MOST NOTEWORTHY: UBS AG, Coventry Health, Express Scripts and Medco Health were today's noteworthy downgrades:

• Credit Suisse downgraded shares of UBS (NYSE:UBS) to Neutral from Outperform as they believe UBS will have difficulty rebuilding the franchise and do not expect a quick recovery for its private bank unit.
  
• Wachovia downgraded Coventry Health (NYSE:CVH) to Market Perform from Outperform citing concerns regarding visibility around higher than expected inpatient/outpatient costs following reduced 2008 guidance.
  
• UBS downgraded Express Scripts (NASDAQ:ESRX) and Medco Health to Neutral from Buy citing the Pfizer (NYSE:PFE)/Ranbaxy settlement, which reduces the likelihood of a generic Lipitor launch in 2010.

OTHER DOWNGRADES:

• Goldman downgraded ENI SpA (NYSE:E) to Neutral from Buy and removed the stock from the Pan-Europe Conviction Buy List.
  
• Huntsman (NYSE:HUN) was downgraded to Underperform from hold at Jefferies.
  
• Commercial Metals (NYSE:CMC) was cut at Citigroup to Hold from Buy.

MOST NOTEWORTHY: Lubrizol, BioMarin Pharmaceutical and Novartis were today's noteworthy downgrades:

• Jefferies downgraded shares of Lubrizol (NYSE:LZ) to Hold from Buy as they expect persistent raw material cost pressures to limit upside over the next few quarters. The firm lowered their target price to $60 from $65.
  
• Citigroup cut BioMarin (NASDAQ:BMRN) to Hold from Buy after their survey indicated an upside surprise from the Kuvan launch is unlikely. The firm lowered their target price to $37 from $42.
  
• HSBC downgraded shares of Novartis (NYSE:NVS) to Underweight from Neutral following the company's stake in Alcon (NYSE:ACL) as they believe it dilutes the company's return on assets.

OTHER DOWNGRADES:

• Goldman removed Waste Management (NYSE:WMI) from its Conviction Buy List.
  
• Thomas Weisel downgraded Kinross Gold (NYSE:KGC) to Market Weight from Overweight.
  
• Dreamworks Animation (NYSE:DWA) was lowered at UBS to Sell from Neutral.
  
• JP Morgan downgraded Martha Stewart (NYSE:MSO) to Neutral from Overweight.

MOST NOTEWORTHY: Allegheny Tech, Carpenter Tech, Haynes, Motorola and Machinery stocks were today's noteworthy downgrades:

• JP Morgan downgraded Allegheny Tech (NYSE:ATI), Carpenter Tech (NYSE:CRS) and Haynes (NASDAQ:HAYN) to Neutral from Overweight based on the decline in nickel prices and its impact on nickel-based metals demand on valuation, as they find the risk/reward less attractive following the recent rally and increased raw material costs.
  
• Oppenheimer downgraded shares of Motorola (NYSE:MOT) to Underperform from Perform after channel checks indicated the company could miss Q2 handset guidance and continued market share losses.
• UBS said the risk/reward profile for owning Machinery stocks given macro challenges and valuations. The firm downgraded Caterpillar (NYSE:CAT) and Kennametal (NYSE:KMT) to Sell from Neutral and United Rentals (NYSE:URI) and RSC Holdings (NYSE:RRR) to Neutral from Buy. Additionally, shares of Paccar (NASDAQ:PCAR) were cut to Sell from Neutral and Navistar (OTC:NAVZ) was downgraded to Neutral from Buy due to weak U.S. truck demand.
  

OTHER DOWNGRADES:

• Jefferies cut Hercules Inc (NYSE:HPC) to Hold from Buy.
  
• Goldman downgraded Pfizer (NYSE:PFE) and DirecTV (NASDAQ:DTV) to Neutral from Buy.
  
• Regeneron (NASDAQ:REGN) was downgraded to Neutral from Outperform at Credit Suisse.

MOST NOTEWORTHY: J Crew, Ryanair and Sigma Designs were today's noteworthy downgrades:

• Citigroup downgraded shares of J Crew (NYSE:JCG) to Sell from Hold following the company's lowered guidance as they expect slowing sales to push shares lower. The firm cut their target to $34 from $42. Wachovia downgraded J Crew to Market Perform from Outperform based on lower growth rate forecast, sourcing costs, and competitive pressures.
  
