A double win: I'm Reiterating by Buy rating for New Britain,Conn.-based tool maker Stanley Works (NYSE: SWK) after the company announced Monday it will buy Black & Decker Corp. (NYSE: BDK) for $4.5 billion in an all-stock deal.

Stanley, first recommended on February 10, 2009 at a price of $32.88, sees the deal as $1 accretive to earnings per share within three years.

Meanwhile, shareholders of Black & Decker, first recommended on April 17, 2009 at a price of $33.53, will receive a 22.1% premium to BDK's closing price as of Friday, October 30, 2009 of $47.22, or about $57.65 per share. Hence, if you bought BDK in April, that represents a 71.9% gain for owning the stock about six months. Not bad.

TheStreet.com's Jim Cramer says opportunistic mergers help deliver value to shareholders during difficult times.

The companies aren't oblivious to this difficult environment. It isn't just that they look at the futures and say, "Uh oh, here comes another bad one" -- the reaction we all feel today. No, it doesn't work like that. They realize that growth's been lowered worldwide and that they can't do it on their own because they don't have critical mass and they have to give up and get together with others in their industries to bring out value.

Black & Decker (NYSE: BDK) (Cramer's Take) and Encore (NYSE: EAC) (Cramer's Take) came to this exact same conclusion at the same time. They just can't make more money for their shareholders independently than they can with other partners. With Encore settling for Denbury's (NYSE: DNR) (Cramer's Take) bid and Black & Decker agreeing to be acquired by Stanley Works (NYSE: SWK) (Cramer's Take), both are settling for about half of what their companies were worth two years ago. But the world has changed in two years, and a lot of the rosy scenarios that justified being independent have to be reconsidered.

I'm reiterating my Buy rating for Stanley Works (NYSE: SWK), first recommended on February 10, 2009 at a price of $32.88. If you bought SWK in February, you're up more than 39%.

Institutional investors (IIs) have bid-up Stanley's shares practically all year, on likely better-than-expected emerging market GDP growth and a firming U.S. economy.

"While companies have been cutting dividends at an historic pace over the last 24 months, the fact is that there are still quality companies with long histories of paying dividends that represent good long-term investments," says Chuck Carlson, a specialist in companies offering dividend reinvestment plans.

In his top-notch The DRIP Investor he says, "The seven stocks featured here have each been paying a dividend for over 100 years, have raised their dividend annually for at least the last quarter century and offer direct-purchase plans.

Analyst upgrades:

• Citigroup upgraded Cooper Industries (NYSE: CBE) to Buy from Hold on valuation as it believes commercial construction concerns are well known. The firm raised its target on shares to $40 from $37, and coupled the upgrade with a downgrade of Rockwell Automation (NYSE: ROK) to Sell from Hold.
• Credit Suisse upgraded BJ Services (NYSE: BJS) to Neutral from Underperform following its acquisition by Baker Hughes (NYSE: BHI). The firm raised its target to $17.
• Credit Suisse also upgraded Amkor Technology (NASDAQ: AMKR) to Outperform from Neutral and raised its target to $8 from $7. The firm expects Amkor to benefit from near-term strength in the supply chain and the mix shift towards higher value packaging.
• Textron (NYSE: TXT) was upgraded to Conviction Buy from Neutral at Goldman.
• Siemens (NYSE: SI) was upgraded to Neutral from Sell at UBS.
• Stanley Works (NYSE: SWK) was upgraded to Buy from Neutral at Janney Montgomery.

I'm reiterating my Buy rating for Stanley Works (NYSE: SWK), first recommended on February 10, 2009, at a price of $32.88.

New Britain, Conn.-based Stanley manufactures tools for professional, industrial, and consumer use, and has built a business model that's been successful for more than a hundred years. A security solutions unit accounts for about 30% of revenue, but the key revenue driver here is tools: hammers, screwdrivers, sockets, saws, and measuring tape, among other products.

Analyst upgrades:

• Deutsche Bank upgraded BT Group (NYSE: BT) to Buy from Hold as it believes the company's Q4 results could remove uncertainty and cost cutting initiatives could drive upside.
  
• Baird upgraded Stanley Works (NYSE: SWK) to Outperform from Neutral and raised their target to $42 from $34 citing valuation, solid execution, and growth potential.
  
• Citigroup upgraded Netflix (NASDAQ: NFLX) to Buy from Hold as it believes the recent sell-off presents an attractive buying opportunity. The firm believes Netflix has one of the best earnings outlooks in the internet sector and increased its target price to $52 from $37.
• AstraZeneca (NASDAQ: AZN) was upgraded to Buy from Neutral at UBS.
  
• Joy Global (NYSE: JOYG) and Bucyrus (NYSE: BUCY) were raised to Buy from Neutral at Goldman.

Can one make the case for easing back into the U.S. stock market?

The U.S. recession continues, and it's likely to continue through at least Q2, and probably through Q3. Meanwhile, credit market conditions, while they've improved since last fall, they're still constrained.

