Pearson PLC (PSO), a publisher of educational materials and financial information, received a nice bid today following the release of some earnings data. At the time of this writing, the stock was higher by nearly 6% to a quote of $15.98. The shares had reached a price of $16.02 earlier in the day, which isn't at all far off from the 52-week high of $16.37. Cool to see an equity near the 52-week high, right?

The one-year chart shows how the stock has recovered after its recent pullback. Will it continue to climb in an upward direction?

Analyst Upgrades

• RBC Capital upgraded Suncor (SU) to outperform from sector perform following the Q1 report and FY10 production guidance. The firm has a $46 target on the stock.
• Wells Fargo upgraded Clear Channel Outdoor (CCO) to outperform from market perform. The firm expects the company to report higher-than-expected Q1 revenue and guidance, as it thinks a late cycle ad recovery is occurring.
• Piper Jaffray upgraded Power Integrations (POWI) to overweight from neutral following the company's Q1 results and subsequent sell-off. The firm has a $43 price target for shares.
• ArcelorMittal (MT) was upgraded to buy from hold at ING Group.
• Sapient (SAPE) was raised to conviction buy from buy at Goldman and to buy from hold at Citigroup.
• Powerwave (PWAV) was upgraded to buy from hold at Befferies and to buy from neutral at Merriman.

Analyst upgrades:

• Goldman upgraded CTC Media (NASDAQ: CTCM) to Buy from Neutral on a better outlook for European Media names and raised its target on shares to $17.60 from $12.
• Morgan Joseph upgraded Movado (NYSE: MOV) to Buy from Hold after the company reported better-than-expected Q2 results. The firm set a $16 target on the stock.
• Needham upgraded LTX Credence (NASDAQ: LTXC) to Strong Buy from Hold following the company's Q4 results with a $3 price target.
• Canon (NYSE: CAJ) was upgraded to Outperform from Underperform at Macquarie.
• Whitney Holding (NASDAQ: WTNY) was upgraded to Buy from Neutral at SunTrust.
• Gafisa SA (NYSE: GFA) was upgraded to Overweight from Equal Weight at Morgan Stanley.

Analyst upgrades:

• Citigroup upgraded MEMC Electronic (NYSE: WFR) to Buy from Hold after channel checks indicated solar poly price pressures are easing. The firm added MEMC to its Top Picks Live list and raised its price target on shares to $24 from $15.
  
• FBR Capital upgraded PHH Corp (NYSE: PHH) to Outperform from Market Perform to reflect an improvement in mortgage banking fundamentals and recent management changes at the company. The firm raised its target on shares to $23 from $13.
  
• Deutsche Bank upgraded PerkinElmer (NYSE: PKI) to Hold from Sell on valuation, seeing a balanced risk/reward at current levels. The firm raised its target on shares to $19 from $14.
• Pearson plc (NYSE: PSO) was upgraded to Outperform from Neutral at Credit Suisse.
  
• Dell (NASDAQ: DELL) was upgraded to Conviction Buy from Neutral at Goldman.
  
• Nymagic (NYSE: NYM) was upgraded to Market Perform from Underperform at Keefe Bruyette.

Analyst upgrades:

• Deutsche Bank upgraded Portland General Electric (NYSE: POR) to Buy from Hold on valuation as it finds the risk/reward on shares attractive at current levels. The firm raised its target price to $22 from $20.
  
• FBR Capital upgraded Abercrombie & Fitch (NYSE: ANF) to Outperform from Market Perform after channel checks indicated recent sales are driving increased traffic and easing market share losses. The firm raised its target price on shares to $37 from $21.
• Barclays upgraded Yahoo (NASDAQ: YHOO) to Overweight from Equal Weight as it believes the company is well positioned for a rebound in advertising and that the valuation is compelling at current levels. The firm raised its target on shares to $20 from $15.
• Kohl's (NYSE: KSS) was raised to Overweight from Market Weight at Thomas Weisel.
  
