Analyst Upgrades

• Micron (MU) to buy from neutral at UBS.
• Baker Hughes (BHI) to outperform from market perform at BMO Capital.
• PDL BioPharma (PDLI) to outperform from sector perform at RBC Capital.
• Fluor (FLR) and Rush Enterprises (RUSHA) to buy from neutral at BofA/Merrill.
• Camden Property (CPT) to outperform from neutral at Macquarie.
• Pinnacle Financial (PNFP) to buy from hold at Wunderlich.
• Linear Technology (LLTC) to neutral from reduce at Nomura.
• Hologic (HOLX) and Illumina (ILMN) to buy from hold at Citigroup.
• F5 Networks (FFIV) to buy from neutral at Gleacher.

Analyst Upgrades

• Diamond Offshore (DO) to conviction buy from sell and Baker Hughes (BHI) to buy from neutral at Goldman.
• Frontier Communications (FTR) to outperform from market perform at Wells Fargo.
• Syntel (SYNT) to outperform from market perform at Wells Fargo, to buy from hold at Deutsche Bank and to buy from neutral at Janney Capital.
• Kulicke & Soffa (KLIC) and Fiserv (FISV) to outperform from perform at Oppenheimer.
• 3M (MMM) to neutral from underweight and Tyco (TYC) to overweight from neutral at JPMorgan.
• Collective Brands (PSS) and Nordstrom (JWN) to overweight from equal weight, as well as Foot Locker (FL) to equal weight from underweight, at Morgan Stanley.
• Amazon.com (AMZN) to buy from hold at Lazard Capital.
• Yamana Gold (AUY) to outperform from neutral at Credit Suisse.

Analyst Upgrades

• Advance Auto Parts (AAP) was upgraded to Perform from Underperform at Oppenheimer.
• Macquarie upgraded Gen-Probe (GPRO) and Beckman Coulter (BEC) to neutral from underperform.
• Tyco (TYC) was upgraded to neutral from reduce at Nomura.
• BofA/Merrill upgraded Cousins Properties (CUZ) to buy from underperform.
• Morgan Stanley upgraded Energy Conversion (ENER) to equal weight from underweight.
• Thermo Fisher (TMO) was upgraded to buy from hold at Auriga.

Analyst Upgrades

• Citigroup assumed coverage of Illinois Tool Works (ITW) and upgraded shares to buy from hold with a $52 price target. Citi cites valuation and the company's successful execution for the rating change.
• UBS upgraded Rowan Companies (RDC) to buy from neutral based on better-than-expected dayrates in the high specification jack-up market. The firm raised its price target to $42 from $28.
• UBS also upgraded NetLogic (NETL) to buy from neutral and keeps a $33.50 target on the stock. The firm upgraded shares based on valuation and solid long-term outlook.
• AvalonBay (AVB) and BRE Properties (BRE) were upgraded to neutral from underperform at Macquarie.
• Covance (CVD) was upgraded to equal weight from underweight at Morgan Stanley.
• Reynolds American (RAI) was upgraded to neutral from underperform at BofA/Merrill.

Tyco International (TYC - option chain) shares are rising today on news that Standard & Poor's will add TYC to its S&P 500 index after the close of trading on August 26. The stock will replace Smith International (SII), which will be acquired by Schlumberger (SLB). 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 TYC.

TYC opened this morning at $38.61. So far today the stock has hit a low of $38.16 and a high of $38.88. As of 11:55, TYC is trading at $38.35 up $1.61 (4.4%). The chart for TYC looks neutral and S&P gives TYC a neutral 3 STARS (out of 5) hold ranking.

Within the first hour of the trading day, option traders were piling into Tyco International (TYC) calls, selling roughly 4,000 of the April 37 calls for 65 cents. These options are out-of-the-money by slightly more than a dollar and are easily the most-active option trading across Tyco today.

Given that open interest at this strike was just 2,283 heading into today's trading, it is plausible that today's volume traded to open. The price action suggests these calls were sold to open, which is a bearish to neutral strategy. The investor in question may already own TYC shares and could be selling these upside calls as a hedge against modest downside during the next two months.

Analyst Upgrades

• Baird upgraded Intel (INTC) to outperform from neutral and has a $26 target on the stock. The firm's checks indicate tier-one PC OEMs have raised their 1H10 procurement forecasts, which could lead to Intel outperformance.
• Citigroup upgraded UnitedHealth (UNH) to buy from hold on expectations the company will benefit from a sector rotation into Managed Care in 2010. The firm raised its price target on shares to $39 from $30.
• UBS upgraded Morgan Stanley (MS) to buy from neutral based on strong capital and liquidity positions, building investment banking pipelines, and expectations for a turn in EPS/ROE, among other reasons.
• Deutsche Bank upgraded the U.S. Refining group as it believes demand is improving and margins could expand in 2010. The firm raised its rating on Sunoco (SUN) to hold from sell and its target on shares to $25 from $18, and upgraded Tesoro (TSO) and Frontier Oil (FTO) to buy from hold.
• Boeing (BA) was raised to overweight from equal weight at Barclays.
• Wynn Resorts (WYNN) was upgraded at UBS to buy from neutral.
• Investors Bancorp (ISBC) was upgraded to buy from neutral at Janney Montgomery.

