Societe Generale upgraded shares of Credit Suisse (NYSE: CS) to Buy from Sell as they believe the company is the European investment bank investors should own as sentiment gradually improves.
Societe Generale also raised Deutsche Bank (NYSE: DB) to Hold from Sell as they believe it has managed the credit crisis well and that the government bailout of the GSEs will improve investor sentiment.
Citigroup upgraded shares of Kimberly Clark (NYSE: KMB) to Buy from Hold as they expect the company to benefit from falling materials and energy prices. The firm raised their target to $71 from $60.
UST Inc (NYSE: UST) was lifted at Morgan Stanley to Equal Weight from Underweight.
Corning (NYSE: GLW) was upgraded to Overweight from Market Weight at Thomas Weisel.
Analyst downgrades:
Credit Suisse downgraded the U.S. Homebuilders sector to Market Weight from Overweight to reflect deteriorating traffic trends and higher valuations. In addition, the firm cut Toll Brothers (NYSE: TOL), Pulte Homes (NYSE: PHM), D.R. Horton (NYSE: DHI) and KB Home (NYSE: KBH) to Neutral from Outperform.
This morning, GLW opened at $17.74. So far today the stock has hit a low of $17.41 and a high of $18.20. As of 12:30, GLW is trading at $17.49, down $2.01 (-10.3%). The chart for GLW looked bullish before today and S&P gives GLW a positive 5 STARS (out of 5) strong buy ranking.
For a bearish hedged play on this stock, I would consider a January bear-call credit spread above the $22.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in 4 and a half months as long as GLW is below $22.50 at January expiration. Corning would have to rise by more than 28% before we would start to lose money. Learn more about this type of trade here.
U.S. stock futures are higher Wednesday morning, a day after markets rallied around 2.4% due to declining oil prices. But today, ADP monthly employment data will be released, as well as weekly oil inventories data. Investors will digest the numbers and the slew of earnings due for release.
Already reported this morning (to name a few):
Comcast (NASDAQ: CMCSA) said its second-quarter profit rose 8% as cable TV rates rose and consumers ordered more digital and premium services. While the results fell short of Wall Street's forecast, CMCSA shares are trading mildly higher.
Arcelor Mittal (NYSE: MT) said its second-quarter profit more than doubled due to increased production and higher steel prices. It also gave an upbeat outlook for third quarter. The company outperformed consensus by about 20% at the revenue. MT shares, which have already close 7% higher Tuesday, are trading up another 6% in premarket action.
Garmin (NASDAQ: GRMN) shares are crashing, trading 11% lower in premarket action after the company reported quarterly profit that was above market estimates, but revenue missed expectations and 2008 outlook was cut due to macroeconomic conditions and high fuel prices that have already impacted growth.
Office Depot (NYSE: ODP) shares are over 1.7% lower in premarket trading after reporting a second-quarter loss as declining spending by smaller businesses and retail customers hurt sales.
Siemens (NYSE: SI) reported that "third quarter net profit fell 31% due to a one-time gain a year earlier, but order intake and revenue rose, beating expectations and showing the industrial conglomerate's resilience so far to the economic downturn." SI shares are 3.9% higher in premarket trading.
Corning (NYSE: GLW) shares are down over 2% in premarket trading after reporting inline earnings per share, but revenue slightly below estimates.
IAC/InterActive (NASDAQ: IACI) said it swung to a second-quarter loss, hurt by a $300 million charge in its Cornerstone Brands business. Adjusted earnings were 35 cents per share as revenue rose 7% to $1.6 billion. Analysts polled by Thomson Financial expected profit of 31 cents per share on $1.6 billion in sales.
MOST NOTEWORTHY: Super Micro Computer, Corning and Vertex Pharmaceuticals were today's noteworthy initiations:
Merriman believes Super Micro Computer (NASDAQ: SMCI) is a unique value in the Data Center sector and thinks it could trade to a range of $10-$12 in the near-term. Shares were initiated with a Buy rating.
