Weyerhaeuser (NYSE: WY - option chain) stock is falling today after the company cut its quarterly dividend to 5 cents from 25 cents. In addition, Weyerhaeuser will defer timber harvest and close some facilities in order to contain costs. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on WY.

This morning, WY opened at $28.64. So far today the stock has hit a low of $28.51 and a high of $29.42. As of 10:40, WY is trading at $28.96, down $1.03 (-3.4%). The chart for WY looks neutral and S&P gives WY a neutral 3 STARS (out of 5) hold ranking.

Analyst upgrades:

• Bernstein upgraded Amgen (NASDAQ: AMGN) to Outperform from Market Perform on valuation as it believes threats to the core business are priced in at current levels and upside catalysts may come from pipeline news. The firm raised its target on shares to $65 from $57.
• Stephens upgraded CyberSource (NASDAQ: CYBS) to Overweight from Equal Weight on valuation as it believes the recent pullback creates a buying opportunity. The firm raised its target on shares to $16 from $14.
• JPMorgan upgraded Magna (NYSE: MGA) and Tenneco (NYSE: TEN) to Overweight from Neutral on expectations global auto production has sequentially bottomed with European light vehicle production rebounding in Q2. The firm also sees a short-term trading opportunity in TRW Automotive (NYSE: TRW), but keeps a Neutral rating on the stock.
• SINA Corp. (NASDAQ: SINA) was upgraded to Conviction Buy from Buy at Goldman.
• Cogent Communications (NASDAQ: CCOI) was raised to Buy from Hold at Citigroup.

The Associated Press reports that jobless claims -- at 455,000 -- hit a six-year high in July. Analysts underestimated the total by 25,000, as they forecast 430,000 such claims. When combined with this morning's disappointing July retail sales results, the economy appears to be doing worse than experts expected.

AP reports that many companies announced layoffs recently. These include General Motors Corp. (NYSE: GM), Weyerhaeuser Co. (NYSE: WY), Starbucks Corp. (NASDAQ: SBUX) and Bennigan's restaurants. More such layoffs are likely to be announced as the economy prepares a recessionary banquet of woes for the presidential candidates.

The lesson for those interested in economics is pretty clear. You can create the illusion of prosperity by borrowing lots of money. If someone lends me $100 million and I buy a big estate on Long Island, people will think I am rich. But if I can't pay back the loan, the bank will kick me out of the house and suddenly I won't look so well off.

That's what the banks are doing now across wide swaths of the economy. And it will be years before the mess is cleaned up.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

With a turn of the calendar page, we drift into the middle portion of the current quarter, but the earnings season rolls on. Among the many companies scheduled to report quarterly results this coming week are Time Warner Inc. (NYSE: TWX), Cisco Systems Inc. (NASDAQ: CSCO), News Corp. (NYSE: NWS), and Whole Foods Market International (NASDAQ: WFMI). Let's take a look at which companies Wall Street analysts are expecting to be among the top earnings gainers and decliners this week.

Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.

• DRS Technologies Inc. (NYSE: DRS): $0.85 EPS (+95.3%) on revenue of $823.8 million (+12.0%)
• Integrys Energy Group Inc. (NYSE: TEG): $0.40 EPS (+70.0%) on revenue of $2.6 billion (+9.7%)
• Cimarex Energy Co. (NYSE: XEC): $2.53 EPS (+64.4%) on revenue of $599.9 million (+75.4%)
• Forest Oil Corp. (NYSE: FST): $1.51 EPS (+55.6%) on revenue of $456.1 million (+79.1%)
• Devon Energy Corp. (NYSE: DVN): $3.28 EPS (+48.5%) on revenue of $4.1 billion (+38.5%)
• CMS Energy Corp. (NYSE: CMS): $0.13 EPS (+46.2%) on revenue of $1.4 billion (+6.7%)
• Transocean Inc. (NYSE: RIG): $3.23 EPS (+43.0%) on revenue of $3.1 billion (+112.9%)
• Sara Lee Corp. (NYSE: SLE): $0.26 EPS (+38.5%) on revenue of $3.5 billion (+8.9%)
• Williams Companies Inc. (NYSE: WMB): $0.69 EPS (+37.7%) on revenue of $3.4 billion (+20.0%)
• Harris Corp. (NYSE: HRS): $0.99 EPS (+28.3%) on revenue of $1.4 billion (+18.0%)

TheStreet.com's Jim Cramer says this is a crucial moment for the dividend-payers, which should be getting support here.

