Goldman Sachs upgraded the banking sector last week, and this coming week we'll get a chance to see whether Goldman and other big banks reporting third quarter results will live up to the expectations of analysts surveyed by Thomson Reuters.

New York-based Goldman Sachs Group Inc. (NYSE: GS) looks set to be this week's earnings game winner. Analysts expect this dividend-paying company to report a third-quarter profit of $4.24 per share, which is 57.3% higher than in the same period of last year. Revenue for the period that ended in September is expected to be $11.0 billion. So far, the full-year forecast is for $17.74 per share on $44.6 billion.

Analyst upgrades:

• Deutsche Bank upgraded HealthSouth (NYSE: HLS) and Rehabcare (NYSE: RHB) to Buy from Hold after raising its Post Acute Care sector view to Positive from Neutral. The firm believes volumes and margin leverage can drive better than expected Q2 results and 2009 guidance. The firm raised its target on HealthSouth shares to $16 from $12 and on Rehabcare to $28 from $19.
  
• Jefferies upgraded Moody's (NYSE: MCO) to Hold from Underperform to reflect stabilizing credit markets and its belief regulatory concerns are overstated. The firm raised its target on shares to $30 from $19.
  
• Keefe Bruyette upgraded Goldman Sachs (NYSE: GS) to Outperform from Market Perform as it finds the stock inexpensive following the better than expected results. The firm has a $195 target on shares.
• Vale (NASDAQ: VALE) was upgraded to Buy from Neutral at BofA/Merrill.
  
• CNOOC (NYSE: CEO) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• International Game Tech (NYSE: IGT) was upgraded to Buy from Neutral at Janney Montgomery.
  

Analyst upgrades:

• Stephens upgraded The Andersons (NASDAQ: ANDE) to Overweight from Equal Weight on expectations the company is benefiting from good space income opportunities and better ethanol profitability. The firm raised its target price to $31 from $28.
  
• Jefferies upgraded NRG Energy (NYSE: NRG) to Buy from Hold as the analyst believes Exelon (NYSE: EXC) will have to materially raise its offer to close the acquisition. The firm raised its target on shares to $25 from $22.50.
  
• FBR Capital upgraded FMC Technologies (NYSE: FTI) to Outperform from Market Perform after meeting with management to reflect the company's 2011 growth potential. The firm raised its target on shares to $51.
• J. Sainsbury (OTC: JSAIY) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• SVB Financial (NASDAQ: SIVB) and Fulton Financial (NASDAQ: FULT) were upgraded to Outperform from Sector Perform at RBC Capital.

Analyst upgrades:

• HSBC upgraded Royal Bank of Scotland (NYSE: RBS) to Overweight from Neutral as it believes the risk of immediate nationalization has been removed.
  
• JP Morgan upgraded DTS Inc (NASDAQ: DTSI) to Overweight from Neutral to reflect accretion from the Neural acquisition and its expectation the company can generate strong cash flow during the downturn. The firm raised its target to $18.
  
• Cowen upgraded Coach (NYSE: COH) to Outperform from Neutral citing the recent sell-off in shares.
  
• BJ's Wholesale (NYSE: BJ) was upgraded to Buy from Neutral at UBS.
  
• First Horizon (NYSE: FHN) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  
• Spartech (NYSE: SEH) was raised to Hold from Underweight at KeyBanc.

The new earnings season ramps up this week as Alcoa Inc. (NYSE: AA) reports fourth-quarter results. Last week, the Pittsburgh-based producer of aluminum and alumina announced layoffs and production cuts as a reaction to the economic downturn. Analysts surveyed by Thomson Reuters expect that Alcoa will have swung to its first quarterly loss in years: $0.10 per share. That compares to a profit of $0.36 per share in the same period of the previous year. Revenues for the quarter are expected to have fallen 28.8% from a year ago to $5.3 billion. For 2008, analysts are looking for earnings of $1.40 per share on revenue of $27.6 billion, down from $2.60 per share and $30.8 billion in the previous year. Alcoa missed earnings estimates in three of the past five quarters, by 25.4% in the third quarter. The consensus recommendation of analysts shifted from buy to hold AA during the past quarter. The share price has been climbing in recent weeks, but it is 65.6% lower than a year ago.