Citigroup started Corning (NYSE: GLW) with a Hold rating and $23.50 target. The firm sees limited upside given the risks to LCD glass demand.
Vertex Pharmaceuticals (NASDAQ: VRTX) was assumed with an Overweight rating and $57 target at Thomas Weisel, as they are positive on its telaprevir opportunity.
OTHER INITIATIONS:
Lehman reinitiated Cablevision (NYSE: CVC) with an Equal Weight rating.
Silicon Motion (NASDAQ: SIMO) was initiated at Cowen with an Outperform rating.
Brinks (NYSE: BCO) was initiated with a Positive rating at Susquehanna.
MOST NOTEWORTHY: Norfolk Southern, OfficeMax and PetroQuest Energy were today's noteworthy upgrades:
JP Morgan upgraded Norfolk Southern (NYSE:NSC) to Overweight from Neutral based on leverage to export coal and the tighter truckload market.
Credit Suisse upgraded OfficeMax (NYSE:OMX) to Outperform from Neutral citing the company's clean balance sheet, positive cash flow, and limited downside.
UBS upgraded PetroQuest Energy (NYSE:PQ) to Buy from Neutral citing valuation and production catalysts. The company's target was raised to $30 from $25.
OTHER UPGRADES:
Piper Jaffray (NYSE:PJC) was upgraded to Market Weight from Underweight at Thomas Weisel.
Corning(NYSE:GLW) was upgraded at Merrill to Buy from Neutral.
HSBC lifted BP Plc (NYSE:BP) to Overweight from Neutral.
Calgon Carbon (NYSE:CCC) was raised to Hold from Sell at Morgan Joseph.
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Rest assured, the first decade of the 21st century is not likely to be remembered as a renaissance period in U.S. history. No one will confuse this decade with the Roaring '20s or even the Wonderful '90s.
Further, if the nation needs an example of rebirth and renewal -- it would be hard to find a better one than the story of multinational corporation Corning (NYSE: GLW), nestled in the small town of Corning, New York.
Corning is your classic, feel-good American success story. And doesn't the United States need a few of those today?
Moreover, Corning, arguably, represents one of the signature corporate transformation stories of the digital age.
From cookware to fiber optics to LCDs
Formerly a primarily glass and cookware company, (who doesn't remember that ubiquitous Corning cookware that was safe for microwave ovens?), Corning successfully transformed itself first into a fiber optic company in the 1990s.
MOST NOTEWORTHY: Corning, BTU International and RiskMetricks were today's noteworthy initiations:
ThinkPanmure believes Corning (NYSE: GLW) is well-positioned to benefit from increased penetration of LCD panels into televisions, flat panel monitors, notebooks, and mobile handsets. Shares were initiated with an Accumulate rating and $31 target.
Thomas Weisel said BTU International (NASDAQ: BTUI) is seeing strong order trends for the company's high margin solar sales in its in-line diffusion furnace and metallization products. The firm started shares with an Overweight rating and $15 target.
RiskMetrics (NYSE: RMG) was assumed at JMP Securities with an Ootperform rating and $26 target. The firm expects RMG to benefit from greater focus on managing portfolio risk and on corporate governance issues.
OTHER INITIATIONS:
Intel (NASDAQ: INTC) was initiated at ThinkPanmure with a Buy rating and $29 target.
Gen-Probe (NASDAQ: GPRO) was assumed at William Blair with an Outperform rating.
Baird initiated BJ's Restaurants (NASDAQ: BJRI) with a Neutral rating and $13 target.
Readers of this space know that my investment bias is toward large-cap companies with demonstrated business models and which have a competitive advantage in established markets, preferably with a favorable global trend as a support. In general, turnaround and business model change plays are avoided, but there are exceptions to the rule, and one is Corning.
Corning Inc. (NYSE: GLW), once a reliable but slow-growth kitchenware and cookware company, today represents one of the signature corporate transformation stories of the digital age.
