Analyst upgrades:

• Banc of America/Merrill upgraded Lincoln National (NYSE: LNC) to Buy from Underperform and raised its target to $17 from $10 citing expectations that the company will "qualify for and accept TARP funding."
  
• Credit Suisse upgraded AU Optronics (NYSE: AUO) to Outperform from Neutral as it believes inventory levels are low end demand is better than expected.
  
• JP Morgan upgraded Shaw Group (NYSE: SGR) to Overweight from Neutral. The firm views the recent pullback in shares as a buying opportunity given the company's attractive nuke position and expected ramp in government spending.
• Patterson-UTI Energy (NASDAQ: PTEN) was upgraded to Buy from Neutral at Goldman.
  
• Barrick Gold (NYSE: ABX) was raised to Overweight from Market Weight at Thomas Weisel.
  
• Stryker (NYSE: SYK) was lifted to Sector Perform from Underperform at RBC Capital.

One group of stocks to own during a recession is the education space, and my favorite name is ITT Educational Services (NYSE: ESI).

With unemployment rising, workers having difficulty finding jobs turn to education as a way to improve prospects.

With the growth of the Internet, the educational space has changed over the years. Brick-and-mortar schools have fallen behind the online degree providers. With a cost-effective and flexible program, online schools have been experiencing solid growth during this recession.

Despite the recent rally, this has been the most difficult period for investors since the Great Depression, and many trying to time a bottom in this market have been burned.

And the reality is that we are still not out of the woods. So is it time to give up?

Not at all!

There are companies operating in this environment that are actually growing their business despite the recession. And these stocks should hold their own in this bear market, even if we retest the recent lows.

Analyst upgrades:

• Jefferies upgraded shares of Alkermes (NASDAQ: ALKS) to Overweight from Neutral on valuation, as they believe the current share price undervalues Risperdal Consta and provides little to no value for other pipeline drugs.
  
• JP Morgan upgraded ASML Holding (NASDAQ: ASML) to Buy from Hold following the company's Q1 results, as they believe further estimate reductions are unlikely.
  
• UBS expects ITT Educational (NYSE: ESI) to benefit from strong enrollment growth and they see less private student lending risk. Shares were upgraded to Buy from Neutral.
• BMC Software (NYSE: BMC) was upgraded to Buy from Neutral at Goldman and added to the firm's Conviction Buy List.
  
• Credit Suisse (NYSE: CS) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Covance (NYSE: CVD) was raised to Overweight from Equal Weight at First Analysis.

Analyst downgrades:

• UBS downgraded Anglo American (NASDAQ: AAUK) to Neutral from Buy and added shares to its Short-term Sell list citing the significant reduction in 2009 coal prices and estimates.
  
• Friedman Billings cut Century Aluminum (NASDAQ: CENX) to Market Perform from Outperform and lowered its target to $8 from $18 shares to reflect a lowered aluminum price forecast and financing concerns.
  
• Bernstein downgraded eBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN) to Market Perform from Outperform citing recent share performances and the difficult macro environment.
• CommVault (NASDAQ: CVLT) was downgraded to Sell from Neutral at Goldman and added to the Conviction Buy List.
  
• TomoTherapy (NASDAQ: TOMO) was cut to Market Perform from Outperform at William Blair.
  
• Boston Properties (NYSE: BXP) was lowered to Neutral from Buy at UBS.

Analyst initiations:

• Morgan Keegan initiated Brinker (NYSE: EAT) with a Market Perform citing the difficult macro economy, relative debt levels and the competitive environment.
  
• Brookdale Senior Living (NYSE: BKD) was initiated at Oppenheimer with an Outperform rating and $12 target. The firm expects the company to benefit from growing demand for higher acuity assisted living.
  
• Baird initiated Healthcare Realty (NYSE: HR) with an Underperform rating and $19 target citing the company's premium valuation vs. the group.
• UBS initiated Expedia (NASDAQ: EXPE), Priceline (NASDAQ: PCLN), and Orbitz Worldwide (NYSE: OWW) with Neutral ratings citing the difficult near-term demand environment.
  
