Late Thursday, McDonald's (NYSE: MCD) announced a 10% increase to its cash dividend. The fast-food firm will now shell out 55 cents per share each quarter, bringing its total quarterly dividend payout to roughly $600 million. The increase will cost McDonald's about $220 million per year. This most recent dividend hike continues a long-term trend for Mickey D's, which has raised its quarterly payout every year since 1976.

In other MCD news, Bernstein initiated coverage of the stock with an "outperform" rating. The brokerage firm likes McDonald's because of its broad global footprint, with Bernstein noting that restaurants more heavily dependent on the sluggish U.S. market could struggle.

Brokerage firm Barclays this morning raised its price target on Apple Inc. (NASDAQ: AAPL) from $188 to $208. The new target represents a premium of 25.8% to AAPL's closing price on Wednesday. Additionally, Barclays reiterated its upbeat Overweight rating on the shares.

In a note to clients, analyst Ben Reitzes cited Apple's solid product pipeline and strong free cash flow outlook. "New products should begin to flow again within a few weeks," said Reitzes. "We are more upbeat about the long-term prospects for the iPhone & Mac lines with potential new products."

Analyst upgrades:

• Citigroup upgraded American Express (NYSE: AXP) to Buy from Hold and added the stock to its Top Picks Live list following the company's investor day. Citi believes American Express' credit trends are improving and raised its price target on shares to $36 from $28.
• Janney Montgomery upgraded Gardner Denver (NYSE: GDI) to Buy from Neutral after meeting with management to reflect expectations for EPS growth in 2010 and valuation. The firm has a $38 target on the stock.
• BofA/Merrill upgraded Freeport McMoRan (NYSE: FCX) to Buy from Underperform and raised its target to $87 from $49 based on strong copper fundamentals.
• Cbeyond (NASDAQ: CBEY) was upgraded to Overweight from Equal Weight at Stephens.
• Gibraltar Industries (NASDAQ: ROCK) was upgraded to Outperform from Neutral at Baird.
• Fortress (NYSE: FIG) was upgraded to Outperform from Market Perform at Keefe Bruyette.

Moody's cut Sony Corp.'s (NYSE: SNE) long-term ratings from A2 to A3 today. Slowing growth, price declines, and a strong yen were given as the reasons.

The company expects a second consecutive year of losses and is getting ready to kick off a restructuring plan. Nonetheless, the credit rating agency doesn't expect the Japanese electronics firm to overcome the effects of the global financial crisis -- especially for high-end, high-margin products.

US securities analysts have been encouraged not to rate every company they cover as a Buy. That may not be working even as earnings fall.

According to the FT, "Equity research departments around the world have become much more bearish since the start of the year, but US analysts remain markedly more bullish on stocks than peers elsewhere." Research quoted by the paper shows that only 6.7% of stocks covered by U.S. stock researchers rate a Sell.

The news is disturbing because positive ratings are one of the things that keep investors in stocks and analysts who are slow to cut their price targets and modify opinions are likely to cost shareholder money.

U.S. stock researchers have long believed that lowering ratings gives them less access to management. That is a poor excuse for being overly bullish on shares.

The investing public and press mock analysts who put Sell ratings on stocks after they have dropped 90%. It appears that those actions are built into the U.S. equity research system.

Douglas A. McIntyre is an editor at 24/7 Wall St.

The shares of Level 3 Communications (NASDAQ: LVLT) are sinking deeper into penny-stock territory this morning following a damaging price-target cut from analysts at Citigroup. The brokerage firm slashed its price target on LVLT from $2.00 to 50 cents, and reiterated its Sell rating on the stock.

After closing Monday at 94 cents, LVLT is slipping ever closer this morning to that hypothetical "support at zero." In fact, following yesterday's all-out bearish note on General Motors (NYSE: GM), one has to wonder if Deutsche Bank will soon be slapping another of its famous goose-egg targets on Level 3. The stock has closed seven out of the past 13 sessions south of the $1 level, and its descending 10-day and 20-day moving averages have provided stubborn resistance in recent months.

In fact, while many analysts have already denounced LVLT, there's still room for potential downgrades or price-target cuts. Zacks reports two Buy or better ratings from brokerage firms, and these bulls may soon be shamed into lowering their opinions (if so, they would join six analysts who consider the stock a Hold, and six who deem it a Sell or Strong Sell).