• U.S. Steel (NYSE: X) and CB Richard Ellis (NYSE: CBG) were upgraded at Goldman to Neutral from Sell.
  
• Dolby Laboratories (NYSE: DLB) was upgraded at JP Morgan to Overweight from Neutral.

Analyst upgrades:

• Citigroup upgraded shares of Lennar (NYSE:LEN) to Buy from Hold on valuation as they believe the recent sell-off on concerns of fraud is overdone. The firm thinks the allegations made by Barry Minkow/Fraud Discovery Institute are unfounded and has an $11 target on shares.
  
• Merriman upgraded Nautilus Group (NYSE:NLS) to Neutral from Sell after meeting with management to reflect increased optimism on the company's turnaround.
  
• Baird upgraded Leap Wireless (NYSE:LEAP) to Outperform from Neutral based on valuation and strong subscriber trends.
  
• Transocean (NYSE:RIG) was added to Goldman's Conviction Buy List.
  
• Pearson PLC (NYSE:PSO) was raised to Neutral from Underweight at JP Morgan.
  
• Smith & Nephew (NYSE:SNN) was lifted to Outperform from Neutral at Credit Suisse.

Analyst downgrades:

• JP Morgan downgraded Bed Bath & Beyond (NASDAQ:BBBY) to Underweight from Neutral and lowered their target to $20 from $26 as they believe potential benefits from the Linens' N Things closing are being overstated and that the risk/reward is unfavorable at current levels.
  
• Keefe Bruyette downgraded Citizens Republic (NASDAQ:CRBC) to Market Perform from Outperform and cut their target to $3 from $7 to reflect the company's lower capital position.
  
• UBS downgraded Energizer (NYSE:ENR) to Sell from Neutral and lowered their target to $40 from $48 citing signs of a battery price war, Wal-Mart's (NYSE:WMT) reduction in space allocation, and the company's cuts in investment.
  
• Chevron (NYSE:CVX) was removed from Goldman's Conviction Buy List.
  
• MetroPCS (NYSE:PCS) was lowered to Sector Perform from Outperform at RBC Capital.
  
• Lincoln Electric (NASDAQ:LECO) was cut to Sell from Neutral at Piper Jaffray.

Analyst initiations:

• Global Hunter believes Pep Boys (NYSE:PBY) is well-positioned to benefit from increased demand for replacement parts and maintenance services as new car purchases are deferred. Shares were initiated with a Buy rating and $5.50 target.
  
• Jefferies started Sanofi-Aventis (NYSE:SNY) with an Underperform rating and sees downside risk to the stock from the potential introduction of Lovenox generics in the U.S.
  
• Merriman assumed Alter Nrg (NYSE:ANRGF) with a Neutral rating and recommends waiting on the sidelines pending increased visibility on the company's gasification projects.
  
• JP Morgan (NYSE:JPM) was re-initiated with a Buy rating at Goldman. Shares were also added to Goldman's Conviction Buy List.
  
• Hudson City Bancorp (NYSE:HCBK) was assumed with an Overweight rating and $15 target at Barclays.
  
• DG FastChannel (NASDAQ:DGIT) was initiated at BWS Financial with a Strong Buy rating and $30 target.

Analyst upgrades:

• Oppenheimer upgraded Inter Parfums (NASDAQ: IPAR) to Outperform from Perform on valuation and increased comfort with the company's outlook after meeting with management.
  
• Deutsche Bank raised Covidien (NYSE: COV) to Buy from Hold on the company's solid execution and ongoing restructuring, which they believe will drive EPS higher. The firm raised its target to $63 from $51.
• Regions Financial (NYSE: RF) was upgraded to Outperform from Market Perform at Keefe Bruyette.
• American Eagle (NYSE: AEO) was lifted to Buy from Neutral at Banc of America.
  
• Goldman raised Healthways (NASDAQ: HWAY) to Neutral from Sell.

