MOST NOTEWORTHY: Banco Santander, Acorda Therapeutics, Agruim, Annaly Capital and ImmunoGen were today's noteworthy upgrades:

• UBS upgraded shares of Banco Santander (NYSE: STD) to Buy from Neutral as they expect the acquisition of ABN Amro Holding NV (NYSE: ABN) assets in Brazil and Italy to boost earnings in 2008 and 2009.
  
• Friedman Billings added Acorda Therapeutics (NASDAQ: ACOR) to its Top Picks List, as they have confidence in fampridine-SR's safety profile.
  
• Agrium (NYSE: AGU) was upgraded to Sector Outperformer from Sector Performer at CIBC on valuation, as they believe the outlook for wholesale and retail is robust with all three nutrients at historical high levels.
• Annaly Capital Management (NYSE: NLY) was upgraded to Buy from Neutral at UBS, citing likely further FED cuts, benefits from recent secondary, and BVPS growth.
  
• RBC Capital upgraded shares of ImmunoGen (NASDAQ: IMGN) to Outperform from Sector Perform based on valuation, growing pipeline, valuable technology platform, and potential as an acquisition candidate.

OTHER UPGRADES:

• Soleil upgraded ExpressJet Holdings (NYSE: XJT) to Hold from Sell.
  
• Goldman upgraded Assurant (NYSE: AIZ) to Buy from Neutral.
  
• Merill upgraded Forest Labs (NYSE: FRX) to Buy from Neutral.
  
• Citigroup upgraded Domtar (NYSE: UFS) to Buy from Hold.

MOST NOTEWORTHY: CheckFree (CKFR), Colgate-Palmolive (CL), Wal-Mart (WMT), Thornburg Mortgage (TMA) and Avery Dennison (AVY) were today's noteworthy downgrades:

• Suntrust downgraded CheckFree (NASDAQ: CKFR) to Neutral from Buy based on the Fiserv (FISV) acquisition.

• Colgate-Palmolive (NYSE: CL) was removed from Goldman's Conviction Buy List.

• Wal-Mart (NYSE: WMT) was cut to Neutral from Overweight at JP Morgan.

• Jefferies, RBC Capital, Piper Jaffray, Friedman Billings and Credit Suisse downgraded Thornburg Mortgage (NYSE: TMA) to Underperform based on liquidity concerns.

• Matrix cut Avery Dennison (NYSE: AVY) to Sell from Hold, and said Avery is being affected by the growing price competition in North America and Europe for self-adhesive labels and tabs...

OTHER DOWNGRADES:

• Merrill downgraded Westwood One (NYSE: WON) to Sell from Neutral.

• Morgan Keegan downgraded Haverty Furniture (NYSE: HVT) to Market Perform from Outperform.

• Hambrecht cut Akamai (NASDAQ: AKAM) to Hold from Buy.

• Raymond James downgraded Domtar (NYSE: UFS) to Outperform from Strong Buy.

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

Despite the predictions a few years ago that email would mean the end of paper, the Canadian company Domtar Corp. (NYSE: UFS) has managed to hold on. The paper industry isn't easy -- there are constant concerns about demand, freight costs (paper isn't light), tight margins, pricing issues, and rising energy costs -- but the fact is there will always be a need for paper products, and a company like Domtar has the potential to make steady profits if it handles its risks properly.

Domtar finished its acquisition of Weyerhaeuser Fine Paper back in March, and this deal was part of a larger corporate strategy of growth through acquisition. This is always a risky way to grow, of course, but Domtar has also been investing in technologies to cut costs and integrate its acquisitions, and as this strategy is implemented we may well see Domtar increase its margins as well as its revenues. The company has also closed a number of its less successful factories, cutting overhead costs and personnel costs, and this too will help increase profitability for Domtar.

2006 had a couple very rough quarters for Domtar, but the company delivered solid earnings in the first quarter, and the analysts at Goldman Sachs predict this growth will continue over the next couple years. They like the fact that Domtar has cut costs and also closed factories, and they believe the company has the ability to increase pricing on its "uncoated free sheets" (UCFS) over the coming years. Other analysts are less optimistic given all of the risks mentioned above, and they argue that there isn't the pricing flexibility to enable Domtar to increase its margins.

I like this company, though, for its long-term strategy and I think at the right discount it could prove to be a nice value buy.

