Analyst Upgrades

• Disney (DIS) to buy from hold at Wunderlich.
• Pike Electric (PIKE) to outperform from market perform at FBR Capital.
• Kindred Healthcare (KND) to overweight from equal weight at Barclays.
• UBS (UBS) to hold from sell at Canaccord.
• Avery Dennison (AVY) and Take-Two (TTWO) to buy from neutral at BofA/Merrill.
• Mercer (MERC) to outperform from market perform at Raymond James.

On Wednesday, Investors pushed call option prices higher in the savings & loan industry and pushed put option prices higher in the electric utilities industry.

Any time the volatility skews above 1.00, it is an indication that calls are more expensive than puts. Typically, when calls are more expensive than puts, it means the demand for calls is greater than the demand for puts because investors believe the stock is going to rise in the future and they want to take advantage of that movement by buying calls.

The opposite is also true. Any time a volatility skews below 1.00, it is an indication that puts are more expensive than calls.

Bullish Volatility Skews

- Hudson City Bancorp, Inc. (HCBK)---part of the Savings & Loans industry---came in at the top with a volatility skew of 1.13. This may come as a surprise as HCBK is down -6.89 percent for the past month.

Investors call services are pushing put option prices higher in the diversified utilities industry today.

Any time the volatility skews above 1.00, it is an indication that calls are more expensive than puts. Typically, when calls are more expensive than puts, it means the demand for calls is greater than the demand for puts because investors believe the stock is going to rise in the future and they want to take advantage of that movement by buying calls.

Shares of CardioNet (BEAT) were punished Monday morning after an unfavorable decision from the Centers for Medicare and Medicaid Services (CMS). The administrative group proposed that the reimbursement rates on the technical component of mobile cardiovascular telemetry should stay carrier-priced for 2011, defying CardioNet's wishes to obtain a national reimbursement rate for the technology.

Now, CardioNet will attempt to lobby CMS during the public comment period prior to the final ruling, which is due by Nov. 1. "We will work diligently during the public comments period to request that CMS change its recommendation to one that is more beneficial to Medicare recipients who depend on" devices containing CardioNet's technology, explained CEO Joe Capper.

"The road back from near bankruptcy in 2002 for CMS Energy (NYSE: CMS) has been a rocky one," says Roger Conrad. Here's an update from his specialty service, The Utility Forecaster.

"From Three Mile Island to the Enron meltdown, utilities have always recovered from disaster by cutting debt and operating risk and repairing regulatory relations.

"Last fall, the shares of CMS Energy -- our latest featured growth stock -- plunged from high teens to single digits on recession worries in embattled Michigan. Ironically, however, CMS' underlying business is healthier than at any time since the late 1990s.

Trade groups representing developers and commercial lenders are lobbying Congress for a bailout. They are saying that $530 billion dollars of CMS's (commercial mortgage backed securities) are coming due in three years and $160 billion dollars are coming due next year.

The kinds of buildings involved include office complexes, hotels, shopping centers and other commercial buildings. Much like home mortgages, these CMS's were bundled together and sold to third parties and just as the market for home mortgages collapsed, so too this market's refinancing has all but come to a standstill.

Delinquency rates, though quite low, have been rising up to .96% in November from .62% in September. Some analysts predict this will rise to 2% by the end of 2009.

We now have a new financial dilemma. Congress and the Administration were reluctant to bail out the auto industry. The question again is: should we do this for commercial lenders as well?

With a turn of the calendar page, we drift into the middle portion of the current quarter, but the earnings season rolls on. Among the many companies scheduled to report quarterly results this coming week are Time Warner Inc. (NYSE: TWX), Cisco Systems Inc. (NASDAQ: CSCO), News Corp. (NYSE: NWS), and Whole Foods Market International (NASDAQ: WFMI). Let's take a look at which companies Wall Street analysts are expecting to be among the top earnings gainers and decliners this week.

Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.

• DRS Technologies Inc. (NYSE: DRS): $0.85 EPS (+95.3%) on revenue of $823.8 million (+12.0%)
• Integrys Energy Group Inc. (NYSE: TEG): $0.40 EPS (+70.0%) on revenue of $2.6 billion (+9.7%)
• Cimarex Energy Co. (NYSE: XEC): $2.53 EPS (+64.4%) on revenue of $599.9 million (+75.4%)
• Forest Oil Corp. (NYSE: FST): $1.51 EPS (+55.6%) on revenue of $456.1 million (+79.1%)
• Devon Energy Corp. (NYSE: DVN): $3.28 EPS (+48.5%) on revenue of $4.1 billion (+38.5%)
• CMS Energy Corp. (NYSE: CMS): $0.13 EPS (+46.2%) on revenue of $1.4 billion (+6.7%)
• Transocean Inc. (NYSE: RIG): $3.23 EPS (+43.0%) on revenue of $3.1 billion (+112.9%)
• Sara Lee Corp. (NYSE: SLE): $0.26 EPS (+38.5%) on revenue of $3.5 billion (+8.9%)
• Williams Companies Inc. (NYSE: WMB): $0.69 EPS (+37.7%) on revenue of $3.4 billion (+20.0%)
• Harris Corp. (NYSE: HRS): $0.99 EPS (+28.3%) on revenue of $1.4 billion (+18.0%)