Intel Corp. (NASDAQ: INTC) is also scheduled to report fourth-quarter results this week, one of a handful of tech stocks to do so. The number one semiconductor maker is expected to post earnings down 86.8% to $0.05 per share, and sales of $8.2 billion, down 23.3% from a year ago. Last week, Intel forecast sales for the quarter of $8.2 billion. The full-year numbers are expected to be marginally lower than a year ago, or $0.94 per share on $37.7 billion. Intel only missed earnings estimates in one of the past five quarters. Shares are about $2.00 higher than the 52-week low, but 37.2% lower than a year ago.

Who knows why the Treasury gives our money to some banks and not to others. That comes to mind when considering that we just gave $18 billion to 10 regional banks -- three of which are unprofitable. Why does this matter? Because giving taxpayer money to an unprofitable bank could be as good as flushing it away. I guess Treasury figures it can always get more where that came from, so why not?

Here are the lucky winners of the government bailout lottery that earned a profit and their pre-market stock price change:

• SunTrust (NYSE: STI): $540 million -4.6%
• Capital One Financial Corp. (NYSE: COF): $374 million -2.3%
• Northern Trust (NASDAQ: NTRS): $214 million -2.1%
• Regions Financial (NYSE: RF): $206 million -0.8%
• Huntington Bancshares (NASDAQ: HBAN): $115 million +6.1%
• Valley National Bancorp (NYSE: VLY): $41 million 0%
• City National (NYSE: CYN): $16.6 million 0%

And here are the three that lost money but still got taxpayer capital -- the amount of their latest loss is in parentheses:

There were two big trades on Wall Street today: One was the bailout trade, which included financial stocks obviously, but other than the big banks, investors also went after the second-tier firm -- the smaller, regional banks. The other big trade was the economy. As the U.S. and global economy slows down, retailers, techs and a variety of materials and industrials will suffer. Investors showed their concerns over the economy today, hammering down many of these stocks down.

Here are a few big losers from today:

Financials - obviously, financials depended on the bailout plan more than others, at least in the immediate future:

Bank of America Corp. (NYSE: BAC) declined 17.6%, while JPMorgan Chase & Co. (NYSE: JPM) slumped 15%. Citigroup (NYSE: C) declined nearly 12%, Goldman Sachs (NYSE: GS) sank 12.5% and Morgan Stanley (NYSE: MS) plunged over 15%.

American Express Co. (NYSE: AXP) was the Dow's biggest loser today with a 17.5% drop thanks to Citigroup cutting profit estimates of the credit card company.

Second-tier banks declined much more:

Bank of New York Mellon Corp. (NYSE: BK) slipped over 27%, CIT Group Inc. (NYSE: CIT) lost 25.5%, Fifth Third Bancorp (NASDAQ: FITB) fell 43.6%, FirstFed Financial Corp. (NYSE: FED) tumbled over 25%, First Horizon National Corp. (NYSE: FHN) slipped 35.7% and National City Corp. (NYSE: NCC) tumbled 63.3%.

In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade -- what went wrong, and what happens next.

First Horizon National Corporation (NYSE: FHN) operates as the holding company for First Tennessee Bank, making it one of many regional banks on our roster. If you're the intelligent, discerning audience that I assume you to be, I probably need only mention that FHN is in the mortgage-lending business for you to guess what might be ailing the stock.

What went wrong? At number 15 on our list of SPX laggards, FHN shed 76% of its value during the 10-year period ending June 30, 2008. The stock peaked at $48.65 in March 2004, but didn't start to plunge in earnest until July 2007. Say it with me, people: subprime.

While the share price didn't plummet immediately in response, FHN first revealed mortgage-related weakness in August 2006. The bank warned that quarterly earnings would be dented by deteriorating mortgage-market conditions, and profits fell during the next two quarters. FHN cited "lower gain on sale margins, further reductions in new mortgages and increased costs to hedge the servicing risks for mortgage loans" for the earnings weakness.

On September 4, 2007, FHN's head of employee services got chatty with The Memphis Daily News. John Daniel admitted that the bank was trimming its headcount gradually in a cost-cutting effort, but reassured the paper that the subprime crisis didn't have too deep an impact. "We don't see any significant reductions in staff as a result of what's happening in the mortgage industry right now," he asserted. Just a week later, on September 13, the Daily News reported that FHN was slashing 50% of its mortgage sales force, about 2,000 total positions.