Analyst downgrades:

MOST NOTEWORTHY: Wachovia, Deutsche Bank and Pearson plc were today's noteworthy downgrades:

• UBS believes it is increasingly likely that Wachovia Bank (NYSE: WB) will need to raise capital. The firm said the company may need to raise $5B in equity and cuts its dividend to 1c, which will save $3B annually. UBS cut shares to Neutral from Buy and lowered its 2008 EPS estimate to ($1.98).
  
• Morgan Stanley downgraded shares of Deutsche Bank (NYSE: DB) to Underweight from Equal Weight as they believe DB may have to increase its tier 1 ratio, which could lead to dividend cuts or asset sales.
  
• Deutsche Bank downgraded Pearson (NYSE: PSO) to Sell from Hold as they believe the weak funding environment for Education will slow earnings growth.

OTHER DOWNGRADES:

• UBS lowered Thomson Reuters (NASDAQ: TRIN) to Sell from Neutral.
  
• Starwood Hotels (NYSE: HOT) and Gaylord Entertainment (NYSE: GET) were downgraded to Sell from Neutral at Goldman Sachs.

Did we learn nothing from A Million Little Pieces? Come on, folks. If you've got a good story to tell, but it's largely out of your imagination rather than your memory, consider wiring a novel. The latest scandal to rock the literary world concerns Love and Consequences: A Memoir of Hope and Survival, written by Margaret Jones and billed as a memoir of life as part of a drug gang.

The book was exposed as a fraud and may now be pulled off shelves by its publisher. Talk about consequences. The CEO of Riverhead Books' parent, Penguin Group (USA), David Shanks, told The Wall Street Journal that a decision to recall the book hasn't been officially made, but the verdict will arrive as soon as today. Shanks added that "There are enough inaccuracies in the book to make us think that we will need to recall it."

"Margaret Jones" bills herself as a biracial foster child who came of age in South Central Los Angeles, running with the Bloods street gang and selling drugs. The real power behind the pen, Margaret Seltzer, is white and reportedly grew up comfortably in a suburban home with her biological family and enjoyed a private-school education. At least Pieces author James Frey actually had a history of drug use!

Penguin Group is owned by publishing giant Pearson PLC (NYSE: PSO). About 19,000 copies of the book have come off the printing presses, most of which have likely already been shipped to bookstores.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

MOST NOTEWORTHY: American Capital (ACAS), Doral Financial (DRL), E-Trade Financial (ETFC) and Family Dollar (FDO) were today's noteworthy downgrade:

• Jefferies downgraded shares of American Capital (NASDAQ: ACAS) to Hold from Buy citing the slowing M&A market and risk characteristics of the company.

• Soleil downgraded Doral Financial (NYSE: DRL) to Sell from Hold, on the belief that the recent reverse stock split will increase short-selling activity and discourage speculative buying.

• E-Trade Financial (NASDAQ: ETFC) was cut to Neutral from Buy at UBS, citing deteriorating trends in the credit/mortgage markets, lack of near-term catalysts; the firm does not see an M&A deal occurring near-term.

• Goldman downgraded Family Dollar (NYSE: FDO) to Neutral from Buy, citing weakness in the low-end consumer and increased pressure from Wal-Mart (WMT)...

OTHER DOWNGRADES:

• Wachovia downgraded Tween Brands (NYSE: TWB) to Market Perform from Outperform.

• Estee Lauder (NYSE: EL) was downgraded to Neutral from Outperform at Credit Suisse.

• Deutsche Bank cut Pearson (NYSE: PSO) to Hold from Buy.

• Matrix downgraded Talisman Energy (NYSE: TLM) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required

MAJOR PAPERS:

• The FDA said no to Pristiq, an experimental Wyeth (NYSE: WYE) drug to treat the symptoms of menopause, reported the Wall Street Journal.
• The $3.1B sale of General Motors Corporation's (NYSE: GM) Allison Transmission to Carlyle Group and Onex has stalled in the debt financing market, thanks to difficulties raising debt from investors, reported the Wall Street Journal's "Heard on the Street" column.
• LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY) is expected to acquire Les Echos from Pearson (NYSE: PSO) for $331.9M, reported the Wall Street Journal.