You can't even find protection in yields these days. It just went away. Perhaps we will get it if Sen. Obama gets elected. Perhaps with higher rates. Perhaps with the downfall of the high-yielding American financials. (Nice discussion of the lack of dividend safety courtesy of the man who knows more about dividends than anyone, Dave Peltier, in the Columnist Conversation last week.)

For ages, it seemed you could get to a magic number, typically 4% yield, where stocks would bounce, or at least be given a parachute that opened for a gentle landing.

Last week that parachute failed. You have stocks like Con Ed (NYSE: ED) (Cramer's Take) just getting trashed here, pushing the yield to 6%. You have stocks like Weyerhauser (NYSE: WY) (Cramer's Take), Carnival Cruise (NYSE: CCL) (Cramer's Take), Gannett (NYSE: GCI) (Cramer's Take), just slicing through the protection. The former's got cyclicality, the middle's got consumer and fuel worries, and the latter is in secular. But they all have no trouble paying the dividend.

Or consider Verizon (NYSE: VZ) (Cramer's Take) and AT&T (NYSE: T) (Cramer's Take). The first is at a 5% yield, the other is almost there. No one questions their ability to support that dividend.

MOST NOTEWORTHY: Anheuser-Busch, Brasil Telecom and Finisar were today's noteworthy downgrades:

• UBS downgraded Anheuser-Busch (NYSE: BUD) to Neutral from Buy citing the InBev unsolicited bid.
  
• JP Morgan cut Brasil Telecom (NYSE: BRP) to Underweight from Neutral on concerns over the merger with Telemar.
  
• Piper downgraded Finisar (NASDAQ: FNSR) to Neutral from Buy following strong Q4 results, as they believe the company's acquisition of Optium creates substantial integration risk.

OTHER DOWNGRADES:

• Merrill cut Weyerhaeuser (NYSE: WY) to Neutral from Buy.
  
• PDL BioPharma (NASDAQ: PDLI) was downgraded to Neutral from Outperform at Credit Suisse.
  
• Wachovia downgraded McClatchy News (NYSE: MNI) to Underperform from Market Perform.
  
• Archer Daniels (NYSE: ADM) was downgraded to Equal Weight from Overweight at Morgan Stanley.

MOST NOTEWORTHY: Weyerhaeuser, Infineon and Intuit were today's noteworthy downgrades:

• Deutsche Bank downgraded shares of Weyerhaeuser (NYSE: WY) to Hold from Buy following the company's investor day, as they were disappointed that no REIT conversion will occur before 2010. Deutsche lowered their target price to $65 from $95.
  
• Citigroup assumed coverage of IFX (NYSE: IFX) and downgraded the stock to Hold from Buy on valuation following the recent rally.
  
• Merrill Lynch cut Intuit (NASDAQ: INTU) to Underperform from Neutral. The rating changes reflect Merrill's new rating system based on relative recommendations within the sector.

OTHER DOWNGRADES:

• Morgan Stanley lowered ReneSola (NYSE: SOL) to Underweight from Equal Weight.
  
• RBC Capital downgraded Canadian Pacific (NYSE: CP) to Sector Perform from Outperform.
  
• Praxair (NYSE: PX) was downgraded at HSBC to Neutral from Overweight.

RBC downgraded Canadian Pacific (NYSE: CP) to "sector perform" from "outperform," according to Briefing.com. The news service also reports Morgan Stanley downgraded LDK Solar (NYSE: LDK) to "equal weight" from "overweight."