It felt hard enough to milk out a two-day rally when you looked over the numbers yesterday. Now we have a 3-day rally. Gnarly jobless claims were swept under the table despite the notion that we now have over 5.3 million adults on the continued jobless claims.

The retail sales data was enough of a boost, and the data on things not being as bad at the financials helped even further. Trading volume still feels light, but at least everyone's retirement accounts have gone up. After all, it still feels good to see broad-based rallies. Here are today's closing bell levels:

Dow 7,170.06 +239.66 (3.46%)
S&P 500 750.74 +29.38 (4.07%)
Nasdaq 1,426.10 +54.46 (3.97%)

Top Analyst Upgrades
Top Analyst Downgrades

If you've been watching earnings this past week, or if you read last week's Week in Preview, then this coming week may leave you feeling a bit like Bill Murray in Groundhog's Day. That is, again analysts surveyed by Thomson Reuters expect earnings declines to be more frequent and deeper than earnings gains.

Motorola Inc. (NYSE: MOT), Dow Chemical Co. (NYSE: DOW), Anadarko Petroleum Corp. (NYSE: APC), IAC Interactivecorp (NASDAQ: IACI), Moody's Corp. (NYSE: MCO), Elizabeth Arden Inc. (NASDAQ: RDEN), Devon Energy Corp. (NYSE: DVN), Diebold Inc. (NYSE: DBD), Tyco International Ltd. (NYSE: TYC), United Parcel Service (NYSE: UPS), Cisco Systems Inc. (NASDAQ: CSCO), Polo Ralph Lauren Corp. (NYSE: RL), ITT Corp. (NYSE: ITT), and Walt Disney Co. (NYSE: DIS) are scheduled to report quarterly results this week, and they're all expected to report double-digit declines in earnings.

But again this week, let's take a look who Wall Street feels may have done well in the past quarter.

Is the Fed's program of slashing interest rates to near zero having any beneficial effects? If we look back at the past three months investors have been running away from any investment with the least bit of risk. This is why we've seen such a massive shift into US Treasuries.

One market hardest hit by the financial crisis was the Corporate Bond Market which tumbled 35% in 2008. Now, however, with interest rates so low, investors are venturing out a bit to find investments with higher yields. In December new Corporate deals included $10 billion dollars of FDIC backed bonds by General Electric Co. (NYSE: GE), Devon Energy (NYSE: DVN) is selling five and 10 year notes, Brown and Foreman (NYSE: BF.B) is offering $250 million dollars in five year notes, and Tyco International (NYSE: TYC) offered $500 million dollars of 10 year notes. The major "active book-running" players are Bank of America (NYSE: BAC), JP Morgan (NYSE: JPM) and Citigroup (NYSE: C)

What is an interesting dynamic to watch is that investors are always looking for better deals and higher returns. It seems they are tip toeing into the Corporate markets which indicates that there is some movement at unlocking this market for further activity.

Corporate bonds and notes offer higher yields than US Treasuries. Would you invest in this market?

Today was a strange day as Veteran's Day was observed by the bond market but not by the stock market. Stocks traded lower most of the day as the realization that even a Chinese stimulus package was not going to prevent a global recession. Here were today's unofficial closing bell levels:
DJIA: 8,693.96 (-1.99%)
NASDAQ: 1,580.90 (-2.22%)
S&P 500: 898.94 (-2.21%)
Analyst Upgrades
Analyst Downgrades

Chesapeake Energy Corp. (NYSE: CHK) announced a joint venture in the Marcellus Shale and an international unconventional natural gas exploration alliance with StatoilHydro. Despite this supposedly being a win, shares were down 5% at $22.45 right before the close.

Focus Media Holding Ltd. (NASDAQ: FMCN), a Chinese advertising agency for online, outdoor, and print ads, was hit extremely hard after posting light earnings and guiding estimates lower ahead. Shares were trading down over 45% at $8.74 right before the close.

Las Vegas Sands Corp. (NYSE: LVS) announced the pricing of a full financing package to keep it within its debt covenants, but it did so at what appears to be a 40% discount on a fully diluted basis. Shares were trading down 35% at $5.22 right before the close.

Starbucks (NASDAQ: SBUX) traded down after the high-end coffee retail destination posted light earnings and gave a warning for the base case for its fiscal year of Sept-2009. Shares were down 13% at $22.00 right before the close.

Tyco International Ltd. (NYSE: TYC) posted earnings at $0.81 EPS, well above the $0.73 EPS estimates. Unfortunately, the company said the current environment was going to put pressure on earnings ahead, and that somehow managed to surprise the investor community. Shares were down 13% at $22.01 right before the close.

