Analyst Upgrades

• Exxon Mobil (XOM) and BB&T (BBT) to outperform from perform at Oppenheimer.
• D.R. Horton (DHI) upgraded to outperform from market perform at Wells Fargo.
• Meritage Homes (MTH), Old Dominion Freight (ODFL) and Heartland Payment (HPY) to outperform from market perform at Wells Fargo.
• Toll Brothers (TOL) to overweight from equal weight at Barclays.
• Hershey (HSY) to buy from neutral at Janney Capital.
• UnitedHealth (UNH), Cigna (CI) and Allscripts (MDRX) to buy from hold at Deutsche Bank.
• Nationwide Health (NHP) to outperform from market perform at JMP Securities.
• Reynolds American (RAI) to buy from neutral at UBS.
• Adtran (ADTN), PG&E (PCG) and Wisconsin Energy (WEC) to overweight from equal weight at Morgan Stanley.

Analyst Upgrades

• Thoratec (THOR) to buy from neutral at UBS.
• TW Telecom (TWTC) to buy from hold at Citigroup.
• TAL Education (XRS) to overweight from neutral at Piper Jaffray.
• Amedisys (AMED) to buy from hold at Deutsche Bank.

Analyst Downgrades

• Navigators (NAVG) to neutral from outperform at Macquarie.
• El Paso Electric (EE) to hold from buy at Jefferies.
• Hancock Holding (HBHC) to hold from buy at Wunderlich.
• California Water Service (CWT) and American States Water (AWR) to neutral from buy at Janney Capital.
• Mednax (MD) to hold from buy at Deutsche Bank.

Cisco Systems, Inc. (CSCO) December 20 and January 20 calls were active with total call option volume of 497K contracts compared to 143K puts. December and January call option implied volatility is at 22, February is at 26, compared to its 26-week average of 30 according to Track Data. Large volume suggests traders positioning for movement.

Charles River Laboratories (CRL) closed up 3%, on Relational Investors LLC and the California State Teachers' Retirement System having a combined 6.1% stake in the company, and wanting the company to put itself up for sale, reports the Wall Street Journal. January option implied volatility of 29 is below its 26-week average of 34 according to Track Data, suggesting decreasing price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Today started out strong and ended up even stronger with triple-digit DJIA gains. The reports from ISM showed no manufacturing recession and actually showed more employment improvements. This was on the heels of a strong Chinese auto figure and on all major indexes outside of the US trading higher. The S&P 500 even got back above its 200-day moving average.

Here were today's unofficial closing bell readings:

Dow Jones 10,674.38 +208.44 (1.99%)
S&P 500 1,125.86 +24.26 (2.20%)
Nasdaq 2,295.36 +40.66 (1.80%)

U.S. stock futures advanced Monday morning, as investors seemingly ready to continue to drive stocks higher after reaching a 19-month high Friday. Strong earnings season, made stronger with this morning's Caterpillar report have been a key driver in the past couple of weeks. In addition, as the Greece bailout moves forward and economic indications continue to point to recovery, investors gain confidence.

There are no major economic reports due Monday, but the week is full of key readings such as GDP, consumer confidence and jobless claims. Also, the Federal Reserve Open Market Committee is meeting to discuss monetary policy, including interest rates. The two-day meeting will conclude on Wednesday.

Analyst Upgrades

• Barrington upgraded Lincoln Electric (LECO) to outperform from market perform to reflect its positive 2010-2012 outlook for the global welding sector. The firm has a $60 price target on shares.
• Merriman upgraded Akamai (AKAM) to buy from neutral as it believes the company's market share losses have stemmed and traffic volume growth should outpace pricing declines.
• Oppenheimer upgraded Blackstone Group (BX) to outperform from perform, citing improving fundamentals and disclosure. The firm set a $20.50 price target on the stock.
  
• Freeport McMoRan (FCX) was upgraded to outperform from sector perform at RBC Capital.
• Charles River Labs (CRL) was upgraded to equal weight from underweight at Morgan Stanley.
  

