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.

The timing of the Thomson-Reuters merger could not have been worse as many of their biggest customers on Wall Street are struggling. Now, Thomson Reuters Corporation (NYSE: TRI) is trying to make the best of a bad situation. Investors may like what they are seeing today but they won't over the long term.

Shares of Thomson Reuters are trading up even though the financial information company reported disappointing earnings. The stock is rallying following an earlier sell-off. Revenue was $3.13 billion, a 73% rise but short of the $3.32 billion analysts surveyed by Bloomberg News expected. The results benefited from the merger. Earnings were $172 million, or 22 cents per share, down from $375 million, or 58 cents per share a year earlier.

Chief Executive Tom Glocer told reporters that financial services markets "are likely to remain challenging through at least the end of the year." That means that big clients are going to be asking for big discounts. Bloomberg, my former employer and the company's biggest rival, has usually been able to resist this temptation.

MOST NOTEWORTHY: Gen-Probe, iRobot and Emeritus were today's noteworthy initiations:

• RBC Capital expects Gen-Probe Inc. (NASDAQ: GPRO) to continue to generate high margin, annuity-like revenue from its core business while new tests with good long-term growth. Shares were initiated with an Outperform rating and $66 target.
  
• Kaufman Brothers believes robotics technology is more than just a fad and that iRobot (NASDAQ: IRBT) is well-positioned given its innovation applications and innovative applications that create new solutions to existing issues; Kaufman started iRobot with a Buy rating and $22 target.
  
• Jefferies believes Emeritus Corp. (AMEX: ESC), initiated with a Buy rating, is well-positioned to drive superior cash flow growth given favorable/stable industry fundamentals and renewed operational focus.

OTHER INITIATIONS:

• Piper assumed Comverge Inc. (NASDAQ: COMV) with a Buy rating and $17 target.
  
• Morgan Stanley initiated Excel Maritime Carriers Ltd. (NYSE: EXM) with an Overweight rating.
  
• Thomson Reuters (NASDAQ: TRIN) was initiated at JP Morgan with a Neutral rating.

MOST NOTEWORTHY: Full House Resorts, Starent Networks and Capital Trust were today's noteworthy initiations:

• Morgan Joseph said Full House Resorts Inc.'s (AMEX: FLL) valuation does not reflect the present value of its tribal management contract with the FireKeepers Casino. Shares were initiated with a Buy rating and $3.50 target.
• Starent Networks Corporation (NASDAQ: STAR) was assumed with an Overweight rating at Thomas Weisel. The firm said STAR offers a compelling risk/reward profile given strong gross margins and expanding operating margins.
• Keefe Bruyette initiated Capital Trust Inc. (NYSE: CT) with a Market Perform rating and $30 target, and believes the expected deterioration of commercial real estate fundamentals is likely to remain a headwind for valuations of the shares.

OTHER INITIATIONS:

• Thomson Reuters Plc. (NASDAQ: TRIN) was started at UBS with a Neutral rating.
• Piper initiated Heritage-Crystal Clean Inc. (NASDAQ: HCCI) with a Buy rating and $20 target.
• Goldman Sachs initiated The Sherwin-Williams Company (NYSE: SHW) with a Neutral rating.

MOST NOTEWORTHY: Equitable Resources, Allied Capital and Apria Healthcare were today's noteworthy initiations:

• RBC Capital is positive on Equitable Resources' (NYSE:EQT) Appalachian Basin exposure and valuation. Shares were started with an Outperform rating and $78 target.
  
• Morgan Keegan views Allied Capital's (NYSE:ALD) valuation and outlook as attractive, starting shares with an Outperform rating.
  Credit Suisse assumed Apria Healthcare (NYSE:AHG) with a Neutral rating and $20 target, citing the challenging Medicare backdrop.

OTHER INITIATIONS:

• Keefe Bruyette initiated Zions Bancorp (NASDAQ:ZION) with a Market Perform rating and $47 target.
  
• Thomson Reuters (NASDAQ:TRIN) was started with a Sell rating at ABN Amro.
  
• Canaccord Adams initiated Cyberonics (NASDAQ:CYBX) with a Buy rating and $20.50 target.