Meanwhile, Thomson Financial pegs the average 12-month price target at $1.68, a premium of 87% to the equity's closing price on Monday. While more negative notes could drag the shares lower, there is a bright side -- from their current level, the shares could only lose about 85 cents.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Fertilizer firm Potash Corp. of Saskatchewan (NYSE: POT) was hit with a price-target cut from analysts at UBS today. The brokerage firm slashed its target price from $150 to $130, but reiterated its Buy rating on the stock. It's been a schizophrenic day for the company, brokerage-wise; the late-breaking note from UBS effectively dashed the upward momentum POT gained this morning when Dundee upgraded the North American fertilizer sector to Overweight.

In fact, "schizophrenic" more or less sums up analyst activity on POT during the past several weeks. Following its third-quarter earnings report on October 23, Potash Corp. received no fewer than five price-target cuts, along with three reiterations of bullish Buy or better ratings, plus an upgrade. To make matters even more interesting, this is the second price-target cut UBS has issued on POT in the past week -- the first cut, on October 29, was from $165 to $150.

According to Thomson Financial, the deluge of downward revisions might not be over yet. POT's average 12-month price target is $115.98. This consensus estimate represents a rather healthy premium of 36% to the stock's closing price last Friday. Considering that POT shares have plummeted about 41% year-to-date, it seems safe to say that expectations might be too high for this Canadian import.

On October 3, the shares of Apple Inc. (NASDAQ: AAPL) dropped below the $100 mark for the first time since May 2007. In fact, the stock dropped last Friday to a new 52-week low of $85, representing a 19-month nadir for the iPhone parent. Today, this price plunge served as the catalyst for a valuation-based upgrade from Bernstein.

In a note to clients, Bernstein boosted its rating on AAPL from Market Perform to Outperform, and said that its "longer-term growth story remains intact." Analyst A.M. Sacconaghi added, "Investors appear to be valuing Apple on an earnings multiple, rather than on cash flow, which fundamentally undervalues the company given the huge deferred revenue growth associated with the iPhone."

Specifically, the brokerage firm estimates that the iPhone itself could add between $2.25 and $3.40 per share to cash flow above earnings in fiscal 2009.

However, following the stock's recent free-fall down the charts, Bernstein was forced to trim its price target on AAPL from $175 to $135. Credit Suisse followed suit, slashing its price target on the equity from $200 to $135. Despite today's gain of about 7% amid a massive rally in U.S. stocks, Apple shares could be vulnerable to more price-target cuts during the near term. Thomson Financial pegs the average 12-month price target at $176.33, a lofty premium of 82% to Friday's close at $96.80.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Forget finance -- it's a rough day to be a handset maker. Following a widely panned earnings report from Research In Motion Limited (NASDAQ: RIMM), Finnish firm Nokia Corp. (NYSE: NOK) was slapped with price-target cuts from JP Morgan and ING. What's more, Dresdner Kleinwort warned that RIM's weak gross-margin guidance will most likely be echoed by Nokia.

Digging into the various reports, JP Morgan and ING both slashed their price target on Nokia from 11 euros to 10 euros per share. JP Morgan reiterated its "underweight" rating, and said it still thinks Nokia can increase its market share -- just not as much as the company might have hoped. The brokerage firm also sees replacement cycles growing by 6.5 months in 2009.

Meanwhile, Dresdner Kleinwort backed its 'hold" rating and its 15-euro target price, but warned that gross margins across the sector will remain under pressure through 2010.

The barrage of bearish brokerage notes -- along with RIM's disappointing turn in the earnings spotlight -- has NOK more than 4% lower at midday. Today's plunge likely came as a disappointment to enthusiastic option players; yesterday, traders on the International Securities Exchange (ISE) and the Chicago Board Options Exchange (CBOE) bought to open 25,322 calls on NOK, compared to just 346 puts.

The shares of Wachovia Corporation (NYSE: WB) opened on a gain of nearly 6% this morning, thanks to a positive note from brokerage firm UBS. The analysts raised their price target on WB from $12.50 to $16, and reiterated a "neutral" rating. However, the stock has wasted no time in whittling its early morning gains, and slipped into negative territory before midday.

Yesterday, Wachovia shares closed lower after Friedman Billings & Ramsey reinitiated coverage at "underperform." No surprise there -- but, in today's session, the equity is declining on what should have been a bullish boost from UBS. In fact, most financial stocks are higher today following speculation on a potential buyout bid for Lehman Brothers (NYSE: LEH). The Select Sector SPDR Financial Fund (NYSE: XLF) is sitting on a gain of more than 2% at last check.

Shares of Ctrip.com International, Ltd. (NASDAQ: CTRP) dropped into negative territory right out of the gate this morning, thanks to some skeptical analyst commentary. The Shanghai-based travel firm is slated to report its second-quarter earnings after the closing bell tonight, and Piper Jaffray analyst Michael J. Olson warned in a client note that he expects CTRP's results to fall short of consensus estimates.