Analyst upgrades:

• RBC Capital upgraded Bank of America (NYSE: BAC) to Outperform from Sector Perform and said the company has attractive franchise value and earnings power, and is nearing the start of a credit driven earnings recovery. The firm raised its target to $22 from $19.
• Oppenheimer assumed coverage of Amazon.com (NASDAQ: AMZN) and upgraded shares to Outperform from Perform. The firm expects Amazon's revenue growth to re-accelerate over the next several quarters, making consensus estimates too conservative. Opco set a $130 price target on the stock.
• Barclays upgraded Ford (NYSE: F) to Equal Weight from Underweight and believes the company will report Q3 results above the Street. The firm raised its Q3 EPS estimate to 7 cents from 16 cents, vs. consensus of 21 cents, and its price target to $8 from $7.
• Charles River Labs (NYSE: CRL) was upgraded to Neutral from Sell at Goldman.
• Briggs & Stratton (NYSE: BGG) was upgraded to Outperform from Neutral at Baird.
• Sealed Air (NYSE: SEE) was upgraded to Equal Weight from Underweight at Barclays.

Selling prevailed again today. We got more news on who the new cabinet members would be under Obama; we have an auto bailout in the works in D.C.; and the EU cut rates. Even the Bank of England came in with a rate cut much larger than expected at 150 basis-points. The economic numbers were again dismal, which is something we just have to get used to.

Here are today's unofficial closing bell levels:
DJIA: 8,696.19 -4.85%
NASDAQ: 1,608.70 -4.34%
S&P 500: 905 -5.01%

52-week lows
Top Analyst Upgrades
Top Analyst Downgrades

Charles River Laboratories International Inc. (NYSE: CRL) dropped the ball that it was cutting its guidance for 2008. The trends we saw in early August appear to be coming to a crashing halt. This stock was down 21% at $26.60 right before the close.

Pepco Holdings, Inc. (NYSE: POM) did fairly well considering the company priced a secondary offering at $16.50 per share for 14 million shares. Shares were down only 2.6% at $17.12 right before the close.

Analyst upgrades:

• William Blair upgraded Parexel (NASDAQ: PRXL) to Outperform from Market Perform on increased conviction in the company's earnings growth outlook following channel checks.
  
• Friedman Billings upgraded UDR Inc (NYSE: UDR) to Outperform from Market Perform and raised its target to $22 from $26 citing the company's approximate 8% implied cap rate on is vastly improved apartment portfolio.
  
• Citigroup upgraded Abercrombie & Fitch (NYSE: ANF) to Hold from Sell on valuation as they believe weak fundamentals are now priced into the stock.
• Goldman upgraded Portland General Electric (NYSE: POR) to Buy from Neutral and added shares to the Conviction Buy List.
  
• StellarOne (NASDAQ: STEL) and Union Bankshares (NASDAQ: UBSH) were upgraded to Neutral from Underperform at Baird.
  
• Bernstein upgraded DISH Network (NASDAQ: DISH) to Market Perform from Underperform.

Analyst downgrades:

• Deutsche Bank downgraded Align Tech (NASDAQ: ALGN) to Hold from Buy as they believe macroeconomic pressures will limit the company's ability to reach longer term growth expectations. Align's target was lowered to $8 from $14.
  
• Jefferies downgraded shares of Advanced Medical (NYSE: EYE) to Underperform from Buy and lowered its target to $9 from $28 following the company's lowered guidance as they believe macroeconomic pressures affecting LASIK volumes and the unanticipated slowdown in lens care should put continued pressure on the stock.
  
• ThinkPanmure expects the macro slowdown and credit crunch to slow Intel's (NASDAQ: INTC) growth and IT capex spending. The firm downgraded shares to Sell from Buy, lowered its 2009 EPS estimate to $1.01 from $1.35, vs. consensus of $1.46, and cut Intel's target to $12 from $24.
• MGM Mirage (NYSE: MGM) was lowered to Neutral from Positive at Susquehanna.
  
• Charles River Labs (NYSE: CRL) was downgraded at William Blair to Market Perform from Outperform.
  
