Billionaire investor Carl Icahn spent months trying to buy Dynegy (DYN), but the transaction fell apart. There are always more deals though, right? Well, Icahn is now making a bid for Mentor Graphics (MENT).

He is proposing $1.73 billion for the company or $17 per share. In fact, Icahn already has a 14.7% stake. And as should be no surprise, the shares of Mentor are up about 11%.

Analyst Upgrades

• Dynegy (DYN) was upgraded to buy from neutral at Pritchard.
• Itron (ITRI) was upgraded to neutral from underperform at Macquarie.
• Goldman upgraded Ameren (AEE) to sell from conviction sell.
• Signet Jewelers (SIG) was upgraded to buy from hold at Societe Generale.
• JPMorgan upgraded Synopsys (SNPS) to overweight from neutral.

Today was a rough day on mostly geopolitical risks and fears. We had another military skirmish reporting round from the Koreas, and that sent bonds higher with stocks lower. Then a FOMC meeting that smells of currency manipulation and official dissent inside the FOMC did nothing to add more confidence. Lastly, Irish banking woes and European concern added pressure as well. Many investors still have big gains and some have decided to lock-in.

Here were today's unofficial closing bell levels:

Dow Jones 11,036.37 -142.21 (-1.27%)
S&P 500 1,180.73 -17.11 (-1.43%)
Nasdaq 2,494.95 -37.07 (-1.46%)

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Top Analyst Calls

Stocks made a new push today ahead of earnings season. Where the market goes from here will most likely be dependent upon the reaction the spate of earnings this week. The news that the FOMC Minutes showed a less optimistic but not definite move of quantitative easing helped to keep things from getting out of hand.

Here were today's unofficial closing bell levels:

Dow Jones 11,020.33 +9.99 (0.09%)
S&P 500 1,169.72 +4.40 (0.38%)
Nasdaq 2,417.92 +15.59 (0.65%)

Top Analyst Calls

Analyst Upgrades

• Piper Jaffray upgraded Edwards Lifesciences (EW) to overweight from neutral and raised its target price for shares to $77 from $53 after The New England Journal of Medicine reported the company's PARTNER Trial met primary endpoints.
• UBS upgraded Endo Pharmaceuticals (ENDP) to buy from neutral and raised its price target to $36 from $25. UBS is positive on Endo's creative strategic deals and believes the switch to Opana TRF from Opana ER will be easy. Additionally, the analyst believes pipeline expectations are very low.
• BMO Capital upgraded Nvidia (NVDA) to outperform from market perform based on expectations that share loss in the core GPU business will stop, Tegra momentum and valuation. The firm raised its price target to $16 from $9.
• FirstEnergy (FE) and Allegheny Energy (AYE) were upgraded to outperform from neutral at Credit Suisse.
• Mylan (MYL) was upgraded to conviction buy from buy at Goldman. Warner
• Chilcott (WCRX) was upgraded to overweight from equal weight at Morgan Stanley.

This was another day mostly in and out of the red. The true closing bell levels were up in the air until the close. Japanese data and Chinese data led the headlines now that China has a larger economy than Japan. Education stocks were weak on steady pressure and many other sectors were seeing a mixed bag as the markets tried to balance between bears and bulls.

Here were the unofficial closing bell levels:

Dow Jones 10,301.86 -1.29 (-0.01%)
S&P 500 1,079.37 +0.12 (0.01%)
Nasdaq 2,181.87 +8.39 (0.39%)

Analyst Upgrades

• Deutsche Bank upgraded Smurfit-Stone (SSCC) to buy from hold after raising its estimates for containerboard names and upped its target for shares to $28 from $22. The firm also raised its price target for International Paper (IP) to $38 from $32, for Packaging Corp. (PKG) to $33 from $28, for Temple-Inland (TIN) to $31 from $28, for Greif (GEF) to $67 from $65, and for Rock-Tenn (RKT) to $70 from $65. All stocks are buy rated.
• ThinkEquity upgraded VMware (VMW) to buy from hold and has a $90 price target on the stock. The firm expects VMware to benefit from increased virtual infrastructure adoption and improving vSphere solutions.
• Needham upgraded Cavium Networks (CAVM) to strong buy from buy, citing the recent pullback in shares following Cisco's (CSCO) cautious commentary. The firm has a $37 target on the stock.
• Intercontinental Exchange (ICE) was upgraded to outperform from neutral at Credit Suisse.
• MedAssets (MDAS) was upgraded to buy from hold at Auriga.
• Brookfield Properties (BPO) was upgraded to buy from hold at Citigroup.

