe there's some light at the end of the mine.

While other earnings may have disappointed last week, the news was good for oil giant ConocoPhilips (NYSE: COP). In what some took as a good sign for big oil, the Houston-based company reported that third quarter net income surged 41% year over year to $3.39 per share, and that revenue also surged 52% to $70 billion. We'll see whether the good news extends to other petroleum giants scheduled to report quarterly results this week.

Analysts surveyed by Thomson Financial are looking for BP (NYSE: BP) profits to have grown 43.2% in the most recent quarter to $2.34 per share on revenue of $109.7 billion, and Chevron Corp. (NYSE: CVX) to post earnings up 39.4% to $3.25 per share on revenue of $86.8 billion. Marathon Oil Corp. (NYSE: MRO), ExxonMobil Corp. (NYSE: XOM), and Royal Dutch Shell (NYSE: RDS.A) likewise are expected to report higher net income of $2.33 per share (sales of $23.4 billion), $2.40 per share (sales of $131.4 billion), and $2.65 per share, respectively. Even Valero Energy Corp. (NYSE: VLO) is expected to post earnings slightly higher to $1.46 per share (sales of $36.4 billion), despite the effects of Hurricane Ike. Among these companies, only BP and Valero beat earnings expectations in the previous quarter. Not surprisingly, analysts on average recommend buying all except Valero, and shares of all of these companies have recently hit 52-week lows.

Alpha Natural (NYSE: ANR) will be acquired by Cleveland Cliffs (NYSE: CLF) in a cash and stock transaction valued at $10 billion.

ANR stockholders will receive 0.95 CLF common shares and $22.23 in cash. Based on CLF closing price on July 15, ANR shares would receive $128.12 per share.

ANR August option implied volatility of 86 is above its 26-week average of 64 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Royal Dutch Shell (NYSE: RDS.A) closed at $85.07 Tuesday. Crude futures are down 1.88% to $126.43 according to Bloomberg.

RDS overall option implied volatility of 27 is near its 26-week average of 25 according to Track Data, suggesting non-directional fluctuations.

Alpha Natural (NYSE: ANR), an Appalachian coal producer with a market cap of $5.11 billion, closed at $72.73 Tuesday. Davenport & Company raised its rating to Buy with an $85 target price on May 27.

ANR overall option implied volatility of 65 is above its 26-week average of 58, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: The more noteworthy downgrades today included eFunds Corp (EFD), Halliburton Co (HAL), Coventry Health Care, Inc (CVH), Fording Canadian Coal Trust (FDG) and US Steel Corp (X):

• Citigroup downgraded shares of eFunds Corp (NYSE: EFD) to Sell from Hold to reflect an unfavorable risk/reward as they see little upside if the company sells itself and significant downside due to recent operational issues if the company is not sold.

• Goldman cut Halliburton Co (NYSE: HAL) to Neutral from Buy based on valuation.

• Bear Stearns cut Coventry Health (NYSE: CVH) to Peer Perform from Outperform based on valuation.

• BMO Capital downgraded Fording Canadian Coal Trust (NYSE: CFG) to Underperform from Market Perform on valuation...

• UBS cut US Steel Group (NYSE: X) to Reduce from Neutral based on valuation.
  

OTHER DOWNGRADES:

• Goldman downgraded the coal sector, citing the potential for fundamentals to disappoint. The firm downgraded Arch Coal (NYSE: ACI) to Sell from Buy, Foundation Coal Holdings (NYSE: FCL) to Sell from Neutral, and Alpha Natural Resources (NYSE: ANR) to Neutral from Buy.

• Matrix cut CBRL Group (NASDAQ: CBRL) to Sell from Hold.

• CE Unterberg downgraded Atheros Communications (NASDAQ: ATHR) to Market Perform from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).