Three stocks that deserve special call-out, in my view, for those investors who can tolerate moderate risk, due to their favorable risk/return.

Freeport McMoRan (NYSE: FCX). The global recovery appears to be underway, and with it demand for key commodities, such as copper, will increase. And Freeport, the world's second largest producer of copper, is poised to capitalize. Sell/Stop Loss if you were to buy shares in FCX: $32.

Freeport has taken a hit, and is not only still standing, it's ready to take on new challenges. I'm Reiterating my Buy rating for Freeport McMoRan (NYSE: FCX), first recommended on March 23, 2009 at a price of $41.87.

The global recovery appears to be underway, and with it demand for key commodities, such as copper, will increase. And Freeport, the world's second largest producer of copper, is poised to capitalize.

Analyst upgrades:

• UBS upgraded Target (NYSE: TGT) to Buy from Neutral and raised its price target to $52 from $45 citing reduced inventories, some credit stability, and an improved back-to-school period.
• Credit Suisse said concerns regarding Safeway's (NYSE: SWY) price position are overblown and that earnings risk is limited. The firm upgraded shares to Outperform from Neutral and raised the target price to $25 from $22.
• Oppenheimer upgraded Canadian Solar (NASDAQ: CSIQ) to Outperform from Perform as it believes the story is underappreciated following the recent sector rally. The firm has a $14 price target on the stock.
• CME Group (NASDAQ: CME) was upgraded to buy from Neutral at Goldman.
• Freeport McMoRan (NYSE: FCX) was upgraded to Overweight from Neutral at JP Morgan.
• Gilead Sciences (NASDAQ: GILD) was upgraded to Buy from Neutral at FTN Equity.

The U.S. stock market remains one characterized by considerable risk: It has shown some internal strength recently, but all its takes is one sub-expectations earnings report -- or one public policy error in Washington -- and the bears will be out in force again. Hence, discretion is the order of the day, with a premium placed on companies with demonstrated business models. With this in mind, Freeport-McMoRan is worth a review.

Freeport (NYSE: FCX) is a preferred miner due to its copper and molybdenum operations. Yes, the gold operation is sexy, but the copper operation is the backbone here, with the company boasting about 100 billion pounds of proven and probable copper reserves.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Amazon.com Inc. (NASDAQ: AMZN) shares surged after earnings easily topped Q4 expectations.
• AT&T Inc. (NYSE: T) reported that its Q4 earnings fell while its revenue rose marginally.
• Boeing Co. (NYSE: BA) posted a big loss and lower revenue due to strikes and design changes.
• Caterpillar Inc. (NYSE: CAT) reported that Q4 profit fell despite higher revenue and lowered its guidance.
• Danaher Corp. (NYSE: DHR) lower Q4 profit topped analysts' estimates, sending shares higher.
• Eastman Kodak Co. (NYSE: EK) reported a Q4 net loss and announced additional job cuts.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

Growth stock expert Mark Skousen looks to the commodity sector for a favorite idea for 2009. In his specialty advisory service, The Turnaround Trader, he explains, "While the market continues to be volatile, we believe Freeport McMoRan (NYSE: FCX) offers an opportunity for profit."

Skousen continues, "Industrial commodities have been beaten down in the face of a deep, global recession. Aluminum was $1.50 a pound a year ago, and is now down to 66 cents. Copper was more than $4 a pound last year, and recently fell to $1.40.

"But the outlook for commodities is changing quickly with all the talk of bailouts, stimulus, and easy money.

"Aluminum, copper, and other base metals have risen recently on the news that President-elect Barack Obama has pledged 'substantial' spending to fix and add buildings, roads and bridges as a way to revive the economy.

"And then there's China. The world's largest emerging market recently committed to stimulating domestic growth, and announced plans to purchase 1 million tons of base metal for about $3 billion. China's massive stimulus plan, combined with Obama's, could be enough to reignite the commodities boom.

