Analyst upgrades:

• Keefe Bruyette upgraded American Express (NYSE: AXP) to Outperform from Market Perform to reflect improving credit trends following the July monthly data. The firm raised its target price on shares to $37.
• Oppenheimer upgraded Corning (NYSE: GLW) to Outperform from Perform as it believes 2010 estimates are achievable and concerns over falling LCD demand are overdone. The firm set a $19 price target on the stock.
• JPMorgan upgraded International Game Technology (NYSE: IGT) to Overweight from Neutral on valuation and expectations domestic replacement orders will pick up. The firm has a $23 price target on shares.
• Goldman Sachs (NYSE: GS) was raised to Buy from Neutral at Pali Capital.
• Portland General Electric (NYSE: POR) was upgraded to Buy from Neutral at Goldman.
• Mechel Steel (NYSE: MTL) was upgraded to Neutral from Reduce at Nomura.

Analyst upgrades:

• RW Baird upgraded LHC Group (NASDAQ: LHCG) to Outperform from Neutral based on valuation and expectations for raised 2009 guidance. The firm has a $36 target on the stock.
  
• Deutsche Bank upgraded Swiss Reinsurance (OTC: SWCEY) to Buy from Hold following the CEO change as the firm views it as a positive move.
  
• Wachovia upgraded DuPont Fabros (NYSE: DFT) to Outperform from Market Perform because it thinks the company has taken major measures to mitigate its liquidity risk by obtaining additional debt. The firm also notes that the company signed several new leases.
• Goldman added Air Products (NYSE: APD) and Burger King (NYSE: BKC) to the Conviction Buy List.
  
• MSC Industrial (NYSE: MSM) was upgraded to Outperform from Market Perform at William Blair.
  
• Northrop Grumman (NYSE: NOC) was raised to Outperform from Market Perform at Bernstein.

Elan (NYSE: ELN) said it is initiating a strategic review which could result in a minority investment, a strategic alliance, a merger, or a sale. ELN closed at $8.03 Monday. ELN February call option implied volatility is at 103, puts are at 112, above its 26-week average of 100 according to Track Data, suggesting larger price movement..

Biogen Idec (NASDAQ: BIIB) closed at $48.45 Monday. BIIB and ELN have a 50-50 stake in the multiple sclerosis drug Tysabri. ELN said it is initiating a strategic review which could result in a minority investment, a strategic alliance, a merger or a sale. BIIB February option implied volatility of 56 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Crucell NV (NASDAQ: CRXL), a biopharmaceutical company, and Wyeth (NYSE: WYE) confirmed on January 7 the two firms are in discussion to combine. CRXL closed at $22.63 Monday. CRXL February option implied volatility of 58 is near its 26-week average of 61, according to Track Data, suggesting non-directional price movement.

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

MOST NOTEWORTHY: Arthur J. Gallagher (AJG), Akamai Technologies (AKAM) and three railcar companies were today's noteworthy initiations:

• Citigroup believes Arthur J. Gallagher (NYSE: AJG) is at a disadvantage to smaller rivals who accept contingent commissions and lacks the global presence of larger competitors, and started shares with a Sell rating and $25 target.

• Friedman Billings believes Akamai (NASDAQ: AKAM) can leverage its broad product portfolio, global network deep pockets and extensive track record to remain the leader in the content delivery market, starting shares with an Outperform.

• Keefe Bruyette started coverage of three railcars with a Buy rating: Greenbrier (NYSE: GBX), Wabtec Corporation (NYSE: WAB) and FreightCar America (NASDAQ: RAIL)...

OTHER INITIATIONS:

• Citigroup started Goodyear Tire (NYSE: GT) with a Buy rating.

• CIBC initiated Praxair (NYSE: PX) with a Sector Performer rating.

• Crucell NV (NASDAQ:CRXL) was initiated with an Outperform rating at Lehman.

• FTN Midwest initiated RadioShack (NYSE: RSH) with a Neutral rating.

• Cowen initiated Penwest Pharmaceuticals (NASDAQ: PPCO) with an Outperform rating.

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