Patience appears to be paying off with the Bank of New York Mellon (BK), which I first wrote about on April 6, 2009, at a price of $28.16.

Moreover, the Bank of New York, a premier bank and wealth manager, is a good stock to be patient with. BK's 30% summer swoon found support, as forecast, near $23, and the stock has since moved back above $27 and the key, 50-day moving average.

Analyst Upgrades

• Piper Jaffray upgraded Salesforce.com (CRM) to overweight from neutral, citing valuation following the recent sell-off and strong business trends. The firm has a $115 price target for shares.
• Keefe Bruyette upgraded M&T Bank (MTB) to market perform from underperform on valuation after AIB sold its stake in the company. The firm has a $72 price target for shares.
• Jefferies upgraded OGE Energy (OGE) to buy from hold following the announcement that ArcLight will purchase 9.9% of OGE's interest in Enogex for $183M and believes this deal highlights the hidden value associated with Enogex. The firm raised its price target to $51.50 from $43.
• Thomas & Betts (TNB) was upgraded to outperform from perform at Oppenheimer.
• Bayer (BAYRY) was upgraded to buy from neutral at UBS.
• Texas Roadhouse (TXRH) was upgraded to outperform from neutral at Baird.

Typically, a stock that nose-dives 23% in three months would be cause for alarm, but not when the stock is The Bank of New York Mellon (BK), which I first wrote about on April 6, 2009 at a price of $28.16.

Just view BK's over-correction as a chance to scoop-up shares of a premiere bank and wealth manager.

Look for BK's 2010 revenue to rise about 7-10%, then about 10-12% in 2011, on higher fees and improving margins. Asset management fees in its equities and fixed income business should record solid increases, on price gains in those markets and due to increased client deposits. New business wins add to the positive mix.

Analyst Upgrades

• Deutsche Bank upgraded Barrick Gold (ABX) to buy from hold and reiterates a buy rating on Newmont Mining (NEM) after upping its 2011 gold forecast to $1,450 per ounce and 2012 forecast to $1,600 per ounce. The firm upped its target for Barrick shares to $53 from $45, for Newmont shares to $74 from $72, and on hold-rated Goldcorp (GG) and Kinross Gold (KGC) to $40 and $20, respectively.
• Citigroup upgraded General Dynamics (GD) to hold from sell following the recent pullback in shares. The firm keeps a $67 price target for the stock.
• UBS upgraded Public Service (PEG) to buy from neutral and has a $34 price target on the stock. The firm cites the company's solid balance sheet, earnings profile, and valuation for the upgrade.
• News Corp. (NWS) was upgraded to buy from hold at Soleil.
• AK Steel (AKS) was upgraded to neutral from underperform.
• Progress Energy (PGN) was upgraded to buy from neutral at BofA/Merrill.
• PNC Financial (PNC) was upgraded to outperform from market perform at Keefe Bruyette.

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

• AirTran Holdings Inc. (NYSE: AAI) reported its third consecutive quarterly profit and will increase capacity.
• Amazon.com Inc. (NASDAQ: AMZN) shares soared after it reported very strong Q3 numbers.
• Apple Inc. (NASDAQ: AAPL) reported stellar Q4 results, driven by the popularity of Macs and iPhones.
• BlackRock Inc. (NYSE: BLK) Q3 earnings soared, due in part to a tax benefit, and assets managed grew.
• Broadcom Corp. (NASDAQ: BRCM) revenue surged sequentially but note the would be flat going forward.
• Caterpillar Inc. (NYSE: CAT) beat Q3 earnings expectations and shares rose though revenue slumped.

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

• Advanced Micro Devices Inc. (NYSE: AMD) narrowed its net loss in Q2 but not as much as expected.
• Apple Inc. (NASDAQ: AAPL) posted better-than-expected Q3 results on demand for iPhones and Macs.
• Intuitive Surgical Inc. (NASDAQ: ISRG) reported earnings and revenue that topped expectations.
• JDA Software Group Inc. (NASDAQ: JDAS) shares surged after it reported record results for Q2.
• Microsoft Corp. (NASDAQ: MSFT) lower Q4 results still topped earnings estimates, but shares fell.
• VMware Inc. (NYSE: VMW) unimpressive Q2 results still managed to beat analysts' low expectations.
• Yahoo! Inc. (NASDAQ: YHOO) Q2 profit was flat year over year and revenue and cash flow declined.