"Wells Fargo (NYSE: WFC) absolutely surprised Wall Street, which had downbeat expectations for lower earnings," reports Richard Rhodes, trading expert and editor of The Rhodes Report.

"WFC earned $1.75 billion or $0.53/share for the April to June period, which is down just a bit from $2.28 billion or $0.67 per share for the same period last year. Provisions for credit losses were $3 billion, which included increase in reserves for future losses of $1.5 billion.

"But what really surprised the market was that fact that WFE raised their quarterly dividend to $0.34/share per quarter from $0.31, a near +10% increase. In a world where most, if not all, banks are raising capital and slashing dividends - WFC sees fit to stand on the Left Coast and shout that 'all is fine in the water, come on in!'

"This should support the banking community today, which given yesterday's better-than-expected earnings out of First Horizon (NYSE: FHN), has tended to cause a bit of short covering in the banks.

"In our view, this will be a large test for the banking sector. We are interested in how it trades today given the good WFC news - WFC is higher by nearly +10% as we finish up writing, for if they can rally and hold their gains, we are apt to put on an aggressive long position to capture a sharper short covering rally that may cause value managers to 'dip their toe' into the water and become buyers.

"Expectations have been inordinately low; the regional banks are showing there are managing their businesses relatively well."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

TheStreet.com's Jim Cramer says our problems are so widespread, he sees lots more IndyMacs before we're out.

You don't need me to tell you it's awful out there. You don't need me to tell you that there's no quick fix for any of these things. But what might help you understand why it feels so bad this time is that I have never, in my career, seen so many companies go off track at the same time. This is one unbelievable moment, and it is made more horrible by the day as companies' stocks just get pummeled, causing people to then question the very viability of the companies involved.

First, obviously, are Fannie Mae (NYSE: FNM) (Cramer's Take) and Freddie Mac (NYSE: FRE) (Cramer's Take). We don't know what will happen, but we do know that their futures are much darker than their pasts. Their best hope: a Democrat becomes president and shows the usual love to both. But as investments, they are pretty much perma-losers going forward. The losses are that heavy. Yes, it is true that two years from now they will be better, but will the government let them limp through to that? View them as calls on a Democratic win.

We all know that Citigroup (NYSE: C) (Cramer's Take), Wachovia (NYSE: WB) (Cramer's Take), Washington Mutual (NYSE: WM) (Cramer's Take) and National City (NYSE: NCC) (Cramer's Take) are in trouble. Bank of America (NYSE: BAC) (Cramer's Take) says it isn't in trouble, but obviously the market doesn't believe management because the stock failed to rally when it said its dividend was safe. Any short-selling hedge fund could hire 30 actors and have them line up at a Washington Mutual or two and get a bank run going. Then we would have to hear about a "hasty" Treasury department plan to bail out WM. Hasty? How can these guys not see it coming?

After the implosion of IndyMac Bancorp (NYSE: IMB) and news of the deterioration of Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) last week, there's bound to be a certain level of trepidation as the earnings crunch begins this coming week and many big financial companies report. Here's a look at what Wall Street was expecting (see The week in preview: Expectations as the earnings crunch begins for expectations of other reporting companies.)

Analysts surveyed by Thomson Financial are expecting the following of companies to report lower earnings when compared to the same period of the previous year.

• JPMorgan Chase & Co. (NYSE: JPM): 44 cents EPS (-63.3%) on sales of $16.4 billion (-13.2%)
• Comerica Inc. (NYSE: CMA): 51 cents EPS (-59.2%) on sales of $680.2 million (-7.3%)
• Zions Bancorp. (NYSE: ZION): 75 cents EPS (-47.6%) on sales of $627.3. million (+2.7%)
• Huntington Bancshares Inc. (NYSE: HBAN): 23 cents EPS (-32.4%) on sales of $617.1 million (+50.7%)
• Capital One Financial Corp. (NYSE: COF): $1.31 EPS (-30.7%) on sales of $4.4 billion (+7.8%)
• Wells Fargo & Co. (NYSE: WFC): 50 cents EPS (-25.4%) on sales of $10.7 billion (+7.7%)
• M&T Bank Corp. (NYSE: MTB): $1.50 EPS (-23.1%) on sales of $756.6 million (+1.6%)
• BB&T Corp. (NYSE: BBT): 69 cents EPS (-16.9%) on sales of $1.8 billion (+5.9%)
• U.S. Bancorp (NYSE: USB): 60 cents EPS (-7.7%) on sales of $3.8 billion (+8.3%)
• PNC Financial Services Group Inc. (NYSE: PNC): $1.16 EPS (-7.2%) on sales of $1.9 billion (+8.5%)

