El Paso (EP) closed at $11.10. EP is expected to report Q4 EPS in late February. February option implied volatility is at 36, versus its 26-week average of 42. DVN options were active on January 19 with trading volume of 71,749 contracts, according to Track Data. Average daily volume in EP is 6,610 according to IVolatility.com.

Devon Energy (DVN) closed at $73.57. WTI Crude oil futures are recently down 0.83% to $77.35, according to Bloomberg. DVN is expected to report Q4 EPS on February 17. February option implied volatility of 33 is below its 26-week average of 37, according to Track Data.

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

The Dow gained 286 points to retake the ground lost Friday. Markets were still rattled about sub-prime and credit concerns, but there is hope going into the tomorrows Fed meeting that maybe the Fed will pay closer attention to the subject.

The NYSE had volume of 4.2 billion shares with 1,782 shares advancing while 1,551 declined for a gain of 183.14 points to close at 9,553.74. On the NASDAQ, 2.6 billion shares traded, 1,455 advanced and 1,626 declined for a gain of 36.08 to 2,547.33.

Fannie Mae (NYSE: FNM) jumped $5.87 (10%) to $62.50. CIT Group (NYSE: CIT) fell $2.30 (-6%) to $34.38. Intuit (NASDAQ: INTU) rose $2.16 (8%) to $30.26. Crocs, Inc. (NASDAQ: CROX) fell $3.49 (-6%) to $55.13. Countrywide Financial Corporation (NYSE: CFC) rose $1.75 (7%) to $26.75 as it reported access to $46 billion cash.

The most active calls were on the QQQQ's as investors are hopeful for a turnaround. PowerShares QQQ Trust ETF (NASDAQ: QQQQ) saw heavy volume on the August 48 calls (QQQHV) with over 82,687 options trading. The VIX set a new intraday high at 26.47. Likewise options were very active as investors worked to hedge risk in this market. CBOE S&P 500 Volatility Index (NASDAQ: $VIX) saw heavy volume on the August 25 calls (VIXHE) with over 45,877 options trading.

One of the most active sectors recently has been the financial area, with sub-prime concerns. Financial Sector SPDR ETF (NYSE: XLF) saw heavy volume on the September 35 calls (XLFII) with over 44,080 options trading. A couple of individual stocks that made are most active list include Cisco Systems (NASDAQ: CSCO) moved volume on the August 30 calls (CYQHF) with over 27,000 options trading. El Paso (NYSE: EP) saw heavy volume on the September 16 puts (EPUQ) with over 34,000 options trading. In options there were 7.7 million puts and 6.7 million calls traded for a put/call open interest ratio of 1.15
.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and/or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

MOST NOTEWORTHY: Dendreon Corp (DNDN), Whole Foods Market, Inc (WFMI), Rio Tinto plc (RTP), El Paso Corp (EP), and Oplink Communications, Inc (OPLK) were today's more notable downgrades:

• Banc of America downgraded shares of Dendreon Corp (NASDAQ: DNDN) to Sell from Neutral following the FDA's request for additional clinical data for Provenge.

• HSBC cut Whole Foods Market (NASDAQ: WFMI) to Underweight from Neutral after the second quarter miss.

• BMO Capital downgraded Rio Tinto plc (NYSE: RTP) to Underperform from Market Perform based on valuation.

• El Paso Corp (NYSE: EP) was cut to Sell from Buy at Matrix after the company's weak operating performance.

• Merriman downgraded shares of Oplink Communications (NASDAQ: OPLK) to Sell from Neutral based on concerns over the OCP acquisitions and inventory...

OTHER DOWNGRADES:

• 24/7 Real Media, Inc (NASDAQ: TFSM) was cut to Hold from Buy at Jefferies.

• Credit Suisse downgraded shares of RadioShack Corp (NYSE: RSH) to Neutral from Outperform.

• Bear Stearns cut Harman International Industries (NYSE: HAR) to Peer Perform from Outperform.

• Piper Jaffray downgraded shares of Cache, Inc (NASDAQ: CACH) to Market Perform from Outperform.

• Restoration Hardware, Inc (NASDAQ: RSTO) was cut at Caris to Average from Above Average.

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

MOST NOTEWORTHY: Some of today's most notable upgrades include Qualcomm, Inc (QCOM), Countrywide Financial Corp (CFC), American Eagle Outfitters (AEO) and Chevron Corp (CVX):

• JP Morgan upgraded Qualcomm, Inc (NASDAQ: QCOM) to Neutral from Underweight, to reflect the company's re-accelerating business fundamentals and positive pre-announcement on Tuesday.

• Friedman Billings upgraded shares of Countrywide Financial Corp (NYSE: CFC) to Outperform from Market Perform as they believe the company remains among the premiere mortgage originators and will be the ultimate beneficiary of the mortgage market shakeout.

• Susquehanna upgraded shares of American Eagle Outfitters Inc (NYSE: AEO) to Positive from Neutral based on a strong spring assortment and long-term earnings power from new brand concepts aerie and MARTIN+OSA.

• Deutsche Bank upgraded shares of Chevron Corp (NYSE: CVX) to Hold from Sell based a backlog of resources that keeps growing and increased pressure on the need for delivery.