OTHER PAPERS:

• Time Warner Inc's (NYSE: TWX) AOL is entering the behavioral-targeting ad market by purchasing Tacoda, which uses "behavioral targeting" techniques to track Web surfers' habits, reported the New York Post.
• Cerberus Capital Management's acquisition of DaimlerChrysler AG's (NYSE: DCX) Chrysler unit could be completed on Monday or Tuesday of next week, reported the Detroit Free Press.

Britain's Financial Times and General Electric Company (NYSE: GE)-owned CNBC may launch an alliance if Rupert Murdoch's News Corporation (NYSE: NWS) succeeds in buying business news publisher Dow Jones & Co. (NYSE: DJ), according to an article in today's Wall Street Journal. The Wall Street Journal is owned by Dow Jones, while Pearson (NYSE: PSO) owns the Financial Times.

Right now, the Financial Times and CNBC are limiting their discussions to a content -- sharing arrangement between their struggling websites, says the Journal. However, the British newspaper and the business news TV station could expand their collaboration if Murdoch buys the Journal and ends its content-sharing agreement with CNBC. It appears that Murdoch will take that step if he buys Dow Jones, since News Corp. plans to launch a business news channel in October that will go up against CNBC. The Journal currently has an obligation to make its reporters exclusively available for CNBC interviews, and the Financial Times may reach a similar agreement with CNBC if News Corp. gets Dow Jones.

An alliance between CNBC and The Financial Times "makes tremendous sense for both media outlets," says Chicago Tribune columnist Phil Rosenthal.

It makes sense. The Financial Times and CNBC would benefit by cross-promoting each other. The Financial Times stands to benefit to a greater extent, since its brand is not as well known in the U.S. as CNBC. The Financial Times website, for example, has just 90,000 online subscribers, compared with 931,000 subscribers for The Wall Street Journal.

Also, Pearson investors have been clamoring for the company to sell the Financial Times, in order to avoid a "circulation war" with Murdoch, according to a recent Thomson Financial story. CNBC is not going anywhere for the foreseeable future, if we can draw any conclusions from the continuing presence of ratings-poor MSNBC. However, CNBC's website, ranked 58th in popularity among business news websites globally, could certainly use the infusion of new European readers that collaboration with the Financial Times would likely provide.

Yesterday, Reuters reported that General Electric Company (NYSE: GE) and Pearson PLC (NYSE: PSO) would discontinue "exploratory talks" for a potential bid for Dow Jones & Company Inc (NYSE: DJ). The talks for a rival bid to News Corporation's (NYSE: NWS) $5 billion bid reportedly fell apart because the price was too high. GE and Pearson had discussed spinning off their financial news entities - Financial Times and CNBC - to combine with Dow Jones.

Now that it's out of the running, GE could be facing CNBC, one of its most profitable outlets, being challenged by Rupert Murdoch's impending business channel. Murdoch is launching the Fox Business Channel this fall, and he believes it could benefit from Dow Jones content, including the Wall Street Journal.

The elimination of GE and Pearson as competitors could leave News Corp, led by Murdoch and his $60 per share bid, the sole bidder for Dow. Sources believe that no other rival bids will emerge, although Brad Greenspan, who co-founded the popular social-networking Web site MySpace, offered to buy a 25% stake in Dow at $60 per share; the sources believe Greenspan's offer is a "stretch."

Dow Jones, and the Bancroft family that controls it, have been looking for a higher bid than News Corp's. The Bancrofts are concerned about retaining editorial independence and believe GE and Pearson, who could have given the Bancrofts a minority stake in a venture that combined the business entities, could have been better-suited owners than Murdoch. However, since GE and Pearson are now out, this leaves the Bancrofts with less room to negotiate with their only bidder.

Late Friday, Dow Jones & Co (NYSE: DJ) said that Financial Times publisher Pearson Plc (NYSE: PSO) has been trying to find partners to pursue an acquisition of Dow Jones, people familiar with the matter said. Shares of Dow Jones & Co. jumped 3% on the news.

