With the market showing some signs of life, it's easy to believe there's a rally about to happen. Not just a few hundred points, but a real rally that will take the Dow Jones Industrial Average above 11,000. Not gonna happen.

While earnings have been good in many sectors (stellar in tech), the overall economic picture continues to point to an even slower economy. Even the Fed heads advise to keep our expectations low. Housing prices aren't moving up, except in a few regions. Employment isn't improving. While interest rates are low, no one wants to borrow, especially if they've been laid off for six months. Companies are sitting on billions in cash, looking to spend on more tech but not people.

Analyst Upgrades

• FBR Capital upgraded New York Community Bancorp (NYB) to outperform from market perform following the FDIC-assisted acquisition of AmTrust. The firm raised its target price on shares to $16 from $11.
• Oppenheimer upgraded Brocade (BRCD) to outperform from perform to reflect valuation, low investor expectations, and the company's potential to gain market share in IP/Ethernet switching. The firm set a target price of $8.50 on shares.
• Stifel Nicolaus upgraded National Health Investors (NHI) to buy from hold following the announcement that the litigation vs. Care Foundation has been dismissed. The firm has a $37 target on the stock.
• American Express (AXP) was upgraded to neutral from underperform at BofA/Merrill.
• ACE Ltd. (ACE) was upgraded to buy from neutral at Goldman.
• Kohl's (KSS) was raised to outperform from neutral at Baird.

Analyst upgrades:

• FBR Capital upgraded U.S. Bancorp (NYSE: USB) and New York Community Bancorp (NYSE: NYB) to Market Perform from Underperform to reflect a new valuation framework. The firm raised its target on U.S. Bancorp to $21 from $14 and on New York Community Bancorp to $10 from $9.
• Stephens upgraded Insulet (NASDAQ: PODD) to Overweight from Equal Weight to reflect the company's top-line growth prospects and reasonable expectations. The firm raised its target on shares to $14 from $8.
• Baird upgraded Athenahealth (NASDAQ: ATHN) to Outperform from Neutral and raised its target to $46 from $37 based on expectations for revenue and gross margin expansion, and relative valuation.
• Broadcom (NASDAQ: BRCM) was upgraded to Overweight from Equal Weight at Barclays.
• Phillips-Van Heusen (NYSE: PVH) was upgraded to Buy from Neutral at BofA/Merrill.
• Reliant Energy (NYSE: RRI) was upgraded to Conviction Buy from Neutral at Goldman.

Analyst upgrades:

• Morgan Stanley said Bank of America's (NYSE: BAC) capital needs are largely known and shares are trading "cheaply despite reduced downside risk." The firm upgraded shares to Overweight from Underweight and raised the price target to $25 from $16. Shares were also upgraded to Outperform from Neutral at Baird citing manageable capital needs and attractive risk/reward.
  
• Keefe Bruyette upgraded Fifth Third Bancorp (NASDAQ: FITB) to Outperform from Market Perform on valuation as it views the stock as inexpensive despite the recent rally. The firm has an $8 target on the stock.
• Banc of America/Merrill upgraded Ericsson (NASDAQ: ERIC) to Buy from Neutral as it believes fewer hedging losses could bring upside over the next few quarters.
• Rio Tinto (NYSE: RTP) was raised to Overweight from Neutral at Barclays.
  
• EnerNOC (NASDAQ: ENOC) was lifted to Buy from Neutral at Janney Montgomery.
  
• Westpac Banking (NYSE: WBK) was upgraded to Neutral from Underperform at Credit Suisse.

Analyst upgrades:

• Wachovia upgraded shares of Exelon (NYSE: EXC) to Outperform from Market Perform to reflect the company's attractive nuclear fleets and strong operational track record.
  
• Jesup & Lamont upgraded Ormat Technologies Inc. (NYSE: ORA) to Buy from Hold on valuation and increasing visibility on near-term Products revenue.
  
• RBC Capital upgraded Memc Electronic (NYSE: WFR) to Outperform from Sector Perform on expectations of improved demand growth following the likely eight-year extension of the US solar tax credit program.
• AmBev (NYSE: ABV) was raised to Outperform from Neutral at Credit Suisse.
  
