Analyst Upgrades

• Deere (DE) to outperform from market perform at Wells Fargo.
• American Eagle (AEO) to buy from neutral at Janney Capital.
• FedEx (FDX) and Shaw (SJR) to outperform from neutral at Credit Suisse.
• Superior Energy (SPN) and Rowan Cos. (RDC) to overweight from equal weight at Barclays.
• Tesoro (TSO) to outperform from neutral at Macquarie.
• Mechel (MTL) to buy from neutral at Goldman.
• SunPower (SPWRA), LDK Solar (LDK) and First Solar (FSLR) to buy from hold at ThinkEquity.

Banks could face another mortgage crisis, according to Barron's, if they are forced to buy back subprime, Alt-A and options adjusted home mortgage securities they've sold prior to the financial crisis, mostly as mortgage-backed securities. Already some buyers, like Fannie Mae (FNMA) and Freddie Mac (FMCC), have enjoyed some success returning defective mortgages. And this could be just the beginning.

The banks, of course, are fighting vigorously to fend off these demands. As usual, the courts will have to settle the matter. The focus of the debate seems to be founded on the issue of representations and warranties that may or may not have been violated.

There are no surprises among the 11 banks mentioned. It is the conspicuous absence of names you might expect to find that is.

Analyst Upgrades

• Wells Fargo upgraded Accenture (ACN) to outperform from market perform following the company's Q4 results, citing improved tone and increased visibility. The firm raised its target range for shares to $51 to $53 from $41 to $44.
• Macquarie upgraded FirstMerit (FMER) to outperform from neutral and has a $21 price target on the stock. The firm cites FirstMerit's strong fundamentals and competitive advantage for the upgrade.
• Macquarie transferred coverage on Marshall & Ilsley (MI) with a neutral from an underperform based on improved risk/reward.
• Eaton (ETN) was upgraded to overweight from neutral at JPMorgan.
• HSBC (HBC) was upgraded to conviction buy from buy at Goldman.
• Walgreen (WAG) was upgraded to overweight from equal weight at Morgan Stanley.

Analyst Upgrades

• Auriga upgraded Leap Wireless (LEAP) to buy from hold following the company's Q2 results and analyst day, citing valuation, longer-term potential for consolidation and prospects for business improvements. Despite upgrading, the firm lowered its target for shares to $16 from $19.
• Goldman upgraded Barnes & Noble (BKS) to neutral from sell following the company's announcement to explore strategic alternatives. The firm raised its price target to $15 from $12.
• RBC Capital upgraded ESCO Technologies (ESE) to sector perform from underperform following the better-than-expected Q3 report. The firm raised its price target to $30 from $28.
• MetLife (MET) was upgraded to buy from neutral at BofA/Merrill.
• Priceline.com (PCLN) was upgraded to buy from hold at Stifel Nicolaus.
• HSBC (HBC) was upgraded to outperform from underperform at CLSA.

Analyst Upgrades

• Wunderlich upgraded Granite Construction (GVA) to buy from hold, citing valuation and expected positive catalysts in 2011. The firm has a $29 price target for shares.
• Jefferies upgraded WuXi PharmaTech (WX) to buy from hold following the Q2 report, citing continued strength in China-based lab services growth. The firm has an $18 target on shares.
• BMO Capital upgraded Newell Rubbermaid (NWL) to outperform from market perform following capital structure actions. The firm has a $20 price target on the stock.
• Energizer (ENR) was upgraded to overweight from equal weight at Morgan Stanley.
• Cephalon (CEPH) was upgraded to buy from neutral at BofA/Merrill.
• Dycom (DY) was upgraded to outperform from market perform at Morgan Keegan.

The U.S. stock market is closed in observance of Independence day, which gives us a great opportunity to examine a few stocks with ties to the 4th of July.

This first of this three-part series will start by comparing investment opportunities in the United States -- home of the authors of the Declaration of Independence -- with those across the pond in the United Kingdom -- whose monarch was the recipient of that declaration. Then we'll then take a look at a few of the stocks that help us maintain our freedom as we dive into the U.S. defense industry. Finally, we'll take a look at stocks that benefit from the partying and picnicking that are so much a part of any 4th of July celebration.

Analyst Upgrades

• Raymond James upgraded Research in Motion (RIMM) to outperform from market perform based on valuation. The firm has a $70 price target on the stock.
• Macquarie upgraded Halliburton (HAL) to outperform from neutral and has a $40 price target on the stock. The firm said recent pressure pumping activity is above their expectations and pricing has firmed.
• Canaccord upgraded Baldor Electric (BEZ) to buy from speculative buy, citing improving business trends and the upcoming mandatory transition to premium efficiency motors. The firm has a $47 price target on the stock.
• Wells Fargo upgraded Williams-Sonoma (WSM) to outperform from market perform.
• Medco Health (MHS) was upgraded to conviction buy from buy at Goldman.
• Repsol (REP) was upgraded to buy from neutral at BofA/Merrill.