MOST NOTEWORTHY: Intel, Respironics and First Horizon were today's noteworthy downgrades:

• JP Morgan lowered its rating on Intel (NASDAQ:INTC) to Neutral from Overweight, as their checks indicate a late-quarter slowdown for Intel in order rates from the PC end market, which offset the upside the company experienced in earlier in Q4.
  
• Banc of America downgraded shares of Respironics (NASDAQ:RESP) to Neutral from Buy to reflect the acquisition by Philips (NYSE:PHG).
  
• Friedman Billings downgraded First Horizon (NYSE:FHN) to Underperform from Market Perform, citing its exposure to home equity and construction loans and mortgage banking operations. The firm adds that it expects the company to cut its quarterly dividend.

OTHER DOWNGRADES:

• JP Morgan removed General Motors (NYSE:GM) from its Focus List.
  
• Merrill downgraded Hess Corp (NYSE:HES) to Neutral from Buy.
  
• Lehman downgraded Westlake Chemical (NYSE:WLK) to Equal Weight from Overweight.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"For more conservative investors, my favorite idea for 2008 is First Horizon National Corp. (NYSE: FHN), the Tennessee-based holding company for First Tennessee Bank," says Keith Fitz-Gerald, editor of Money Morning.

"Its banks feature all the offerings you might expect from a good regional bank: Savings, checking, mortgages, investment banking, and brokerage services. It's not exactly an innovative idea -- minimize risks and maximize profits.

"But let's face it, it's a tried-and-true strategy that most US banks have abandoned as they chase after the (allegedly) big profits that subprime-backed debt, leveraged buyouts and other similarly esoteric investments appeared to promise.

"Yes, FHN really over-extended itself in the credit markets and recently announced a loss of $14.2 million. More losses may be coming. And its ultra-high dividend yield off 7.93% may be in jeopardy. Nonetheless, we think the stock's beating was overdone.

MOST NOTEWORTHY UPGRADES:

• Hilliard Lyons upgraded Sypris Solutions (NASDAQ: SYPR) to Buy from Neutral on valuation, and expected improvements in the company's Industrial Group and Electronics Group.
  
• TD Newcrest upgraded Quebecor World (NYSE: IQW) to Hold from Reduce, while UBS upgraded Quilmes Industrial (NYSE: LQU) to Neutral from Sell.

MOST NOTEWORTHY DOWNGRADES:

• Respironics Inc. (NASDAQ: RESP) was downgraded to Market Perform from Outperform by BMO Capital, following the company's acquisition by Philips.
  
• Think Equity downgraded Nanophase Technologies (NASDAQ: NANX) to Accumulate from Buy, citing checks that indicate sales for architectural coatings remain sluggish.
  
• Golden Telecom (NASDAQ: GLDN) was lowered to Equal Weight from Overweight by Morgan Stanley.
  
• First Horizon National Corp. (NYSE: FHN) was downgraded to Sell from Hold on Friday by Sandler, O'Neill & Partners.

MOST NOTEWORTHY: IMS Health, Ford Horizon Rite Aid were today's noteworthy upgrades:

• IMS Health (NYSE: RX) was upgraded to Neutral from Underperform at Baird on valuation.
  
• Keefe Bruyette upgraded First Horizon (NYSE: FHN) to Market Perform from Underperform on valuation.
• UBS upgraded Rite Aid (NYSE: RAD) to Buy from Neutral based on valuation and potential West Coast divestiture.

OTHER UPGRADES:

• Schering-Plough (NYSE: SGP) was upgraded to Overweight from Equal Weight at Lehman.
  
• Research in Motion (NASDAQ: RIMM) was upgraded to Outperform from Peer Perform at Bearn Stearns.
  
• Kenexa (NASDAQ: KNXA) was upgraded to Buy from Accumulate at ThinkEquity.