Corning is one of the leading providers of fiber-optic cable, which the company invented more than 30 years ago. Further, its substrates business did not draw Wall Street's attention until technological advances enabled the price-competitive production of flat panel displays in flat panel televisions, desktop monitors and notebook computers.
Corning (NYSE: GLW) shares are falling today after the Labor Department reported that outside of food and energy, prices rose by 0.4% last month, which was double what analysts had expected. For the full year, inflation was the highest it has been since 1991. As costs for everyday goods increase, fewer people will be interested in purchasing major electronics which need LCDs from Corning. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on GLW.
After hitting a one-year low of $20.04 in January, the stock has risen to make a one-year low of $28.07 this month. This morning, GLW opened at $27.68. So far today the stock has hit a low of $26.94 and a high of $27.68. As of 12:00, GLW is trading at $26.98, down 0.79 (-2.8%). The chart for GLW looks bullish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $30 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in nine weeks as long as GLW is below $30 at July expiration. Corning would have to rise by more than 10% before we would start to lose money. Learn more about this type of trade here.
Stocks futures were lower early Wednesday morning as investors awaited not only a rate decision from the Federal Reserve this afternoon but several key economic indicators and lots of corporate earnings too.
U.S. stock markets ended mostly lower on Tuesday. While the Dow Jones Industrial Average ended down 39 points, or 0.31%, the S&P 500 ended 5 points lower, or 0.39%. Only the heavily tech weighted Nasdaq Composite rose 1.7 points, or 0.07% due to a lift from upbeat earnings from Corning.
Today, investors will focus their attention on different items throughout the day as they await the Fed decision coming at 2:15 p.m. EDT when the Fed releases its policy statement. Most expect the Federal Reserve to cut key rates by a quarter point to 2%, but to hint at a pause in the cuts.
Before the bell, Wall Street will also look at earnings from heavyweights such as General Motors, Procter & Gamble and Time Warner. PG and TWX already reported results.
Procter & Gamble (NYSE: PG) reported that first-quarter profit rose 8% o $2.71 billion, or 82 cents per share as cost control and price increases helped offset higher commodity costs. Revenue rose 9% to $20.46 billion. Analysts predicted profit of 81 cents per share on revenue of $20.43 billion.
Time Warner Inc. (NYSE: TWX)'s first-quarter profits fell 36% following an asset sale a year ago, and the company also said it will spin off the rest of its cable business. Excluding one-time effects, per-share results were 22 cents per share, a penny below analyst estimates and in line with a year ago. Revenues rose 2% to $11.42 billion from $11.18 billion.
Despite today's major markets showing a drop, this would really look like another mixed day on fairly light trading volume as profits fight economic numbers. Oil fell more than $3.00 per barrel and consumer confidence came in at a 5-Year low. Foreclosures also have risen by more than 100% with what now appears to be 1 home per 194 that are in foreclosure. All this is one day ahead of the FOMC meeting with the decision to raise rates, and one day after Warren Buffett called a recession already here. Below are the unofficial closing prices for major US index averages:
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Analyst upgrades:
Here are some highlights from this past week's 
U.S. stock futures are higher Wednesday morning, a day after markets rallied around 2.4% due to declining oil prices. But today, ADP monthly employment data will be released, as well as weekly oil inventories data. Investors will digest the numbers and the slew of earnings due for release..gif){kind=logo}
This post is part of our 
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Readers of this space know that my investment bias is toward large-cap companies with demonstrated business models and which have a competitive advantage in established markets, preferably with a favorable global trend as a support. In general, turnaround and business model change plays are avoided, but there are exceptions to the rule, and one is Corning. 
Here are some highlights from this past week's 
Stocks futures were lower early Wednesday morning as investors awaited not only a rate decision from the Federal Reserve this afternoon but several key economic indicators and lots of corporate earnings too. 
John McCain, losing ground, goes for broke tonight
If nothing else, gasoline prices are falling!
Closing Bell: Dow slump puts bulls on suicide watch; BAC, MS, F, FSLR all down, AMD up