State Street (NYSE: STT) is recently trading at $24.30 in pre-open trading, below its close of $36.35. STT reported Q4 EPS of 15 cents on net income of $65 million, compared to net income of $223 million, or 57 cents per share in Q4 2007. STT February option implied volatility is at 88, February is at 84; above its 26-week average of 73, according to Track Data, suggesting larger price movement.

Bank of New York (NYSE: BK) is recently trading at $21.39 in pre-open trading, below its close of $23.36. BK is expected to report Q4 EPS on January 22. BK February option implied volatility of 87 is above its 26-week average of 69, according to Track Data, suggesting larger price movement.

Northern Trust (NASDAQ: NTRS) is recently down $4.58 to $46.50 in pre-open trading. NTRS is expected to report Q4 EPS on January 21. NTRS option implied volatility of 99 is above its 26-week average of 71, according to Track Data, suggesting larger price movement.

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

I think it's fair to say that there's much trepidation about the earnings season that picks up steam this week. And for better or worse, numbers from the big financials have begun to roll in. Last week we saw profit sink for JPMorgan Chase (NYSE: JPM) and significant losses from Bank of American Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), and Deutsche Bank (NYSE: DB).

Analysts surveyed by Thomson Reuters expect Bank of New York Mellon Corp. (NYSE: BK) to be among those financials reporting fourth-quarter earnings growth this week. They anticipate that Bank of New York will post a profit of $0.70 per share, compared to $0.67 per share a year ago and $0.72 in the previous quarter. Revenue is expected come to $3.8 billion, about the same as it was a year ago. Bank of New York has fallen short of earnings estimates in two of the past five quarters, by as much as 11.1%. For the full year, analysts are looking for $2.78 per share (+5.8%) on $14.8 billion (+4.2%). The consensus recommendation of analysts is to buy BK, and the long-term EPS growth rate forecast is 10.7%. Shares are 48.7% lower than a year ago. Other financials expected to report quarterly earnings growth this week include SunTrust Banks Inc. (NYSE: STI) and M&T Bank Corp. (NYSE: MTB).

Back in the early 1990s, the U.S. was mired in a recession and the money center banks were in dire straits. But, of course, it was a great opportunity for investors.

So, are we seeing a repeat? Perhaps so, although, you still need to tread carefully. This is according to a front-page piece in Barron's [a paid publication].

And yes, this week has been particularly encouraging, as seen with a widespread rally in the financials. It certainly helped that there was strength from Wells Fargo (NYSE: WFC) and JPMorgan (NYSE: JPM). At the same time, the results from Citigroup (NYSE: C) weren't as bad as expected.

By any measure -- such as price-to-book values and P/Es -- the financials look extremely cheap. Besides, these companies are taking quick medicine in terms of write offs. In other words, once financials report next year, the comparisons should look strong.

Something else: the Securities and Exchange Commission has implemented new rules on short selling (regarding 19 financial companies). Ultimately, this may relieve some of the volatility.

So what are some interesting possible investments? Barron's mentions a variety of companies, such as JPMorgan Chase, Lehman Brothers (NYSE: LEH), Bank of New York Mellon (NYSE: BK), Wells Fargo, and PNC Financial (NYSE: PNC). Though it might be smart to avoid companies like Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and Washington Mutual (NYSE: WM).

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

The quarter has hardly begun and, with analysts and investors watching nervously, the earnings crunch is about to begin anew. The following 11 big banks are among companies reporting results the week of April 14 to April 18.

These three are expected by analysts surveyed by Thomson Financial to be the the top performers in the first quarter, based on earnings growth from the same period of last year:

• State Street Corp. (NYSE: STT): 39%
• Bank of New York Mellon Corp. (NYSE: BK): 22%
• Northern Trust Corp. (NASDAQ: NTRS): 13%

These also happen to be three of the four forecast top performers from just before fourth quarter of 2007 results were reported back in January.

MOST NOTEWORTHY: The Brokers and Asset Managers sector, Pacific Sunwear and Metabasis Therapeutics were today's noteworthy upgrades:

• Goldman upgraded the Brokers and Asset Management sector to Attractive from Neutral as they believe an inflection point has been reached for stocks with minimal credit exposure, or where exposure is marked to market. Goldman expects the problem to shift to regional banks and specialty finance from brokers. As such, Goldman upgraded American Express (NYSE: AXP), Metlife (NYSE: MET), Bank of New York Mellon (NYSE: BK), Franklin Resources (NYSE: BEN), Janus Capital (NYSE: JNS) and NYSE Euronext (NYSE: NYX) to Buy from Neutral.
  
