MOST NOTEWORTHY: BEA Systems, Nokia, Medco Health, Quest Diagnostics and PetSmart were today's noteworthy downgrades:

• Citigroup downgraded shares of BEA Systems (NASDAQ: BEAS) to Hold from Buy on valuation following the $17/share offer by Oracle (NASDAQ: ORCL) as they think a public bidding war for the company is unlikely.
  
• ABN Amro downgraded shares of Nokia Corporation (NYSE: NOK) to Hold from Buy on valuation and believes above consensus Q3 results are already priced into shares.
  
• Wachovia downgraded Medco Health Solutions (NYSE: MHS) to Market Perform from Outperform on valuation.
  
• The firm also downgraded Quest Diagnostics (NYSE: DGX) to Market Perform from Outperform, as they believe the prospects from stabilizing volumes and cost savings are reflected in valuation and Street estimates.
  
• Credit Suisse downgraded shares of PetSmart (NASDAQ: PETM) to Neutral from Outperform citing aggressive pricing at Petco, accelerating growth initiatives, limited visibility around expense management, and lack of consistent results.

OTHER DOWNGRADES:

• Methanex Corporation (NASDAQ: MEOH) was downgraded to Sector Underperformer from Sector Performer at CIBC.
  
• Rochdale downgraded Heico Corporation (NYSE: HEI) to Neutral from Buy.
  
• JP Morgan downgraded BankUnited Financial Corp (NASDAQ: BKUNA) to Neutral from Outperform and removed Qwest Communications (NYSE: Q) from its Focus List.
  
• Goldman removed MetLife (NYSE: MET) from its Conviction Buy List.
  
• Coldwater Creek (NASDAQ: CWTR) was downgraded to Hold from Buy at Standford and at Stifel.

Quickly, now, name three states where upscale women's clothing retailers are headquartered. Was Idaho one of them? No? It should have been.

Coldwater Creek (NASDAQ: CWTR) is a specialty retailer of women's apparel, accessories, jewelry and gift items. The merchandise is directed toward the 35 and over group, through some 250 U.S. retail stores. The Sandpoint, Idaho firm also publishes four catalogs and operates a web site. Competitors include Jones Apparel Group (NYSE: JNY) and Liz Claiborne (NYSE: LIZ).

The firm pleased investors last week, when it reported Q1 EPS of 13 cents and revenues of $281.3 million. Analysts had been looking for 9 cents and $264.5 million. Management also boosted Y07 EPS guidance from 55-63 cents to 61-67 cents and FY07 revenues from $1.23-1.27 billion to $1.26-1.28 billion. Two Wall Street brokerages subsequently declared the stock a "strong buy" and three others called it a "buy".

Last night after the closing bell, Coldwater Creek (NASDAQ: CWTR) released its earnings for the first quarter. Net income rose 4% at the women's apparel retailer, hitting $12 million, or 13 cents per share. Revenue, meanwhile, spiked 31% to $281.3 million. Both of these figures topped analysts' expectations; the consensus estimate called for per-share results of eight cents on $264.5 million in revenue.

Same-store sales were 7.3% higher, while total sales jumped 44% to $184.9 million. Catalog net sales were off 1.7%, but internet sales jumped up 18.5%.

CWTR shares surged in after-hours trading, jumping more than 13% to overcome the $23.50 mark. Should this move materialize in today's market action, it would effectively lift the stock to a new five-month high, closing the bear gap created in mid-January. A move above the 23 region would also force the shares above their 10-month and 20-month moving averages, trendlines that have acted as technical resistance during the past five months.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

MOST NOTEWORTHY: Disney (DIS), IBM Corp (IBM), Advanced Micro Devices (AMD) and Texas Instruments (TXN) topped today's list of initiations:

