Analyst upgrades:

• Canaccord upgraded Rio Tinto (NYSE: RTP) to Buy from Hold citing valuation following the severe price decline following BHP Billiton's (NYSE: BHP) dropped bid.
• UBS upgraded Itron (NASDAQ: ITRI) to Buy from Neutral citing valuation and defensive business mix.
• Jefferies upgraded shares of HealthSouth (NYSE: HLS) to Buy from Hold on valuation and maintains a $13.50 target.
• Melco PBL Entertainment (NASDAQ: MPEL) was raised to buy from Neutral at Goldman.
• PG&E (NYSE: PCG) was upgraded at Merrill Lynch to Buy from Neutral.
• HSBC Holdings (NYSE: HBC) was upgraded to Buy from Neutral at UBS.

Analyst downgrades:

MOST NOTEWORTHY: European banks, the Paper and Forest Products sector, Kindred Healthcare and Convergys were today's noteworthy upgrades:

• Keefe Bruyette upgraded the European Banks sector to Neutral from Underweight on valuation as they see limited downside from current levels. Included in the firm's top picks are HSBC Holdings Plc (NYSE: HBC) and Banco Santander SA (NYSE: STD).
• Credit Suisse upgraded the Paper and Forest Products sector to Overweight from Underweight citing valuations and expectations that fundamentals will bottom this fall. The firm raised shares of Temple-Inland Inc (NYSE: TIN) and Smurfit-Stone Container Corporation (NASDAQ: SSCC) to Outperform from Neutral.
• Friedman Billings upgraded shares of Kindred Healthcare Inc (NYSE: KND) to Outperform from Market Perform on valuation following the recent pullback and believes the company is well-positioned to beat modest expectations over the remainder of the year. The firm raised their target to $36 from $29.
• Oppenheimer raised Convergys Corporation (NYSE: CVG) to Outperform from Perform on valuation, as they believe investors should look at the company's business lines separately. Their sum of parts valuation yields an $18 target.

OTHER UPGRADES:

• Suncor Energy Inc (NYSE: SU) was upgraded to Overweight from Neutral at JP Morgan and to Outperform from Market Perform at Friedman Billings.
• UBS upgraded BT Group Plc (NYSE: BT) to Neutral from Sell.
• Broadcom Corporation (NASDAQ: BRCM) was upgraded to Buy from Neutral at Piper.

MOST NOTEWORTHY: Kindred Healthcare, Five Star Quality, Corporate Executive Board, Deckers Outdoor and Discover were today's noteworthy upgrades:

• Jefferies upgraded shares of Kindred Healthcare Inc (NYSE: KND) to Buy from Hold on valuation as they believe the risk/reward is attractive given good near-term earnings visibility and reasonable prospects for legislation to remove a significant reimbursement overhang.
• The firm also upgraded Five Star Quality Inc (AMEX: FVE) to Buy from Hold following a meeting with management, to reflect the company's improving occupancy and better cost controls.
• Deutsche Bank upgraded shares of The Corporate Executive Board Company (NASDAQ: EXBD) to Buy from Hold as they believe the company is positioned for strong growth in 2008.
• Nollenberger upgraded shares of Deckers Outdoor Corporation (NASDAQ: DECK) to Buy from Neutral, as they believe the UGG brand will continue to outperform expectations both domestically and internationally.
• Discover Financial Services LLC (NYSE: DFS) was upgraded to Buy from Neutral at Calyon on valuation.

OTHER UPGRADES:

• HSBC raised Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM) to Overweight from Neutral.
• Banc of America upgraded Hess Corporation (NYSE: HES) to Buy from Neutral.
• Wal-Mart Stores Inc (NYSE: WMT) was upgraded to Neutral from Sell at Merrill Lynch.
• Deutsche Bank upped General Mills Inc (NYSE: GIS) to Buy from Hold.

MOST NOTEWORTHY: Wal-Mart Stores, Magna International, EchoStar Communications, Westell Technologies and SiRF Technology were today's noteworthy upgrades:

• Rochdale upgraded shares of Wal-Mart Stores (NYSE: WMT) to Buy from Hold citing improved outlook for margins and ROIC.
• CIBC World Markets resumed coverage and upgraded shares of Magna International (NYSE: MGA) to Sector Outperformer from Sector Performer as they believe higher multiples are warranted due to the company's improving earnings power and cash flow generation.
  
• Oppenheimer upgraded shares of EchoStar Communications (NASDAQ: DISH) to Buy from Neutral as they believe recent events add $4-$6 per share to their valuation analysis.
  
• Westell Technologies (NASDAQ: WSTL) was upgraded to Outperform from Neutral at Baird. The firm believes Westell is taking the right steps to improve its market position and financial performance.
  
• Credit Suisse upgraded SiRF Technology Holdings (NASDAQ: SIRF) to Outperform from Neutral, expecting the stock to benefit from a strong holiday season at electronic retailers.

OTHER UPGRADES:

• Goldman upgraded Campbell Soup Company (NYSE: CPB) to Neutral from Sell and Emerson Electric (NYSE: EMR) to Buy from Neutral.
  
• Keefe Bruyette upgraded Oriental Financial Group (NYSE: OFG) to Outperform from Market Perform.
  
• Prudential plc (NYSE: PUK) was raised to Outperform from Peer Perform.
  
• Wachovia upgraded Kindred Healthcare Inc (NYSE: KND) to Market Perform from Underperform.