Analyst upgrades:

• Janney Montgomery upgraded Aqua America (NYSE: WTR) to Buy from Neutral on valuation, viewing the recent weakness as a buying opportunity. The firm has a $19 target on the stock.
• UBS upgraded Gildan Activewear (NYSE: GIL) to Buy from Neutral due to customer Broder's improved liquidity and the improved outlook for margins.
• RBC Capital upgraded State Street (NYSE: STT) to Top Pick from Outperform and raised its target to $55 from $40. The analyst said the $2B capital raise addresses TCE ratio concerns and large unrealized losses in the investment portfolio.
• Sherwin-Williams (NYSE: SHW) was upgraded to Overweight from Neutral at JP Morgan.
• Advance Auto Parts (NYSE: AAP) was upgraded to Buy from Underperform at Banc of America/Merrill.
• M&T Bank (NYSE: MTB) was upgraded to Outperform from Market Perform at Bernstein.

Analyst upgrades:

• Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
• Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
• Boardwalk Pipeline (NYSE: BWP) was raised to Buy from Hold at Deutsche Bank.
• Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
• JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
• Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.

• Sherwin-Williams (NYSE: SHW) and AerCap Holdings (NYSE: AER) were downgraded to Neutral from Overweight at JP Morgan.
• UBS downgraded Embarq (NYSE: EQ) to Neutral from Buy following the CenturyTel (NYSE: CTL) merger announcement.

Sherwin-Williams (NYSE: SHW) shares are falling after the company cut its second-quarter earnings estimate to between $1.40 and $1.50 per share, down from a range of $1.45 to $1.60 per share. SHW also cut its FY2008 forecast to a range of $3.60 to $4.10 per share, down from a range of $4.70 to $4.85 per share. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SHW.

After hitting a one-year high of $55.90 last April, the stock hit a one-year low of $33.54 in January. This morning, SHW opened at $51.73. So far today the stock has hit a low of $51.68 and a high of $54.80. As of 12:15, SHW is trading at $54.34, down $1.35 (-2.4%). The chart for SHW looks bullish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $60 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 12.4% return in seven weeks as long as SHW is below $60 at July expiration. Sherwin Williams would have to rise by more than 10% before we would start to lose money. Learn more about this type of trade here.