Analyst upgrades:

• Credit Suisse upgraded Sprint Nextel (S) to outperform from neutral and raised its target to $6 from $4. The firm believes Sprint Nextel's core business is turning and that valuation is attractive. Credit Suisse also added Sprint Nextel to its Focus List.
• Goldman expects Nordstrom (JWN) to benefit from a recovery in the high-end consumer. The firm upgraded shares to buy from neutral and raised its target to $41 from $39.
• Deutsche Bank remains cautious on the Dry Bulk sector long-term but expects increased Q4 day rates. The firm upgraded Genco (GNK) to buy from hold and raised its target to $31 from $24; the firm also upgraded Eagle Bulk (EGLE) to hold from sell.
• Steelcase (SCS) was upgraded to buy from hold at BB&T.
• United Rentals (URI) was upgraded to outperform from perform at Oppenheimer.
• GLG Partners (GLG) was upgraded to outperform from market perform at Keefe Bruyette.
• Ladish (LDSH) was upgraded to outperform from market perform at FBR Capital.

Analyst upgrades:

• Jefferies upgraded MDS Inc. (NYSE: MDZ) to Buy from Hold on valuation as it believes shares are pricing in a "worst case" scenario at current levels. The firm keeps a $6.50 target on the stock.
  
• JP Morgan upgraded Continental (NYSE: CAL) to Overweight from Neutral on valuation as it believes the recent sell-off is overdone. The firm keeps a $13 price target on the stock.
• Thomas Weisel is positive on Allergan's (NYSE: AGN) diverse product portfolio, global infrastructure, vertical integration, and deep pipeline. The firm upgraded shares to Overweight from Market Weight and has a $54 target on the stock.
• NetLogic (NASDAQ: NETL) was upgraded to Buy from Neutral at Piper.
  
• Dover (NYSE: DOV) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Map Pharmaceuticals (NASDAQ: MAPP) was upgraded at Argus to Hold from Sell.

Citigroup downgraded Hershey (NYSE:HSY) to Hold from Buy, according to Briefing.com. The news services also reports that Bank of America downgraded Ingram Micro (NYSE:IM) to Neutral from Buy.

Robert Half (NYSE:RHI) was cut to Underweight at Lehman, according to 24/7 Wall St. The financial website also reports that Comverse Tech (NASDAQ:CMVT) was cut to Neutral at JPMorgan.

Plenty of companies advertise how their product can help the world in some way. Firms sometimes brag about using recyclable materials or the charities they donate to. Even if I think the company is doing it for publicity reasons, the donations still help a good cause, so I approve. Well, now Microsoft (NASDAQ: MSFT) has designed a creative way of drawing in customers and sending out donations.

The program, called i'm (think instant messaging), donates a portion of the ad revenue that Microsoft receives each time you use Windows Live Messenger or Windows Live Hotmail. So just by using its services the user can give to a worthy cause. Since March of last year, this service has raised over $1.5 million in ad revenue for charity.

Starting June 23, the initiative is hosting the i'mtalkathon (read the disclaimer at the bottom). It's "30 days of e-mailing and IMing for the common cause." The intention is to get people who stumble upon the 'blog' to go and sign up for one of the offered services. Surely, this will help raise money for charities as well as Microsoft.

Most investors do not think of tech companies as being debt-laden. Many became pubic by raising cash in IPOs over the last decade. Any debt they had was paid off with capital raised. The rest stayed on the balance sheet.

A study by Paul Kedrosky written up in Barron's paints a very different picture for some companies. Several large corporations, including Dell (NASDAQ: DELL), Take-Two Interactive (NASDAQ: TTWO), and Wipro (NYSE: WIT), have long-term debt-to-equity ratios of over 2x. For some big tech names, the figure is over 6x.

(Unfortunately, Barron's had to pull its piece because Paul's data appears to have been inaccurate.)

Under normal circumstances, this kind of data would be benign. But with the credit markets in crisis, refinancing debt on terms more favorable than firms have currently may be very difficult. Or, if the bond market gets very right, a company like Ingram Micro (NYSE: IM) could get in a real pinch.