• FedEx (NYSE: FDX) was started at Jesup & Lamont with a Hold rating.

Financial winter is here and the temperature of the market seems to be dropping anew. Credit markets are frozen and the line for government handouts grows by the day. There is no easy fix to the morass.

That much is clear.

As such, we will have plenty of time to contemplate exactly where it is we want to go from here. Hopefully, we won't make the same mistakes twice, and, in that way, some good may come out of the carnage after all.

We all know how we got into this mess. Greed and debt led to asset value growth that was unsustainable. The piper is calling in a major way.

He'll have plenty of listeners, mainly those now unemployed. Job losses are growing by the minute with some speculating that unemployment rates will grow to 10% or more before this recession is finished.

Certainly, the craziness in the mortgage market with its Wall Street accomplice had much to do with our troubles today. But then again, so did weakness in our education system. Shortcomings there have as much to do with job losses to overseas competition as anything else.

The Wall Street Journal's "Heard on the Street" column(subscription required) presents a strong bearish case for the for-profit educational providers -- companies such as University of Phoenix operator Apollo Group (NASDAQ: APOL) and ITT Educational Services (NYSE: ESI).

Sallie Mae (NYSE: SLM), a major provider of student loans, has tightened up its lending practices, and that could make career education less affordable for a lot of students.

According to the Journal, "The problem is that the schools will likely struggle to sustain their growth rates because of the tight lending environment and the slower-growing economy. If students have a tougher time borrowing, they may need to pay more out of their own pockets. But if their job prospects are looking rocky, or if they are worried they could be laid off from existing jobs, they won't want to shell out the tuition themselves."

But there may be another element to this that could make the outlook even more bleak for these companies, many of which have a lackluster reputation due to run-ins with regulators and questions surrounding their reporting and the value of the services they provide. Students attending career colleges are also thought to be at greater risk for default.

But here's another rub: Massachusetts' Democratic Governor Deval Patrick has proposed making two-year colleges free for all students -- a move like that would be devastating to the for-profit colleges. If that comes to pass in Massachusetts, or if other states make similar, less radical efforts to lower the cost of two-year colleges, for-profit colleges could see enrollment plummet.

Investors in these stocks will want to keep a close high on the political climate.

MOST NOTEWORTHY: Fortress, ITT Educational Service and Kendle International were today's noteworthy initiations:

• Fortress Investment Group (NYSE: FIG) was initiated with a Hold rating and $18.50 target at Jefferies. The firm expects near-term volatility given the increasingly difficult private equity market.
  
• Banc of America assumed coverage of ITT Educational Service (NYSE: ESI) with a Buy rating and $130 target and believes the recent weakness creates an attractive entry point as they see continued margin expansion and upside to Street estimates.
  
• Susquehanna expects Kendle International (NASDAQ: KNDL) to benefit from positive trends in the Clinical Research Organization industry, expanded customer base and geographical reach, integration of Charles Rivers Laboratories (NYSE: CRL), and backlog. The firm started shares with a Positive rating.

OTHER INITIATIONS:

• China Security & Surveillance (NYSE: CSR) was initiated with an Overweight rating and $30 target at Lehman.
  
• Morgan Stanley started Akamai Technologies (NASDAQ: AKAM) with an Equal Weight rating and $39 target.
  
• Goldman resumed coverage of AU Optronics (NYSE: AUO) and Clorox (NYSE: CLX) with Neutral ratings.

My recent Investing in Oregon post took a look at some companies that the Motley Fool had featured in its investigation of investment opportunities in the Beaver State, including Precision Castparts Corp. (NYSE: PCP), StanCorp Financial Group Inc. (NYSE: SFG), FLIR Systems Inc. (NASDAQ: FLIR), and Columbia Sportswear Co. (NASDAQ: COLM).