• AmerisourceBergen (NYSE: ABC) was upgraded at Merrill Lynch to Buy from Neutral.
  
• Piper upgraded Anadys Pharma (NASDAQ: ANDS) to Neutral from Sell.

Analyst downgrades:

MOST NOTEWORTHY: The Aerospace sector, Boeing, Aurora Oil & Gas and Syniverse were today's noteworthy downgrades:

• Goldman downgraded the Aerospace sector to Cautious from Neutral to reflect high oil prices and the weak economy. The firm also downgraded Boeing (NYSE: BA) shares to Sell from Neutral and added the stock to their Conviction Sell List as they expect the economic weakness and high fuel prices to drive slowing orders.
  
• Jefferies downgraded shares of Aurora Oil & Gas (AMEX: AOG) to Underperform from Hold to reflect the company's falling production, minimal cash flow through the remainder of 2008, and limited access to capital.
  
• Baird cut Syniverse (NYSE: SVR) to Neutral from Outperform as they believe the impact from the Verizon (NYSE: VZ)-Alltel merger could be greater than investors think.

OTHER DOWNGRADES:

• Arch Chemicals (NYSE: ARJ) was lowered at Oppenheimer to Perform from Outperform.
  
• New York Community Bancorp (NYSE: NYB) was downgraded to Hold from Buy at Citigroup.
  
• Sonic (NASDAQ: SONC) was downgraded to Equal Weight from Overweight at Stephens.

MOST NOTEWORTHY: New York Community Bancorp, Gushan Environmental and Central European Distribution were today's noteworthy initiations:

• Citigroup believes New York Community Bancorp (NYSE: NYB) is uniquely-positioned to benefit from the current operating environment and expects loan growth, NIM expansion, and good credit to boost EPS growth over the next year. The firm initiated shares with a Buy rating and $19 target.
  
• Oppenheimer said Gushan Environmental (NYSE: GU) benefits from the Chinese government's policies encouraging growth of renewable fuels; shares were initiated with an Outperform rating and $14 target.
  
• Jefferies initiated Central European Distribution (NASDAQ: CEDC) with a Buy rating and $66 target and views the company as a pure play on rising disposable incomes, particularly in Poland where it is headquartered.

OTHER INITIATIONS:

• Lehman assumed Ciena (NASDAQ: CIEN) with an Overweight rating and $35 target.
  
• BMO Capital started Millenium Pharma (NASDAQ: MLNM) with an Outperform rating and $18 target.
  
• Keefe Bruyette started Meridian Interstate Bancorp (NASDAQ: EBSB) with an Outperform rating and $11.50 target.

MOST NOTEWORTHY: New York Times Co (NYT), New York Community Bancorp, Inc (NYB), Cadbury Schweppes plc (CSG), International Paper Co (IP) and TurboChef Technologies, Inc (OVEN) were today's noteworthy upgrades:

• JP Morgan upgraded shares of the New York Times Co (NYSE: NYT) to Neutral from Underweight to reflect easier advertising sales comparisons the rest of the year and the possibility for a stepped-up buyback program.

• Friedman Billings upgraded New York Community Bancorp (NYSE: NYB) to Market Perform from Underperform with an $18 target.

• Bernstein upgraded shares of Cadbury Schweppes (NYSE: CSG) to Outperform from Market Perform and revised its sum-of-the-parts and "real options" analysis. The firm still sees major upside and limited downside at these levels.

• Matrix believes higher selling prices and lower costs are improving profit margins at International Paper (NYSE: IP).

• TurboChef Technologies (NASDAQ: OVEN) was upgraded to Sector Perform from Underperform following Q1 results...

OTHER UPGRADES:

• Citigroup upgraded H.J. Heinz Co (NYSE: HNZ) to Buy from Hold with a $52 target.

• AG Edwards raised Corporate Office Properties Trust (NYSE: OFC) to Buy from Hold.

• Baird transitioned coverage of Pike Electric Corp (NYSE: PEC) with an Outperform rating, up from Neutral.

• Medical Properties Trust, Inc (NYSE: MPW) was upgraded to Buy from Hold at Stifel.

• Buckingham raised Eaton Corp (NYSE: ETN) to Strong Buy from Accumulate.

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