• Citing tough comps and slowing consumer spending for their neutral stance, The Walt Disney Co. (NYSE:DIS) was initiated with a Sector Performer at Pacific Crest.
• Prudential initiated International Business Machines Corp (NYSE:IBM) with a Neutral rating and $100 target, and explained that Service bookings growth for the year will likely be negative and backlog growth continues to be stuck in neutral.
• Advanced Micro Devices Inc. (NYSE:AMD) was started with a Sell rating and $13 target at Nollenberger, as they believe shares are "vulnerable" in 2007 in terms of CPU/GPU market share and ASP declines;
• additionally, Nollenberger started Texas Instruments Inc. (NYSE:TXN) with a Buy rating and $34 target, as they believe Texas Instruments should continue to be able to gain market share in all of its markets.

OTHER INITIATIONS:

• Cowen resumed coverage of Urban Outfitters Inc. (NASDAQ:URBN) with a Neutral rating; they would look to buy shares on a modest pullback.
• Lehman Brothers initiated shares of Coldwater Creek Inc. (NASDAQ:CWTR) with an Overweight rating and $29 target.

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

The deals and general craziness of Black Friday have already been well-covered in this space, so I thought it might be interesting to turn your attention to the actual stock reactions. My intentions were simple enough (but aren't they always?): grab a list of retail stocks and calculate the returns from the close on Wednesday, November 22, through this morning. Sorting the list would give a quick (but early) overview of how the Street was reacting to the "day."

I have ample data manipulation tools at my disposal, so I figured this to be an easy task. What I didn't count on was not being able to find what I considered to be a satisfactory list of retail stocks. The lists I found were either too broad or too narrow. I wanted the usual suspects like Best Buy (NYSE:BBY), Wal-Mart Stores, Inc. (NYSE:WMT), and Gap (NYSE:GPS), while also picking up some of the smaller players like Bebe Stores (NASDAQ:BEBE) and Chico's FAS (NYSE:CHS). Additionally I wanted to capture some of the brands like Crocs (NASDAQ:CROX) and dELiA*s (NASDAQ:DLIA), while excluding consumer goods producers and fast food restaurants.

Unable to find a list that suited my (admittedly arbitrary) desires, I began to handpick names and compile a list of 72 stocks. The graph below shows the top and bottom performing stocks through noon today.



Blue Nile (NASDAQ:NILE), Pier One (NYSE:PIR), and Coldwater Creek (NASDAQ:CWTR) are the weakest stocks, while Lowe's (NYSE:LOW), American Eagle Outfitters (NASDAQ:AEOS), and Jo-Ann Stores (NYSE:JAS) are the strongest.

As you can infer from the graph, the bulk of the returns are flat to lower as two of the "best performing" stocks, Aeropostale (NYSE:ARO) and Limited Brands (NYSE:LTD), show a loss. In other words, buying just ahead of Black Friday doesn't seem like it would have been a good short-term trading strategy. Going forward though, I would expect to see some stocks distinguish themselves and separate from the pack. With my list now created (and saved!) it should be much easier to track. If there is interest in this, I can post periodic updates.

Nick Perry is an analyst with Schaeffer's Investment Research.

Investment pro Jim Cramer on tonight's "Mad Money," discussed a retail play that could make you money. He says Coldwater Creek (NASDAQ: CWTR) is the new face of shopping on the Internet because it has figured out how to cater to the computer illiteracy of the Baby Boomer generation. The show included live Q&A from real employees for shoppers online.

This shop and website caters to mostly wealthy women baby boomers. Cramer says it is a retail triple play. It has a great catalog business and great stores. It fits into the regional-to-national theme. It targets income levels of $75,000 and higher that are less price sensitive. As many as 85% to 90% of its transactions occur at full retail price. The company is targeting 500 stores, and Cramer thinks that is too low.

CWTR trades at 53.6 times earnings, but it trades about 34 times 2007 earnings and has 34% growth rates. The stock traded down 0.6% to $28.60 in regular trading, but it was up 3.6% to $29.63 in after-hours after Cramer noted the name.