It was good news bad news for the steel industry Tuesday. AK Steel Holding Corp. (NYSE: AKS) and United States Steel Corp. (NYSE: X) both reported better-than-expected third-quarter results. But for U.S. Steel, it was the third straight quarterly loss as the economic downturn continued to drag down demand.

For the three months that ended in September, U.S. Steel said it lost $303 million, or $2.11 per share. That compares with a profit of $919 million, or $7.79 per share, in the same period of last year. Revenue for the quarter fell 61% to $2.82 billion. Analysts surveyed by Thomson Reuters had expected a loss of $2.87 per share on revenue of $2.72 billion.

TheStreet.com's Jim Cramer says the plunge in China overnight is being blamed on the industrial metal, so expect some carry-over.

It turns out copper was the metric. Drats, I thought it was the dollar or oil. I thought we were supposed to buy the cyclicals on earnings being better than expected. I thought we might be buying the minerals and the steels and the oils off the morning proxy of the Baltic Freight Index, known as the Baltic Fright Index in the days when it kept going down, and kept us out of the Freeports (NYSE: FCX) (Cramer's Take) and Vales (NASDAQ: VALE) (Cramer's Take) and Union Pacifics (NYSE: UNP) (Cramer's Take) and U.S. Steels (NYSE: X) (Cramer's Take).

Silly me.

"The steel stocks tend to go through boom and bust cycles depending on global economic activity; they have been pummeled over the last year, as the global economy slowed," notes turnaround expert George Putnam.

In his The Turnaround Letter, he explains, "But the news about steel is not all bad." Indeed, he believes some steel companies are poised for a turnaround. Here's his review of 6 leading steel production companies.

"Weakness in two big steel consuming industries, autos and construction, has been particularly troublesome for the steelmakers.

"However, there is evidence that steel inventories are gradually being worked off to low levels. There are also signs that economic activity in China, which is a huge consumer of steel, will not fall off as far as some economists initially feared.

Analyst upgrades:

• Keefe Bruyette upgraded American Capital (NASDAQ: AGNC) to Outperform from Market Perform on expectations the company's book value and earnings are trending higher. The firm raised its target price to $22.
• Jefferies upgraded Spartan Stores (NASDAQ: SPTN) to Buy from Hold as it believes the company's EPS and sales momentum will return with the Michigan economy likely bottoming out. Despite upgrading, the firm lowered its target price to $18 from $24.
• Morgan Stanley upgraded U.S. Steel (X) to Overweight from Equal Weight due to its favorable product mix and leverage to improving operating rates.
• CSX Corp. (NYSE: CSX) was upgraded to Buy from Neutral at Goldman.
• Mueller Water (NYSE: MWA) was raised to Perform from Underperform at Oppenheimer.
• Marvell Technology (NASDAQ: MRVL) was upgraded to Outperform from Underperform at JMP Securities.

Analyst upgrades:

• Deutsche Bank upgraded Portland General Electric (NYSE: POR) to Buy from Hold on valuation as it finds the risk/reward on shares attractive at current levels. The firm raised its target price to $22 from $20.
  
• FBR Capital upgraded Abercrombie & Fitch (NYSE: ANF) to Outperform from Market Perform after channel checks indicated recent sales are driving increased traffic and easing market share losses. The firm raised its target price on shares to $37 from $21.
• Barclays upgraded Yahoo (NASDAQ: YHOO) to Overweight from Equal Weight as it believes the company is well positioned for a rebound in advertising and that the valuation is compelling at current levels. The firm raised its target on shares to $20 from $15.
• Kohl's (NYSE: KSS) was raised to Overweight from Market Weight at Thomas Weisel.
  
• U.S. Steel (NYSE: X) and CB Richard Ellis (NYSE: CBG) were upgraded at Goldman to Neutral from Sell.
  
• Dolby Laboratories (NYSE: DLB) was upgraded at JP Morgan to Overweight from Neutral.

Analyst upgrades:

• Barclays believes Disney (NYSE: DIS) is the best positioned company for "media's digital evolution." The firm upgraded shares to Overweight from Underweight and has a $32 target on shares.
  
• Oppenheimer upgraded Semtech (NASDAQ: SMTC) to Outperform from Perform after channel checks indicated improved inventory levels, better product mix, and market share gains. The firm set a $20 target on the stock.
  
• RBC Capital expects Rigel's (NASDAQ: RIGL) R788 in RA to achieve its primary endpoint in the Phase II trials. Shares were upgraded to Sector Perform from Underperform and the price target was raised to $8 from $6.
• WebMD (NASDAQ: WBMD) was upgraded to Accumulate from Sell at ThinkEquity.
  
• International Game Tech (NYSE: IGT) was raised to Conviction Buy from Neutral at Goldman.
  
• Infineon (NYSE: IFX) was lifted at Banc of America/Merrill to Buy from Neutral.

TheStreet.com's Jim Cramer says it's hard not to capitulate when your clients demand irrationality.

When I was weighted short and we would have these seemingly endless days of rallying, it was the mornings that would get me. The mark-ups of the futures, the refusal of Asia or Europe to go down, the "tone." It was relentless.

Then I would get to the office and, after a long period in which all I heard were downgrades, I would be greeted by upgrades, where I would always scream, "Now? Now they upgrade Intel (NASDAQ: INTC) (Cramer's Take)?" Or, "He's putting Research In Motion (NASDAQ: RIMM) (Cramer's Take) on the list now, after this run?" Or, "Wells Fargo (NYSE: WFC) (Cramer's Take) goes from hold to buy? After it ran up 4 points? What is he thinking?"

