Wednesday morning, Standard & Poor's announced that it may cut AT&T's (T) credit rating because the company could have trouble reducing its debt load within a "reasonable timeframe."

The ratings house placed the communications firm on CreditWatch negative with implications, which includes the company's "A" rating and its "A-1" short-term and commercial paper ratings. S&P stated, that it expects "a potential downgrade of the corporate credit rating, if any, would be limited to one notch." This news has had very little impact on the stock, as shares of the titan of telecom were trading near break-even by late morning.

Late Monday, Standard & Poor's announced that Dress Barn (DBRN) has been selected to join its S&P MidCap 400 Index (MID). The retailer will replace outgoing MID member Terra Industries (TRA), which is in the process of being acquired by CF Industries (CF).

Dress Barn is slated to join MID after the close of trading on Friday, April 9, when CF's exchange offer to acquire Terra is expected to be complete. Meanwhile, NorthWestern Corp. (NWE) will step into Dress Barn's former spot in the S&P SmallCap 600 Index (SML).

Late Friday, Sirius XM Radio (SIRI) expanded the size of its planned senior notes offering from $550 million to $800 million. The sale of senior notes due 2015 was conducted via private placement, with the notes bearing an annual interest rate of 8.75%. Stakeholder Liberty Media (LCAPA) was slated to buy $150 million of the notes.

The offering is intended to provide Sirius the ability to prepay, in full, all of its borrowings under a senior secured term loan that matures in 2012. The satellite radio company will also redeem notes due 2013, and finance the fees and expenses related to the notes offering.

Genworth Financial (GNW) attracted some mixed attention Tuesday. While the insurance issue started off on the right foot with a price-target boost from KBW, the stock was then slapped with a credit-rating downgrade from Standard & Poor's.

Beginning with KBW, the brokerage firm adjusted its price targets on a slew of U.S. insurers Tuesday morning. In a note to clients, KBW explained that it's overweight on the insurance sector for 2010, because it expects a significant earnings recovery and a modest revenue rebound for the group.

What happens when a bank has to accept the collateral posted for loans? Well, in Russia, it's like the punchline to a bad Yakov Smirnoff joke. "In Russia, when a bank takes collateral, it has to set up a pigpen!"

Well, this is exactly what happened to Alexander Lebedev's OAO National Reserve Bank. It wound up with 40,450 of them. As Russian banks are coping with the financial crisis, they are finding themselves with a variety of hard goods that they never expected to receive.

Late Thursday, Standard & Poor's announced a few changes to its U.S. indices. The reason for the changes are that Wyeth (NYSE: WYE) is being acquired by Pfizer (NYSE: PFE), leaving an opening in both the S&P 100 and S&P 500 (SPX). I want to focus on the stock that will replace WYE in the SPX, First Solar (NASDAQ: FSLR). In after-hours trading, FSLR jumped more than 6% in response to the announcement.

FSLR manufactures solar modules and is a major benefactor of what I like to call the "green rush" that took place during the past two years. FSLR capitalized nicely on the global environmental consciousness revolution last year, ascending as high as the $310 region. Yes, the stock has backed off quite a bit due to the economic crisis, but it could enjoy a bit of a recovery provided it can parlay this latest news into a breach of some overhead resistance.

Late Wednesday, Blockbuster Inc. (NYSE: BBI) scored a ratings upgrade from Standard & Poor's. The ratings agency raised Blockbuster's corporate credit rating from "CCC" to "B-" with a stable outlook. S&P commented, "The stable outlook reflects our belief that liquidity will remain adequate over the near term despite continued operational weakness and moderate deterioration of the company's credit protection metrics."

S&P's new rating is still six notches into junk territory, but the upgrade is nevertheless a vote of confidence in Blockbuster's refinancing efforts. On Monday, the video rental firm announced plans to offer up to $340 million in senior secured notes due 2014, and yesterday, Blockbuster said it would close up to 40% of its brick-and-mortar stores during the next two years.

Moody's (NYSE: MCO) closed down $1.84 to $24.26. A U.S. District Court judge declined to reject a lawsuit against Moody's (MCO) and McGraw Hill's (NYSE: MHP) Standard & Poor's, according to Bloomberg. MCO September and October option implied volatility of 58 is near its 26-week average according to Track Data.

McGraw-Hill closed down $3.30 to $29.01. MHP September and October option implied volatility of 44 is below its 26-week average of 50 according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Sirius XM Radio (NASDAQ: SIRI) may get a bit of a lift this morning, as the company's corporate credit rating was raised by Standard & Poor's (S&P). The ratings agency upped SIRI's rating to "CCC+" from "CCC" and raised the issue-level ratings a notch. That said, S&P did keep SIRI's senior unsecured notes at "CCC-."

S&P analyst Hal Diamond attributed the move to "increased comfort with the company's near-term liquidity needs," following a loan from Liberty Media. Liberty loaned SIRI money in exchange for preferred stock, which is convertible into 40% of SIRI's common shares. This investment pushed significant debt maturities from 2009 to 2011.