Novartis (NYSE: NVS) was started as "overweight" at JPMorgan, according to 24/7 Wall St. The financial site also reports that Weyerhaeuser (NYSE: WY) was cut to "hold " at Deutsche Bank.

TheStreet.com's Jim Cramer says they'll soon become much more important.

So far, dividends haven't done the job. Last night I recommended Weyerhaeuser (NYSE: WY) (Cramer's Take) because I liked the transaction they made with International Paper (NYSE: IP) (Cramer's Take) where they became much more of a pure timber play than before. They got rid of a commodity division with no growth for $6 billion, which they needed to pay down debt and fix up the balance sheet.

Once they did that this week, they became, in my eyes, the best play on a housing recovery with a great deal less risk because they pay almost a 4% dividend.

But I caveated the segment because I didn't want anyone to think that a 4% dividend would stop it from coming down. It didn't for AT&T (NYSE: T) (Cramer's Take) and it didn't for Verizon (NYSE: VZ) (Cramer's Take) -- those had to go to 5% to stop -- and it hasn't for BP (NYSE: BP) (Cramer's Take) which blitzed right through the 5% level to 5.5%. I know BP is challenged when it comes to management. I know that BP is in the ETFs that could force it, on short-selling alone, to go to $55 before someone would say, "An oil company yielding more than 6%, let me at it."

MOST NOTEWORTHY: International Paper, Dynavax Tech and Telecom Italia were today's noteworthy downgrades:

• JP Morgan downgraded International Paper (NYSE: IP) to Neutral from Overweight and said its purchase of Weyerhaeuser's (NYSE: WY) containerboard business will shift the company's focus back to North America and result in a less attractive product mix given increased OCC exposure.
  
• Merriman downgraded shares of Dynavax Tech (NASDAQ: DVAX) to Neutral from Buy after the company's hepatitis B vaccine was placed on clinical hold.
  
• Merrill cut Telecom Italia (NYSE: TI) to Neutral from buy as they expect stronger competition and regulatory measures to cut prices.

OTHER DOWNGRADES:

• Bear Stearns (NYSE: BSC) was downgraded to Neutral from Accumulate at Buckingham.
  
• ViewPoint Financial (NASDAQ: VPFG) was lowered to Market Perform from Outperform at Keefe Bruyette.
  
• Bear downgraded Siemens (NYSE: SI) to Peer Perform from Outperform.

TheStreet.com's Jim Cramer says the Weyerhaeuser and Bristol-Myers stories slipped under the radar yesterday.

Did anyone even see that Weyerhaeuser (NYSE: WY) (Cramer's Take) made this great trade with International Paper (NYSE: IP) (Cramer's Take), getting out of the commodity container board business and pulling in $6 billion to reduce debt? To me, anytime you get out of a commodity business you lift your multiple, even if the rest is constrained by the housing-related lumber business.

Or how about the story that Bristol-Myers (NYSE: BMY) (Cramer's Take) might sell its baby-food business for a big chunk of change, another $6 billion.

Hmm, $12 billion in shuffles, both good for the shufflers, and no one really cares.

That's the problem with the endless focus on the financials, something I know I am falling prey to, too. Because of the focus, for example, I also missed that Caterpillar (NYSE: CAT) (Cramer's Take) traded back to $68 and change after trading up to $75, a terrific opportunity.

An International Paper (NYSE: IP) press release announced today that the company is intending to purchase the Containerboard, Packaging and Recycling (CBPR) businesses of Weyerhaeuser (NYSE:WY)for $6 billion in cash. The deal is expected to close in Q3 2008, subject to regulatory approval and financing.

Due to the realization of tax benefits based upon International Papers purchase of Weyerhaeuser assets rather than stock, IP shall realize tax benefits in the amount of approximately $1.4 billion, making the actual purchase price closer to $4.6 billion.

