Analyst upgrades:

• Citigroup upgraded Blue Nile (NASDAQ: NILE) shares to Buy from Hold on valuation following the recent sell-off as they believe weakening fundamentals have been factored into estimates and that Blue Nile should benefit from the recent softening of diamond prices. The firm raised its target price to $30 from $20.
  
• Baird upgraded AmSurg (NASDAQ: AMSG) to Outperform from Neutral based on valuation, potential upside from in-line results, good visibility, and FCF yield.
  
• Oppenheimer upgraded DryShips (NASDAQ: DRYS) to Perform from Underperform on valuation following the recent weakness and believes the company is at least halfway through its $500M equity offering.
• UAL Corp (NASDAQ: UAUA) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Mylan (NASDAQ: MYL) was upgraded to Overweight from Equal Weight at Barclays.
  
• Exxon Mobil (NYSE: XOM) was lifted at Deutsche Bank to Buy from Hold.

Analyst upgrades:

• Oppenheimer upgraded shares of Premiere Global (NYSE: PGI) to Outperform from Perform on valuation and believes the company's strategic initiatives will drive "healthy" top-line results in a difficult economy.
  
• Citigroup upgraded Prudential (NYSE: PRU) to Buy from Hold on valuation, as they believe the stock is oversold at current levels. Though upgraded, the firm lowered their target price to $30 from $80.
  
• Citigroup also upgraded Bankrate (NASDAQ: RATE) to Buy from Hold as they believe the company will benefit from the financial market volatility and that the risk/reward is attractive at current levels. The firm maintains a $40 target on the stock.
• Hospitality Properties (NYSE: HPT) was raised to Outperform from Sector Perform at RBC Capital.
  
• Diamond Offshore (NYSE: DO) was upgraded at Merrill Lynch to Buy from Neutral.
  
• Alcon (NYSE: ACL) was upgraded to Outperform from Market Perform at Wachovia.

Analyst downgrades:

"You may not have your eye on Alcon Inc. (NYSE: ACL), but if you wear contact lenses, suffer from dry eyes, worry about glaucoma, or even if you have hay-fever, you may have bought ACL products," notes global expert Frida Ghitis.

Here, the contributing advisor to Vivian Lewis' Global Investing, explains, "This Swiss eye drug giant has with its eyes on both the bottom line and the pipeline.

"As the world's largest eye care company, ALC has excellent management, stellar performance, promising demographics, and an intriguing ownership structure.

"Demographics bode well. Aging eyes need attention. Demand will rise for glaucoma medication, dry eye treatments, and other Alcon top sellers. As emerging markets grow their middle class, eye-care will be affordable by millions more people.

Just announced this morning, global drug manufacturer Novartis (NYSE: NVS) is offering to buy a minority stake in the world's largest eye-care firm, Alcon (NYSE: ACL), by buying the stake from food conglomerate Nestle (OTC: NSRGY).

Essentially, the deal is to happen in two parts. The first stage appears to be a purchase of a 25% stake in Alcon for around $11 billion. This purchase comes with an option to purchase an additional 52% stake for about $28 billion.

Novartis will pay $143.18 a share for the purchase of the 25% stake. The option to purchase the 52% stake will come at a fixed share price of $181 and can come between 2010 and 2011.

From a statement on Nestle's website, the food maker plans to use the proceeds to reduce debt and the cash will also "support opportunities for profitable growth in line with the group's nutrition, health and wellness orientation.''

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

Stock futures were higher Monday morning as reports of a cash injection into WaMu as well as a big pharma deal hit the news. Also, Monday marks the beginning of earnings season as the first of the Dow companies, Alcoa reports after the close. Investors will be interested to see how corporate profits have fared in the first quarter of 2008 while many economists say the U.S. may have entered a recession during that time.

On Friday, U.S. stocks closed mostly higher despite a dismal March jobs report that showed payroll have declined for the third month in a row while unemployment jumped. Still, while the Dow industrials finished 16 points or 0.13% lower, it registered a weekly gain of 3.2%. The S&P 500 rose 1 point, or 0.08%, Friday for a 4.2% weekly increase, and the Nasdaq Composite added 7 points, or 0.32%, Friday, rising 4.9% for the week.

Without much economic news today, investors will focus on corporate news:

If last week it was UBS and Lehman Brothers that announced equity deals and helped boost sentiment on Wall Street, this week it is Washington Mutual (NYSE: WM), which according to The Wall Street Journal, is close to a deal to get a $5 billion investment from private equity firm TPG and other investors. As of 6:58 a.m., WM shares are up over 15% in premarket trading.