Southern Peru Copper (NYSE: PCU) closed at $18.12 Monday. Copper is recently up 5.31% to 153.65 according to Bloomberg. PCU February option implied volatility of 83 is above its 26-week average of 78, according to Track Data, suggesting larger price movement.

Teck Cominco (NYSE: TCK), a diversified mining company, closed at $6.82 Monday. TCK January 7.5 straddle is priced at $1.60, December 7.5 straddle is priced at $2.60. TCK February option implied volatility of 121 is above its 26-week average of 110 according to Track Data, suggesting larger share price movement.

Freeport McMoRan (NYSE: FCX) closed at $28.22 Monday. FCX, the world's second-largest copper producer, is expected to report Q4 EPS in mid January. February call option implied volatility is at 87, puts are at 84; near its 26-week average according to Track Data, suggesting non-directional price movement.

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

This post was written by Minyanville contributor Vitaliy Katsenelson.

"You should buy Freeport McMoRan (NYSE: FCX), Caterpillar (NYSE: CAT), PACCAR (NASDAQ: PCAR)." That is what I hear from friends of mine, who are in the biz, all the time. They tell me how cheap these stocks are -- three, six, eight times earnings. "You are a value guy! How come you are not loading up on them?" they ask.

Let me tell you when I'll buy "stuff" stocks (if I ever do, because I've never really cared for the cyclicality of that business). It's when everyone stops telling me how cheap they are and that they are "buys."

These stocks are very similar to housing stocks two years ago: housing stocks were down 50% and looked cheap. Value managers bought just to see their stocks get cut in half again and again.

One needs to subnormalize earnings in this environment for all stocks, but stuff stocks need to see their earnings to be "sub-sub-sub-sub normalized." I've said it before, but it is worth repeating: the global economy just started its journey into a recession, and demand for stuff will drop off the cliff most likely to a lot greater degree than anyone imagines.

How will we know when things have thawed? Everyone's looking at LIBOR and I can't blame them as that indicator of lending from one bank to another bank is crucial for the way the system is supposed to work. It's a good thermometer for certain, but I don't want it to overstay its welcome, because there are other "true" indicators out there besides just LIBOR.

I am looking at something else: takeovers. On Monday, we saw Waste Management (NYSE:WMI) pull its bid for Republic Services (NYSE:RSG) , a smart idea as WMI had dropped so precipitously despite reporting better-than-expected earnings that one had to question if it was worth doing it. More important, though, getting the money was proving to be possible, but difficult. This situation also prevailed in Altria's (NYSE: MO) buy of UST (NYSE: UST) where Goldman Sachs said, "Don't bother, wait," even though the integration of the two is crucial for Altria's growth.

Now I expect deals to be done if the banks are for real about lending.

Further, the endless margin selling has created tremendous bargains for well-capitalized companies to buy other companies that have brimming order books but are being kept down because of hedge fund redemptions. How can some company not want to buy a Trinity (NYSE:TRN), for example, which has been virtually cut in half even though both presidential candidates are pro-wind? Or how about a Foster Wheeler (NASDAQ: FWLT) or a Joy Global (NASDAQ:JOYG) or a Terex (NYSE: TEX) betting that if there is credit there will eventually be a revival?

"Recent weakness in commodities is just a pause to breathe , not the beginning of the end," says Yiannis Mostrous in Vital Resource Investor. His favorite copper play? Freeport-McMoRan Copper & Gold (NYSE: FCX).

"Most investors aren't able to grasp this commodities cycle's massive potential. The main reason is that few investors are willing to accept the big transformation that's taking place in several emerging market economies, led by China and India.

"We've been advocating this change for quite some time. And after several years of doing so, investors are more receptive. However, they're not totally convinced yet.

"This is the main reason this bull market in emerging markets and commodities has another strong leg up before it reaches all-time highs. But we're far from that point. Meanwhile, copper remains one of our favorite metals.