There is another side to this. Cash-rich companies like Microsoft (NYSE: MSFT), Google (NASDAQ: GOOG), and Cisco Systems (NASDAQ: CSCO) may be able to shop for bargains. For them to pick up a company and pay its debt down may not be a significant problem.

More tech M&A this year? Almost certainly.

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY: Voyager Learning, Digital River and FMC Tech were today's noteworthy upgrades:

• Bear upgraded Voyager Learning (OTC: VLCY) to Peer Perform from Underperform following the company's announcement to explore strategic alternatives.
  
• Credit Suisse upgraded Digital River (NASDAQ: DRIV) to Outperform from Underperform citing attractive risk/reward.
  
• Wachovia raised its rating on FMC Tech (NYSE: FTI) to Market Perform from Underperform citing the larger than expected Pazflor Angolan development contract. The firm expects optimism of other large developments should bode well for growth beyond 2009.

OTHER UPGRADES:

• UBS upgraded Gold Fields (NYSE: GFI) and United Rentals (NYSE: URI) to Buy from Neutral.
  
• Goldman upgraded Ingram Micro (NYSE: IM) to Buy from Neutral.
  

Sometimes, a company is so far ahead of its competition that the only way for the company to grow is to expand into new markets. Ingram Micro, Inc (NYSE: IM) is the largest technology distributor in the world, offering almost 100,000 different hardware and software products to its customers for resale, along with a host of value-added services like product support, warranty management and financing. Servicing customers in more than 150 countries from 100 distribution centers worldwide, Ingram enjoys a great economy of scale.

So where does a company with such an enormous market-share go from here? In today's global economy, the answer is easy: Asia. The 2004 purchase of Australian-based Tech Pacific doubled the size of Ingram's Asian operation, and has helped the company gain traction in the region. Now, Ingram is starting to see great returns -- recent third quarter reports show Asian-Pacific revenue up 35% over the previous year. With its solid competitive advantage and expanding markets, it's no wonder that Ingram is currently reporting 15% higher revenue than last year, and is currently predicting 18% net income growth for the final quarter of 2007.

As I've said before, however, tech stocks are inherently risky: there's a lot of movement in the technology sector, and, due to a lack of competition for resources, it's relatively easy for new companies to enter the market -- particularly a rapidly growing one such as Asia. That said, Ingram is operating so far ahead of its competitors that it would be hard for any other company to achieve the same margins that keep Ingram strong. But Ingram is sensitive to the risks, and the company's recently-announced $300 million share buyback program should help reduce volatility over the next three years.

Type of Stock: Ingram Micro Inc. is the world's largest technology distributor and a leading technology sales, marketing and logistics company.

Price Target: Goldman Sachs rates this one slightly above many other sell-side analysts at $24. I'd look to pick up shares at $19 or less (slightly below where it is currently trading).

Hilary Kramer,author of the newly released Ahead of the Curve, is a financial editor and money coach for AOL and an authority on investing.

MOST NOTEWORTHY: Ingram Micro (IM), SYNNEX Corp (SNX), Yahoo! (YHOO), Macquarie Infrastructure (MIC) and Polypore International (PPO) were today's noteworthy initiations:

• Banc of America assumed coverage of Ingram Micro (NYSE: IM) with a Buy rating and $23 target, as the firm is positive on the company's balanced growth and margin expansion.

• Banc of America also initiated shares of SYNNEX Corp (NYSE: SNX) with a Buy rating and $24 target, as they believe cost synergies and mix in 2007 will drive 2008 leverage and share appreciation.

• ThinkEquity transferred coverage of Yahoo! (NASDAQ: YHOO) with an Accumulate rating and cut its target to $27. ThinkEquity believes Yahoo!'s challenges, which include employee turnover risk, slower user growth, competitive pressures and limited upside in search, are unlikely to be fixed near-term by the new team of management.

• Macquarie Infrastructure (NYSE: MIC) was initiated with a Buy rating and $51 target at Citigroup, as the firm believes management fee concerns are priced into shares and that the recent acquisition of Mercury Air and San Jose Jet Center will drive a 6% increase in dividend by the end of 2007.

• Bear Stearns started Polypore International (NYSE: PPO) with a Peer Perform rating on valuation.