Olson, who maintains a "neutral" rating on CTRP, cited the severe earthquake that hit western China in May as a key fundamental challenge for the company. He noted a 1% year-over-year decline in Chinese air traffic during the second quarter, observing, "This is the first time since the SARS issue in 2003 that China Airline traffic data has turned negative." He also expects that Ctrip's third-quarter outlook will disappoint the Street, due to travel restrictions related to the Olympic Games in Beijing.

Ahead of tonight's second-quarter release, analysts surveyed by Thomson Reuters are expecting Ctrip.com to report a profit of 20 cents per American Depositary Receipt (ADR) on $53.8 million in revenue. The company has a history of solid performance in the earnings spotlight; according to First Call, Ctrip.com has exceeded analysts' consensus estimates in each of the previous four quarters. And, in contrast to Olson's skepticism, Catherine Leung of Citi Investment Research believes that the online travel firm can pull off another positive surprise.

Merck & Co (NYSE: MRK) shares are trading higher today after a Citi Investment Research analyst initiated coverage on the stock with a "Buy" rating, saying the company will benefit as rivals' drug patents expire in the coming year. This is despite news that came out today that Merck will soon start to send out almost $5B in Vioxx settlement checks. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MRK.

After hitting a one-year high of $61.62 in December, the stock hit a one-year low of $34.49 in June. MRK opened this morning at $37.12. So far today the stock has hit a low of $36.60 and a high of $37.38. As of 1:05, MRK is trading at $37.38, up 42 cents(1.1%). The chart for MRK looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in just three months as long as MRK is above $32.50 at October expiration. Merck would have to fall by more than 13% before we would start to lose money. Learn more about this type of trade here.

MRK hasn't been below $34.50 at all in the past year and has shown support around $37 recently. This trade could be risky if the company's earnings (due out 7/21) disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low, which is just below $35.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MRK.

Mercadolibre (NASDAQ: MELI) shares are trading higher today after the company's CEO terminated a prearranged stock trading plan that could have sold up to 1,768,794 shares of MELI. A few analysts released notes today after this news that were generally positive on MELI's outlook. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MELI.

After hitting a one-year low of $21.00 in August, the stock hit a one-year high of $81.17 in December. MELI opened this morning at $28.50. So far today the stock has hit a low of $27.65 and a high of $30.73. As of 12:15, MELI is trading at $30.45, up $3.66 (13.7%). The chart for MELI looks bearish and steady.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just ten weeks as long as MELI is above $20 at September expiration. MELI would have to fall by more than 35% before we would start to lose money.

MOST NOTEWORTHY: Symantec, Cardinal Financial and BP Plc were today's noteworthy upgrades:

• ThinkPanmure upgraded Symantec (NASDAQ:SYMC) to Buy from Accumulate based on improved execution, stable growth in core business, and ramping competitive position in some high-growth businesses.
  
• Baird upgraded Cardinal Financial (NASDAQ:CFNL) to Outperform from Neutral based on valuation, the company's favorable credit risk profile in Northern Virginia, and its excess capital position.
  
• Societe Generale raised BP Plc (NYSE: BP) to Hold from Sell as it believes the bad news is priced into shares and earnings could be better than expected.

OTHER UPGRADES:

• Alcatel-Lucent (NYSE:ALU) was upgraded at Merrill Lynch to Neutral from Underperform.
  
• Jefferies lifted Hunsman (NYSE: HUN) to Hold from Underperform.
  
• Teva Pharmaceutical (NASDAQ:TEVA) was upgraded to Overweight from Neutral at HSBC.

Priceline.com (NASDAQ: PCLN) shares are falling today after an analyst at Citi Investment Research reiterated his hold rating on PCLN and dropped his price target to $142, citing weakness in European travel. Citi also removed competitor Expedia (NASDAQ: EXPE) from its Top Picks Live list, cut the price target on EXPE as well. 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 PCLN.

After hitting a one-year low of $59.50 in August, the stock hit a one-year high of $144.34 in May. This morning, PCLN opened at $119.78. So far today the stock has hit a low of $114.38 and a high of $121.95. As of 12:10, PCLN is trading at $117.95, down $7.18 (-5.7%). The chart for PCLN looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider an August bear-call credit spread above the $155 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in seven weeks as long as PCLN is below $155 at August expiration. PCLN would have to rise by more than 32% before we would start to lose money. Learn more about this type of trade here.

PCLN hasn't been above $145 at all in the past year and has shown resistance around $132 recently. This trade could be risky if the company's earnings (due out in early August) are a positive surprise, but even if that happens, this position could be protected by resistance PCLN might find around $140, where it topped out in May.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in PCLN or EXPE.