This was an interesting day in the markets. The market opened higher because of yesterday's recovery, but slid from the open. And it slid lower most of the day. Commodities fell again on worries that the economy isn't far enough along to support higher prices, and possible regulation on the size of speculators continued to hamper prices.

T. Boone Pickens gave bullish oil forecasting today, but compared to the past it wasn't that bullish. There was no major economic data for the markets to chew today, just a continued paring down of expectations ahead of earnings season. Here were the unofficial closing bell levels:

Dow 8,162.39 -162.48 (-1.95%)
S&P 500 880.96 -17.76 (-1.98%)
Nasdaq 1,746.17 -41.23 (-2.31%)

Top Analyst Calls

Analyst upgrades:

• Keefe Bruyette upgraded KeyCorp (NYSE: KEY) to Outperform from Market Perform due to valuation and the company's capital position. The firm has an $8 target price on the stock.
• BofA/Merrill upgraded its view of the semiconductor sector and upgraded Intel (NASDAQ: INTC) and Marvell Technology (NASDAQ: MRVL) to Buy from Neutral, LSI Corp. (NYSE: LSI) to Buy from Underperform, and Maxim (NASDAQ: MXIM) and National Semiconductor (NYSE: NSM) to Neutral from Underperform. The firm now sees 2010 revenue growth of 21% vs. its prior estimate of 14% due to improving electric demand and lean inventories.
• Thomas Weisel upgraded Vital Images (NASDAQ: VTAL) to Overweight from Market Weight based on compelling valuation and potential upside from its new ViTAL Enterprise product offering.
• Jones Apparel (NYSE: JNY) was upgraded to Buy from Neutral at Goldman.
• Hess Corp. (NYSE: HES) was upgraded to Overweight from Equal Weight at Barclays.
• Nationwide Health (NYSE: NHP) was upgraded to Outperform from Market Perform at Morgan Keegan.

Analyst upgrades:

• Jefferies upgraded Quicksilver (NYSE: KWK) to Buy from Hold as it believes the company has many options to resolve its liquidity crisis. The firm expects shares to move towards its $10 NAV estimate and raised its target price to $10 from $7.
• Deutsche Bank upgraded Omnicom Group (NYSE: OMC) to Hold from Sell following the Q1 results as the company's margins are holding up better than previously thought. The firm raised its target price on shares to $31 from $21.
  
• Deutsche Bank also upgraded Universal Health (NYSE: UHS) following the company's better than expected Q1 results. Shares were lifted to Buy from Hold and the firm raised its target on the stock to $60 from $45.
• Barclays (NYSE: BCS) was raised to Buy from Reduce at Nomura.
  
• Orient-Express (NYSE: OEH) was lifted to Neutral from Underweight at JP Morgan.
  
• CVS Caremark (NYSE: CVS) was upgraded at Goldman to Conviction Buy from Buy.

Analyst upgrades:

• Barclays upgraded Spectra Energy (NYSE: SE) to Overweight from Equal Weight. The firm believes Spectra's valuation is attractive and that the dividend is secure.
• Soleil upgraded Sunoco (NYSE: SUN) to Buy from Hold on valuation following the recent pullback and maintains a $45 target on the stock.
  
• Friedman Billings upgraded O'Reilly Automotive (NASDAQ: ORLY) to Outperform from Underperform on valuation and the company's better than expected sales and earnings acceleration. The firm has a $38 target on the stock.
• Royal Caribbean (NYSE: RCL) was removed from Goldman's Conviction Sell List.
  
• Intercontinental Hotels (NYSE: IHG) was raised to Buy from Hold at Jefferies.
  
• Valspar (NYSE: VAL) was lifted to Neutral from Underweight at JP Morgan.

Hansen Medical (NASDAQ: HNSN) said economic conditions have led to lower than expected Q4 sales. HNSN, a developer of products for robotic catheter-based technologies, closed at $6.26. Thomas Weisel Partners has a $8 price target on HNSN. HNSN February call option implied volatility is at 115, puts are at 133, above its 26-week average of 69, according to Track Data, suggesting larger price movement.