• Ryanair (NASDAQ:RYAAY) was cut to Neutral from Buy at UBS to reflect the rise in fuel costs and lower face prices.
  
• RBC Capital downgraded Sigma Designs (NASDAQ:SIGM) to Sector Perform from Outperform following the Q1 report and cited pricing pressure.

OTHER DOWNGRADES:

• Piper downgraded Costco (NASDAQ:COST) to Neutral from Buy.
  
• Ashland (NYSE:ASH) was cut at JP Morgan to Underweight from Neutral.
  
• Friedman Billings cut Southwestern Energy (NYSE:SWN) to Market Perform from Outperform and removed the stock from the Top Picks list.

MOST NOTEWORTHY: Shanda Interactive, Evergreen Solar, SunPower and Marriott were today's noteworthy downgrades:

• Citigroup downgraded shares of Shanda Interactive (NASDAQ:SNDA) to Hold from Buy following the company's lower-than-expected guidance as they see a lack of positive catalysts.
  
• Merrill downgraded Evergreen Solar (NASDAQ:ESLR) and SunPower (NASDAQ:SPWR) to Sell from Neutral citing a potential reduction in German tariffs.
  
• Morgan Stanley downgraded Marriott (NYSE:MAR) to Equal Weight from Overweight citing economic pressures on business travel.

OTHER DOWNGRADES:

• Vivus (NASDAQ:VVUS) was downgraded at Wachovia to Market Perform from Outperform.
  
• UBS lowered Juniper(NASDAQ:JNPR) to Neutral from Buy.
  
• Cemex (NYSE:CX) was downgraded to Neutral from Overweight at JP Morgan.

If you have children in elementary school, then you know Scholastic Corporation (NASDAQ: SCHL), operator of the annnual school book fair. Scholastic does an excellent job publishing high-quality children's literature and other educational materials. If only it could do so at a profit. Scholastic has been the U.S. publisher for the Harry Potter series these past few years. But even during the height of Pottermania, Scholastic did not turn much of a profit. This year is no exception. The company recently released 3Q 2008 results. Revenue increased $12 million to $458 million, yet losses continue to widen to $4.6 million for the quarter in which there was no Harry Potter release.

YTD 2008 figures show revenue increased 20% and net income more than doubled due to the last Harry Potter release in the previous quarter. Yet YTD net loss now totals $9.3 million or $0.24 per share compared to net income of $20.5 million in the previous year. To be fair, Scholastic has taken huge losses -- $82 million in Q3 2008 alone -- to exit its direct-to-home sales channel. This led to a $77.5 million net loss in Q3. But even with all business segments "performing solidly," according to CEO Richard Robinson, the company continues to bleed money.

Bloomsbury Publishing PLC, the British publisher of Harry Potter, recently reported robust sales and profit from Harry Potter books. Given that Scholastic also published this year's Caldecott Medal winner, Brain Selznick's The Invention of Hugo Cabret, why is the company still drownding in red ink? S&P Equity downgraded the comapny from Buy to Hold.

MOST NOTEWORTHY: Target, Novatel Wireless and Emageon were today's noteworthy downgrades:

• Citigroup downgraded shares of Target (NYSE:TGT) to Sell from Hold as they believe the company could continue to face macro headwinds, credit deterioration, and merchandising pressures. They also see increased risk with Target's credit card portfolio.
  
• JMP Securities cut Novatel Wireless (NASDAQ:NVTL) to Market Perform from Outperform citing mixed Q4 results and guidance.
  
• Emageon (NASDAQ:EMAG) was downgraded to Market Perform from Outperform at Friedman Billings following its weak Q4 report and guidance.

OTHER DOWNGRADES:

• Goldman downgraded Norsk Hydro (NHYDY) to Neutral from Buy and removed shares from their Pan-Europe Buy List.
  
• Oppenheimer lowered SunTrust Banks (NYSE:STI) to Underperform from Perform.
  
• PetMed Express (NASDAQ:PETS) was downgraded to Sell from Neutral at Piper Jaffray.

