Analyst upgrades:

• PepsiCo (NYSE: PEP) was upgraded to Buy from Hold at Deutsche Bank.
• Fortress (NYSE: FIG) was upgraded at Citigroup to Hold from Sell.
• Prudential (NYSE: PUK) was lifted to Overweight from Neutral at JP Morgan.
• Keefe Bruyette upgraded Franklin Resources (NYSE: BEN) to Outperform from Market Perform and added shares to their Best Ideas List on valuation as they see an attractive risk/reward at current levels.
• UBS upgraded ASML Holding (NASDAQ: ASML) to Buy from Neutral on valuation as they believe the company remains a market leader.
• Oppenheimer raised Seattle Genetics (NASDAQ: SGEN) to Outperform from Perform on valuation following the recent weakness as they expect positive clinical news flow beginning in December.

Analyst downgrades:

• UBS downgraded U.S. Steel (NYSE: X) to Sell from Buy and lowered its target to $30 from $60 citing deteriorating U.S. conditions and concerns about the company's high fixed costs in a falling steel price environment.
• Royal Dutch Shell (NYSE: RDS.A) was downgraded to Underperform from Neutral at Credit Suisse.
  
• China Unicom (NYSE: CHU) was lowered to Underweight from Neutral at JP Morgan.

Analyst upgrades:

• Keefe Bruyette upgraded shares of Colonial Bancgroup (NYSE: CNB) to Outperform from Market Perform on valuation following the recent weakness and believes the company will be eligible to receive TARP funds. Morgan Stanley believes the company's valuation adequately reflects risk to the loan portfolio; the firm raised shares to Equal Weight from Underweight.
• Merrill upgraded Ericsson (NASDAQ: ERIC) and ASML Holding (NASDAQ: ASML) to Buy from Underperform and believes their valuation reflects the worst-case for bad news.
• Oppenheimer upgraded Trimble Navigation to Outperform from Perform on valuation as they believe the company's long-term growth story is intact.
• Celestica (NYSE: CLS) was upgraded to Sector Outperformer from Sector Performer at CIBC.
• KeyCorp (NYSE: KEY) was added to Goldman's Conviction Buy List.
• Wachovia raised EastGroup Properties (NYSE: EGP) to Outperform from Market Perform.

Analyst downgrades:

• UBS cut Barclays (NYSE: BCS) to Neutral from Buy as they believe capital raises could negatively impact earnings and that the dividend is likely to be cut.
• JP Morgan downgraded Discovery Holdings (NASDAQ: DISCA) to Underweight from Neutral based on valuation and the deteriorating economic outlook.
• Friedman Billings downgraded shares of Janus Capital (NYSE: JNS) to Underperform from Market Perform and lowered its target to $7 from $23 as they see further risk to the downside following the company's weaker-than-expected results.
• LKQ Corp (NASDAQ: LKQX) was cut to Sector Perform from Outperform at RBC Capital.
• Affymetrix (NASDAQ: AFFX) was lowered to Sell from Hold at Deutsche Bank.
• RightNow Tech (NASDAQ: RNOW) was downgraded at Baird to Neutral from Outperform.

"The August lows now represent important technical levels defining the U.S. markets' primary uptrend," notes Michael Ashbaugh. The editor of The Marketwatch Technical Indicator explains, "Specifically, the S&P 500's August low holds at 1,427 while the Nasdaq's August low holds at 2,492. In addition, the Dow's August low holds at 13,134.

Ashbaugh continues, "For the Nasdaq and the S&P, a break below those levels would mark a failed test of support, also placing each index under its 200-day moving average. And if the breakdown were decisive, the primary trend would likely turn lower.

Yet "as ugly" as the current backdrop looks, he contends, from a strictly technical standpoint, the primary uptrend still has the benefit of the doubt.

Meanwhile, he suggests, we continue to find some names that are well positioned technically. These, he says, are intended as radar screen names - sectors or stocks positioned to move near term. In this light, the technician sees ongoing strength among chip-equipment names.

Ashbaugh says, "Each of these names broke out decisively in mid-July. Since then, Lam Research (NASDAQ: LRCX), ASML Holding (NASDAQ: ASML) and KLA-Tencor (NASDAQ: KLAC) have pulled in, establishing support around the breakout point. Further, he adds, Applied Materials (NASDAQ: AMAT) and Varian Semiconductor (NASDAQ: VSEA) are the group's strongest names, knifing even higher after the initial breakout, despite a down market."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

MOST NOTEWORTHY: The semiconductor sector, Quest Diagnostics (NYSE: DGX) and Federal National Mortgage Association (NYSE: FNM) were today's noteworthy upgrades:

• Bernstein upgraded the semiconductor sector to Overweight form Market Weight on expectations that utilization will rise starting in Q2. The firm upgraded ASML Holding NV (NASDAQ: ASML) to Outperform from Market Perform and Infineon Technologies (NYSE: IFX) to Market Perform from Underperform.
• UBS upgraded Quest Diagnostics to Buy from Neutral, citing Laboratory Corporation Of America Holdings' (NYSE: LH) contract renewal with Cigna HealthCare, which should ease concerns regarding deteriorating pricing.
• Fannie Mae was upgraded to Outperform from Market Perform at Friedman Billings, citing improving fundamentals, better business mix and the possibility the company reports current financials in the next 12-18 months.

OTHER UPGRADES:

• Mediacom Communications Corporation (NASDAQ: MCCC) was upgraded to Neutral at Pali Capital, as the firm does not see a major catalyst to drive down shares.
• Soleil upgraded shares of ICU Medical Inc (NASDAQ: ICUI) to Buy from Hold.
• DynCorp International Inc (NYSE: DCP) was upgraded to Outperformer from Sector Performer at CIBC World Markets.
• CIBC also upgraded shares of Radware Limited (NASDAQ: RDWR) to Outperformer from Sector Performer.