"Our long-standing recommendation to take advantage of copper's strength is Freeport-McMoRan Copper & Gold. Copper suffered from supply challenges along with investors' underestimation of its potential early in the year.

TheStreet.com's Jim Cramer says that rebuilding from natural disasters can alter the growth picture for a country.

Is it Katrina all over again? Or is it bigger? Much bigger? That's what I am thinking about this Chinese earthquake.

Katrina distorted the U.S.'s growth pattern for more than a full year. The raw materials, the effort, the work, the reconstruction affected businesses from small-scale retail to refining and infrastructure.

We don't really know how China works, although a lot of people tell us they do. To me, the Chinese are always a day away from revolution or civil war and the trick of the government is to stay one step ahead of the posse. (Chinese hands will dispute that, but you have to appreciate that it takes a special skill to be wrong for more than a century and still maintain credibility.)

That means massive reconstruction: bricks, lumber, cement, steel and all the trimmings. Massive imports, not controlled by the Chinese and their little negotiation games like they play with iron and steel and coal. Just full-bore buying and something that could take growth for China back to the levels that everyone thought it couldn't absorb without more inflation.

"There's no doubt about it: vital resources are in a bull market of gigantic proportions," note Yiannis Mostrous and Roger Conrad.

"The co-editors of Vital Resource Investor caution that "no market moves in a straight line, and in commodities, the action is often extremely violent." However, for long-term investors, they offer some favorites in iron ore, aluminum and copper.

"All commodity bull markets are ultimately gored by demand destruction, alternatives and new supply. But it will almost certainly be years before that happens to this one. And that means plenty of money will be made along the way.

"We're still extremely bullish on iron ore as the market remains in deficit and prices continue to rise. Chinese domestic supply has been falling and, if this continues, imports will make up the difference, thereby helping the miners.

"China consumes 51% of the world's iron supply. Portfolio holding Companhia Vale do Rio Doce (NYSE: RIO), the world's largest iron ore producer, will benefit from the shortage in iron ore supply.

"We favor aluminum in the industrial metals sector. We've been advocating aluminum for some time, and the market's finally going our way. Aluminum prices have been impacted by lack of available power in China and South Africa and higher alumina and bauxite prices.

"A once in a lifetime super bull market in commodities is underway," note resource experts Mary Anne and Pamela Aden. Here, the advisors look at some favorite commodity stocks in their The Aden Forecast.

"Commodities are in a mega super rise is because of the dramatic changes in the global economy. The rise that started in commodities in 2001 has continued to expand over the years and we believe the upmove is just warming up and it has years to run.

"There are several reasons for this. The weakening dollar and low interest rates have certainly helped push up the whole sector while investment demand grew as an inflation hedge. But the key reason why the commodities are in a mega super rise is because of the dramatic changes in the global economy.

MOST NOTEWORTHY: AstraZeneca, Massey Energy and Freeport McMoRan were today's noteworthy upgrades:

• Dresdner Kleinwort upgraded shares of AstraZeneca (NYSE: AZN) to Buy from Hold following the company's settlement with Ranbaxy on the Nexium patent.
  
• Massey Energy (NYSE: MEE) was raised to Overweight from Neutral at Massey Energy citing the company's leverage to metallurgical coal prices in 2009.
  
• Freeport McMoRan (NYSE: FCX) was upgraded at HSBC to Overweight from Neutral on valuation.

OTHER UPGRADES:

• Arcelor Mittal (NYSE: MT) was upgraded to Buy from Hold at Citigroup.
  
• Merrill upgraded Bernis (NYSE: BMS) to Neutral from Sell.

Freeport McMoRan (NYSE: FCX), a gold and copper mining company, closed at $93.97 Monday.

Gold is recently up 1.23% to $983.80 according to Bloomberg.

FCX overall option implied volatility of 56 is above its 26-week average of 50 according to Track Data, suggesting larger price movement.

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