MOST NOTEWORTHY: EMC Corp, Blue Nile, Getty Images and Sonus Networks were today's noteworthy initiations:

• EMC Corporation (NYSE: EMC) was initiated with a Buy rating and $24 target at Banc of America as they believe the company's core business is undervalued and should benefit from penetration of new market segments. Deutsche Bank views shares of the stock as fully valued at current levels, starting shares off with a Hold rating and $20 target. Jefferies believes the divergence in valuation of core EMC and majority-held VMWare Inc (NYSE: VMW) creates an attractive entry point. The firm started EMC shares with a Buy rating and $25 target.
  
• CIBC finds shares of Blue Nile (NASDAQ: NILE) fairly valued and sees challenges as competition increases. The firm started shares with a Sector Performer rating.
  
• CIBC also initiated shares of Getty Images Inc (NYSE: GYI) with a Sector Performer rating, as the firm believes the company's earnings visibility is limited while the business model is in transition.
  
• Coverage of Sonus Networks Inc (NASDAQ: SONS) was resumed with an Overweight rating and $8 target at Thomas Weisel. Their checks indicate the company is experiencing increased order activity in 2H07, and they expect an improved Q3 followed by a very strong Q4.

OTHER DOWNGRADES:

• Credit Suisse Group (NYSE: CS) was initiated with an Overweight rating at Morgan Stanley.
  
• Oppenheimer initiated Consolidated Communications Holdings Inc (NASDAQ: CNSL) with a Buy rating and $24 target.
  
• UBS initiated the U.S. homebuilding sector with a Pessimistic outlook.
  
• UBS initiated shares of Nvidia Corporation (NASDAQ: NVDA) with a Neutral rating and $37 target.
  
• Bear started shares of The Dow Chemical Company (NYSE: DOW) with a Peer Perform rating.
  

Getty Images, Inc. (NYSE: GYI) volatility elevated as GYI nears 5-year low:

GYI, a creator and distributor of visual content, was recently down 34 cents to $27.28. Goldman Sachs Group, Inc. (NYSE: GS) says "GYI's business model remains in transition." GSCO went on to say "we see no rush to own shares." GYI October option implied volatility of 40 was above its 26-week average of 33 according to Track Data, suggesting larger risk.

Jupitermedia Corporation (NASDAQ: JUPM) option implied volatility elevated at 74:

JUPM, a provider of online information, images & research, was recently up a cent to $6.18. JUPM is expected to report earnings per share on November 8th. JUPM over all option implied volatility of 74 was above its 26-week average of 55 according to Track Data, suggesting larger risks.

Cree, Inc. (NASDAQ: CREE) option volume and volatility was elevated as CREE rallied 7%.

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

August has been positively brutal for Getty Images Inc. (NYSE: GYI); its second-quarter results came in lower than the Street expected and investors started fleeing, sending the stock price down from the mid $40s to the low $30s in a couple of days. Personally, I think the stock has been punished too much, and investors have a chance to grab this one at a temporary low.

To be sure, Getty faces problems. The main issue is that technology has greatly increased competition, and Getty hasn't yet figured out how to adapt to these changes. Between the proliferation of digital cameras, the emergence of payment sites that can be used by amateur photographers, and ever-improving search capabilities, it has become much easier and cheaper to find images on the web. While it's still by far the biggest company in the images business, Getty is not necessarily the first or last place people go to find images, and so its revenue growth has been declining.

Getty has started to adjust: it acquired iStockPhoto.com, a site that sells less expensive and less famous images, and it has also changed its licensing terms. Getty is also entering the music business with its acquisition of Pump Audio. Revenues are climbing at iStockPhoto, and Getty's acquisition of MediaVast, another image company, will also help boost its revenues going forward. CEO Jonathan Klein is a savvy manager who, with Mark Getty, revolutionized the images business once with the creation of Getty Images, and he may well be able to find a way to deal with these new adversities.

Late last year, I did an interview with Steve Ellis, who is founder and CEO of Pump Audio. I thought his company filled an import need in the market – and was poised for growth in the YouTube video surge.

Well, Getty Images (NYSE: GYI) is also bullish. That is, the company shelled out $42 million to buy Pump Audio.

Basically, Pump Audio has spent the past six years developing a sophisticated system to license music to digital providers. The catalog has over 100,000 titles and has biggie customers like GE's (NYSE: GE) NBC and Nike (NYSE: NKE).

So, video creators have a way to enhance content (the search engine makes it easy to locate the right music). And, at the same time, music creators can also monetize their creations.

It's a pretty smart idea. It's also a good fit with Getty Images, which focuses on licensing businesses.

To get more insight on all this, you can check out Ellis' interview on BloggingStocks.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.