Analyst upgrades:

• Baird upgraded Starwood Hotels (NYSE: HOT), Host Hotels (NYSE: HST) and Marriott (NYSE: MAR) to Outperform from Neutral based on valuation and indications that negative sentiment has reached a bottom.
• Citigroup upgraded Torchmark (NYSE: TMK) to Buy from Hold as they find the valuation attractive and think management can grow earnings and book value in 2009/2010. Despite upgrading, the firm lowered their target price to $37 from $45.
• ASM International (NASDAQ: ASMI) was added to Goldman's Conviction Buy List.
• Credit Suisse (NYSE: CS) was raised to Overweight from Equal Weight at Morgan Stanley.
• Live Nation (NYSE: LYV) was upgraded at Natixis to Buy from Hold.

MOST NOTEWORTHY: Mueller Water, ASM International and Kensey Nash were today's noteworthy upgrades:

• Baird upgraded shares of Mueller Water (NYSE: MWA) to Outperform from Neutral following recent channel checks, as they believe the company has seen a cyclical trough in earnings and downside is limited at current levels. The company's target was raised to $12 from $9.
  
• Jefferies upgraded shares of ASM International (NASDAQ: ASMI) to Buy from Hold as they believe a break-up is likely following bids for the company's front-end business.
  
• Susquehanna said Kensey Nash's (NASDAQ: KNSY) sale of its endovascular products division was the best outcome and will allow the company to focus on being a pure-play OEM biomaterials platform company. Shares were upgraded to Positive from Neutral.

OTHER UPGRADES:

• Goldman added Vistaprint (NASDAQ: VPRT) to the Conviction Buy List.
  
• UBS upgraded Smith & Nephew (NYSE: SNN) to Buy from Neutral.
  
• BorgWarner (NYSE: BWA) was raised to Overweight from Equal Weight at Lehman.

MOST NOTEWORTHY: Webster Financial, Eaton and Macrovision were today's noteworthy upgrades:

• Keefe Bruyette upgraded shares of Webster Financial (NYSE: WBS) to Outperform from Market Perform on valuation as they feel the company is adequately capitalized and in a position to withstand the weakening credit markets.
  
• JP Morgan upgraded Eaton (NYSE: ETN) to Overweight from Neutral citing bullish management comments at its conference last week.
  
• Piper upgraded Macrovision (NASDAQ: MVSN) to Buy from Neutral citing the closure of the Gemstar deal.

OTHER UPGRADES:

• Lehman upgraded U.S. stocks to Overweight from Underweight.
  
• Goldman added Hess Corp (NYSE: HES) and Mosaic (NYSE: MOS) to its Conviction Buy List.
  
• Novo Nordisk (NYSE: NVO) was raised at HSBC to Neutral from Underweight.
  
• Jefferies upgraded ASM International (NASDAQ: ASMI) to Hold from Underperform.

Before the bell: Futures steady ahead of payroll report

Wal-Mart Stores Inc. (NYSE: WMT) is holding its annual shareholder meeting Friday.

Apple Inc. (NASDAQ: AAPL) Chief Executive Officer Steve Jobs will deliver his keynote speech Monday June 9 and may unveil then an iPhone that works with third-generation, or 3G, wireless networks, which are much faster than current AT&T (NYSE: T)'s network as Apple tries to lure business users from Research in Motion Ltd. (NASDAQ: RIMM) BlackBerry users and reach more international customers. If the iPhone was at first positioned as a consumer phone, the business segment is too lucrative to avoid, not to mention that many overseas customers are used to 3G networks.

Verizon Wireless has agreed Thursday to buy Alltel Corp. for $5.9 billion, which would make it by far the largest cellular carrier in the U.S. Verizon Wireless is a joint venture of Vodafone (NYSE: VOD) and Verizon Communications (NYSE: VZ). The deal comes just seven months after Alltel was taken private by TPG Capital and a unit of Goldman Sachs Group (NYSE: GS). Together, they would have some 80 million subscribers, surpassing AT&T (NYSE: T)'s 71 million.

MAJOR PAPERS:

• If the financial crisis hasn't crippled banks enough, the cost to build bank loan reserves may be just as painful, according to the Wall Street Journal's "Heard on the Street". The need for larger reserves is eating away at earnings and is showing up in first quarter reports for banks such as Bank of America Corporation (NYSE: BAC), whose results took an additional hit because of a $6B addition to its loan loss reserve.
• Just four months after Journal parent Dow Jones & Co. was bought by Rupert Murdoch's News Corporation (NYSE: NWS), Wall Street Journal managing editor Marcus Brauchli is expected to resign, according to the Wall Street Journal. Journal publisher Robert Thomson may temporarily take over until a new managing editor is hired.
• The Financial Times reported that Citigroup Incorporated (NYSE: C) is seeking advice from IT group Hewlett-Packard Company (NYSE: HPQ) on how to overcome a crisis without breaking up the company.

WEB SITES:

• According to Reuters, activist shareholders in ASM International (NASDAQ: ASMI) believe, by giving more equity to top managers, that they can boost its value by $1.6B.