Teva Pharmaceuticals (NASDAQ: TEVA - option chain) shares have moved higher today after the Food & Drug Administration approved the company's generic version Pulmicort, an asthma drug made by competitor AstraZeneca (NYSE: AZN). If you think that the stock 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 TEVA.

TEVA opened this morning at $43.00. So far today the stock has hit a low of $42.55 and a high of $43.78. As of 12:25, TEVA is trading at $42.84, up $0.65 (1.5%). The chart for TEVA looks bullish and S&P gives TEVA a positive 5 STARS (out of 5) strong buy ranking.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $35 range.

Analyst upgrades:

• Goldman upgraded Bed Bath & Beyond (NASDAQ: BBBY) to Buy from Neutral based on valuation and a potential margin rebound at Linens N' Things.
  
• Citigroup upgraded Rockwell Automation Inc. (NYSE: ROK) to Hold from Sell on valuation and believes expectations have been reset to a reasonable level. The company's target was lowered to $27 from $33.
  
• Friedman Billings upgraded shares of Ceradyne (NASDAQ: CRDN) to Outperform from Market Perform on valuation following the recent weakness and thinks the Army will move forward with a larger XSAPI procurement in FY09. The firm raised their target to $30 from $26.
• Goldman added Wyeth (NYSE: WYE) to the Conviction Buy List.
  
• Equity Residential (NYSE: EQR) was upgraded to Buy from Neutral at UBS.
  
• Analog Devices (NYSE: ADI) was raised to Overweight from Equal Weight at Morgan Stanley.

Analyst downgrades:

My colleague (sort of) James Cramer has suddenly turned into a giant, growling bear. He has been moving in that direction for a few months and now he thinks we all should go into hibernation for five years. He is so wrong!

First of all, it is never a good idea to make decisions while you are in panic mode. Second, Jim's guidance is moving with the market so he is not making any serious prognostication, just staying slightly ahead of the mob. He might as well stick his finger in the air.

Are things bad? Yes! Could they get worse? Yes! Would I run for the hills? ABSOLUTELY NOT! Even though I agree we are in for some tough times, I think the market is reacting to more than meets the eye (see All bets are off -- stocks' irrational downside).

If I recall correctly, 50% of the significant gains in the Dow Jones Industrial Average were made on 7% of the up days. You have to be in the game to win the game. If you are in panic mode you should alter your investment portfolio so that you can rest easy. Diversification helps and speculation hurts.

Most people who have been investing for any length of time have heard of dollar cost averaging. This is where you put a certain amount of money into an index fund regularly each month, so that when the market is up you are buying fewer shares at higher prices and when the market is on sale, like it may be today, you are buying more shares at a lower price. This allows you to grow your portfolio consistently while paying a reasonable price for the shares you add -- on average.

It was July 1, 2008 when I first posted Serious Money: Five stable stocks for troubled times. The title speaks for itself. This update, after nine weeks and horrible market conditions, is through Friday October 3, 2008.

The index for comparison is the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The S&P closed Friday at 1,099.23 , down 14.12%.

Each of my five picks is beating the market and three of the five are actually up despite crushing news in the financial sector, unemployment and housing. Congress did pass a Wall Street backstop/bailout bill that President Bush has signed, but only after adding another 450 pages and $130 billion to the amount. Although the five stocks have averaged a 0.75% loss, as intended, they easily beat the S&P by 13.37%.

Here are the five stocks that I still think are worth considering. For my original rationale see the linked story above.

1) Johnson and Johnson (NYSE: JNJ) -- when recommended, the stock closed at $64.34 and paid a 2.89% dividend yield. It closed Friday at $66.16 -- up 2.75%. JNJ was featured in Barron's this month as the most respected from the top 100 companies in the world.

2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended, the stock closed at $45.80 and paid a 1% dividend yield. It closed October 3 at $46.08 -- up 0.06% 0.62% Teva (of Isreal) is the largest generic drug company in the world and just got bigger through the acquisition of Barr Pharmaceuticals last month.

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.

After a volatile, historic week on Wall Street that featured Lehman Brothers going bankrupt, Merrill Lynch being bought and the government bailing out AIG, culminating Sunday when the last large independent brokers were granted bank status. This morning futures are lower as investors seem to be taking a breath to take it all in with a cautious eye on the government's most recently announced plan -- a $700 billion proposal to buy a mountain of bad mortgage debt. But it is the dollar that may get crushed following the plan.

Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) the last of the large independent brokers, have applied and were granted bank status Sunday. Both are down 1.7% and 1.8% respectively in pre-market trading.

According to MarketWatch, several companies left out of the short-selling ban list may ask to be added to the list. Companies like General Electric Co. (NYSE: GE) with its financial services unit making up 45% of its business, or American Express (NYSE: AXP) and CIT Group (NYSE: CIT) are a few examples.

Ambac (NYSE: ABK) shares are down another 12% in pre-market trading after closing down nearly 42% Friday as Moody's said it might downgrade the bond insurer's ratings.

The Dow Jones is down around 300 points again (Update: closed down 450) so it's time to revisit my stable stock picks to see how they are holding up. Each of my five picks is beating the market and all of them are up despite crushing news in the financial sector every day since my last report.

The prediction business is highly speculative, but I gave it a try anyway, searching for stocks that would hold their value. This update is a spot-check of my earlier post, Serious Money: Five stable stocks for troubled times. The closing prices are from yesterday but these companies are doing well in today's down market too as the government steps in again and bails out AIG with $85 billion.

The standard for comparison is the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The S&P closed yesterday at 1,213.59, down 5.47%. The percentage gains for the stable stocks do not include dividends. They are up 4% for a 9.47% advantage. The volatility in the market today may alter some of the data points so expect an after market update. Update: the following five stocks remain ahead of the market but they did turn down in the last hour.

1) Johnson and Johnson (NYSE: JNJ) -- when recommended, the stock closed at $64.34 and paid a 2.89% dividend yield. It finished at $69.80 -- up 8.48% -- and is trading up this morning. JNJ was featured in Barron's this week as the most respected from the top 100 companies in the world. Final Update: down $-0.29 to $69.51

2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended, the stock closed at $45.80 and paid a 1% dividend yield. It finished at $45.96 -- no change -- and is trading slightly down this morning. Teva is the largest generic drug company in the world and just got bigger throught the acquisition of Barr Pharmaceuticals. Final Update: down $-1.25 to $44.11

Analyst upgrades:

• Goldman upgraded shares of Novartis (NYSE: NVS) to Buy from Neutral as they believe the Alcon (NYSE: ACL) acquisition has diversified the company's business.
  
• Tyson Foods (NYSE: TSN) was upgraded to Equal Weight from Underweight on valuation.
  
• JP Morgan raised Albermarle (NYSE: ALB) to Overweight from Neutral.
  
• BMO Capital upgraded Wynn Resorts (NASDAQ: WYNN) to Outperform from Market Perform.
  
• Synovus Financial (NYSE: SNV) was lifted to Buy from Hold at Sterne Agee.

Analyst downgrades:

• Morgan Stanley downgraded Reynolds American (NYSE: RAI) to Underweight from Equal Weight based on the impact from Altria's (NYSE: MO) purchase of competitor UST (NYSE: UST), which may result in pricing pressure.
  
• Goldman downgraded AstraZeneca (NYSE: AZN) to Sell from Neutral as they believe shares do not support near-term fundamentals.
• Max Capital (NASDAQ: MXGL) was downgraded to neutral from Buy at Banc of America.
  
• AudioCodes (NASDAQ: AUDC) was lowered at Merrill to Neutral from Buy.
  
• Pinnacle Financial (NASDAQ: PNFP) was downgraded to Neutral from Outperform at Baird.

I was out all morning and returned to my desk to find employment and retail numbers sent the Dow Jones Industrial Average tumbling down 345 points today. That made me think it was important to check out how stable my stable stocks -- stocks with the ability to ride out this bearish run -- were doing in bad times.

This update is a spot-check of my earlier post Serious Money: Five stable stocks for troubled times, to see how my picks are holding up so far. Closing prices are for today.

The standard for comparison is the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The S&P closed today at 1,236.82, down 3.37%. The percentage gains do not include dividends. Four out of five of my picks beat all the indices; CB was close.

1) Johnson and Johnson (NYSE: JNJ) -- when recommended the stock closed at $64.34 and paid a 2.89% dividend yield. It finished at $70.45 -- up 9.5%

2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended the stock closed at $45.80 and paid a 1% dividend yield. It finished at $47.92 -- up 4.63%.

Well, the market was in the dumps yesterday and is even worse today. So this may be a good time to check on my list of stocks for those looking for equities that are stable enough to ride out this bearish storm.

