Analyst Upgrades

• Exxon Mobil (XOM), Netflix (NFLX), Noble Corp. (NE), Pioneer Natural (PXD) and Noble Energy (NBL) to buy from neutral at Goldman.
• Cenovus Energy (CVE) to conviction buy from neutral and Atwood Oceanics (ATW) to neutral from sell at Goldman as well.
• Southern Company (SO) to buy from hold at Citigroup.
• Chevron (CVX) to buy from neutral at BofA/Merrill.
• Ryder (R), Entergy (ETR) and Seaspan (SSW) to buy from hold at Jefferies.
• Gerdau (GGB), Crown Castle (CCI) and American Tower (AMT) to buy from neutral at UBS.
• Aon (AON) and Willis Group (WSH) to buy from neutral at Janney Capital.
• Ryland Group (RYL) to buy from neutral at Ticonderoga.

On Thursday, the Federal Deposit Insurance Corp. (FDIC) is expected to propose new guidelines for private-equity investors seeking to buy failed banks. Those guidelines are intended to ensure that these largely unregulated firms don't take too many risks with troubled banks or buy and flip them.

The new rules come as private-equity firms have grown increasingly active in the banking sector. FDIC Chairman Sheila Bair said she's comfortable with the private-equity deals the agency has struck for failed banks such as IndyMac and BankUnited, but that a more structured process needs to be put in place.

Not long ago, the private equity firm, Fortress Investment Group LLC (NYSE: FIG), appeared to be in deep trouble. But things are looking better now, as the stock price has gone from $1 to $4.65 this year.

In fact, Fortress is now pulling the trigger on some deals. Just this week, the firm teamed up with Crestview Partners LP and Lightyear Capital LLC to invest $450 million in First Southern Bancorp (Lightyear is operated by Donald Marron, who was the former chief of PaineWebber Group).

TheStreet.com's Jim Cramer says this bank on the FDIC's problem list is big enough to matter.

How much was made of the FDIC's "problem bank" list yesterday? Frankly, a little too much -- the list could be 200 banks long and be insignificant or it could be five banks long and be of incredible importance.

Is there any doubt that that the FDIC can handle 100 banks of the $1 billion to $2 billion variety? There shouldn't be. They can look the other way on most of them if they have to, or close them sequentially while asking for more capital along the way.

But if BankUnited (NASDAQ: BKUNA) (Cramer's Take) with $7 billion in deposits goes under, that'd makes headlines. It would be particularly newsworthy because it is in a visible location (the Miami area) and would cause a flood of stories about older people worried about their deposits -- pensioners -- and a big round of stories about how horrible Florida real estate really is. Then you get stories about how IndyMac and BankUnited represent the "system," and when you add that to the woes of Fannie (NYSE: FNM) (Cramer's Take) and Freddie (NYSE: FRE) (Cramer's Take) -- which are now directly making it harder to get cheap mortgage money because they are paying through the nose for their own money and buying fewer mortgages, just want we don't need -- and you get headlines galore about how bad things are. When you couple that with the inaction of Treasury on the FNM/FRE front, you are going to be in for a test of the July 15 lows.

MOST NOTEWORTHY: HSBC Holdings, AstraZeneca, Syneron Medical, Talbots, BankUnited and First Fed Financial were today's noteworthy downgrades:

• UBS downgraded shares of HSBC Holdings(NYSE: HBC) to Neutral from Buy on valuation, rising customer defaults and slower growth at the company's the U.S. consumer-finance unit.
  
• UBS also downgraded AstraZeneca (NYSE: AZN) to Sell from Neutral, as they believe the company faces major risks from drug approvals, competition and lawsuits.
  
• Merriman downgraded shares of Syneron Medical (NASDAQ: ELOS) to Neutral from Buy following the company's Q3 earnings preannouncement due to near-term margin erosion and growth drivers that remain four quarters away.
  
• CIBC downgraded shares of Talbots (NYSE: TLB) to Sector Performer from Outperformer as they believe 2H07 expectations are too high given the current weakness in the Missy space.
  
• Friedman Billings downgraded BankUnited (NASDAQ: BKUNA) to Market Perform from Outperform and FirstFed Financial (NYSE: FED) to Underperform from Market Perform based on credit trends that are eroding faster than anticipated.

OTHER DOWNGRADES:

• Merrill downgraded JMP Group (NYSE: JMP) to Neutral from Buy.
  
• Baird downgraded Cabela's (NYSE: CAB) to Neutral from Outperform.
  
• Societe Generale downgraded Business Objects (NASDAQ: BOBJ) to Hold from Buy.