Former Tyco (NYSE: TYC) CEO Dennis Kozlowski and former CFO Mark Swartz asked New York's Supreme Court to throw out their convictions on the grounds of insufficient evidence -- Kozlowski had been convicted of grand larceny.

As despicable of a character as Kozlowski is, he doesn't belong in prison: Tyco was a corporate governance train wreck, and he was essentially jailed for being paid an obscene amount of money. Tyco was not a massive securities fraud and, in fact, has produced solid returns for its shareholders.

One of the flaws with the Tyco case -- and it extends into media coverage of corporate governance today -- is that it held an executive responsible for gross negligence on the part of the board of directors. By throwing Kozlowski in jail and writing him off as a crook, the real threat to shareholders was essentially let of the hook: complacent and compliant directors at public companies.

Free Dennis Kozlowski, stop wasting taxpayer money imprisoning someone who was more reflective of an era than evil, and move onto bigger battles.

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

• American International Group Inc. (NYSE: AIG) blamed another big loss on housing and credit markets.
• Barrett Business Services Inc. (NASDAQ: BBSI) beat Q2 estimates and raised its Q3 guidance.
• Fannie Mae (NYSE: FNM) Q2 loss was three times more than analysts had predicted.
• Freddie Mac (NYSE: FRE) big loss was due to loan write-offs, but revenue rose 10%.
• HSBC Holdings PLC (NYSE: HBC) reported a drop in profit and warned of more difficulties to come.
• InterContinental Exchange (NYSE: ICE) posted Q2 results that were in line with Wall Street expectations.
• Marvel Entertainment Inc. (NYSE: MVL) posted strong Q2 results on Iron Man and Incredible Hulk movies.
• Midway Games Inc. (NYSE: MWY) widened its Q2 net loss as revenues slumped.
• News Corp. (NYSE: NWS) posted strong Q4 results on asset gains, and warned of slower growth.
• Playboy Enterprises Inc. (NYSE: PLA) posted a worse-than-expected Q2 loss despite cost controls.
• Procter & Gamble Co. (NYSE: PG) healthy Q4 and full-year results beat analysts' expectations.
• RadiSys Corp. (NASDAQ: RSYS) easily beat Q2 expectations on strong demand for wireless products.
• Time Warner Inc. (NYSE: TWX) net income slumped on declining AOL subscriber fees (see transcript).
• Tyco International Ltd. (NYSE: TYC) beat Q3 earnings expectations and raised its full-year guidance.
• Whole Foods Market International (NASDAQ: WFMI) posted dismal results and suspended its dividend.

Tyco International (NYSE: TYC) is a leading provider of security products and services, fire protection and detection products and services, valves and controls, and other industrial products. The firm has operations in more than 60 countries, employing 118,000 worldwide. Customers include commercial and shipping enterprises, governmental entities, military forces, transportation systems, original equipment manufacturers, engineering contractors and homeowners. General Electric (NYSE: GE) and Honeywell International (NYSE: HON) are major competitors.

The company pleased investors last week, when it reported Q3 EPS of 88 cents and revenues of $5.21 billion. Analysts had been expecting 67 cents and $5.15 billion. Each of the firm's five divisions posted double-digit increases in operating income. Management also guided FY08 EPS to $2.97-$2.99 ($2.76 consensus).

I don't know about you, but I'm tired of watching all the red on the screen. Everyday we're faced with doomsday predictions facing the real estate market, the credit crunch, rising inflation, natural disasters, and my favorite, the Iranian threat facing the entire world.

Bloomberg is out with a story this morning that details the soaring arson rate in foreclosed homes around the U.S. As foreclosed homes are vacated, arson rates are on the rise. Not surprisingly, the highest arson rates are in the states with the highest foreclosure rates.

According to Bloomberg, "Last year, fires in vacant Nevada buildings increased 4 percent from a year earlier." Local officials think that number may grow this year. Bloomerg further states, "The state had the worst foreclosure rate in the U.S. during the first quarter, with one filing for every 54 households, according to data compiled by RealtyTrac Inc. The national rate was one filing per 194 households, analysts at the Irvine, California company said."

How can investors play this without taking out policies on their neighbors' houses? Investors may want to look at Tyco International (NYSE: TYC). Yes, that same company that had corporate execs dipping both hands into the cookie jar and spending on lavish parties, apartments, umbrella stands -- all during the excesses of the late 1990's. Well, the company is a leader in Fire and Safety products: everything from sprinkler systems in office buildings to its ADT division, a leading alarm monitoring firm.

The stock hasn't done much after the company broke itself up into three separate, publicly traded companies. It's pretty diversified in its products and does have a lot of exposure to the building industry -- so, a prolonged downturn in the housing industry could affect the firm. But it's got some world class products, a global sales and marketing infrastructure and is diversified in its businesses to capture global growth.

Hopefully, it won't crash and burn like the foreclosed, U.S. homeowner.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author is long TYC stock.