International Paper Chairman and Chief Executive Officer John Faraci is quoted in the press release as stating: "This deal represents a compelling opportunity for International Paper and our share owners at a very attractive valuation... integrating Weyerhaeuser's CBPR business into our North American packaging platform fits very well with our strategy to improve our earnings, cash flow and returns by strengthening existing businesses. We expect the combined packaging business will generate stronger cash flow and higher EBITDA margins than either standalone business."

Even though International Paper sees considerable upside potential in this acquisition, as of this writing, shares of International Paper have lost nearly 8.5 percent on the day. This may signal a good near term opportunity to buy into company shares when considering that the company indicates this deal holds income increase potential of as much as $400 million annually. The company sees this acquisition improving profitability over a three year period of assimilation, with approximately 40% of that improvement to be realized within the first 12 months of closing the deal.

MOST NOTEWORTHY: DiamondRock Hospitality, Pzena Investment and Vodafone were today's noteworthy upgrades:

• DiamondRock Hospitality (NYSE: DRH) was upgraded to Outperform from Neutral at Baird, citing the newly-announced 4.8M repurchase plan, strong balance sheet and valuation.
  
• Keefe Bruyette upgraded shares of Pzena Investment (NYSE: PZN) to Market Perform from Underperform after the company announced February ending AUM.
  
• Goldman added Vodafone (NYSE: VOD) to its Conviction Buy List following the recent weakness as they expect the company to benefit from growth in wireless data.

OTHER UPGRADES:

• UBS raised Weyerhaeuser (NYSE: WY) to Buy from Neutral.
  
• Credit Suisse upgraded MedCath (NASDAQ: MDTH) and Lululemon (NASDAQ: LULU) to Outperform from Neutral.
  
• Goldman added Cardinal Health (NYSE: CAH) to its Conviction Buy List.

In a world where we write emails instead of memos, read newspapers online, and reuse office paper as much as possible, it's little wonder that the market for paper isn't thriving like it used to. This is particularly true for uncoated free-sheet paper (UFS), the kind generally used in business settings. Demand for UFS has fallen more than 15% since 2000. So why then is Goldman Sachs rating Domtar Corporation (NYSE: UFS), a company that derives much of its business from UFS sales and manufacturing, a buy?

In a tough market, Domtar has taken an interesting approach to the fact that demand for its product is decreasing: It has cut back on its operations and increased its prices. The plan is to make Domtar the lowest cost producer of UFS in North America, in an attempt to stay competitive with companies like International Paper (NYSE: IP), who have the advantage of operating in traditionally lower cost countries in South America.

MOST NOTEWORTHY: Antofagasta plc, Merrill Lynch, Valueclick, Telmex and Network Appliance were today's noteworthy upgrades:

• UBS upgraded shares of Antofagasta (OTC: ANFGY) to Neutral from Sell as they see a strong possibility of delays to copper supply due to an earthquake on Nov. 14 in northern Chile.
  
• Credit Suisse is positive on the appointment of John Thain as Merrill Lynch (NYSE: MER)'s CEO and his ability to get the company back on track strategically. The firm upgraded shares of Merrill to Outperform from Neutral.
  
• Valueclick (NASDAQ: VCLK) was upgraded to Buy from Hold at Citigroup on valuation, as they believe the recent sell-off provides a great entry point.
  
• Citigroup also raised its rating on Telmex (NYSE: TMX) to Buy from Hold after the company announced the spin-off of its international businesses.
  
• Bear Stearns upgraded Network Appliance (NASDAQ: NTAP) to Peer Perform from Underperform following its Q2 report and increased outlook.

OTHER UPGRADES:

• RBC Capital upgraded Sciele Pharma (NASDAQ: SCRX) to Sector Perform from Underperform.
  
• Lehman upgraded Amgen (NASDAQ: AMGN) to Overweight from Equal Weight.
  
• W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Market Perform at Morgan Keegan.
  
• Merrill Lynch upgraded Weyerhaeuser (NYSE: WY) to Buy from Neutral.

ANFGY;MER;VCLK;TMX;NTAP;SCRX;AMGN;GWW;WY