OTHER UPGRADES:

• Lehman upgraded Darden Restaurants, Inc (NYSE: DRI) to Equal-Weight from Underweight to reflect the company's strong management team and what they believe to be "very achievable" guidance.

• Cadbury Schweppes plc (NYSE: CSG) was upgraded to Neutral from Sell at Goldman Sachs as they believe the company may break up Nelson Peltz acquired a stake in the company.

• AG Edwards upgraded El Paso Corp (NYSE: EP) to Buy from Hold with a $16 target.

• Gladstone Capital Corp (NASDAQ: GLAD) was upgraded to Market Perform from Underperform at Wachovia.

• Gabelli upgraded shares of Boston Beer Company (NYSE: SAM) to Buy from Hold following the strong fourth quarter report.

• Southwest Airlines Co (NYSE: LUV) and JetBlue Airways Corp (NASDAQ: JBLU) were upgraded to Overweight from Neutral at HSBC.

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

Fall earnings are winding down, but there were still a number of notable companies reporting this week.

Excellent

• AES Corporation (NYSE:AES) 27c per share vs analyst expectations of 21c - at $22.45 (yesterday's close) the stock is up 42% year-to-date and is near its 52-week high of $22.66.
• American International Group (NYSE:AIG) $1.53 vs $1.42 - AIG is only now returning to its levels from the beginning of the year with just over a 2% return YTD. The stock is up more than 2.5% today.
• Fluor Corporation (NYSE:FLR) 31c vs (12c) - while FLR is up more than 20% in the past year, its YTD return is only 8% and at $83.39 is trading within its 52-week range of $68.70-$103.85
• JC Penney (JCP) $1.26 vs. $1.23 - JCP had an amazing run. YTD return is nearly 45%. The stock is up another 1.3% today to $80.61, very near its 52-week high of $81.40 set yesterday during the session.

On the Fence

• El Paso Corporation (NYSE:EP) 16c vs 16c
• Watson Pharmaceutical (NYSE:WPI) 33c vs 34c
• Walt Disney Company (NYSE:DIS) 36c vs 34c

Awful

• Federated Department Stores (NYSE:FD) 20c vs 25c
• IMAX Corporation (NASDAQ:IMAX) (30c) vs 5c
• Lions Gate Entertainment Corp. (NYSE:LGF) (14c) vs (2c)

Earnings review from Tedd Cohen of TheFlyOnTheWall.com (subscription required).

Almost every single day day of last week I said the same in the morning, that futures point to a positive start. Yet it seemed the market just couldn't get a break and was hit with one economic news after another that kept bulls at bay. Once again this morning futures are positive, pointing to a higher start for stocks, and hopefully finally ending a six-day losing streak. It would be interesting to see how the market reacts a day before the midterm elections.

Part of this early positive sentiment, undoubtedly has to do with oil prices. This morning, oil prices slipped to below $59 a barrell. This is due partly due to the belief OPEC would have a hard time fulfilling its announcement to cut production and partly because the threats to disrupt production in Nigeria and the U.S. never came to pass. At the same time, OPEC President Edmund Daukoru also said this morning that there is oversupply and warned of further production cuts.

Today there are no economic data due, and this week in general will have little from the economic front. On Thursday, trade balance will be reported and that would be the major report to note. However, a number of Federal Reserve will be speaking today and the market could very well react to that.

In Corporate news:

Some companies due to report today: Anadarko Petroleum Corp. (NYSE:APC) - estimated $1.35 earnings per share, El Paso Corp. (NYSE:EP) - estimated $0.16 earnings per share, RealNetworks Inc. (NASDAQ:RNWK) - estimated $0.22 earnings per share, and XM Satellite Radio Holdings, Inc. (NASDAQ:XMSR) - estimated -$0.46 earnings per share.

Google Inc. (NASDAQ:GOOG) yesterday announced that it will test expansion of its business into offline media and will now be helping customers buy advertisements in 50 U.S. newspapers. More than 100 advertiser were invited to join the three-month test of a Print Ads service that places ads in daily papers such as the New York Times Co. (NYSE:NYT), Gannett Co. (NYSE:GCI) and the Washington Post.

Ryanair Holdings Plc (NASDAQ:RYAAY), Europe's largest low-cost airline, posted a 24% gain in quarterly profit and lifted its 2007 guidance. Shares rose more than 3% in London.

The Wall Street Journal reported this morning that General Motors Corp.'s (NYSE:GM) Rick Wagoner said that a deal between $6 billion to $7.5 billion could be reached soon with Delphi Corp. (OTC:DPHIQ) over GM's contribution on labor costs at auto-parts maker. Wagoner is touring China where GM also displayed the company's hydrogen fuel cell-powered Sequel.

Again, according to the Wall Street Journal the U.S. Justice Department, informally probing anti-competitive behavior in the private equity sector, has requested information from Merrill Lynch's (NYSE:MER) private equity arm.

ImClone Systems Inc. (NASDAQ:IMCL) and Bristol-Myers Squibb Co. (NYSE:BMY) reported mixed results from a pair of Phase III trials of Erbitux, the cancer drug.

In the radio market, in attempt to to defend its eroding market share from satellite radio and iPods, U.S. radio operators said sales of its high-definition radios will expand to Circuit City Stores, Inc. (NYSE:CC), and stations are set to air some 75,000 ads a week pushing HD Digital radio.