Further, the U.S. Treasury Secretary Timothy Geithner announced Tuesday that the United States government will commit up to an additional $2 trillion to encourage new lending and remove toxic assets in an effort to end the credit crunch.

TheStreet.com's Jim Cramer says the economics are still dire, but stocks aren't even flinching on huge warnings.

Preannouncement after preannouncement after preannouncement. Yawn after yawn after yawn.

I've never seen anything like it. Worst ever. But, did anyone really think Ingersoll Rand (NYSE: IR) (Cramer's Take), cut in half here, would make the quarter? How about Nucor (NYSE: NUE) (Cramer's Take)? Stanley Works (NYSE: SWK) (Cramer's Take)? ITT (NYSE: ITT) (Cramer's Take)? Eaton (NYSE: ETN) (Cramer's Take)? Pentair (NYSE: PNR) (Cramer's Take)? I figured they would all miss. I bet the ones that preannounced last night hardly go down. Why should they? ITT's up nicely. Eaton's unchanged. Not even glancing blows. Nucor's up 10! Ten from a preannouncement.

Most glaring: the 10% miss by Joy Global (NASDAQ: JOYG) (Cramer's Take) with the almost 15% rally! Now that's gigantic.

That's why people feel better about this tape. In the end of that big run up, stocks failed to react to even the biggest beats. Now they fail to react to the biggest misses.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Analogic Corp. (NASDAQ: ALOG) Q1 earnings plunged well below expectations due to costs.
• CKE Restaurants Inc. (NYSE: CKR) solid Q3 earnings were in line with analysts expectations.
• Costco Wholesale Corp. (NASDAQ: COST) beat Q1 expectations and same-stores sales increased.
• Dow Chemical Co. (NYSE: DOW) lowered its guidance and announced layoffs and factory closings.
• Eastman Kodak Co. (NYSE: EK) withdrew its guidance due in part to weak consumer spending.
• Electronic Arts Inc. (NASDAQ: ERTS) lowered its outlook due to weaker-than-expected holiday sales.
• Eli Lilly & Co. (NYSE: LLY) offered a full-year profit forecast that missed analysts' expectations.
• FedEx Corp. (NYSE: FDX) lowered its earnings guidance and announced price increases.
• FuelCell Energy Inc. (NASDAQ: FCEL) reported a deeper-than-expected loss but topped sales estimates.
• H&R Block Inc. (NYSE: HRB) Q2 net loss was in line with expectations but revenue fell short.
• Hartford Financial Services Group (NYSE: HIG) raised its full-year forecast, doubling the share price.
• Hooker Furniture Corp. (NASDAQ: HOFT) shares sold off following disappointing Q3 results and outlook.
• Krispy Kreme Doughnuts Inc. (NYSE: KKD) reported a deeper-than-expected Q3 loss on increased costs.

Many investors know about the key metrics that provide clues regarding the U.S. economy's health, and where it's likely to head, near-term.

Retail sales, housing starts, UPS (NYSE: UPS) / Fed Ex (NYSE: FDX) deliveries and, of course, those infamous corrugated box orders, all provide clues about demand at the retail and wholesale levels, and are positively correlated with increases in U.S. GDP.

Then there are those lower-profile metrics that experienced investors monitor -- and new investors are highly recommended to do so, as well. One such metric: Stanley Works (NYSE: SWK) and on Thursday the hardware and tool giant provided yet another bearish data point for the U.S economy and stock market.

New Britain, Conn.-based Stanley lowered 2008 full-year earnings guidance to $3.30-$3.40 per share, down about 35-45 cents from previous guidance, and also announced it would lay-off 2,000 employees, or about 10% of its work force, citing rapidly deteriorating business conditions. Further, Stanley said "economic conditions remain too variable to warrant issuing formal 2009 guidance at this time."

The Reuters 2008 EPS consensus estimate for Stanley is $4.30. Stanley's shares Thursday closed down $2.02 to $32.30.

MOST NOTEWORTHY: Stanley Works, the Generic Drug sector, Fiserv and Fidelity National were today's noteworthy downgrades:

• Deutsche Bank downgraded shares of Stanley Works (NYSE: SWK) to Hold from Buy as they see risk to Q2 and FY08 earnings due to a slowdown in the European industrial and consumer categories. The firm lowered their target to $52 from $62.
  
• Wachovia cut the Generic Drug sector to Market Weight from Overweight Wachovia sees near-term challenges for Teva Pharmaceutical (NASDAQ: TEVA), Mylan (NYSE: MYL) and Watson Pharmaceuticals (NYSE: WPI). The firm thinks Teva will become a very strong company over the long-term, following its takeover of Barr (NYSE: BRL). However, the firm adds that Teva will need to integrate the acquisition nearly perfectly, and Mylan may feel compelled to make another acquisition, even as it is still integrating Merck Generics, while Watson's growth prospects are still uncertain.
  
