Baird upgraded Bank of America (NYSE: BAC) to Outperform from Neutral citing valuation and long-term earnings power.
Keefe Bruyette upgraded shares of Nationwide Financial (NYSE: NFS) to Outperform from Market Perform as it believes the deal is not at risk and will close at the agreed upon $52.25 price.
Friedman Billings upgraded American Eagle (NYSE: AEO) to Outperform from Market Perform citing valuation.
Eli Lilly (NYSE: LLY) was upgraded to Hold from Sell at Natixis.
W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Neutral at RW Baird.
Fidelity National (NYSE: FIS) was upgraded to Buy from Neutral at SunTrust.
Analyst downgrades:
Credit Suisse downgraded Eli Lilly NYSE:(LLY) to Neutral from Outperform citing the increased risk profile from the ImClone (IMCL) deal.
Soleil downgraded Google (NASDAQ:GOOG) to Hold from Buy as it believes Google's cost management may lag revenue weakness and that the falling stock price implies employee defections. The firm lowered its target to $350 from $580.
Piper downgraded shares of Orbitz (NYSE:OWW) to Sell from Neutral to reflect deteriorating travel industry fundamentals and the company's levered balance sheet.
US Steel (NYSE:X) was downgraded to Neutral from Buy at Goldman.
Bidz.com (NASDAQ:BIDZ) was initiated with a Hold at Stamford, as the firm does not want to recommend a company that has never been tested during difficult economic times, but is positive on BIDZ's growth potential.
American Superconductor (NASDAQ:AMSC) was initiated with a Hold at Stanford, as the firm believes the Euro decline and global market turmoil are near-term risks.
Union Bankshares (NASDAQ:UBSH) was initiated with an Underperform at RBC Capital, as the firm views shares as overvalued.
Regis Corp (NYSE:RGS) was initiated with a Neutral at RW Baird.
CommVault's (NASDAQ:CVLT) coverage was resumed with a Neutral at Merrill Lynch.
Grainger (NYSE: GWW) supplies all manner of facilities maintenance products to all types of businesses. The company just posted great 2Q numbers. Sales gained 10% to $1.8 billion. Net earnings increased 8% to $113 million and EPS turned out a healthy $1.43. Grainger posted these good numbers and gained market share in a slowing economy. Nice work.
Grainger operates in the U.S., Mexico and is beginning to establish a footprint in China. The company is expanding both its product line and its market reach in each of these markets. Sales in the U.S. grew 9% and the company opened 6 new full service locations. Sales in Mexico grew 25% and the company opened one new full service location. China sales doubled to $2 million from the company's one location, with big expansion plans for the future. Grainger has added another 100,000 products to its catalog and repurchased 800,000 shares of stock for $75 million. CEO James Ryan forecasts FY2008 EPS in the $5.80-$6.10 range, not a bad return on a stock that currently trades right around $86.
As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from Alcoa (NYSE: AA) and General Electric (NYSE: GE) kicking things off last week, here's a look at what Wall Street is expecting from many of the companies scheduled to report this coming week.
Analysts surveyed by Thomson Financial are expecting the following companies to report a rise in earnings when compared to the same period of the previous year.
Nucor Corp. (NYSE: NUE): $1.80 EPS (36.6%) on sales of $6.4 billion (+53.0%)
Google Inc. (NASDAQ: GOOG): $4.74 EPS (24.9%) on sales of $3.9 billion (+41.6%)
Nokia Corp. (NYSE: NOK): 56 cents EPS (23.2%) on sales of $19.9 billion (+17.8%)
CSX Corp. (NYSE: CSX): 90 cents EPS (21.1%) on sales of $2.9 billion (+12.8%)
Altera Corp. (NASDAQ: ALTR): 27 cents EPS (18.5%) on sales of $346.7 million (+8.4%)
IBM (NYSE: IBM): $1.82 EPS (+17.6%) on sales of $25.9 billion (+9.0%)
eBay Inc. (NASDAQ: EBAY): 41 cents EPS (17.1%) on sales of $2.2 billion (+18.0%)
The Pediatric Ethics Subcommittee of the Pediatric Advisory Committee will meet at 8:30 am to discuss the application of 21 CFR 50.52 (Clinical investigations involving greater than minimal risk but presenting the prospect of direct benefit to individual subjects) to FDA-regulated research. The discussion will be illustrated with hypothetical case examples of research involving HIV vaccines in adolescents and controlled trials of inhaled corticosteroids in children with asthma.
The Pediatric Ethics Subcommittee will meet at 8:00 am to discuss the application of 21 CFR 50.52 to FDA-regulated research illustrated with a hypothetical case example of research using stem cells for treating periventricular white matter injury in children.
Cisco Systems (NASDAQ: CSCO) to hold conference call at 11:00 am to discuss business video innovation.