MOST NOTEWORTHY: Intel (INTC), Capital One Financial (COF), Nestle (NSRGY), Cisco Systems (CSCO), Liz Claiborne (LIZ) and Trump Entertainment Resorts (TRMP) were today's noteworthy upgrades:

• Lehman upgraded shares of Intel Corp (NASDAQ: INTC) to Overweight from Equal-Weight as they believe Q2 sales will meet the high-end of guidance with Dell (DELL) and Hewlett-Packard (HPQ) restocking in preparation for an improved PC market.

• Friedman Billings upgraded Capital One Financial (NYSE: COF) to Outperform from Market Perform based on expected cost savings on restructuring initiatives.

• Deutsche Bank upgraded shares of Nestle (OTC: NSRGY) to Buy from Hold on valuation as they believe the stock has become the cheapest among the major European food companies.

• Credit Suisse upgraded Liz Claiborne (NYSE: LIZ) to Outperform from Neutral expecting management at its July 11th investor meeting to have a significant announcement regarding strategic alternatives for a large number of its brands.

• Merrill Lynch upgraded Cisco Systems (NASDAQ: CSCO) to Buy from Neutral as they believe Q4 expectations could be exceeded due to strong business demand. The broker finds shares inexpensive and also added CSCO to its U.S. 1 List.

• Bear Stearns upgraded Trump Entertainment (NASDAQ: TRMP) to Peer Perform from Underperform on valuation...

OTHER UPGRADES:

• Chittenden Corp (NYSE: CHZ) was upgraded to Sector Perform from Underperform at RBC Capital.

• Micron Technology (NYSE: MU) was upgraded to Buy from Neutral at American Technology.

• Matrix USA raised Williams-Sonoma (NYSE: WSM) to Hold from Sell.

• Goldman raised Alcon (NYSE: ACL) to Buy from Neutral.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Barnes Group Inc (B), MFA Mortgage Investments (MFA), Alberto-Culver Co (ACV), ZymoGenetics, Inc (ZGEN) and Genelabs Technologies (GNLB) were today's noteworthy initiations:

• CIBC expects Barnes Group (NYSE: B) to benefit from the sustained upswing in the aerospace cycle and robust global execution, starting shares of with a Sector Outperformer rating.

• JMP Securities is positive on MFA Mortgage Investments' (NYSE: MFA) organic yield improvement potential of its short duration portfolio and the company's modest leverage, starting shares with a Market Outperform rating.

• William Blair started shares of Alberto-Culver Co (NYSE: ACV) with an Outperform rating, believing the company is one of the better long-term growth opportunities among mid-cap stocks in consumer products.

• ZymoGenetics Inc (NASDAQ: ZGEN) was started with a Neutral rating at Oppenheimer, since the firm doesn't expect any important new clinical data until Q308.

• Genelabs Technologies Inc (NASDAQ: GNLB) was started with a Buy at Oppenheimer, saying the company has a portfolio of early-stage programs in the treatment of Hep-C that have the potential to be best-in-class...

OTHER INITIATIONS:

• Cowen started Maxygen, Inc (NASDAQ: MAXY) with an Outperform.

• Merrill initiated Atheros Communications, Inc (NASDAQ: ATHR) with a Buy rating.

• Jefferies initiated shares of Alcon, Inc (NYSE: ACL) and Chemed Corp (NYSE: CHE) with Buy ratings.

• Rodman initiated Amgen, Inc (NASDAQ: AMGN) with a Market Perform rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Specialty pharmaceutical companies make up today's most noteworthy list:

• The Bank of America initiated Shire plc (NASDAQ: SHPGY), Mentor Corp (NYSE: MNT), Alcon, Inc (NYSE: ACL) and Allergan, Inc (NYSE: AGN) with Buy ratings and initiated Cephalon, Inc (NASDAQ: CEPH), Forest Laboratories, Inc (NYSE: FRX), Sepracor Inc (NASDAQ: SEPR) with Neutral ratings. Bank of America's top pick is Shire plc as the firm expects the company to launch six products or product extensions by mid-2008, followed by Mentor Corp, as the conversion to silicone breast implants should drive a period of stronger-than-expected sales and earnings.

OTHER INITIATIONS:

• Ford Motor Co (NYSE: F) was initiated at Buckingham with an Underperform rating and General Motors (GM) was started with a Neutral rating.

• Nollenberger believes Under Armour, Inc (NYSE: UA), started with a Buy rating, is positioned to outperform the market based on the strength of its brand name and demand through the continued introduction of new products along with European growth.

• Barr Pharmaceuticals, Inc (NYSE: BRL) was initiated with an Equal Weight rating and $53 target at Morgan Stanley.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).