Analyst Upgrades

• Goldman upgraded Eaton (ETN) to conviction buy from neutral.
• AECOM Technology (ACM) was upgraded to outperform from neutral at Macquarie.
• Piper Jaffray upgraded Hologic (HOLX), Gen-Probe (GPRO) and Qiagen (QGEN) to overweight from neutral.
• GeoMet (GMET) was upgraded to accumulate from neutral at Global Hunter.
• Accretive Health (AH) was upgraded to outperform from neutral at RW Baird.
• Morgan Stanley upgraded Reinsurance Group (RGA) to overweight from equal weight.
• BofA/Merrill upgraded Clearwire (CLWR) to neutral from underperform.

Analyst Upgrades

• State Street (STT) was upgraded to buy from neutral at Goldman.
• Roth Capital upgraded Intel (INTC), Marvell Technology (MRVL) and Nvidia (NVDA) to buy from neutral.
• Bebe Stores (BEBE) was upgraded to buy from neutral at Janney Montgomery.
• W&T Offshore (WTI) was upgraded to buy from accumulate at Global Hunter.
• Citigroup upgraded International Rectifier (IRF) and Timberland (TBL) to hold from sell.
• Watson Pharma (WPI) was upgraded to buy from neutral at UBS.
• Atmel (ATML) was upgraded to strong buy from buy at Needham.
• Ashford Hospitality (AHT) was upgraded to outperform from neutral at RW Baird.
• Oppenheimer upgraded MetroPCS (PCS) to outperform from perform.

Clearwire (CLWR - option chain) shares are rising today on reports that the company will auction some of its wireless spectrum in order to raise $2.5 billion to $5 billion. According to Bloomberg, potential bidders for the spectrum include AT&T (T), Verizon (VZ), Deutsche Telekom, Time Warner Cable (TWC) and Sprint (S). 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 CLWR.

SPDR Gold Shares (GLD) is recently up $1.26 to $108.60. Gold is also up 11% to $1,108.60 according to Bloomberg. GLD January and February option implied volatility of 24 is near its 26-week average of 25, according to Track Data, suggesting non-directional price movement.

Clearwire (CLWR) a provider of 4G service called Clear, closed at $6.79. CLWR January option implied volatility is at 73, March at 68; near its 26-week average of 67 according to Track Data, suggesting non-directional price movement.

CBOE Volatility Index-VIX at 22.51; 10-day moving average is 21.93.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Kaufman Bros. upgraded Yahoo! (YHOO) to buy from hold after channel checks indicated display advertising is seeing continued improvement in pricing and demand. The firm finds the risk/reward profile on Yahoo! shares attractive at current levels and raised its price target on the stock to $20 from $19.
• Citigroup upgraded Edwards Lifesciences (EW) to buy from hold following the company's investor meeting as it believes new product launches will serve as catalysts in 2010. Citi raised its target on shares to $101 from $72.
• Deutsche Bank upgraded BWAY Holding (BWY) to buy from hold following the company's Q4 results and raised its target on shares to $22 from $17.
• Clearwire (CLWR) was upgraded to buy from sell at Soleil.
• Nokia (NOK) was raised to hold from sell at Societe Generale.
• NCR Corp. (NCR) was upgraded at JPMorgan to overweight from neutral.

The vision of Clearwire (CLWR) is definitely ambitious: to "give you faster Internet at home, at work and on the go, so that people everywhere will have the magic of the Internet with them all the time." This means building a sophisticated network across the country, which does not come cheap.

Tuesday, Clearwire announced yet another financing round, which comes to $1.56 billion. The investors include Sprint Nextel (S), Comcast (CMCSA), Time Warner Cable (TWC), Intel (INTC), Eagle River Holdings LLC, and Bright House Networks LLC.

Clearwire (NASDAQ: CLWR) a provider of 4G service called Clear, closed at $9.09. CLWR over all option implied volatility of 76 is below a level of 216 on December 15, 2008 and above a level of 51 on September 26, 2008 according to IVolatility.

Vale SA volatility near 14-month lows as shares trend higher

Vale SA (NASDAQ: VALE), a metals and mining company, closed at $22.01. VALE options were active on total volume of 94,194 contracts. VALE October option implied volatility is at 43, December is at 45, below its 26-week average of 52 according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

As earnings season begins to wind down, some apparel retailers are scheduled to report quarterly results this week. Analysts polled by Thomson Reuters anticipate that Walmart Stores Inc. (NYSE: WMT), the 800-pound gorilla in the space, will report that it earned $0.77 per share in the first quarter, about the same as in the first quarter of last year. But JCPenney Co. (NYSE: JCP), Kohl's Corp. (NYSE: KSS), Nordstrom Inc. (NYSE: JWN), and Urban Outfitters Inc. (NASDAQ: URBN) are expected to report lower profits for the first quarter as consumers continued to hold off on spending. Macy's Inc. (NYSE: M) and Abercrombie & Fitch Co. (NYSE: ANF) are expected to have swung to a loss year over year.