The worldwide decline in the demand for steel sent U.S. Steel's (NYSE: X) fortunes tumbling in the first quarter of 2009. The company reported today a decline in net sales of $1.75 billion over the previous quarter and $2.4 billion over the same quarter in 2008. This resulted in a net loss of $439 million, or $3.78 per share.

The company blames weak demand for its flat-rolled steel, a drop in tube steel usage in the drilling industry as a result of declining oil prices, and "unfairly traded and subsidized tubular imports from China." The industry has benefited from trade protections in the past after claiming that foreign competitors were being subsidized.

TheStreet.com's Jim Cramer says opportunities will arise, but it's still too early.

You can't fight the unseen. Whether it be a local E. coli outbreak for Taco Bell or Chernobyl or SARS or swine flu, you have to let the epidemic run its course before the obvious buying opportunity. What do we know about this swine flu now? 1) It is not under control, and 2) We haven't had fatality counts yet in this country that will freak people out.

Does it matter that the president says it is not out of control? Not to investors. This is a convenient excuse to sell everything consumer, including anything that needs people to go out and do something that is not at home.

TheStreet.com's Jim Cramer says economic fundamentals haven't changed enough to make last week's rally a lasting force.

Stocks are the tools to tell the tale, and last week made you want to own stock. The banks showed you they need not be wards of the state, GM (NYSE: GM) (Cramer's Take) acted as if didn't need to be a ward of the state and oil held its own. Drug companies, among the enterprises with the best balance sheets, decided to "give up" and combine in the face of diminishing returns courtesy of changes in governments worldwide, but particularly in the United States, that would impinge on long-term profitability.

Most important, the backtracking of Obama in his position toward business, something that would never be articulated but most surely occurred as the stock market was no longer ignored -- a Bill Clinton moment in a tone-deaf White house -- set a better tone for risk-taking.

TheStreet.com's Jim Cramer says stocks you'd sell on America alone are buys when you consider that great engine in Asia.

Here's some real tension. The best stocks to play China with may be the worst stocks to own here. Look at Freeport (NYSE: FCX) (Cramer's Take) yesterday, which did that giant and hugely successful secondary. There is no doubt in my mind that housing starts won't even get to 600,000 this year, not after that travesty of a stimulus bill -- or when considering the reaction expressed by the stocks of Lennar (NYSE: LEN) (Cramer's Take) and Pulte (NYSE: PHM) (Cramer's Take) and, perhaps most hobbled, Centex (NYSE: CTX) (Cramer's Take).

There is also no doubt that China's stock market being up 35% means that Freeport's Asian arm, the biggest, will soon be getting huge orders.

TheStreet.com's Jim Cramer says that country can be counted on for tons of growth.

How perfect is China? We have producer price inflation down to almost zero, and rate cut possibilities as far as the eye can see. In our country, all we have heard is "pushing on a string." In their country, all they know is that when the Chinese central bank loosens, wondrous things happen, including a 29% gain in the index.

That gain is so glaring that you can be emboldened about it. You know that they have just started to put China to work and the inventories of all metals could be worked off quickly and the infrastructure products just started.

Amazingly, this week is about to end with stock markets logging gains. Not grim earnings, not glum retail sales, not dismal car sales, nor even weaker-than-expected jobs report seemed able to put a dent in investors' hopes the stimulus bill would pass.

And it's not even the Dow stocks that are leading the advances. As of noon today, the Dow was up about 3% for the week, while the S&P 500 gained about 4.5% and the Nasdaq composite soared some 7%. If you're sorry you didn't take part of this rally, and think perhaps there's more to come after the Senate finally approves the stimulus plan, then BloggingStocks contributors have some ideas for long-term holdings, as well as a few warnings:

"President Obama's proposed rebuilding plans are great news for steel and other industrial metals makers," says resource sector specialist Larry Edelson, who recommends a pair of beneficiaries: U.S. Steel Corp. (NYSE: X) and Alcoa (NYSE: AA).

The editor of Real Wealth newsletter explains, "Obama has pledged to give the U.S. economy a massive shot in the arm with the biggest public works spending package this nation has seen in more than 50 years.

"Besides spending on road, bridge, school improvements and construction, the plan is likely to include upgrading our deteriorating electrical grid and greater investments in public transportation, among other infrastructure projects. The plan is also expected to create about 2.5 million jobs.

"While steel and other base metal prices have tanked sharply this year on slumping global demand, companies that produce the metals have staged some massive cutbacks in production and many have shuttered large chunks of their operations.

TheStreet.com's Jim Cramer says we're in a relentlessly terrible market.

Slew of bad news to wake up to. Freeport (NYSE: FCX) (Cramer's Take) eliminates its dividend to conserve cash as copper has had an unmitigated decline. Impairments coming; ugly, but somewhat predictable given the stunning stock drop. Research In Motion (NASDAQ: RIMM) (Cramer's Take) overnight becomes Nokia (NYSE: NOK) (Cramer's Take) or maybe even Garmin (NASDAQ: GRMN), (Cramer's Take) as the commoditization of tech continues apace. We can sell everything cell-phone-related off that. Tech down again.

Too bad, because it wrecks the rally from yesterday and confirms -- endlessly -- how bad this market is.

It's also too bad because China was up big last night, which I believe will put in a bottom to the mineral and steel market components someday. Pricing will get tight eventually as U.S. Steel (NYSE: X) (Cramer's Take) and Freeport are taking out a huge amount of capacity. They have to; the pricing falls are that devastating. There will be plenty of companies in these industries that simply won't survive because of the pricing.