Type of Stock: One of the largest paper companies in North America.

Price Target: UFS is currently trading under $9, toward the low end of its range since being listed on the NYSE six months ago. Goldman has predicted this stock will rise above $16. That may be high, but I do think UFS is unlikely to dip much more and may well grow as its cost cutting and acquisitions take effect. Second quarter results will be reported Monday, August 13, so be sure to keep an eye on this one.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Mirant Corp. (NYSE:MIR) implied volatility Elevated at 32 as MIR trades near Record levels.

MIR is expected to report full EPS & hold a conference call on 3/5. MIR has been frequently mentioned as a potential candidate for announcing a recapitalization or a share repurchase. MIR call option volume of 1,044 contracts compares to put volume of 3,001 contracts. MIR overall option implied volatility of 32 is above its 26-week average of 26 according to Track Data, suggesting larger price risks.

New Century Financial Corp (NYSE:NEW) low cost deep OTM April & May 5 put spread trades as Hedge.

NEW, a real estate investment trust, providing mortgage products to borrowers nationwide, is recently down 37c to $15.47. NEW deep out of the money April 5 puts traded 4,715 contracts near the bid at .12 & .13 cents above its theoretical value of .01 cent. NEW deep out of the money May 5 puts traded 5,568 contracts on the offer of .40 cents above theoretical value of .04 cents according to Track Data, suggesting spreaders paying up to hedge risk.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX is down 2.88 to 15.44.

Hospira-(NYSE:HSP) option implied volatility Collapses as HSP rallies on 4Q performance. Hospira, a specialty pharmaceutical and medication delivery company, is recently up $2.94 to $38.84. Bank of America says "4Q EPS beat on strong topline performance." BAMO has a 12-month price target of $42 on HSP and says "company provides 2007 guidance range above consensus." HSP March option implied volatility of 22 is below its 26-week average of 32 and an over all level of 40 from yesterday according to Track Data suggesting decreasing price fluctuations.

IndyMac Bancorp-(NYSE:NDE) April option implied volatility indicates larger Risk. IndyMac Bancorp, the 7th largest savings and loan and the 9th largest mortgage originator in the nation, is recently up .77 cents to $34.26. NDE is trading near a 2-year low on challenging times being faced by the credit-mortgage and housing operating environment. NDE April option implied volatility of 51 is above its 26-week average of 33 according to Track Data, suggesting larger risk.

Option volume leaders today were: Qualcomm (NASDAQ:QCOM), Domtar (NYSE:DTC), Weyerhaeuser (NYSE:WY) & Apple Inc. (NASDAQ:AAPL).

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX is up 3.78 to 14.93. VXN 10-day moving average is 10.77. S&P's recently down 2.45%.

Volatility Index NASDAQ 100-VXN up 3.84 to 19.82. VXN 10-day moving average is 15.84. NASDAQ 100 recently sells off 3.41%.

Weyerhaeuser-(NYSE-:WY) implied volatility suggests non-directional risk into Domtar (NYSE-DTC) exchange. On 2/2/07 WY announced a split-off transaction in which each $1 worth of WY tendered will receive $1.11 worth of DTC stock. WY announced on 2/26 that security holders of DTC have voted to approve the plan to combine DTC with the fine paper business of WY, the deal is expected close in March. WY is then expected to be a buyer of its own stock and then possibly announce a more tax efficient structure for its timberlands. WY call option volume of 12,427 contracts compares to put volume of 8,133. WY over all option implied volatility of 22 is near its 26-week average according to Track Data, suggesting non-directional price risk.

Kohl's-(NYSE:KSS) options suggest non-direction price risks into 3/1 EPS & Outlook. KSS, an operator of 817 stores, will report EPS on 3/1. First Call is expecting EPS of $1.43. Buckingham Research says "We are maintaining our neutral rating on KSS ahead of its Q4 earnings report, valuation and the likelihood of difficult sales, gross margin and SD&A comparisons in the hear ahead." KSS call option volume of 1,616 contracts compares to put volume of 1,466. KSS March option implied volatility of 26 is near its 26-week average according to Track Data, suggesting non-directional price risks.

Option volume leaders today were: Qualcomm (NASDAQ:QCOM) & Apple (NASDAQ:AAPL).