Analyst Upgrades

• Keefe Bruyette upgraded Jefferies (JEF) to outperform from market perform based on valuation and improved M&A advisory and underwriting prospects. The firm has a $30 target on the shares.
• JPMorgan upgraded Cosan (CZZ) to overweight from neutral based on valuation.The firm has a $10 target on shares.
• Deutsche Bank upgraded CTC Media (CTCM) to buy from hold, citing better-than-expected operational performance and the impact of recent ad law changes. The firm has a $17 target on shares.

Analyst upgrades:

• Citigroup upgraded Brightpoint (NASDAQ: CELL) to Buy from Hold on expectations global handset units will trough in 2009, leading to a higher multiple for the stock. Citi raised its target on shares to $9 from $6.50.
• FBR Capital upgraded Rosetta Resources (NASDAQ: ROSE) to Outperform from Market Perform on valuation and believes drilling results in Q3 and Q4 should serve as near-term catalysts. The firm raised its target on shares to $15.
• Piper Jaffray upgraded Echelon (NASDAQ: ELON) to Neutral from Underweight following the company's contract announcement with Duke Energy (NYSE: DUK). The firm raised its target on shares to $10 from $6.
• Smith & Nephew (NYSE: SNN) was upgraded to Equal Weight from Underweight at Morgan Stanley.
• Schawk (NYSE: SGK) was upgraded to Neutral from Underperform at Baird.
• Alpha Natural (NYSE: ANR) was upgraded to Outperform from Market Perform at BMO Capital.

Analyst upgrades:

• Citigroup upgraded Adtran (NASDAQ: ADTN) to Buy from Hold on expectations the company will benefit from the broadband Stimulus funds.
• Morgan Stanley upgraded Continental Airlines (NYSE: CAL) to Overweight from Equal Weight based on relative valuation and views the company as a "survivor." Additionally, the analyst lowered 2009 industry estimates but believes it is the last cut for the year and is incrementally more positive on the sector.
• Morgan Stanley also upgraded EXFO Electro-Optical (NASDAQ: EXFO) to Overweight from Market Weight based on valuation.
• Tata Motors (NYSE: TTM) was upgraded to Buy from Hold at Deutsche Bank.
• Ascent Solar (NASDAQ: ASTI) was upgraded to Neutral from Underweight at JP Morgan.
• Mechel Steel (NYSE: MTL) was upgraded to Neutral from Underperform at Credit Suisse.

Dragged down by the challenging market conditions, many stocks have fallen under $10 lately. CNBC's Cindy Perman suggests that some of these stocks could be become good investments for traders. However, not everything that is cheap could be such a good bargain, Perman reminds us. You must always do your homework on potential investment before buying.

For example, Ford Motor (NYSE: F) fell down to around $6 compared with $38 nine years ago -- is it a good investment? Well, while the automaker revealed its plans to shift production from trucks to cars and give a boost to its turnaround plan, it also warned it won't be profitable until 2010 at the earliest.

Perman quotes several investment specialists on the matter. John Schloegel, vice president of investment strategies at Capital Cities Asset Management says, "An investment in Ford today feels like being in the wrong place at the wrong time." And Greg Womack, president of Womack Investment Advisers, advices to stay away from the sector, which doesn't look promising now, for the next three to five years to find out the "winner."

MOST NOTEWORTHY: Schering-Plough, Emergency Medical Services and SLM Corp were today's noteworthy upgrades:

• Banc of America upgraded shares of Schering-Plough (NYSE: SGP) to Buy from Neutral on valuation, as they believe current levels already reflect significant cuts to the company's cholesterol franchise from ENHANCE.
  
