MOST NOTEWORTHY: Puget Energy, RC2 Corp and Marvel Entertainment were today's noteworthy upgrades:

• Baird upgraded Puget Energy (NYSE: PSD) to Outperform from Neutral citing valuation on a stand-alone basis and sees additional upside if the merger with Macquarie is approved this fall.
  
• Piper upgraded shares of RC2 Corp (NASDAQ: RCRC) to Buy from Neutral following the Children's Publishing Division acquisition as they view it as a good strategic fit and find RCRC shares attractively valued.
  
• RBC upgraded Marvel Entertainment (NYSE: MVL) shares to Outperform from Sector Perform to reflect the company's visible earnings growth and valuation.

OTHER UPGRADES:

• ASML Holdings (NASDAQ: ASML) was raised to Buy from Neutral at Goldman. The firm also added shares to the Conviction Buy List.
  
• Invitrogen (NASDAQ: IVGN) was upgraded to Overweight from Neutral at JP Morgan.
  
• Citigroup upgraded Clearwire (NASDAQ: CLWR) and Credence (NASDAQ: CMOS) to Hold from Sell.

FINRA (The Financial Industry Regulatory Authority) decided to look into whether risky subprime mortgage securities were sold inappropriately to individuals who aren't suitable targets for these risky collateralized mortgage obligations (CMOs), Bloomberg reports this morning.

On its website, FINRA warns that CMOs should be sold to "sophisticated investors" who will be "prepared to do a lot of homework." FINRA sent letters on Dec. 14 to find out if this warning was heeded in sales of CMOs to the general public.

In the letter, FINRA asks more than a dozen firms to supply "sales spreadsheets, marketing materials and procedures and methods for matching products to clients' investment needs by Jan. 8, according to Bloomberg. in addition, these letters ask for training materials and a list of customer complaints related to these investors. One lawyer, Brian Rubin, whose clients received the letters, told Bloomberg that "FINRA believes these are potentially risky and complicated products, and they have concerns about suitability." He would not name his clients, and right now the letters were sent to a cross section of the industry without any suspicion of wrongdoing.

The big question is whether these risky products were sold to retirees or others who do not meet the standards of "sophisticated investors" who would be suitable targets for these types of investment products. In September, FINRA CEO Mary Schapiro first indicated that she planned to scrutinize sales of mortgage-backed products to retirees.

MOST NOTEWORTHY: The Semiconductor Production Equipment sector, General Motors (NYSE: GM) and Advanced Micro (NYSE: AMD) topped the massive list of downgrades this morning.

• Goldman Sachs downgraded the Semiconductor Production Equipment sector to Cautious from Neutral, citing expectations for weakness in NAND and DRAM in 2007; the firm also downgraded Advanced Micro Devices (NYSE: AMD), Applied Materials (NASDAQ: AMAT) and Credence Systems (NASDAQ: CMOS) to Sell from Neutral.

• General Motors (NYSE: GM) was downgraded to Sell from Neutral at Bank of America, telling clients it expects market share for the first-half of 2007 to be lower, along with a sharp fourth-quarter decline in new product volume due to overpricing.

• ThinkEquity also downgraded Advanced Micro Devices (NYSE: AMD) to Sell from Buy with a $15 target, as they believe inventory in the channel is building and prices are falling; furthermore, the broker believes Advanced Micro has little opportunity of meeting the high expectations for margins it set on its recent analyst day.

OTHER DOWNGRADES:

• Amazon.com Inc (NASDAQ: AMZN) was downgraded to Sell from Hold with a $34 target at Citigroup citing valuation that reflects aggressive long-term operating margins.

• Wachovia downgraded shares of Cox Radio 'A' (NYSE: CXR) to Underperform from Market Perform and recommended investors to swap out of Cox and into their top 2007 picks: Lamar Advertising 'A' (NASDAQ: LAMR) or Entravision Communication 'A' (NYSE: EVC).

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).