MOST NOTEWORTHY: W.W. Grainger, American Express and Microsoft were today's noteworthy downgrades:
Baird downgraded W.W. Grainger Inc (NYSE: GWW) to Neutral from Outperform, citing concerns regarding the the federal lawsuit accusing the company of overcharging the U.S. Government.
American Express Company (NYSE: AXP) was lowered to Market Perform from Outperform to reflect their assumption for a weaker economy.
RBC Capital downgraded Microsoft Corporation (NASDAQ: MSFT) to Sector Perform from Outperform citing Yahoo! Inc's (NASDAQ: YHOO) rejection of its $31/share bid and a counteroffer of $40/share. The firm expects a deal to get done between $35.00-$40.00 per share, resulting in increased dilution.
MOST NOTEWORTHY: Antofagasta plc, Merrill Lynch, Valueclick, Telmex and Network Appliance were today's noteworthy upgrades:
UBS upgraded shares of Antofagasta (OTC: ANFGY) to Neutral from Sell as they see a strong possibility of delays to copper supply due to an earthquake on Nov. 14 in northern Chile.
Credit Suisse is positive on the appointment of John Thain as Merrill Lynch (NYSE: MER)'s CEO and his ability to get the company back on track strategically. The firm upgraded shares of Merrill to Outperform from Neutral.
Valueclick (NASDAQ: VCLK) was upgraded to Buy from Hold at Citigroup on valuation, as they believe the recent sell-off provides a great entry point.
Citigroup also raised its rating on Telmex (NYSE: TMX) to Buy from Hold after the company announced the spin-off of its international businesses.
Bear Stearns upgraded Network Appliance (NASDAQ: NTAP) to Peer Perform from Underperform following its Q2 report and increased outlook.
OTHER UPGRADES:
RBC Capital upgraded Sciele Pharma (NASDAQ: SCRX) to Sector Perform from Underperform.
Lehman upgraded Amgen (NASDAQ: AMGN) to Overweight from Equal Weight.
W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Market Perform at Morgan Keegan.
Merrill Lynch upgraded Weyerhaeuser (NYSE: WY) to Buy from Neutral.
Demand for new residential and commercial construction continues to be weak in many parts of the country, though that will change shortly in California. But maintenance of existing facilities continues to be a growth industry. W.W. Grainger (NYSE: GWW) is the leading supplier of facilities maintenance products. The company posted record numbers in its most recent earnings report. Sales increased 9% to $1.9 billion, operating earnings increased 15% to $174 million, and EPS increased 11%. Based on these figures, CEO Richard Keyser has revised FY 2007 EPS guidance from $4.75-$4.90 to $4.85-$4.95.
Grainger is pursuing a market expansion strategy and a product line expansion simultaneously. The company has added 70,000 new products in its U.S. locations, opened four new U.S. locations, and continues to exit existing low margin contracts as they expire in 2007. Daily sales have increased each month for July, August, and September. Sales in the U.S. increased 9%, dwarfed by the 24% increase in sales in Mexico and the opening of two more locations. Grainger is also entering the facilities maintenance market in China, a smart move given the massive amount of construction in progress in China.
But current numbers are not the only reason to check out Grainger. Motley Fool lists Grainger as a stock to own for the rest of your life, based on Grainger's dividend pay out record. The current dividend yield is 1.5%, with a payout ratio of 26% and YoY quarterly dividend growth in excess of 20%. In order for a company to pay out increasingly higher dividends over the long haul, it must be able to generate sufficient amounts of cash regularly and repeatedly. Grainger has certainly demonstrated it can do that. The stock traded recently at $89.05, up 16 cents.
MOST NOTEWORTHY: Sirius Satellite (SIRI), Harley-Davidson (HOG), and New York Times (NYT) top today's list of downgrades.
UBS downgraded Sirius Satellite Radio, Inc. (NASDAQ:SIRI) to Market Perform from Outperform. The firm cited the end of its paired trade opportunity with XM Satellite Radio (XMSR), aggressive fourth-quarter subscriber forecasts and weakening consumer interest for satellite radio products.
Harley-Davidson, Inc. (NYSE:HOG) was downgraded to Hold from Buy on valuation at A.G. Edwards. The motorcycle giant was also downgraded to Neutral from Outperform by Robert W. Baird on valuation and the potential for slower seasonal fourth-quarter growth.
Morgan Stanley downgraded New York Times Company (NYSE:NYT) to Underweight from Equal Weight on valuation.
OTHER DOWNGRADES:
Ferris Baker Watts downgraded Powerwave Tech Inc. (NASDAQ:PWAV) to Neutral from Buy on valuation.
William Blair downgraded W.W. Grainger Inc. (NYSE:GWW) and MSC Industrial (NYSE:MSM) to Market Perform from Outperform due to weakened macroeconomic indicators and softness in the construction and transportation end markets.
Finally, Goodrich Petroleum Corp. (NYSE:GDP) was downgraded to Reduce from Neutral at SunTrust Robinson Humphrey based on lower production and higher operating tax expenses.
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Analyst upgrades:
As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from 
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