But the Motley Fool article also mentioned that one of the most prominent business influences in Oregon wasn't even headquartered in the state: semiconductor giant Intel Corp. (NASDAQ: INTC) from Santa Clara, California. It also included mention of four Oregon-based businesses that provided support for Intel: Tektronix Inc. (NYSE: TEK), Mentor Graphics Corp. (NASDAQ: MENT), Triquint Semiconductor Inc. (NASDAQ: TQNT), and Electro Scientific Industries Inc. (NASDAQ: ESIO). One could imagine that Intel's impressive earnings report this week should have been good news for these supporting companies.

Beaverton-based Tektronix, widely known as Tek, is one of the leading makers of test and measurement equipment, such as digital multimeters, logic analyzers, and curve tracers, and oscilloscopes. Tek will win its seventh technical Emmy this year. Tek beat Wall Street expectations in its previous three quarters, reporting earnings per share of 40 cents for its first quarter FY2008. But the consensus of analysts surveyed by Thomson Financial was to hold shares of Tek. The share price reached a 52-week high of $37.95 on Monday when it was announced that Danaher Corp. (NYSE: DHR) will acquire Tek. Tool and equipment maker Danaher just announced record third quarter results.

MOST NOTEWORTHY: Heelys (HLYS), Audible (ADBL) and Response Genetics (RGDX) were today's most noteworthy initiations:

• Baird believes Heelys (NYSE: HLYS) is poised to report strong results through FY07, which is not reflected in current valuation, and started shares with an Outperform rating and $47 target.

• JMP Securities believes a growing number of consumers will opt to acquire books and physical CD audio books digitally over the internet and started shares of Audible (NASDAQ: ADBL) with an Outperform rating and $12.50 target.

• Caris believes Response Genetics' (NASDAQ: RGDX) diagnostics opportunity may represent a significant long-term growth driver and initiated shares with a Buy rating and $7.50 target...

OTHER INITIATIONS:

• JP Morgan initiated DeVry (NYSE: DV), Corinthian Colleges (NASDAQ: COCO) and Strayer Education (NASDAQ: STRA) with Overweight ratings, ITT Educational Service (NYSE: ESI), Apollo Group (NASDAQ: APOL) and Career Education (NASDAQ: CECO) with Neutral ratings and Universal Technical Institute (NYSE: UTI) with an Underweight rating.

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

MOST NOTEWORTHY: Sanofi-Aventis (SNY), Dow Jones & Co (DJ) and AutoDesk, Inc (ADSK) were today's more notable downgrades:

• Sanofi-Aventis (NYSE: SNY) was downloaded from a multitude of companies after a U.S. FDA panel rejected the company's Zimulti weight-loss pill because the medicine was linked to suicides:
  
• To Hold from Buy at Societe Generale
• To Neutral from Outperform at BNP Paribas
• To Neutral from Overweight at JP Morgan and HSBC
• To Neutral from Buy at Merrill Lynch
  
• To Sell from Hold at ABN Amro

• Elsewhere, UBS cut Dow Jones & Co Inc (NYSE: DJ) to Reduce from Neutral as they believe there is no guarantee the controlling Bancroft family will accept News Corp's (NYSE: NWS) offer; they think another bid is unlikely given NWS's aggressive bid and cautions that shares could drop back to mid $30 range if the bid is not accepted.

• Autodesk Inc (NASDAQ: ADSK) was downgraded to Neutral from Buy at Goldman on valuation.

OTHER DOWNGRADES:

• HSBC cut Ivanhoe Mines, Ltd (NYSE: IVN) to Neutral from Outperform.

• Lehman downgraded shares of ITT Educational Services, Inc (NYSE: ESI) to Equal Weight from Overweight.

• VASCO Data Security International, Inc (NASDAQ: VDSI) was downgraded to Hold from Buy at Jefferies.

• Bear Stearns downgraded SLM Corp (NYSE: SLM) to Peer Perform from Outperform.

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