OTHER INITIATIONS:

• BMO Capital initiated shares of Hewlett-Packard (NASDAQ: HPQ), Dell (NASDAQ: DELL) and Western Digital (NYSE: WDC) with an Outperform rating and shares of Seagate Technology (NYSE: STX) with a Market Perform rating.

• Leerink Swann started shares of Applied Biosystem (NYSE: ABI) with an Outperform rating.

• Lehman Brothers initiated shares of Blackstone Group (NYSE: BX) with an Overweight rating and $32 target.

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

With the market being propelled upward due to private equity and corporate acquisitions, investors should not stay on the sidelines. Rather, they should target private equity's next frontier -- IT services. Of the companies in this sector, Unisys Corp. (NYSE: UIS), Perot Systems Corp. (NYSE: PER) and Ingram Micro, Inc. (NYSE: IM) may be worth examining.

A few months ago, I suggested several sectors and companies that private equity could target next. On Friday, TheStreet.com reiterated one of those sectors -- IT services. Here's how much seven such companies have gone up or down since my March 29th post along with their market capitalizations ranked by their Price/Earnings to Earnings Growth (PEG) ratios:

MOST NOTEWORTHY: Xilinx, Inc (XLNX), Red Robin Gourmet Burgers, Inc (RRGB), Ingram Micro Inc (IM), Silicon Laboratories (SLAB) and Comtech Group, Inc (COGO) were today's more noteworthy initiations:

• Deutsche Bank believes upside remains on Xilinx Inc's (NASDQ: XLNX) margins and tax rates, initiating shares with a Buy rating and $38 target.

• JP Morgan waits for improved new unit volumes and better earnings visibility before getting more constructive on Red Robin Gourmet Burgers Inc (NASDAQ: RRGB) and initiated shares with a Neutral rating.

• Given the lack of catalysts to improve margins above their peers, JP Morgan doesn't expect multiple expansions from Ingram Micro (NYSE: IM) in the near-term, assuming shares with a Neutral rating.

• Deutsche Bank expects Silicon Labratories (NASDAQ:: SLAB) multiples to expand with operating margins, starting shares with a Buy rating and $40 target.

• Needham believes Comtech Group Inc (NASDAQ: COGO) is uniquely leveraged to benefit from the growth of manufacturing in China and started shares with a Buy rating and $21 target...

OTHER INITIATIONS:

• Deutsche Bank initiated shares of Marvell Technology Group (NASDAQ: MRVL) with a Buy rating.

• Citigroup started GTx, Inc (NASDAQ: GTXI) with a Buy rating.

• Pacific Growth started Itron, Inc (NASDAQ: ITRI) with a Buy rating.

• First Marblehead Corp (NYSE: FMD) was initiated with a Hold rating and $38 target at Sandler.

• UBS started Kaiser Aluminum Corp (NASDAQ: KALU) with a Buy rating and $100 target.

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

This morning's Wall Street Journal reports on its reporter, Pui-Wing Tam's, report on how Hewlett-Packard Company (NYSE: HPQ) spied on her.

There are many levels of irony in this story. Reporters do all sorts of investigations on their subjects. I don't know how they cultivate their anonymous sources to dig up the details that they report. But my hunch is that while they're often snoops -- peering into places where their targets would prefer they did not -- reporters don't resort to the kind of tactics (pre-trash inspections or monitoring phone calls and IM sessions) to which Tam was subjected.

But I can't help but think that Tam's subjects share some of the same fears of being investigated that she must have felt when she began to realize that HP was placing her under surveillance. Her article's cool, almost tongue-in-cheek tone does not reveal these fears explicitly, instead leaving them to the reader's imagination.

But I imagine that former HP Chair Patricia Dunn must have felt a similar fear when she realized that someone on HP's board was leaking to the media. I'm not defending what HP did; I think it's a 1984-like invasion of privacy for which HP will suffer significant consequences.

With deference to Prussian General Von Clausewitz -- who famously said war is "a continuation of politics by other means" -- I see HP's tactics as investigative reporting by other means.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He has no financial interest in HP.

As I mentioned in my post about Blogher, AIM is where it's at for the sorts of people who use instant messenger programs to communicate. Not only do teenagers love the product, with all the spiraling viral effects that has for AOL, but I use it for work -- and many other businesses are becoming IM-savvy.

