Analyst Upgrades

• Bristol-Myers (BMY) to hold from underperform at Jefferies.
• Pep Boys (PBY) to buy from hold at Stifel Nicolaus.
• Tesla Motors (TSLA) to overweight from equal weight at Morgan Stanley.
• Emerson (EMR) to buy from hold at Deutsche Bank.
• ARM Holdings (ARMH) to buy from neutral at BofA/Merrill.
• NetLogic (NETL) and Cavium Networks (CAVM) to buy from hold at Auriga.
• Aimco (AIV) to hold from sell at Citigroup.
• Ceragon Networks (CRNT) to overweight from equal weight at Barclays.

"According to the Spectrem Group, which recently polled the country's wealthiest people, they're the most optimistic they've been in months," says Marc Lichtenfeld.

The contributing editor to Investment U explains, "Let's take a look at 3 stocks that millionaires (and aspiring ones) should pay attention to: Apple (AAPL), Bristol-Myers Squibb (BMY) and Varian Medical Systems (VAR).

"And according to Fidelity, 83% of millionaires surveyed said the financial crisis did not shake their confidence in investing. And of those who said they'll invest more money in the stock market, nearly 60% of them plan to buy technology stocks. And just under half expect to acquire pharmaceutical and healthcare stocks.

Analyst Upgrades

• Aetna (AET) to buy from neutral at Goldman.
• Kellogg (K) to buy from neutral at UBS.
• PetSmart (PETM) to outperform from market perform at JMP Securities.
• NetApp (NTAP) and Scripps Networks (SNI) to buy from hold at Wunderlich.
• Thoratec (THOR) to buy from hold at Auriga.
• ArcelorMittal (MT) to overweight from neutral at HSBC.
• Bristol-Myers (BMY) to outperform from neutral at Cowen.
• Eaton Vance (EV) to neutral from sell at Ticonderoga.
• Adtran (ADTN) to buy from underperform at BofA/Merrill.

U.S. stock futures are slightly higher this morning, as investors await earnings reports from many companies and economic data on weekly jobless claims. Futures for the Dow Jones Industrial Average gained 9 points to 11,945, while those for the S&P 500 rose 0.90 point to 1,295. Futures for the Nasdaq 100 rose 4.50 points to 2,323.

Abroad, positive sentiment ruled the European markets today. While STOXX Europe 600 Index has gained 0.25%, London's FTSE 100 Index moved up 0.22%.

Asian markets ended mostly higher, with Japan's Nikkei Stock Average adding 0.74%, Australia's S&P/ASX 200 moving down 0.04% and China's Shanghai Composite gaining 1.49%.

Piper Jaffray is raising its price target on shares of Informatica (INFA) to $40 from $37 and has a neutral rating on its shares. Shares of INFA gained $1.39 yesterday to close at $43.79, a gain of 3.28%.

"Many growth and income investors will eventually need to start taking dividends to supplement other forms of cash flow," says Chuck Carlson, an expert in dividend reinvestment plans.

The editor of the DRIP Investor explains, "And many investors would like to receive those dividends on a regular basis. And, in fact, you can get monthly dividend check from a portfolio holding just three stocks.

The earnings crunch continues this week, and analysts surveyed by Thomson Reuters are anticipating lots of strong quarterly reports.

For example, year-over-year earnings growth from big oil Chevron (CVX), ConocoPhillips (COP), ExxonMobil (XOM) and Royal Dutch Shell (RDS.A) are expected to be in double digits. The same is true of many other energy and mining concerns reporting this week: Allegheny Technologies (ATI), Alliant Energy (LNT), Arch Coal (ACI), Cliffs Natural Resources (CLF), CMS Energy (CMS), CONSOL Energy (CNX), DPL (DPL), Hess Corp. (HES), Minerals Technologies (MTX), Pioneer Natural Resources (PXD), PPL Corp. (PPL), Southwestern Energy (SWN), Total (TOT), Whiting Petroleum (WLL), Williams Companies (WMB) and Wisconsin Energy (WEC).

Analyst Upgrades

• Merriman upgraded Penn National (PENN) to buy from neutral, citing the company's strong balance sheet and management team. The firm also raised its target range for shares to $34 to $37.60.
• BMO Capital upgraded Cooper Companies (COO) to outperform from market perform and raised its price target to $55 from $46. The firm sees upside to Street estimates and increased visibility.
• Argus upgraded Watson Pharma (WPI) to buy from hold based on valuation.
• Phillips-Van Heusen (PVH) was upgraded to conviction buy from neutral at Goldman.
• Allstate (ALL) was upgraded to overweight from neutral at JPMorgan.
• Weingarten Realty (WRI) was upgraded to neutral from underperform at BofA/Merrill.

"Foreign corporations have been on a mini buying spree in 2010. Not surprising, merger and acquisition activity has heated up a bit in the drug sector," says Chuck Carlson, editor of The DRIP Investor.