Cardinal Health (NYSE: CAH), a drug wholesaler and medical-equipment supplier, lowered its full-year outlook on January 8 because it sees reduced hospital spending. Smith Barney has a 12-month price target of $39 on CAH. February option implied volatility of 49 is above its 26-week average of 41 according to Track Data, suggesting larger price movement.

Becton Dickinson (NYSE: BDX), a medical technology company, closed at $69.11. Morgan Stanley raised its rating on BDX to Overweight. BDX February option implied volatility of 38 is above its 26-week average of 33, according to Track Data, suggesting larger price movement.

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

MOST NOTEWORTHY: Entertainment software stocks, Luxottica and Hansen Medical were today's noteworthy initiations:

• Citigroup initiated Electronic Arts (NASDAQ: ERTS) and Activision (NASDAQ: ATVI) with Buy ratings and targets of $75 and $29, respectively; the firm initiated Take-Two (NASDAQ: TTWO) and THQ Inc (NASDAQ: THQI) with Hold ratings and targets of $23 and $34, respectively.
  
• Citigroup also started shares of Luxottica Group (NYSE: LUX) with a Buy rating. The firm believes the company can maintain its dominant market position given its house brands portfolio and early expansion into emerging markets.
  
• Merriman started shares of Hansen Medical (NASDAQ: HNSN) with a Buy rating and thinks the company's Sensei System could radically change the landscape of catheter based surgery. The firm believes the stock can trade to the $34-$41 range in 12-18 months.

OTHER INITIATIONS:

• Calyon Securities initiated shares of General Motors Company (NYSE: GM) and Ford Motor Company (NYSE: F) with a Reduce rating and $31 target and $7 target, respectively.
  
• Deutsche Bank initiated Jack Henry & Associates (NASDAQ: JKHY) and Fiserv (NASDAQ: FISV) with Buy ratings and Advent Software (NASDAQ: ADVS) with a Hold rating.

MOST NOTEWORTHY: Websence (WBSN), RF Micro Devices (RFMD), Fiserv (FISV), Qwest (Q), and OSI Pharma (OSIP) were today's noteworthy upgrades:

• JP Morgan upgraded shares of Websence (NASDAQ: WBSN) to Overweight from Underweight ahead of the renewal period starting in the December quarter and expects this momentum to drive shares higher.

• RF Micro Devices (NASDAQ: RFMD) was raised to Buy from Hold at Citigroup, who said the Sirenza Microdevices (SMDI) deal gives the company its first real prospect for gross margin expansion in years.

• Matrix USA upgraded Fiserv (NASDAQ: FISV) to Buy from Sell, and expects the company to benefit from the Checkfree (CKFR) acquisition.

• Lehman upgraded shares of Qwest (NYSE: Q) to Overweight from Equal Weight, citing the hiring of industry veteran Ed Mueller as CEO. The firm believes the new CEO removes an overhang and could lead to a change in strategic direction and significantly increase capital spending.

• JP Morgan upgraded OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight based on valuation and upcoming catalysts for Tarceva that should be seen in the next year...

OTHER UPGRADES:

• UBS upgraded Allstate (NYSE: ALL) to Neutral from Sell.

• ThinkEquity raised Hansen Medical (NASDAQ: HNSN) to Buy from Accumulate.

• Stanford upgraded Leap Wireless (NASDAQ: LEAP) to Buy from Hold.

• FTN Midwest upgraded shares of Lexmark (NYSE: LXK) to Neutral from Sell.

• Hambrecht upgraded NetGear (NASDAQ: NTGR) to Buy from Hold.

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

MOST NOTEWORTHY: The cable & satellite sector, Broadcom Corp 'A' (BRCM) and Hansen Medical (HNSN) were the most notable initiations this morning.

• Goldman Sachs views the cable & satellite sector favorably and was positive on cable given expectations for multi-year ROIC expansion. Comcast Corp 'A' (NASDAQ: CMCSA) was given a Buy rating from a Neutral and is Goldman's top pick. Cablevision Systems 'A' (NYSE: CVC) and EchoStar Comm (NASDAQ: DISH) were both rated Neutral.