AIM, however, may have come to a bit of an innovation plateau -- the unit seems to be focusing on cuteness and personality rather than functionality. AOL needed to get working if the company wished to expand into the nether reaches of instant communication and electronic networking. Today's announcement of the company's acquisition of Userplane (for an undisclosed sum) underscored Time Warner's dual strategies in this market, which are (1) dominate and innovate and (2) do it by acquisition, whenever possible.

Userplane CEO Mike Jones says the company will remain a separate unit, and the company's venture capitalist lauds Userplane for having been cashflow positive "for a long time." Userplane brings a very strong position in the dating and social networking market, and it's oh-so-Web 2.0. According to TechCrunch, Userplane "uses Flash and Ajax to offer video, audio and text chat in the browser, in single or multiple chat rooms. Those video and audio chats can be recorded using the company's Webrecorder application."

Ch-ch-ch-changes are coming to AOL, and analysts analyze them in an AP piece from earlier today. What everyone (especially Gartner's Allen Weiner) wants to know: what about the yellow running man? "Are they going to keep that yellow dude, whatever his name is? ... to me it represents all those unwanted discs," says Weiner.

Time Warner execs say that social networking (AIM Pages) and video sharing will help AOL keep increasing its advertising revenue per page viewed (up a whopping 58% year-over-year), and that free AOL email addresses will keep the pageviews from falling much more than they have to date (down 26% in June). But is an @aol.com email address cool enough to keep those monetizable eyeballs clicking around the company's pages?

I hardly think it's about cool (and it's definitely not about the yellow man). Whether or not customers will stick around for free AOL, and its content, is partially about storage, partially about usability, and partially about not having to change all your settings and send out those messy mass emails. And maybe I'm off base here but I think @aol.com addresses will start having a retro cool. Hey, I'm doing it...

Will AOL turn around and start growing again, or will the company, like analyst Rob Enderle warns, just tread water? In my opinion, it's not about video, social networking, or email at all, but about the IM -- that's where I spend most of my time these days, and where the kids are getting all their media. AIM is still leading that market by a long ways. And the little yellow dude? In AIM, he's alive and well.

Evidently, investors were feeling good about Microsoft's future today, after concerns late last week. Maybe it was the new version of Messenger released today. Maybe it was general warm-and-fuzzies over the prospects of leaders like Ray Ozzie, who will inherit much of Bill Gates' technology leadership (and, if Ray's listening to Steve Gillmor's advice, he will "seize control of the company alongside Steve Ballmer, not as a greater of equals with Craig Mundie"). Either way the stock was up over 2%, or 45 cents, to $22.55.

MSN Messenger has been renamed along with so many other properties under the "MSN" moniker, to "Windows Live Messenger." While I don't love this focus on the "live"-ness of everything Microsoft (as opposed to the dead messenger? We all know that instant messenger programs do get people in the flesh, it seems so redundant to have to mention that), people seem excited about the new product.

Oddly, though, the "live" debut seems to have hit a snafu ... users are reporting a "coming soon" page where the press release points to a download.

Stephanie Mehta, senior writer at Fortune, took some shots at AOL (AOL: You've gotta catch up).

You see, AOL recently launched new online products – AIM Pages, which is similar to MySpace.com and AIM Phoneline, which is similar to the free phone service of Skype. But, according to Mehta, this is further evidence of the dearth of innovation at AOL.

Yet, this is far from earth shattering news.  The fact is that mega companies rarely innovate.  Did News Corp. start MySpace? Of course not. Did eBay start Skype? No way.

Rather, mega companies like AOL have the cash and market cap to buy innovations or come to the party late with their own offerings. Besides, mega companies bring other benefits to the table, such as brand and user reach. News Corp helped drive growth at MySpace. The same goes for eBay's relationship with Skype.

So, in the case of AOL, it will leverage its huge user base of IM users with AIM Phoneline and AIM Pages. In other words, AOL is doing what big companies are good at.  And innovation usually isn't it.

Actually, the real criticism for AOL is that it developed its own services. Perhaps it would have been better to do what News Corp and eBay did; that is, just buy companies.