This update is a spot-check of my earlier post Serious Money: Five stable stocks for troubled times, to see how my picks are holding up so far. Closing prices are for August 12, 2008.

The standard for comparison will be the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The following are the five stocks with closing prices from July 1.

1) Johnson and Johnson (NYSE: JNJ) -- when recommended the stock closed at $64.34 and paid a 2.89% dividend yield. It finished at $71.70 -- up 11.44%

2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended the stock closed at $45.80 and paid a 1% dividend yield. It finished at $46.41-- up 1.3%.

3) Chubb Corp. (NYSE: CB) -- when recommended the stock closed at $49.01 and paid a 2.64% dividend yield. It finished at $48.39 -- down 1.26%.

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.

MOST NOTEWORTHY: Teva Pharmaceutical, Blue Coat Systems and American International Group were today's noteworthy upgrades:

• Deutsche Bank upgraded shares of Teva Pharmaceutical (NASDAQ: TEVA) to Buy from Hold to reflect the company's greater growth prospects following the acquisition of Barr (NYSE: BRL). The firm raised the target to $56 from $47.
  
• ThinkPanmure upgraded Blue Coat Systems (NASDAQ: BCSI) to Buy from Source of Funds based on the company's growth prospects following positive channel checks.
  
• American International Group (NYSE: AIG) was raised to Buy from Neutral at Banc of America on valuation, as they find the risk/reward attractive at current levels.

OTHER UPGRADES:

• Goldman upgraded the Semiconductor Production Equipment sector to Neutral from Cautious and added Verigy (NASDAQ: VRGY) to its Conviction Buy List.
  
• Morgan Stanley upgraded Whole Foods (NASDAQ: WFMI) and Cintas (NASDAQ: CTAS) to Equal Weight from Underweight.
  
• Gibraltar Industries (NASDAQ: ROCK) was raised to Buy from Neutral at Piper.

Teva Pharma (NASDAQ:TEVA) upgraded to buy from hold at Deutsche Bank, according to MarketWatch.

American International Group (NYSE:AIG) Raised to Buy at Banc of America, according to 24/7 Wall St. The financial news site also reports Nike (NYSE:NKE) Cut to Neutral at HSBC.

UBS upgrades AMR (NYSE:AMR) to Neutral from Sell, according to Briefing.com.

Douglas A. McIntyre

For the phamra industry, the long-term trends look promising, especially in light of the aging population. While companies face lots of pressure to cut costs, this is a good thing for the generic drug industry. And, as should be no surprise, we are seeing some dealmaking.

Today, Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) has agreed to purchase Barr Pharmaceuticals Inc. (NYSE: BRL) for a cool $7.46 billion (rumors have been swarming about this deal since July 16th).

Israeli generic-drug maker Teva is looking for opportunities to bolster its markets. Acquiring Barr would give it a nice platform in Europe (this was actually because of an acquisition of Pliva in 2006). What's more, the company has a nice offering of drugs such in the contraceptives category.

Teva, already the largest generic drug company in the world, has gotten even bigger with this deal. Taken together, the combined entity will have revenues of close to $12 billion.

With its resources, Teva can continue to snap up some pretty big deals. In the case with Barr, the premium was a whopping 42% (as of Wednesday's close).

So far in today's trading, Teva's shares are up 2.2% to $42.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Before the bell: Citi earnings push futures higher despite MER, GOOG, MSFT disappointments

Advanced Micro Devices (NYSE: AMD) stock is down 6.6% in premarket trading after the company posted its seventh consecutive quarterly loss of $1.19 billion, or $1.96 per share, missing Wall Street estimates. The operating loss would have been 60 cents a share, heftier than the loss of 52 cents a share from analysts polled by Reuters Estimates. Following the report, AMD also announced that CEO Hector Ruiz would be replaced by COO Dirk Meyer. Ruiz will stay on as executive chairman.

The Wall Street Journal reports that Freddie Mac (NYSE: FRE) is considering raising capital by selling as much as $10 billion in new shares to investors. FRE stock is down again this morning after the recent wild swings in share price. This morning FRE shares are trading over 5.7% lower in premarket action.

Mattel Inc. (NYSE: MAT) shares rose nearly 4% in after-hours trading following second-quarter financial results. The toy maker's profit fell by nearly half, but results still beat Wall Street expectations. Global Barbie sales dropped off 6%.