• Broadcom Corp 'A' (NASDAQ: BRCM) was initiated with a Buy rating and $15 target at Webush; the firm believes Broadcom still has ramping product cycles to drive growth and also feels revenues are likely to accelerate on a year-over-year basis beginning in June 2007.

• Leerink Swann initiated Hansen Medical (NASDAQ: HNSN) with an Outperform rating and $17 target, noting their survey showed significant interest in remote navigation by EPs.

OTHER INITIATIONS:

• RBC Capital Markets initiated SiRF Technology Holdings (NASDAQ: SIRF) with an Outperform rating and $34 target, positive on SiRF Tech given its strong market growth driven by a significant increase in the GPS attach rate, slower erosion in the company's dominant market share and improving margins.

• Wedbush initiated shares of Marvell Technology Group (NASDAQ: MRVL) with a Hold rating and $20 target, as the firm finds shares fully-valued relative to the company's 2007 and 2008 earnings power.

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

MOST NOTEWORTHY: Altera Corp (NASDAQ: ALTR) and Chico's FAS (NYSE: CHS) were the most noteworthy companies initiated today.

• Shares of Altera Corp (NASDAQ: ALTR) were initiated with a Buy rating and $26 at Nollenberger; the firm believes that due to the company's faster growth rate, increasing market share and higher gross margins, shares should trade at a premium to Xilinx Inc (NASDAQ: XLNX).

• Soleil Securities initiated shares of Chico's FAS (NYSE: CHS) with a Hold rating, believing it may take at least through the spring season to see a meaningful improvement in operating results.

OTHER INITIATIONS:

• Spirit Aerosystems 'A' (NYSE: SPR) was initiated by several firms: Jefferies with a Buy and $36 target, Credit Suisse with a Neutral and $35 target, Citigroup with a Sell rating and $24 target, Morgan Stanley with an Overweight and $38 target, Cowen with a Neutral rating and UBS with a Neutral and $38 target.

• NYMEX Holdings (NYSE: NMX) was initiated with an Underweight rating at JP Morgan, citing the rich valuation for its rating.

• Shares of Hansen Medical (NASDAQ: HNSN) were initiated with an Overweight rating and a $16 target at Morgan Stanley.

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

Given the last day of the trading for 2006, initiations were light.

• Baird initiated Noven Pharmaceuticals (NASDAQ: NOVN) with an Outperform and $30 target, based on the Daytrana, which Baird believes should be a driver for shares with continued success, milestones and improved profitability.

• Also initiated by Baird, POZEN Inc (NASDAQ: POZN) with an Outperform rating and $26 target; they expect Pozen's Trexima to be approved in mid-2007 and for their marketing partner, GlaxoSmithKline plc ADR (NYSE: GSK), to convert 60% of Imitrix market share to Trexima.

• Thomas Weisel initiated Hansen Medical (NASDAQ: HNSN) with an Overweight rating and $14.50 target; the firm is positive on the Sensai platform, a robotic catheter control system, which allows unprecedented control and enables new procedures to become minimally invasive.

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

MOST NOTEWORTHY:

• Wachovia(NYSE:WB) initiated KBR Inc (NYSE: KBR) with a Market Perform rating based on valuation, with a target range of $26-$29.

• Lehman Brothers (NYSE:LEH) initiated Constellation Energy Group (NYSE: CEG) with a Sector Performer rating and $26 target.

OTHER INITIATIONS:

• Hansen Medical (NASDAQ: HNSN) was initiated at JP Morgan(NYSE:JPM), as the firm believes Hansen's Sensei robotic remote catheter navigation system has potential to be a platform technology that could be used in a variety of procedures. The firm also considers Hansen's shares attractive at these levels.

• UBS (NYSE:UBS) initiated Smith Micro Software (NASDAQ: SMSI) with a Buy rating and $18 target; the firm expects Smith Micro to continue to benefit from growth at Verizon Wireless and for the company to continue to further divest its customer base.

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