MOST NOTEWORTHY: Citizens Republic Bancorp, Hess Corp and Sanderson Farms were today's noteworthy upgrades:

• Keefe Bruyette upgraded shares of Citizens Republic Bancorp (NASDAQ: CRBC) to Outperform from Market Perform on valuation following yesterday's sell-off, which they attribute in part to its removal from the Dow Jones Select Dividend Index. Shares were also raised to OUtperform from Perform at Oppenheimer following the sell-off.
  
• Goldman upgraded Hess (NYSE: HES) to Buy from Neutral citing the company's leverage to higher oil prices. The firm said oil is likely to hit $150-$200/bbl in the next 6-24 months.
  
• Stephens upgraded shares of Sanderson Farms (NASDAQ: SAFM) to Overweight from Equal Weight as they expect industry fundamentals to improve in FY09.

OTHER UPGRADES:

• Baird raised Stellent (NASDAQ: STEL) to OUtperform from Neutral.
  
• Friedman Billings upgraded Preferred Bank (NASDAQ: PFBC) to Market Perform from Underperform.
  
• Agco (NYSE: AG) was upgraded at Goldman to Buy from Neutral.
• Lehman upgraded SLM Corp (NYSE: SLM) to Overweight from Equal Weight.

MOST NOTEWORTHY: Garmin, Thomson Reuters and Heritage-Crystal Clean were today's noteworthy initiations:

• Garmin (NASDAQ: GRMN) was initiated with a Neutral rating at JP Morgan. The firm sees risk to 2008 Street estimates given the consumer slowdown in the U.S. and potential ASP and margin pressure as channel inventory is worked down.
  
• Morgan Stanley assumed Thomson Reuters (NASDAQ: TRIN) with an Underweight rating and expects revenue growth in the company's financial business to slow sharply into 2009.
  
• William Blair believes Heritage-Crystal Clean (NASDAQ: HCCI) has the opportunity to gain market share over the next several years as a result of its differentiated parts-cleaning programs, strong sales organization, and experienced management team. Shares were assumed with an Outperform rating.

OTHER INITIATIONS:

• Lehman initiated Dell (NASDAQ: DELL) and Sun Microsystems (NASDAQ: JAVA) with Equal Weight ratings and targets of $20 and $17 and Apple (NASDAQ: AAPL), IBM Corp (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ) with Overweight ratings and targets of $195, $144 and $59, respectively.
  
• Pacific Growth started Spectranetics (NASDAQ: SPNC) with a Neutral rating.
  
• Merrill reinstated Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM) and Hess Corp (NYSE: HES) with Buy ratings and price targets of $110, $105 and $125, respectively.

This market is tough. Pros and novices alike are having a tough time. Particularly in a down market, a market commentators like to call a ""stock picker's market," I find it illustrative to dig deeper into the holdings of those special professional money managers that have found a way to make a go of it.

Take the CGM Focus (CGMFX) fund. This fund consistently shows up at the top of 1-year, 3-year, and multi-year best performers. CGM Focus has returned on average 37% per year for the past five years. While this is absolutely no guarantee that it will continue to perform like this, fund manager Chuck Heebner seems to have the special sauce -- at least for now.

So, what has been so successful for the fund?

Commodity picks like fertilizer plays Potash (NYSE: POT) and Mosaic (NYSE: MOS) have been big positions and have been big winners. Steel plays like US Steel (NYSE: X) have performed very nicely for CGM as well.

Looking at what worked is somewhat like looking into a rear-view mirror. These gains were in the past. What's Heebner and team buying now?

Hess (NYSE: HES) closed at a record high of $104.40 Wednesday. WTI Crude futures are down 0.30% to $95.68 according to Bloomberg. HES overall option implied volatility of 46 is above its 26-week average of 38 according to Track Data, suggesting larger price risks.

Occidental Petroleum (NYSE: OXY) closed at record high of $78.06 Wednesday. OXY operates in two segments: oil-gas and chemicals. OXY has a market cap of $64 billion with long-term debt of $1.7 billion. OXY overall option implied volatility of 34 is near its 26-week average according to Track Data, suggesting non-directional price fluctuations.