• Deutsche Bank cut Heinz (NYSE: HNZ) and MasterCard (NYSE: MA) to Hold from Buy.

Analyst initiations:

• Old Second Bancorp (NASDAQ: OSBC) was initiated with a Market Perform rating and $17 target at Keefe Bruyette. The firm believes the company's exposure to strong markets should generate above-average returns.
  
• Susquehanna assumed Affiliated Computer (NYSE: ACS) with a Positive rating and $55 target and is positive on the company's low levels of customer concentration and high levels of geographic diversification.
  
• Cowen resumed coverage of AnnTaylor (NYSE: ANN) with a Neutral rating, citing the company's share loss to competitors and top-line weakness..
• MetLife (NYSE: MET) was assumed with an Overweight rating at Morgan Stanley.
  
• JMP Securities initiated HFF Inc (NYSE: HF) with a Market Perform rating.
  
• Genpact (NYSE: G) was initiated at Susquehanna with a Neutral rating.

Analyst upgrades:

• Wachovia upgraded shares of The Goldman Sachs Group Inc (NYSE: GS) to Outperform from Market Perform on expectations for greater pricing power given Goldman's position as the largest remaining independent securities firm.
• Keefe Bruyette upgraded Investment Technology Group Inc (NYSE: ITG) to Outperform from Market Perform as they believe the company will take market share with the reshaping of the large wire-house brokerage community. The company's target was raised to $37 from $33.
• Broadpoint raised Hoku Scientific Inc (NASDAQ: HOKU) to Buy from Neutral as they believe the contract with Tianwei New Energy reduces financing risk.
• ACE Ltd (NYSE: ACE) and The Travelers Companies Inc (NYSE: TRV) were upgraded to Buy from Neutral at Goldman.
• Axcelis Technologies Inc (NASDAQ: ACLS) was upgraded to Buy from Hold and Evergreen Solar Inc (NASDAQ: ESLR) was lifted to Hold from Sell at Citigroup.

Analyst downgrades:

MOST NOTEWORTHY: BJ's Wholesale, Affiliated Managers and Yahoo! were today's noteworthy downgrades:

• Citigroup downgraded shares of BJ's Wholesale (NYSE: BJ) to Hold from Buy on valuation and views a takeout as less likely given the current credit market conditions.
  
• Wachovia downgraded shares of Affiliated Managers (NYSE: AMG) to Market Perform from Outperform as they believe credit quality concerns and record commodity prices will hinder the company's recovery in equity flows.
  
• Thomas Weisel downgraded Yahoo! (NASDAQ: YHOO) to Underweight from Market Weight based on visibility into fundamentals and another potential reorganization that will likely be met with skepticism.

OTHER DOWNGRADES:

• Third Wave (NASDAQ: TWTI) was cut to Neutral from Outperform at Baird.
  
• Charles Rivers Labs (NYSE: CRL) was lowered at Goldman to Neutral from Buy.
  
• United Parcel Service (NYSE: UPS) was downgraded at Baird to Neutral from Outperform.
  
• SAIC, Inc (NYSE: SAI) was downgraded to Neutral from Overweight at JP Morgan.

MOST NOTEWORTHY: Fortress, ITT Educational Service and Kendle International were today's noteworthy initiations:

• Fortress Investment Group (NYSE: FIG) was initiated with a Hold rating and $18.50 target at Jefferies. The firm expects near-term volatility given the increasingly difficult private equity market.
  
• Banc of America assumed coverage of ITT Educational Service (NYSE: ESI) with a Buy rating and $130 target and believes the recent weakness creates an attractive entry point as they see continued margin expansion and upside to Street estimates.
  
• Susquehanna expects Kendle International (NASDAQ: KNDL) to benefit from positive trends in the Clinical Research Organization industry, expanded customer base and geographical reach, integration of Charles Rivers Laboratories (NYSE: CRL), and backlog. The firm started shares with a Positive rating.

OTHER INITIATIONS:

• China Security & Surveillance (NYSE: CSR) was initiated with an Overweight rating and $30 target at Lehman.
  