• Wachovia upgraded Pacific Sunwear (NASDAQ: PSUN) to Outperform from Market Perform based on valuation, merchandising improvements, operating efficiencies, favorable product mix, and reductions in underperforming categories.
  
• Rodman & Renshaw raised Metabasis (NASDAQ: MBRX) to Outperform from Market Perform on valuation given the potential for MB07803.

OTHER UPGRADES:

• HSBC raised Novartis (NYSE: NVS) to Neutral from Underweight.
  
• UBS (NYSE: UBS) was upgraded at Morgan Stanley to Equal Weight from Underweight.

Bank of New York (NYSE: BK) is scheduled to report Q1 EPS on April 17.

BK has more than $23 trillion in assets under custody and administration and more than $1.1 trillion in assets under management.

BK call option volume of 5,199 contracts compares to put volume of 10,438 contracts. BK April option implied volatility of 56 is above its 26-week average of 38 according to Track Data, suggesting larger risk.

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

Ted Allrich is the founder of The Online Investor and author of Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he offers advice to investors who are just getting started.

If you own a bank stock, you know how brutal the stock market can be. Many are down more than 50% as the subprime mortgage mess continues to shock all investors. But some banks are being punished for being a bank, not for mortgages they don't even own.

Not all banks are the same. Most banks make mortgage loans to several different kinds of buyers for different types of properties: existing homes, new construction, and/or commercial buildings. Or they only make loans to well-qualified buyers, ones with good income and high FICO scores (your credit score). Still others make no mortgages at all, have a diversified revenue stream and are only guilty of being called banks. Finally, there are banks that have a large percentage of their revenues from international lending. Smart investors will look for all of these types and start investing a small amount in several of them, then wait for the rally that will inevitably come.

MAJOR PAPERS:

• According to the Wall Street Journal's "Heard on the Street," as the economy continues to slow and the credit markets face further turmoil, high-profile companies like Countrywide Financial Corporation (NYSE: CFC) and The Home Depot Inc (NYSE: HD) are cutting back on buybacks as their shares drop.
• The New York Times reported that BlackRock Inc (NYSE: BLK) is expected to be the main asset manager for a $75B fund being created by Bank of America Corporation (NYSE: BAC), Citigroup Incorporated (NYSE: C), and JP Morgan Chase & Co (NYSE: JPM) to help stabilize the market fJor asset-backed securities, according to a source. The Bank of New York Mellon Corporation (NYSE: BK) is reportedly a leading contender to be a custodian of the fund.

OTHER PAPERS:

• A ruling in Vodafone Group Plc's (NYSE: VOD) favor may cause Apple Inc (NASDAQ: AAPL) to rethink its business model for the iPhone device. The injunction against Deutsche Telekom AG (NYSE: DT)'s T-Mobile unit may force Apple to "unlock" its iPhones, the UK Times reported.
• Struggling airline UAL Corporation (NASDAQ: UAUA), along with its unit United Airlines, is struggling, but finding a carrier willing to merge may be a problem, BusinessWeek speculated.

The Bank of New York Mellon Corporation (NYSE: BK) opened at $46.47. So far today the stock has hit a low of $45.49 and a high of $46.57. As of 11:15, BK is trading at $45.75, down $0.38 (-0.8%).

Following a strong surge over the past six weeks, the stock hit a new 52-week high yesterday at $46.93. The company announced earnings of 63 cents per share, just beating Wall Street expectations of 61 cents per share, but profit slipped a hair due to costs stemming from the company's purchase of Mellon Financial Corp. Recent technical indicators for the stock have been bullish and steady, while S&P gives BK a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a September bear-call credit spread above the $50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk and leverage returns. For this particular trade, we will make an 11.1% return in just 2 months as long as BK is below $50 at September expiration. BK would have to rise by 9% before we would start to lose money.

BK hasn't been above $50 at all this year but has been rising sharply recently. This trade could be risky if it turns out that the only reason earnings were down was due to the acquisition.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent neither owns nor controls positions in BK.