Analyst upgrades:

• Goldman upgraded shares of BP Plc (NYSE: BP) to Buy from Neutral on valuation as they believe the recent pullback provides an attractive entry point.
  
• VF Corp. (NYSE: VFC) was raised to Outperform from Neutral at Credit Suisse citing its acquisition platform and international growth. The company's target was increased to $100 from $88.
  
• Deutsche Bank upgraded shares of Tenet Healthcare (NYSE: THC) to Buy from Hold and increased its target to $8.50 from $7 to reflect increased confidence in the company's ability to beat expectations over the next 12 months and reduce its net debt.
• US Steel (NYSE: X) was raised to Sector Outperformer from Sector Performer at CIBC.
  
• United Technologies (NYSE: UTX) was upgraded at UBS to Buy from Neutral.

Analyst downgrades:

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: AbitibiBowater, GlaxoSmithKline, AstraZeneca and Capital One were today's noteworthy downgrades:

• Lehman downgraded AbitibiBowater (NYSE: ABH) to Equal Weight from Overweight citing dilution from the recent $350M convertible offering, cost pressures, and a more cautious outlook near-term for pulp markets.
  
• JP Morgan cut GlaxoSmithKline (NYSE: GSK) and AstraZeneca (NYSE: AZN) to Underweight from Neutral on long-term earnings growth concerns.
  
• Keefe Bruyette lowered Capital One (NYSE: COF) to Underperform from Market Perform to reflect the company's credit outlook.

OTHER DOWNGRADES:

• Nokia (NYSE: NOK) was downgraded to Neutral from Buy at UBS and to Underweight from Overweight at JP Morgan.
  
• Textron (NYSE: TXT) was cut at Credit Suisse to Neutral from Outperform.
  
• Merriman downgraded Blue Coat Systems (NASDAQ: BCSI) to Neutral from Buy.

Bell Boeing has received a $10.4 billion U.S. Department of Defense contract for the V-22 Osprey that guarantees production of at least 167 more of the aircraft through 2012, Bell Boeing announced Monday.

Bell Boeing is a strategic alliance between Bell Helicopter, a unit of Textron (NYSE: TXT) company, and Boeing (NYSE: BA).

The five-year contract includes 26 CV-22 aircraft for the U.S. Air Force Special Operations Command and 141 MV-22 aircraft for the U.S. Marine Corps. The contract includes an option for additional aircraft.

Both Boeing and Textron moved higher on the news. Boeing shares gained 83 cents to $74.30 and Textron rose 47 cents to $55.07 in early Monday trading.

The V-22 is a tiltrotor aircraft with proprotors and engines installed in nacelles at the tips of both wings.

Analysis: The contract is good news on a number of fronts, the most obvious of which is additional work for Boeing and Textron. In the last six months Boeing shares have declined roughly $30 to about $74 on rollout delays for its next-generation 787 Dreamliner commercial aircraft, and the U.S. economic slowdown. The news is also a mild shot in the arm for the U.S. economy, which given the large number of industrial jobs lost to cheaper overseas manufacturing zones, can use all of the domestic industrial jobs it can get.

Before the bell: Futures mixed as Wall Street awaits Paulson's plan

Citigroup Inc. (NYSE: C)'s Vikram Pandit was brought in to make changes at the struggling bank, and that's exactly what he's doing (or at least trying). After much management changes the past weeks, today the financial services company unveiled a restructuring plan that includes setting up an independent credit-card unit and overhauling consumer banking along geographical, rather than product, lines.

Schering-Plough (NYSE: SGP) stock is dropping nearly 17% and Merck (NYSE: MRK) is dropping over 10% in premarket trading after a study published in the New England Journal of Medicine concluded that doctors should cut their use of cholesterol drugs Vytorin -- a combination of Merck's Zocor and SGP's Zetia -- and Zetia.

Teva Pharmaceutical (NASDAQ: TEVA) is buying Bentley Pharmaceuticals (NYSE: BNT) for $360 million in cash, or $15.02 a share, in a move to expand operations in Spain. Bentley's drug delivery business will be spun off to shareholders prior to the Teva transaction. The purchase price represents a 9% premium to Bentley's closing stock price Friday of $13.74.

Before the bell: Stock futures lower -- second day of declines ahead?

Some analyst calls this morning:

• Caris & Company initiated coverage on Research in Motion (NASDAQ: RIMM) with an Average rating and a $96 target price. It also initiated coverage on Nokia (NYSE: NOK) with an Above Average rating.
• Stanford Research initiated coverage on Microsoft (NASDAQ: MSFT) with a Buy and on Red Hat (NYSE: RHT) with a Hold.
• Bear Stearns upgraded Nordstrom (NYSE: JWN) from Peer Perform to Outperform and downgraded Saks (NYSE: SKS) from Peer Perform to Underperform.
• Jefferies & Co downgraded Adobe Systems (NASDAQ: ADBE) from Buy to Underperform, lowering that target price from $50 to $30.
• Banc of America downgraded Polo Ralph Lauren (NYSE: RL) from Buy to Neutral. It also downgraded Schlumberger (NYSE: SLB) for Outperform to Sector Perform.

Amazon.com (NASDAQ: AMZN) agreed to buy Audible Inc. (NASDQ: ADBL), the provider of digital spoken word audio content, for $11.50 a share, a 23% premium to its Wednesday's closing price.