MOST NOTEWORTHY: UBS AG (UBS), Network Appliance (NTAP) and Semiconductors were today's noteworthy downgrades:

• Deutsche Bank downgraded UBS AG (NYSE:UBS) to Hold from Buy following the company's earnings reports to reflect its large new risk exposures.
  
• Citigroup lowered Network Appliance (NASDAQ:NTAP) to Hold from Buy, as they believe the company's lackluster outlook will weigh on shares in the near-term.
  
• Semiconductors Micron Tech (NYSE:MU) and Novellus (NASDAQ:NVLS) were downgraded to Sell from Neutral at Goldman citing expectations of excess DRAM supply.

OTHER DOWNGRADES:

• Goldman removed Intel (NASDAQ:INTC) from its Conviction Buy List.
  
• JP Morgan lowered Knot Inc (NASDAQ:KNOT) to Neutral from Overweight.
  
• Morgan Stanley lowered Boardwalk Pipeline (NYSE:BWP) to Equal Weight from Overweight.

MOST NOTEWORTHY: Yum! Brands, Adobe and Polo Ralph Lauren were today's noteworthy downgrades:

• Deutsche Bank downgraded shares of Yum! Brands (NYSE:YUM) to Hold from Buy and lowered their target to $37 from $43 on valuation and believes 2008 estimates reflect "lofty" expectations.
  
• Jefferies downgraded shares of Adobe (NASDAQ:ADBE) to Underperform from Buy and lowered their target to $30 from $50 following channel checks, as they believe business has decelerated more than expected in January. Jefferies is concerns the slowing consumer will negatively compound the end of the CS3 cycle.
  
• Banc of America downgraded shares of Polo Ralph Lauren (NYSE:RL) to Neutral from Buy and lowered their target to $63 from $90, as they believe the tough macro environment will pressure US wholesale revenues in 2008.

OTHER DOWNGRADES:

• Deutsche Bank downgraded Monster (NASDAQ:MNST) to Hold from Buy.
  
• UBS (NYSE:UBS) was downgraded to Underweight from Equal Weight at Morgan Stanley.
  
• Soleil downgraded Accuray (NASDAQ:ARAY) to Hold from Buy.

MOST NOTEWORTHY: Royal Dutch Shell, Sonic Foundry and AT&T were today's noteworthy downgrades:

• JP Morgan downgraded shares of Royal Dutch Shell (NYSE:RDS.A) to Underweight from Neutral as they expect investors to remain cautious on the company's long-term prospects and a lack of growth catalysts.
  
• Merriman lowered Sonic Foundry (NASDAQ:SOFO) to Neutral from Buy following the weak Q1 results, to reflect the weak Enterprise segment.
  
• AT&T (NYSE:T) was downgraded to Hold from Buy at Citigroup following the company's mixed Q4 results, as they expect wireline softness to weigh on 2008 expectations and see no near-term catalysts.

OTHER DOWNGRADES:

• Bronco Drilling (NASDAQ:BRNC) was downgraded to Hold from Buy at Jefferies.
  
• Piper lowered Celera Genomics (NYSE:CRA) to Neutral from Buy.
  
• Bear Stearns downgraded City National (NYSE:CYN) to Peer Perform from Outperform.

MOST NOTEWORTHY: Financial Guarantors, Philips Electronics and Fannie Mae were today's noteworthy downgrades:

• Banc of America downgraded the Financial Guarantors to Neutral from Overweight, including AMBAC Fin'l (NYSE:ABK), MBIA Inc (NYSE:MBI) and Security Capital Assurance (NYSE:SCA) to Neutral from Buy, due to concerns of slowing economic growth and the rising potential for losses. They believe the bond insurers are in the "perfect storm" of a deteriorating macro-environment, rising write-downs in the financial sector and a sharp housing downturn.
  
• Lehman lowered its rating on Philips Electronics (NYSE:PHG) to Underweight from Overweight, as they see risk to 2008 earnings due to "optimistic" growth expectations amid a weaker macroeconomic environment.
  
• Morgan Stanley downgraded Fannie Mae (NYSE:FNM) to Underweight from Equal Weight, as they believe the company may increase guidance for credit losses.