Whole Foods Market Inc. (NASDAQ: WFMI) and Winn Dixie Stores Inc. (NASDAQ: WINN) are likewise expected to report declining earnings, while the Great Atlantic & Pacific Tea Co. (NYSE: GAP), parent of the A&P supermarket chain, is expected to have narrowed its net loss 68.9% to $0.28 per share.

Kirkland, Wash. based Clearwire Corporation (NASDAQ: CLWR) closed on a transaction in December which merged the Sprint/Nextel (NYSE: S) wireless Internet business with the WiMax business of CLWR.

In connection with the transaction, CLWR secured $3.2 billion from a group of investors linked to the development of the wireless broadband industry, including Comcast (NASDAQ: CMCSA), Google (NASDAQ: GOOG), Intel (NASDAQ: INTC) and Time Warner Cable (NYSE: TWX).

Clearwater is offering its broadband service under the label "Clear."

While operating in a competitive environment for WiMax (Worldwide Interoperability for Microwave Access), CWTR has an advantage over WiFi, which is limited to access in small areas, such as home or coffee shop. WiMax, on the other hand, offers access from a very broad area and while being mobile in a vehicle.

Though not as capitalized as competitors like Verizon (NYSE: VZ) or AT&T (NYSE: T), the company's relationship with its investors should give it access to capital when needed.

On Jan. 9, due to a significant drop in the market value of CLWR stock, Intel announced a writedown of its investment in CLWR of $950 million. Intel is only the first of the investment group to reflect this writedown in their guidance for the quarter.

Driven by accounting rules mandating that investments in stocks that decline significantly in value be written off, the other publicly traded companies with investments in CLWR will be required to follow suit.

In the face of these writedowns, investors have kept the price of CLWR depressed in spite of recent good news from the company. At around $4.60, the stock is trading near its 52-week low of $3.24, and well below its high of $7.20.

The company's balance sheet reflects its growth mode, with a long-term debt-to-equity ratio of 186 and a current ratio of 3.25.

Despite Sprint Nextel Corp.'s (NYSE: S) share price being down more than 50% in the past year, shares were up 7.5% last week -- up 46.5% in the past montyh -- on all the buzz surrounding Sprint lately. There are rumors that Deutsche Telekom (NYSE: DT) may buyout Sprint and merge it into T Mobile. Then there were rumors that Sprint may spin off Nextel (i.e., undo its troubled merger). And there's the excitment around a joint venture with Clearwire Corp. (NASDAQ: CLWR) to create a high-speed wireless internet network that covers most of the U.S.

But when Sprint reports its first-quarter results tomorrow, analysts polled by Thomson Financial expect the company to report earnings of a mere penny per share, down from the same period in 2007 when it earned 18 cents per share, and from the previous quarter's 21 cents per share. The company has beat quarterly estimates over the past year -- by 17.3% in the fourth quarter -- and it certainly has plenty of room to best analysts' low expectations for this past quarter.

Overland Park, Kansas-based Sprint Nextel operates a nationwide digital wireless network with more than 50 million subscribers. In the past year, Sprint's revenues were $40.1 billion. The company's long-term EPS growth forecast is 8.22%, which is less than the 8.67% of rival Verizon (NYSE: VZ) and the S&P 500. The consensus recommendation of analysts continues to be to hold Sprint.

Shares closed Friday at $9.39, up from a 52-week low of $5.48 in March, but still well off the 52-week high of 23.42 last June.

For news that could influence these results, see BloggingStocks' Sprint coverage.

MOST NOTEWORTHY:

• Merrill downgraded AMR Corp (NYSE:AMR), Delta Air Lines (NYSE:DAL), Continental Airlines (NYSE:CAL), US Airways (NYSE:LCC) and UAL Corp (NASDAQ:UAUA) to Neutral from Buy citing earnings risk this year from higher energy costs.
  
• Oppenheimer downgraded shares of Chelsea Therapeutics (NASDAQ:CHTP) to Perform from Outperform after their survey suggested physicians believe currently available generic treatments are adequate in neurogenic orthostatic hypotension, which could impact the company's lead drug Droxidopa.
  
• Clearwire (NASDAQ:CLWR) was cut to Sell from Hold at Citigroup on valuation, as they estimate fair value at $13.

• Goldman downgraded Kellogg (NYSE:K) to Neutral from Buy and Hershey Foods (NYSE:HSY) to Sell from Neutral.
  
• Piper lowered Orbitz Worldwide (NYSE:OWW) to Neutral from Buy.

So, it is pleasing to think that if the new Sprint-Clearwire venture can build out is national presence successfully and capture customers tired of limited high-speed internet service, the world will be its oyster. Of course, other companies are contributing to the venture as well, including Google, Inc. (NASDAQ: GOOG). Why would Google want to put money into this? Because this could be Google's most important investment ever.

Bypassing the telephone and cable companies that have a stranglehold on most of the high-speed internet business in the U.S. has long been the dream of Google. It doesn't want a middleman in the way of it connecting consumers and businesses with the information they seek. Although Google wasn't successful in the recent FCC radio auctions (maybe by design), finding a way to provide internet service directly to its customer base would give Google on a much more powerful perch than it has even today. Google could even buy the new Clearwire partnership outright once it's established.

I think they're starting to get giddy in the Google board room.