It's amazing what can happen over a weekend.

Today's Wall Street Journal, owned, of course, by Dow Jones, reported that General Electric (NYSE: GE) and Pearson are talking about a joint-bid for Dow Jones that would allow the Dow Jones's controlling Bancroft family to maintain a minority interest. The joint-bid would combine GE's CNBC, the Financial Times and Dow Jones into a privately-held joint venture, owned in three equal parts by the three companies. The potential new company would also control Barron's, half the Economist magazine, MarketWatch.com and interests in various business newspapers around the worldwide

Sound like a business news monopoly? Hum.

Another name recently floated as a potential suitors for Dow Jones was billionaire Ron Burkle, who has teamed with the union representing the employees of Dow Jones, and Philadelphia newspaper executive Brian Tierney. Warren Buffet last month said it was "very, very unlikely" that his Berkshire Hathaway (NYSE: BRK.A) would bid for Dow Jones, citing the $5B bid from Rupert Murdoch's News Corp (NYSE: NWS).

Wait. Does that mean that the Oracle of Omaha considers News Corp's $5 billion bid too much? Jonathan Berr of BloggingStocks believes that Murdoch wants the Journal so badly that he's willing to pay an "outrageously high price." Peter Cohan, also of BloggingStocks, thinks the GE/Pearson bid could prevail.

Regardless of Mr. Buffet's opinion, the "lamest bidding war ever," as coined by CNNMoney's Paul R. La Monica, has just started to heat up.

Since General Electric Co. (NYSE: GE) and Pearson Plc. (NYSE: PSO) face daunting odds in trying to challenge Rupert Murdoch's $5 billion bid for Dow Jones & Co. (NYSE: DJ), why are so many leakers trying to keep this story alive?

The Wall Street Journal reports that the two companies are talking -- and it's nothing more than that -- about bidding for the New York-based media company. They would combine CNBC, Pearson's Financial Times and Dow Jones into a privately held joint venture that would be controlled by both companies with a minority stake held by the Bancrofts.

Dow Jones' controlling family would be able to sell their stakes in the company if they want or convert their Dow Jones stock into the new company avoiding a big capital gains tax. The paper said that the Bancrofts would even be willing to accept a LOWER bid than the $60 per share offered by Murdoch's News Corp (NYSE: NWS) to protect the Journal's integrity.

As I've argued before, the Bancrofts professed love for the Journal is a bit hard to believe. Maybe some faction of the family is trying to keep the media's hope that someone may thwart Murdoch's plans to buy Dow Jones to squeeze more money out of the Australian tycoon. That may explain why all of these stories are caveated with phrases such as "long shot."

I would go even farther say that the odds of a competing bid emerging for Murdoch for Dow Jones are slim to none. Chances of GE and Pearson buying the company are even lower. Even if the companies bid, Murdoch would raise his insane offer high enough to deter any rational buyer.

A GE-Pearson bid for Dow Jones makes no sense financially.

As The Journal points out, if the Bancrofts kept a 15 percent in the new company, General Electric and Pearson would have to come up with $4.25 billion in cash, most of which would probably have to come up debt and cash contributions from the U.K. publisher.

Moreover, this would be a bear to manage. Running a news operation is like herding cats on a good day. Running three organizations (CNBC, The Journal and the FT)) each competing for the same audience and the same stories would be Byzantine in complexity. There also would be epic bureaucratic turf wars since both companies would have equal say in managing the company. I suspect allowing the Bancrofts to continue to have a say the venture's affairs would create an additional set of headaches.

Since it's obvious that the GE-Pearson deal won't happen, why are people still trying to talk it up? My hunch is that the chatter is coming from across the Atlantic. Pearson is under pressure from its shareholders to dump the FT and focus on higher-growth businesses such as textbooks. General Electric would probably be keen on the idea of having Dow Jones as a buffer against the nascent Fox Business Channel.

Regardless, Dow Jones is just a business to both companies. For Murdoch, it's an object of lust. At the end of the day, emotion will trump logic.