Analyst upgrades:

• JP Morgan upgraded J.C. Penney (NYSE: JCP) to Neutral from Underweight based on lower input costs, stabilization in home, lower markdown dollars, and valuation.
• Oppenheimer upgraded Novellus (NASDAQ: NVLS) to Perform from Underperform as it believes Novellus' market share has stabilized and that the company is a potential acquisition target. The firm raised its price target to $20 from $9.
• Bernstein upgraded ConAgra (NYSE: CAG) to Market Perform from Underperform citing strength in grains and moderating input costs.
• ConocoPhillips (NYSE: COP) was raised to Buy from Neutral at Goldman.
• China Housing (NASDAQ: CHLN) was upgraded to Buy from Hold at Roth Capital.

After testifying before a Senate committee about AIG (NYSE: AIG) last week, the Fed's Ben Bernanke participates in a Council of Foreign Relations event Monday evening.

Economic data due to be released this week include wholesale trade and job vacancies for January on Tuesday morning, the U.S. Treasury budget for February on Wednesday, retail sales for February and business inventories for January on Thursday morning, and the U.S. trade balance for January on Friday morning.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

Tech stocks are taking a beating lately, as more and more companies scale back on their IT spending. While it may be foolhardy to bet on any significant short-term rallies for this struggling group, there's probably no better time than the present to dive into a long-term play. With BMC Software (NYSE: BMC) approaching key support levels, this is one stock worth looking into.

While many major technology concerns have provided weak or slashed forecasts for the coming quarters (Cisco, anyone?), BMC recently raised its fiscal 2008 earnings guidance. The company now expects fiscal-year profits of $2.15 to $2.25 per share, up from its previous outlook of $2.10 to $2.20 per share. BMC also exceeded second-quarter profit expectations in its October 30 report -- overall, this is one tech name that's no slouch in the earnings department.

With BMC holding up strong in a tough environment, it's no wonder that Raymond James analyst Michael Turits recently upgraded the shares from Outperform to Strong Buy. "We expect ... BMC to continue to benefit from the relative resilience of the mainframe market," Turits wrote in a note to clients, adding that "customers at the [CA World] conference indicated no slowing in mainframe capacity growth planning."

Analyst upgrades:

• Keefe Bruyette upgraded shares of AllianceBernstein (NYSE: AB) to Outperform from Market Perform as they find AB's risk/reward attractive given its attractive long-term business model. Wachovia upgraded Watson Pharma (NYSE: WPI) and Teva Pharma (NASDAQ: TEVA) to Outperform from Market Perform citing valuations and positive drivers for generics that include patent expirations and market share expansion.
• UBS raised Lloyds TSB Group (NYSE: LYG) to Neutral from Sell on expected pricing power following the HBOS (OTC: HBOOY) acquisition.
• Otter Tail (NASDAQ: OTTR) was upgraded to Outperform from Neutral at Baird.
• GFI Group (NASDAQ: GFIG) was upgraded at Citigroup to Hold from Sell.
• Merrill upgraded Logitech (NASDAQ: LOGI) to Neutral from Underperform.

Analyst downgrades:

• JP Morgan downgraded shares of Lloyds TSB Group to Underweight from Neutral on capital concerns and believes the HBOS acquisition is not in the best interest of shareholders.
• Stephens downgraded Universal Truckload (NASDAQ: UACL) to Equal Weight from Overweight on valuation and concerns about a slowdown in the flatbed sector. The firm's target remains $28.

DealBook reports that Fidelity Investments has agreed to buy back $300 million worth of auction-rate securities (ARS). This settlement is a first in the sense that the previous redeemers were ARS issuers. Fidelity is considered to be "downstream" from the issuers. And its decision to settle puts pressure on other downstream participants such as Oppenheimer and Raymond James.

Exactly what has Fidelity agreed to do? "According to the terms of the deal, the first struck with a 'downstream' seller of these securities, Fidelity will not pay a fine. The firm will buy back auction-rate securities from individuals, charities and institutional investors alike, making no distinction among investor classes, as previous settlements with other firms have," DealBook writes.

Of the $330 billion in ARS that were issued, only 10% have been redeemed so far -- "the big banks have repurchased more than $35 billion of the securities and paid more than $360 million in fines," according to DealBook. I am impressed that regulators are continuing to push hard to get ARS issuers to take care of these investors given all the distraction from the weekly collapse of one major financial institution after another.

MOST NOTEWORTHY: AmericanWest and Raymond James were today's noteworthy initiations:

• Keefe Bruyette initiated AmericanWest (NASDAQ: AWBC) with a Market Perform rating and $5 target, citing limited capital and credit visibility.
  
• Sandler started Raymond James (NYSE: RJF) with a Buy rating.

OTHER INITIATIONS:

• Goldman assumed Terra Industries (NYS: TRA) with a Sell rating and CF Industries (NYSE: CF) with a Neutral rating and $180 target.