Who knows why the Treasury gives our money to some banks and not to others. That comes to mind when considering that we just gave $18 billion to 10 regional banks -- three of which are unprofitable. Why does this matter? Because giving taxpayer money to an unprofitable bank could be as good as flushing it away. I guess Treasury figures it can always get more where that came from, so why not?

Here are the lucky winners of the government bailout lottery that earned a profit and their pre-market stock price change:

• SunTrust (NYSE: STI): $540 million -4.6%
• Capital One Financial Corp. (NYSE: COF): $374 million -2.3%
• Northern Trust (NASDAQ: NTRS): $214 million -2.1%
• Regions Financial (NYSE: RF): $206 million -0.8%
• Huntington Bancshares (NASDAQ: HBAN): $115 million +6.1%
• Valley National Bancorp (NYSE: VLY): $41 million 0%
• City National (NYSE: CYN): $16.6 million 0%

And here are the three that lost money but still got taxpayer capital -- the amount of their latest loss is in parentheses:

Analyst upgrades:

• Keefe Bruyette upgraded shares of ING Group (NYSE: ING) to Outperform from Market Perform after upgrading the European insurance sector to Overweight from Neutral due to improved risk management.
  
• Keefe Bruyette also upgraded Wells Fargo (NYSE: WFC) to Market Perform from Underperform to reflect the company's national footprint if the Wachovia (NYSE: WB) deal goes through.
  
• JP Morgan upgraded Dollar Tree (NASDAQ: DLTR) to Overweight from Neutral citing top line performance, growth profile and valuation, among other reasons.
• Jabil Circuit (NYSE: JBL) was upgraded to Outperform from Neutral at Credit Suisse.
  
• Amylin Pharma (NASDAQ: AMLN) was raised to Hold from Sell at Citigroup.
  
• Louisiana Pacific (NYSE: LPX) was upgraded at RBC Capital to Sector Perform from Underperform.

Analyst downgrades:

• Jefferies downgraded shares of Ecolab (NYSE: ECL) to Hold from Buy and lowered its target to $50 from $55 to reflect risks to the company's earnings outlook from the weakening economy.
  
• Coca-Cola (NYSE: KO) was cut to Hold from Buy at Deutsche Bank as they believe the economic slowdown will bring slower volumes. Coca-Cola's target was lowered to $56 from $64.

MOST NOTEWORTHY: Anadigics, American Axle and Caterpillar were today's noteworthy downgrades:

• Stephens downgraded shares of Anadigics (NASDAQ: ANAD) following the company's Q2 results, as they believe shares could trade sideways until the macro environment improves. The firm lowered their target to $9 from $14. Jefferies downgraded shares to Hold from Buy to reflect the company's lower than expected outlook. The firm lowered their target to $9 from $15.
• Deutsche Bank cut American Axle (NYSE: AXL) to Hold from Buy to reflect the risk associated with the company's exposure to General Motors (NYSE: GM) and Chrysler. The firm lowered their target price to $7.50 from $11.
  
• JP Morgan downgraded Caterpillar (NYSE: CAT) to Neutral from Overweight based on increasing macro headwinds and likely multiple pressure.

OTHER DOWNGRADES:

• Washington Mutual (NYSE: WM) was cut to Sell from Neutral at Piper.
  
• United Microelectronic (NYSE: UMC) was downgraded to Sell from Neutral at Goldman.
  
• Downey Financial (NYSE: DSL) and City National (NYSE: CYN) were lowered to Market Perform from Outperform at Keefe Bruyette.

MOST NOTEWORTHY: Barclays, City National and BAE Systems were today's noteworthy upgrades:

• Morgan Stanley upgraded shares of Barclays (NYSE:BCS) to Overweight from Equal Weight after the company announced plans to raise capital and disclosed no further write-downs.
  
• Keefe Bruyette lifted City National (NYSE:CYN) to Outperform from Market Perform on valuation, as they believe the company should outperform peers in terms in credit quality.
  
• Societe Generale upgraded shares of BAE Systems (Other OTC:BAESY) to Buy from Hold to reflect the company's earnings visibility.

OTHER UPGRADES:

• Baird upgraded Host Hotels (NYSE:HST) to Outperform from Neutral.
  
• Goldman added Monsanto (NYSE:MON) to its Conviction Buy List.
• Corinthian Colleges (NASDAQ:COCO) was raised to Overweight from Equal Weight at Lehman.

There are several financial stocks that are taking a beating today after a rash of downgrades by Merrill Lynch (NYSE: MER) this morning.

It has definitely been a couple of tough months for the financials as investors worried about what impact the declining housing market would have on their bottom lines. In the past week or so things have seemed to at least level off,, but according to Merrill Lynch there may still be some troubles ahead for a handful of Mid-Cap banks out there.

The banks that Merrill discussed today are those that the company views as being vulnerable to margin deterioration in the face of lowered earnings expectations and the possibility of future rate cuts by the Federal Reserve. Banks that Merrill views as possessing "asset sensitive" balance sheets (meaning their assets reprice quicker than their liabilities) were on the top of the list of downgrades.

Here are a couple of the banks to Merrill lowered today:

• City National Corp (NYSE: CYN) - downgraded to a sell from a neutral; stock is down 1.5%
  
• Cullen/Frost Bankers Inc. (NYSE: CFR) - downgraded to a sell from a neutral; stock is down 3.3%
  
• First Midwest Bancorp (NASDAQ: FMBI) - downgraded to a sell from a neutral; stock is down 3.1%
  
• Texas Capital Bancshares (NASDAQ: TCBI) - downgraded to a sell from a neutral; stock is down 6.7%
  

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

MOST NOTEWORTHY: Lockheed Martin (LMT), CastlePoint Holdings, Ltd (CPHL) and OraSure Technologies, Inc (OSUR) were today's notable upgrades:

• Matrix USA started Lockheed Martin (NYSE: LMT) with a Strong Buy rating, believing steady demand from defense spending and communications systems is allowing the company to continue to build impressive fundamental trends.

• Piper believes CastlePoint'sHoldings Ltd (NASDAQ: CPHL) relationship with Tower Group allows it immediate access to a high quality book of business, strong relationships in the industry and the ability to efficiently place capital overnight. Piper Jaffray stated shares of CastlePoint with an Outperform rating and a $20 target.

• Lazard started Orasure Technologies Inc (NASDAQ: OSUR) with a Buy rating and $12 target based on new production launches and new CDC HIV testing guidelines...

OTHER INITIATIONS:

• UBS started Grant Prideco, Inc (NYSE: GRP) with a Neutral rating.

• Banc of America started Bon-Ton Stores, Inc (NASDAQ: BONT) with a Buy rating and $64 target.

• Roth Capital transferred coverage of Web.com, Inc (NASDAQ: WWWW) with a Buy rating and $8 target.

• City National Corp (NYSE: CYN) was started with a Hold rating at AG Edwards.

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