"Despite market declines-all markets around the world are now negative for year, most by between 10 and 20% -- valuations are not low enough for aggressive buying," cautions Adrian Day.

The international investing expert and editor of The Global Analyst adds, "However, several stocks on our recommended list are at good buying levels. One such stock is HSBC Holding (HBC), which we consider a core holding.

"Two trends are notable. First, the bank is repositioning itself in the U.S., even as it continues to run off residential mortgages, the business that has cost it billions of dollars in losses, with further to go in the process.

Analyst Upgrades

• Deutsche Bank upgraded Southern Copper (SCCO) to buy from hold to reflect valuation and positive near-term catalysts. The firm raised its target for shares to $38 from $35.
• JMP Securities upgraded Ultimate Software (ULTI) to outperform from market perform. The firm cites the company's expanding employee base for the upgrade. The firm has a $40 target on the stock.
• Piper Jaffray upgraded Aeropostale (ARO) to neutral from underweight following the company's Q4 results and raised its target for shares to $31 from $24.
• Kennametal (KMT) was upgraded to sell from conviction sell at Goldman.
• Lifetime Brands (LCUT) was upgraded to outperform from market perform at Barrington.
• Volvo (VOLVY) was upgraded to overweight from underweight at JPMorgan.

U.S. stock futures fell slightly Thursday ahead of weekly jobs data and after a report on rising Chinese inflation.

Investors mostly worried Thursday China may have to begin tightening its policies after a report released Thursday showed faster-than-expected inflation, while growth remained rapid and capital investment heavy. The consumer price index rose 2.7% in February from a year earlier, accelerating from a 1.5% increase in January's CPI. MarketWatch reports analysts had estimated a 2.4% rise. The stimulus measures the government has enacted in light of the global economic recession may have to be withdrawn.

HSBC Holdings (HBC) closed at $55.23. HBC is expected to report Q4 EPS on March 2. March put option implied volatility is at 39, April and June puts are 34; above its 26-week average of 32, according to Track Data, suggesting larger price movement.

Petrobras (PBR) closed at $41.58. PBR is expected to report Q4 EPS in early March. Crude oil futures are recently down 0.58% to $79.54 a barrel according to Bloomberg. March put option implied volatility is at 37, July is at 38; versus its 26-week average of 39, according to Track Data, suggesting non-directional price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com

Analyst Upgrades

• Canaccord upgraded IBM (IBM) to buy from hold, citing the better-than-expected Q4 report, an ongoing economic recovery and higher IT budgets. The firm raised its target to $150 from $130.
• Citigroup upgraded Archer Daniels Midland (ADM) to buy from hold to reflect strength in the oilseed processing market and a positive inflection in ethanol profitability. The firm raised its target on shares to $37 from $33.
• FBR Capital upgraded Tesco (TESO) to outperform from market perform on expectations the company's top drive orders will accelerate in the coming quarters. The firm raised its target price on shares to $18.
• CBS (CBS) was upgraded to buy from hold at Jefferies.
• HSBC Holdings (HBC) was upgraded to buy from hold at RBS.
• Essex Property Trust (ESS) was upgraded to overweight from equal weight at Barclays.

Analyst upgrades:

• FBR upgraded Abercrombie & Fitch (ANF) to reflect strong channel checks over the Black Friday weekend. The firm raised its target on shares to $46 from $39.
• Morgan Stanley upgraded Safeway (SWY), citing improvements in pricing.
• Baird upgraded US Bancorp (USB) based on valuation. The firm raised its target price to $29 from $25.
• HSBC Holdings (HBC) was upgraded to buy from neutral at BofA/Merrill.
• Genzyme (GENZ) was upgraded to buy from hold at Citigroup.
• Deere (DE) was upgraded to outperform from market perform at Wells Fargo.

HSBC Holdings (HBC) is recently trading at $57.40 in pre-open trading, below its close of $62.07, due the uncertainty of Dubai World; the government investment company sought to delay repayment on much of its debt. HSBC December and January option implied volatility of 29 is below its 26-week average of 36, according to Track Data, suggesting decreasing price movement.

Market Vector Gold Miners (GDX) is recently down $2.02 to $50.81 in pre-open trading. Gold is recently down 2.23% to $1162.10. GDX December and January option implied volatility of 43 is below its 26-week average of 49, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst upgrades:

• Goldman upgraded Aeropostale (ARO) to neutral from sell. The firm, which has a $34 target on the stock, cites the recent sell-off in shares for the upgrade.
• Janney Montgomery upgraded Consolidated Water (CWCO) to buy from neutral on valuation and on expectations the company's earnings will recover in 2010. The firm has a $15 target on the stock.
• Wunderlich upgraded Transmontaigne Partners (TLP) to buy from hold on valuation as it believes the sell-off on the company's Q3 results is overdone. The firm keeps a $26.50 price target on the stock.
• Mobile TeleSystems (MBT) was upgraded to buy from neutral at UBS.
• HSBC (HBC) was raised to buy from hold at Societe Generale.
• Redwood Trust (RWT) was upgraded to outperform from market perform at JMP Securities.