• Morgan Stanley started Akamai Technologies (NASDAQ: AKAM) with an Equal Weight rating and $39 target.
  
• Goldman resumed coverage of AU Optronics (NYSE: AUO) and Clorox (NYSE: CLX) with Neutral ratings.

Outsourcing helps biomedical firms initiate more drug candidates and move them through the pipeline faster, while controling development costs. A recognized source of the assistance needed to smooth the process is headquartered Wilmington, Massachusetts.

Charles River Laboratories International (NYSE: CRL) offers products and services required by pharmaceutical and biotechnical research organizations. Its Research Models and Services unit provides the purpose-bred rodents used in the development of new drugs, devices and therapies. The unit also offers vaccine support and in vitro technology products for testing of medical devices and injectable drugs. The Preclinical Services segment conducts a variety of research programs, including Phase I trials. The company operates from facilities in the United States, France, Germany, Italy, Japan and the United Kingdom.

MOST NOTEWORTHY: Suntech Power (STP), MetroPCS (PCS), Micron Tech (MU) and Charles River Labs (CRL) were today's noteworthy initiations:

• JP Morgan initiated shares of Suntech Power Holdings (NYSE: STP) with a Neutral rating, citing valuation. The firm prefers the stock to peers given the company's larger scale, solid supplier relationships and exposure to new technologies.
  
• JP Morgan also started shares of MetroPCS Communications (NYSE: PCS) with a Neutral rating, as it likes the company's model, but sees greater upside in peers like Clearwire Corporation (NASDAQ: CLWR), Sprint Nextel Corporation (NYSE: S), Leap Wireless (NASDAQ: LEAP) and Rogers Communications (NYSE: RCI).
  
• William Blair believes Charles River Labs (NYSE: CRL) is the best pure-play investment in preclinical development given its dominant franchise in animal disease models, and started shares with an Outperform rating.

OTHER INITIATIONS:

• Gabelli initiated shares of Tenaris SA (NYSE: TS) with a Buy rating and $68 target.
  
• RBC Capital started shares of Time Warner Cable (NYSE: TWC) with a Sector Perform rating and $39 target.
  
• CDC Corporation (NASDAQ: CHINA) was started at ThinkEquity with a Buy rating and $11 target.
  
• Suntrust started shares of Owens Corning (NYSE: OC) with a Neutral rating.

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

Outsourcing helps biomedical firms initiate more drug candidates and move them through the pipeline faster, while controlling development costs. A recognized source of the assistance needed to smooth the process is headquartered in Wilmington, Massachusetts.

Charles River Laboratories International (NYSE: CRL) offers products and services required by pharmaceutical and biotechnical research organizations. Its Research Models and Services unit provides the purpose-bred rodents used in the development of new drugs, devices and therapies. The unit also offers vaccine support and in vitro technology products for testing of medical devices and injectable drugs. The Preclinical Services segment conducts a variety of research programs, including Phase I trials. The company operates from facilities in the United States, France, Germany, Italy, Japan and the United Kingdom. It is in the final stages of establishing a preclinical services joint venture in China.

The firm surprised the Street earlier in the month, when it reported Q1 EPS of $0.64 and revenues of $291.2 million. Analysts had been expecting $0.61 and $279.8 million. Management also guided FY07 EPS to $2.43-$2.53 ($2.49 consensus) and FY07 revenues to $1.16-$1.19 billion ($1.17B consensus). CRL shares popped on the news and have since been defining a bullish "pennant" consolidation pattern. Equities frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys," two "buys" and seven "holds." Analysts see a 14% average annual growth rate through the next five years. The CRL Price to Book ratio (2.10), Price to Cash Flow ratio (16.06), EPS Growth rate (38.03%), Operating Margin (18.18%) and Net Profit Margin (12.36%) compare favorably with industry, sector and S&P 500 averages.

The stock is one of those used to calculate the S&P 400 MidCap Index. Institutional investors hold about 95% of the outstanding shares. Over the past 52 weeks, CRL has traded between $33.73 and $52.30. A stop-loss of $45.50 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.