MOST NOTEWORTHY:

• Patterson (NASDAQ:PDCO) was downgraded to Neutral from Outperform at Baird, as the firm's checks indicate industry fundamentals have softened and it sees greater near-term risk for dental consumables than dental equipment.
  
• Virgin Media (NASDAQ:VMED) was cut to Hold from Buy at Jefferies as they believe the company's results could be under pressure given the continued competitive activity and potential weakening of the UK economy.
  
• Piper downgraded shares of MannKind (NASDAQ:MNKD) to Neutral from Buy and lowered their target to $1.50 after Pfizer (NYSE:PFE) discontinued inhaled insulin Exubera due to an increase in lung cancer cases.

• Lehman cut Cheniere Energy (LNG) to Equal Weight from Overweight.
  
• Pantry (PTRY) was cut to Market Perform from Outperform at Friedman Billings.
  
• JP Morgan lowered Watsco (WSO) to Neutral from Overweight.

Stocks started out in slightly positive territory on what appeared to be more good news out of a major institution. Then oil inventories showed an unexpected decline, sending oil up up over $2.00 per barrel to $110.56 and later even above $112. Throw in a couple of weak earnings reports and the fears that earnings season is going to be tough, and the bears got to rule today.

Below are today's unofficial closing levels for major US index levels:

Dow: 12,328.49, down 0.38%; Nasdaq 2,322.12, down 1.13%; S&P 1354.56, down 0.8%

Full 52-Week Lows.

Bed Bath & Beyond, Inc. (NASDAQ: BBBY) saw a sharp drop today, and that was before the earnings news was out after the close. A Piper Jaffray downgrade led to the sharp drop today.

Citigroup, Inc. (NYSE: C) proved to be a typical example of what is becoming redundant. The company lined up a sale of $12 billion of dollars worth of leveraged loans for some 90 cents on the dollar.

MannKind (NASDAQ: MNKD) is a biopharmaceutical company focused on the discovery, development and commercialization of therapeutic products for diabetes and cancer.

MNKD lead product, Technosphere insulin (TI) an inhaled insulin in phase three data is expected in 2010.

MNKD May option implied volatility is at 68; January 2010 option implied volatility is at 96 according to Track Data, suggesting larger price movement in 2010.

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