OTHER DOWNGRADES:

• Merrill downgraded Agilent (NYSE:A) to Neutral from Buy.
  
• JP Morgan removed Kraft (NYSE:KFT) and Sara Lee (NYSE:SLE) from its Focus List.

MOST NOTEWORTHY: European chipmakers, Select Comfort and American Express were today's noteworthy downgrades:

• Credit Suisse downgraded European chipmakers to Market Weight from Overweight to reflect the slowdown in the economy this year and the decline in the value of the dollar against the euro. The broker downgraded STMicroelectronics (NYSE:STM) to Neutral from Outperform.
  
• William Blair downgraded shares of Select Comfort (NASDAQ:SCSS) to Market Perform from Outperform, as they believe weak consumer demand for large-average-ticket discretionary goods in 2008 will impact prospects of a turnaround.
  
• Friedman Billings lowered its rating on American Express (NYSE:AXP) to Underperform from Market Perform following the company's Q4 pre-announcement.

OTHER DOWNGRADES:

• JMP Securities downgraded Juniper (NASDAQ:JNPR) to Market Perform from Market Outperform.
  
• ABN Amro downgraded Groupe Danone (GDNNY) to Sell from Hold.
  
• Daimler (DAI) was downgraded to Hold from Buy at Merck Finck.

MOST NOTEWORTHY: Intuitive Surgical, Brinker and Circuit City were today's noteworthy downgrades:

• Wachovia downgraded Intuitive Surgical (NASDAQ:ISRG) to Market Perform from Outperform, as they view shares as fully valued and notes that the company may guide 2008 below consensus.
  
• Brinker (NYSE:EAT) was downgraded to Underweight from Hold at KeyBanc following disappointing Q2 same-store-sales report and earnings.
  
• Cowen downgraded Circuit City (NYSE:CC) to Neutral from Outperform, citing limited visibility into the timing of the company's turnaround.

OTHER DOWNGRADES:

• Goldman removed EMC Corp (NYSE:EMC) from its Tech Framework Growth List and added Autoliv (NYSE:ALV) to its Pan-European Sell List.
  
• Merrill downgraded Rockwell (NYSE:ROK) to Sell from Neutral and Illinois Tool Works (NYSE:ITW) to Neutral from Buy.

MOST NOTEWORTHY UPGRADES:

• There were no notable upgrades today.

MOST NOTEWORTHY DOWNGRADES:

• Bear Stearns downgraded MSC Industrial (NYSE:MSM) shares to Peer Perform from Outperform following yesterday's durable goods data as they believe the U.S. maintenance, repair and overhaul market could modestly slow in the near-term.
  
• Citigroup downgraded shares of Golden Telecom (NASDAQ:GLDN) to Hold from Buy and lowered their target to $105, equal to the takeout offer from VimpelCom.
• Chicago Bridge & Iron (NYSE:CBI) was downgraded to Neutral from Add at Capital One Southcoast.

MOST NOTEWORTHY INITIATIONS:

• Lehman Brothers initiated El Paso Pipeline (NYSE:EPB) with an Overweight.
  
• Alliant Techsystems NYSE:ATK) was initiated with a Neutral at Cowen, which said expectations for ATK are high.

MOST NOTEWORTHY: RWE AG, Asta Funding and Trident Microsystems were today's noteworthy downgrades:

• Goldman lowered its rating on RWE AG (OTC:RWEOY) to Sell from Neutral. They believe shares are discounting high power prices for the long term and sees downside risk to earnings.
• Kaufman Bros. downgraded shares of Asta Funding (NASDAQ:ASFI) to Hold from Buy to reflect the uncertainty surrounding the company's extension in reporting its Q4 and fiscal 2007 results.
• Trident Microsystems (NASDAQ:TRID) was lowered to Hold from Buy at Roth Capital. Roth Capital's checks indicate low end TVs continue to outsell top tier LCD TVs, which could impact Trident's revenues.

OTHER DOWNGRADES:

• Trane (NYSE:TT) was downgraded to Equal Weight from Overweight at Lehman.
• Deutsche Bank downgraded Marshall & Ilsley (NYSE:MI) to Hold from Buy.
• UBS downgraded Nestle (NSRGY) to Neutral from Buy.