MOST NOTEWORTHY: Semiconductor stocks, Norfolk Southern and Textron were today's noteworthy downgrades:

• Banc of America downgraded semiconductor stocks as they believe the cyclical recovery that began in early 2007 has "run its course." Banc of America reduced its estimates for sales of integrated circuits in 2008 and lowered their 2008 semiconductor sales growth to 7% from 11%. The firm downgraded Advanced Micro (NYSE: AMD) to Sell from Neutral as they believe the company's Barcelona product will not stem market share losses in servers and desktops vs. Intel (NASDAQ: INTC). They also believe AMD's cost structure will be pressured by higher depreciation and higher material costs in 2008.
  
• JP Morgan downgraded Norfolk Southern (NYSE: NSC) to Neutral from Overweight citing continued weakness in volumes vs. easy Q4 comps, lack of visibility into an upturn and lack of catalysts.
  
• Citigroup lowered its rating on Textron (NYSE: TXT) to Hold from Buy on valuation, as they see a less compelling risk/reward following the 2007 rally.

OTHER DOWNGRADES:

• Fossil (NASDAQ: FOSL) was downgraded to Neutral from Buy at Piper.
  
• CIBC downgraded UnitedHealth Group Inc. (NYSE: UNH) to Sector Performer from Sector Outperformer.
  
• Deutsche Bank downgraded Harte-Hanks (NYSE: HHS) to Sell from Hold.

Look for Textron (NYSE: TXT) to continue to benefit from the global economy's tailwind.

Strong global economic growth should continue to generate solid demand of the company's Cessna jets and planes, which accounted for 51% of its profits. Further, analysts expect Textron's Bell division to perform well in 2008-2009 on strong commercial and military helicopter orders.

Textron's Industrial division should also post solid results, manufacturing everything from golf carts to lawn care machinery to auto parts. A decent, stable dividend adds to the mix. The Reuters F2007/F2008 EPS consensus estimates for TXT are $3.49/$4.09.

According to the Sunday New York Times, conglomerates are back. Companies like ITT Corp. (NYSE: ITT) and Textron Inc. (NYSE: TXT) are trading near multi-year highs. William Holstein writes:

To some extent, the new conglomerates have simply become lucky. They are riding a global infrastructure spending boom for airports and airlines, power systems, waste water and environmental projects, and hospitals and health care systems, not to mention record government spending on military projects and security surveillance. Their ability to assemble product offerings from different industries is a source of strength, they say.

While I'd be extremely skeptical if someone referred to the recent strength of conglomerates as some sort of new paradigm, it really may be different this time. The conglomerate boom of the 1960s and 1970s ended in disaster for many of the high-fliers, but changes have been made. Private equity firms have employed a conglomerate-like model to generate huge returns for their investors, and smarter management and more competent deal-making is leading to better-crafted hodgepodges of divergent businesses.

Honeywell International (NYSE: HON) CEO David Cote is also quoted in the Times piece: "When you look back at the history, the companies were put together without any real integration. They were really just holding companies. They didn't try to do anything to make the businesses better."

The old-time model of hyping the stock of a conglomerate and using it to acquire companies at a lower price/earnings multiple is no longer in vogue, mercifully.

For an interesting, although not entirely enjoyable, look at the history of the conglomerate business model, pick up a copy of The Rise and Fall of the Conglomerate Kings by Robert Sobel.

You may well never have heard of Textron Inc. (NYSE: TXT), but you're almost certainly familiar with its major divisions: Cessna, Bell helicopters, and E-Z-Go golf carts. The company has just come off a very strong second quarter, and has released very positive estimates for the rest of 2007. The stock was rising steadily until investors took their gains last week and sent the stock down 10 points during the course of the week.

My guess is this sell-off will just bring more investors to the table -- eventually. On the eve of the second-quarter results, Goldman Sachs (The Goldman Sachs Group, Inc. (NYSE: GS)) issued a strong buy report on TXT, raising its target price from $127 to $140. The stock subsequently lost ground, as I just mentioned, but I think the Goldman analysts are right.

With globalization and increasing demand for business travel, TXT's Cessna division will continue to grow (the second quarter brought Cessna a revenue increase of around 20% and a profit increase of nearly 30% over the second quarter of 2006), and the numbers for the first six months of 2007 are about the same. Meanwhile, Bell's helicopters are in growing demand, and TXT's military contracts continue to expand, while the financial sector has never had a losing quarter. Its industrial segment continues to show steady growth as well.

Transporting the executive stylishly is a demanding business, but there is an outfit in Providence, Rhode Island that has several of the avenues covered. Their planes, helicopters and golf carts are well thought of by the business crowd. In fact, their products are popular with the military set, too.

Textron, Inc. (NYSE: TXT) specializes in general aviation aircraft. The firm's Bell segment makes helicopters and tiltrotor aircraft for both military and commercial applications. This segment also manufactures weapons, surveillance systems, aircraft landing systems, hovercraft, rescue vessels, armored vehicles and turrets. The Cessna unit manufactures business jets, single engine turboprop caravans, and single engine piston aircraft. The Industrial division offers golf carts, off-road utility vehicles, lawn care machinery and power tools. The Finance segment handles commercial loans. Major competitors include General Electric (NYSE: GE) and United Technologies (NYSE: UTX).

The company pleased investors last week, when it reported Q2 EPS of $1.69 and revenues of $3.23 billion. Analysts had been expecting $1.45 and $3.09 billion. Management also guided Q3 EPS to $1.45-$1.55 ($1.53 consensus), FY07 EPS to $6.35-$6.55 ($6.31 consensus) and FY07 revenues to about $12.87 billion ($12.6B consensus). Further, the company announced a 2-for-1 stock split (8/24/07), a 19% increase in its annualized dividend rate and a 24 million share repurchase program.