On Friday, Standard & Poor's lowered its corporate credit rating for ConAgra Foods (NYSE: CAG). The ratings firm lowered CAG's rating to "BBB" from "BBB+" and removed all ratings on the company from CreditWatch with negative implications, attributing the move to weak credit and high operating costs.

S&P noted that higher operating costs have hurt margins, particularly in CAG's consumer foods segment. This part of CAG's business brought in 64% of the firm's fiscal 2008 revenue.

S&P believes that CAG will "modestly improve" credit measures from current levels during the next two years. S&P could revise CAG's outlook to negative if the firm becomes more aggressive in its financial policy. Currently, CAG's outlook is stable.

Just last week, Hormel Foods Corporation (NYSE: HRL) surprised investors with stronger-than-expected first-quarter earnings. Sales during the period were boosted by healthy demand for the company's recession-friendly canned ham-like product, Spam. Today, it seems that Standard & Poor's is revealing its own soft spot for potted meat, announcing that HRL will join its storied S&P 500 Index as of the close of trading on March 3.

Hormel will replace American Capital Ltd. (NASDAQ: ACAS) in the closely watched broad-market index. The latter stock has given up nearly 96% of its value during the past year, and it's extending those losses today with a plunge of more than 16%.

Diamond Offshore Drilling (NYSE: DO - option chain) shares have been just about flat today after Standard & Poor's (NYSE: MHP) announced that the company will be added to the S&P 500 Index on a date still to be determined, replacing Weatherford International Ltd. (NYSE: WFT). This usually causes a surge in stock value as all the ETFs that track the S&P 500 now have to rush to add DO positions.

While DO is not rising today, it is also not falling sharply like the rest of the market, especially when compared to its peers like Transocean (NYSE: RIG), which just reported slowing earnings today and is down by more than 5%. If you think that DO won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on that stock.

Oil prices have come down over $100 a barrel in the last six months, and so have oil stocks. How many people out there would have lost their house, not due to the reasons we've become accustomed, but due to betting the wrong way on oil? How many out there thought oil would stay near $147 a barrel rather than drop to the mid $30s in six months? I admit I might have been one of those people. Oil is currently trading in the mid $40s.

I have been paying about $2 a gallon for premium gasoline in Southern California -- sometimes a little higher, sometimes a little lower -- but a far cry from the $4.85 I paid in the summer. I can't even believe my eyes or my wallet relief. Five dollar gas is but a memory. We should all keep that in mind because we all know it is coming back to a gas station near you. We just don't know when.

This week's cover story in Barron's, "Big Oil's a Buy" (subscription required), highlights seven companies with varying degrees of support. The author, Dimitra Defotis, discusses companies with depressed stock prices, which may go lower; and with: relatively solid dividends; the possibility that mergers and acquisitions might be on the horizon; and stock buy-backs options. The four key stocks Defotis likes are XOM, TOT, BP and PBR. For example, XOM was chosen because of superior management and stacks of cash; PBR because of its reserves. Defotis questions the debt levels and access to new reserves of COP and RDS.

The report gave WaMu three stars (out of five) and advised investors to "hold" the stock. Its three star rating meant "total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis."

While the report noted that the risk of the stock was "high," it set a twelve month "target price" of $4 and justified its projection with some very sophisticated reasoning involving price-to-book multiples.

The analyst predicted an "increase in net margins in 2008" and noted that WaMu was likely to "... benefit from an improving yield curve, the addition of higher-yielding credit card receivables, and the repositioning of its balance sheet, which included the sale of low-yielding loans and securities."

On September 25, 2008 -- one day after this report was issued -- the FDIC seized WaMu and sold its banking assets to JP Morgan Chase (NYSE: JPM) for $1.9 billion.

WaMu closed yesterday at $1.69. It is likely shareholder value will be destroyed.

I am sure there are many instances where Standard & Poors and other analysts got it right. But the inability of its analyst to look a mere twenty-four hours into the future and see total disaster is a prime example of why investors need to fundamentally change the way they invest.

The concept of studying the markets to find inefficient pricing in any particular stock has little credible evidence to support it. Part of playing this game involves reading analyst reports, listening to the financial media and relying on brokers and advisors who claim to have a skill that does not exist.

This elaborate dance continues because there are so many financial interests that benefit from the process.

Unfortunately, yours is not among them.

Dan Solin is a Registered Investment Advisor and the author of The Smartest Investment Book You'll Ever Read (Perigee Books, 2006) and The Smartest 401(k) Book You'll Ever Read (Perigee Books, 2008).

Analysts at some of the large credit ratings agencies may have had their eyes on the cash register instead of paying attention to the quality of their work. So says the SEC.

According to The Wall Street Journal, "The 10-month examination uncovered poor disclosure practices, a lack of policies and procedures guiding the analysis of mortgage-related debt, and insufficient attention paid to managing conflicts of interests."

That revelation all but buries the already damaged reputations of the ratings firms.

Making money is OK, but the practices may have lost investors billions of dollars. The big credit rating shops like Standard & Poor's have the job of evaluating the risk of products like mortgage-backed securities. Investment banks and their clients thought this paper was fairly safe. It did not turn out that way, not by a long shot.