• JP Morgan upgraded shares of Emergency Medical Services (NYSE: EMS) to Overweight from Neutral following the company's Q4 results.
  
• Friedman Billings upgraded shares of SLM Corp. (NYSE: SLM) to Outperform from Market Perform and raised their target to $25 from $23 to reflect the company's strengthened capital position, diversified sources of income, and attractive valuation.

OTHER UPGRADES:

• JP Morgan added Molson Coors (NYSE: TAP) to its Focus List.
  
• Citigroup raised Dynegy (NYSE: DYN) to Buy from Hold.
  
• Societe Generale upgraded Credit Suisse (NYSE: CS) to Hold from Sell.

MOST NOTEWORTHY: Infosys Technologies, Cognizant and Ansys and were today's noteworthy initiations:

• Infosys Technologies (NASDAQ: INFY) was initiated with a Buy rating and $54 target at Kaufman, as their checks indicate no signs of a slowdown in the Indian software services market. They believe the stock is getting no premium for its defensive nature.
  
• Kaufman also initiated Cognizant (NASDAQ: CTSH) with a Hold rating and $35 target and believes the company's less defensive revenue mix could cause its P/E multiple to trend below rivals.
  
• Ansys (NASDAQ: ANSS) was initiated with a Hold rating and $39 target at Jefferies. The firm recommends waiting for a better entry point given the peak operating margins, a more challenging macro backdrop and tougher comps.

OTHER INITIATIONS:

• Wachovia initiated Invesco (NYSE: IVZ) with a Market Perform rating.
  
• Dynegy (NYSE: DYN) was assumed with a Buy rating and $9.50 target at Merrill.
  
• Navios Maritime (NYSE: NMM) was started with an Overweight rating at JP Morgan.

MOST NOTEWORTHY: Catalyst Pharm, Ruth's Chris Steak House and Dynegy were today's noteworthy initiations:

• Rodman & Renshaw is optimistic on Catalyst Pharmaceutical Partners' (NASDAQ: CPRX) Vigabatrin in drug addiction, initiating shares with a Market Outperform rating and $9 target.
• SunTrust started Ruth's Chris Steak House (NASDAQ: RUTH) with a Neutral rating and $13 target, citing the difficult spending environment and cautious sentiment.
• Jefferies initiated shares of Dynegy Inc. (NYSE: DYN) with a Buy rating and $9 target and expects improved cash flow and earnings from the projected improvement in market heat rates in the Midwest and PJM.

OTHER INITIATIONS:

• Bear Stearns resumed coverage of Siemens AG (NYSE: SI) with an Outperform rating.
• Wachovia initiated the pharmaceutical services sector with an Overweight rating and started Covance Inc. (NYSE: CVD), Icon plc (NASDAQ: ICLR) and Kendle International (NASDAQ: KNDL) with Outperform ratings.

The historical trade-off between the price of oil and natural gas has been 6 to 1, meaning if oil sold for $30 per barrel and natural gas for $5 per mmcf, the two commodities would be equally priced on a BTU basis.

Therefore, a natural substitution effect occurs. When oil is greater than six times the price of natural gas, it would be cheaper for consumers of energy to substitute gas for oil. Conversely, if oil were less the six times the price of natural gas, it would be cheaper to use oil and switch away from using gas. This substitution effect pretty much kept this ratio in tact.

However, in today's market, with oil at $82 per barrel and natural gas selling for $6.00 per mmcf, that ratio has expanded to 13.6x (!). That's huge. This means consumers of energy should be switching all their energy consumption away from oil to natural gas.

How should investors play this? One way is to short oil and go long natural gas. However, that could prove to be a risky strategy. Another way is to look at merchant power producers that use natural gas. Two plays are The AES Corporation (NYSE: AES) and Dynegy Inc (NYSE: DYN). Both use a good amount of gas to produce power and both have corrected rather meaningfully during this market downturn and represent good value.