The dividend expert explains, " Global merger and acquisition activity topped $1 trillion in the first half of 2010, a 9.4% increase over the previous year. And Bristol-Myers Squibb (BMY), recommend stock in our Editor's Portfolio, has been one of the more active participants.

Early Friday morning, Bristol-Myers Squibb (BMY) and AstraZeneca (AZN) announced the results of their randomized, double-blind Phase 3 clinical study in adults with type 2 diabetes that is inadequately controlled with metformin therapy. The study showed that dapagliflozin was non-inferior compared to glipizide (sulphonylurea) and improved glycosylated hemoglobin levels (HbA1c).

In addition to these results, the study also showed that dapagliflozin plus metformin brought about "significant reductions in efficacy secondary endpoints: reduction in total body weight from baseline, compared with a weight gain on glipizide plus metformin therapy, and a reduced number of patients reporting one or more hypoglycemic events."

Bristol-Myers Squibb (BMY - option chain) shares are rising today after the release of a study which shows that an experimental blood-thinning drug co-produced by BMY and Pfizer (PFE) cut the rate of strokes among people with abnormal heartbeats by more than 50% versus aspirin. 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 BMY.

BMY opened this morning at $26.11. So far today the stock has hit a low of $26.00 and a high of $26.34. As of 12:25, BMY is trading at $26.20 up 0.35 (1.3%). The chart for BMY looks bullish and S&P gives BMY a positive 4 STARS (out of 5) buy ranking.

Mead Johnson Nutrition (MJN) -- the makers of the popular infant formula Enfamil -- stand to benefit from parents' desire to take care of their children, even in the hardest of economic situations.

The company -- which spun off from Bristol-Myers Squibb Co. (BMY) in February 2009 -- had a somewhat disappointing earnings announcement last week due to rising administrative and advertising costs. But if emerging market sales can continue to improve, Mead Johnson looks like a good buy.

"New products are the life-blood of any pharmaceutical company. Unfortunately, blockbuster drug breakthroughs have been fairly rare in recent years, lowering valuations for pharmaceutical stocks," says Chuck Carlson.

The editor of The DRIP Investor, which focuses on dividend reinvestment strategies, explains, "The good news is that the lone drug stock in the Editor's Portfolio, Bristol-Myers Squibb (BMY), has had a spate of good news recently on the drug-development front.

"The company recently announced that a mid-stage trial of an experimental arthritis drug had met its goal, supporting further development of the drug.

Analyst Upgrades

• FBR Capital upgraded Noble Corporation (NE) to outperform from market perform as it finds the company's acquisition of Frontier Drilling as smart and strategic. The firm upped its target price for shares to $42 from $36.
• Citigroup upgraded Ameriprise (AMP) to buy from hold, citing potential margin expansion from the Columbia acquisition. The firm maintains a $50 price target for shares.
• Thomas Weisel upgraded Jabil Circuit (JBL) to overweight from market weight, citing valuation and the company's growth prospects. The firm raised its target for shares to $20 from $18.
• Blackrock (BLK) was upgraded to outperform from market perform at Keefe Bruyette.
• Disney (DIS) and News Corp (NWS) were upgraded to buy from neutral at Goldman.
• Portland General Electric (POR) was upgraded to neutral from underperform at BofA/Merrill.

In its weekend edition, Barron's Andrew Bary wonders whether Big Pharma's punishment on Wall Street has gone too far. The sector has fallen out of favor with Wall Street and now has one of the lowest price/earnings ratios of any major sector of the stock market, Bary writes.

Investors are staying away from the large pharmaceutical companies ahead of their looming patent cliff, when blockbuster drugs like Lipitor, Plavix and Singulair lose patent protection and lose most of the sales from these drugs to generics. Investors also fear the companies don't have enough new drugs in the pipeline to make up for the lost sales, which could mean big hits to earnings.

But when the Street writes off one of the world's most important industries and with valuations at all-time lows, investors ought to take notice, Bary says. Especially when the average dividend yield of the big drugmakers is 4.8%.

Analyst Upgrades

• Barclays upgraded GlaxoSmithKline (GSK) to overweight from equal weight and said investor concerns regarding Advair and Avandia are overdone.
• Leerink upgraded Bristol-Myers (BMY) to outperform from market perform, citing management's pipeline execution. Shares were also upgraded at Citigroup this morning to buy from hold.
• Goldman upgraded Medco Health (MHS) to buy from neutral and raised its price target on shares to $76 from $67. The firm cites valuation and expectations that earnings will accelerate in 2H10 driven by a stronger generic outlook.
• U.S. Steel (X) was upgraded to neutral from sell at UBS.
• Blyth (BTH) was upgraded to hold from underperform at Jefferies.
• IPC The Hospitalist Co. (IPCM) was upgraded to buy from hold at Deutsche Bank.