• Oppenheimer downgraded Fiserv (NASDAQ: FISV) and Fidelity National (NYSE: FIS) to Perform from Outperform based on multiple pressure from the challenging banking environment and growth headwinds.

OTHER DOWNGRADES:

• Satyam (NYSE: SAY) was downgraded to Underperform from Outperform at Credit Suisse and Equal Weight from Overweight at Morgan Stanley.
  
• UBS downgraded Textron (NYSE: TXT) to Neutral from Buy.
  
• Constellation Energy (NYSE: CEG) was downgraded at Jefferies to Underperform from Hold.

Father's Day is a special occasion for many of us, a day to show our daddies how much we love them. We give dad some extra attention that day and usually also a present that could make him happy. Kiplinger.com has an interesting idea -- one that I really like -- for a Father's Day present you may want to consider: Find a good stock that could bring him a lot of money.

Let's look at some of the companies Kiplinger's Anne Kates Smith believes would be good options this year:

• O'Reilly Automotive (NASDAQ: ORLY) is an auto parts retailer that is facing weak demand as a result of soaring crude oil prices. However, analysts believe the company's strategy to buy CSK Auto will bring a lot of national success. ORLY is expected to show earnings of $1.76 per share this year and $2.02 next year.
• Stanley Works (NYSE: SWK), headquartered in New Britain, Conn., has the advantage of being one of only two companies offering a complete line of hand tools for consumers. The company focuses its performance on both its industrial tool division and a security business. Analysts forecast a profit of $4.18 this year, and $4.63 a share for next year.

The earnings crunch is in full swing, and here are a few of the highlights of this past week's earnings coverage from BloggingStocks:

• Airgas Inc. (NYSE: ARG) beat expectations and raised its guidance.
• Boeing Co. (NYSE: BA) beat estimates and said the 787 Dreamliner was on schedule.
• Burlington Northern Santa Fe Corp. (NYSE: BNI) fourth-quarter profits fell on rising fuel costs.
• Crane Co. (NYSE: CR) beat expectations and raised its guidance.
• Dow Chemical Co. (NYSE: DOW) profits fell due to rising costs of raw materials.
• Exxon Mobil Corp. (NYSE: XOM) posted the largest annual and quarterly profit ever by a U.S. company.
• Halliburton Co. (NYSE: HAL) beat earnings expectations due to strong international growth.
• Honda Motor Co. (NYSE: HMC) posted record earnings for the third quarter on demand for fuel efficiency.
• JetBlue Airways Corp. (NASDAQ: JBLU) posted a narrower-than-expected loss.
• Nissan Motor Co. (NASDAQ: NSANY) posted strong results due in part to U.S. sales of the Rogue.
• Occidental Petroleum Corp. (NYSE: OXY) fourth-quarter profit surged, leading to its best yearly results ever.
• Paraexel International Corp. (NASDAQ: PRXL) beat estimates and offered revised guidance.
• Ratheon Co. (NYSE: RTN) posted strong fourth-quarter results and offered optimistic guidance.
• RightNow Technologies Inc. (NASDAQ: RNOW) posted a loss, though revenues were up.
• Sony Corp. (NYSE: SNE) posted solid results on TV sales and the game division's return to the black.
• Stanley Works (NYSE: SWK) posted solid results despite the housing slump due to strength overseas.
• United Parcel Service Inc. (NYSE: UPS) met earnings estimates due to a pension-related charge.
• US Steel Corp. (NYSE: X) fourth-quarter and full-year profits declined on acquisition costs and job cuts.
• Valero Energy Corp. (NYSE: VLO) beat expectations despite a profit decline of 49%.

For additional BloggingStocks earnings highlights, see Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others and McDonald's, Kraft, P&G, Verizon, MasterCard, 3M and others.

Tool supplier Stanley Works (NYSE: SWK) remains optimistic about earnings into 2008, despite deterioration of the U.S. homebuilding market. Even in 4Q2007, when the domestic construction market softened like warm butter, Stanley Works managed to post more than respectable earnings. 4Q sales increased 15% to $1.2 billion. Diluted EPS increased 7% to $1.11, operating margins increased and free cash flow increased 89% from 4Q2006.

4Q2007 was a tough quarter in the U.S., as subprime mortgage losses ran into the billions, banks tightened credit, and construction slowed dramatically. Despite the meltdown in the U.S. market, Stanley posted double-digit sales increases in all its international markets, which helped to offset slower sales in the U.S. The story is the same for FY2007.

Overall, the company is in good shape with net sales up 12% to $4.5 billion, although only 2% of that growth is organic. More than half of the increase was due to acquisitions. FY2007 diluted EPS increased 15% to $4.00, and free cash flow increased by $99 million to $457 million. Despite forecasting an organic growth rate of 0-1%, CEO John Lundgren states that Stanley Works is well positioned to withstand a possible U.S. recession.