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

Hess Corp. (NYSE:HES): HES keeps rising with the price of oil. The stock was up to $86.46 against a 52-week low of $45.96.

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN): BioMarin is now able to charge more for new drug Kuvan than expected. Shares were up to $37.17 compared to 52-week low of $15.53.

Savient Pharmaceuticals Inc. (NASDAQ:SVNT): Strong results from its new gout drug kept shares up second day in a row. It hit $19.40 against 52-week low of $10.58.

Rigel Pharmaceuticals Inc. (NASDAQ:RIGL): An upgrade from Lehman came after strong results from drug trials. Shares spiked to $31 in contrast to 52-week low of $6.64.

Douglas A. McIntyre is an editor at 247wallst.com.

With the markets in a choppy consolidation mode, it's best to consider including a few defensive stocks in your portfolio. Hess Corp. (NYSE: HES) is worth a review.

Hess's 68% organic reserve replacement is sub-par but most other fundamentals are favorable. In general, analysts see decent-to-good production increases, and reasonable operating costs, but the value driver here, of course, is gasoline refining, energy marketing, and retail gasoline sales (including 1,350 Hess gasoline stations). A liquefied natural gas joint venture also adds to the mix. The Reuters F2007/F2008 EPS consensus estimates for HES are $5.72/$6.24.

Hess is not as well-known or as large as its oil industry counterparts, but in the era of elevated oil prices, and barely-adequate U.S. refinery capacity, particularly for gasoline, those two data points can be overlooked. Moreover, in general oil stocks are not a defensive play, strictly speaking, but the bias here is toward adding an oil stock or two, given current market conditions, as there's little empirical evidence to suggest that the era of elevated oil prices will end anytime soon.

Yesterday's WSJ's "Heard On The Street" column (subscription required) has published examples of recession-resistant stocks, in order to better-prepare individual investors for a potential additional downturn in the U.S. economy.

We took it a step further. What follows is a more panoramic view of each stock, including chart analysis.

AT&T (NYSE: T): the telecom giant has become a growth company. T's chart is healthy with the stock recently broken out to $42.50.

MOST NOTEWORTHY: Mattel (MAT), UnitedHealth (UNH), Alcoa (AA), 1-800-Flowers.com (FLWS) and Marathon Oil (MRO) were today's noteworthy upgrades:

• Piper upgraded shares of Mattel (NYSE: MAT) to Outperform from Peer Perform on valuation and improving fundamentals and notes that product recalls have historically not had a lasting impact on sales.

• Goldman upgraded UnitedHealth (NYSE: UNH) to Neutral from Sell on valuation and expectations for improved profitability in 2H07.

• Alcoa (NYSE: AA) was upgraded to Outperform from Market Perform at Friedman Billings on valuation and expectations for a favorable report next week.

• JMP Securities has increased confidence in 1-800-Flowers.com's (NASDAQ: FLWS) management initiatives to drive leverage and operating margins following the Q4 report, upgrading shares to Outperform from Market Perform.

• Lehman upgraded shares of Marathon Oil (NYSE: MRO) to Overweight from Equal-Weight on valuation and expectations for strong oil and gas production growth...

OTHER UPGRADES:

• NBTY Inc (NYSE: NTY) was upgraded to Neutral from Underperform at JP Morgan.

• ThinkEquity upgraded F5 Networks (NASDAQ: FFIV) to Buy from Accumulate.

• Goldman upgraded the oil services sector to Attractive from Neutral based on the recent pullback; Sunoco (NYSE: SUN) and Hess (NYSE: HES) were also upgraded to Buy from Neutral.

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

MOST NOTEWORTHY: Advantest (ATE), RightNow Technologies (RNOW), Mattson Technology (MTSN), Akamai Technologies (AKAM) and P.F. Chang's (PFCB) were today's noteworthy downgrades:

• Matrix downgraded Advantest (NYSE: ATE) to Strong Sell from Hold; the firm doesn't expect Advantest's profits to improve in the near-term after chip makers indicated they plan to cut capital spending.

• RightNow Technologies (NASDAQ: RNOW) was cut to Sector Perform from Outperform at Pacific Crest to reflect the company's poor execution.

• Mattson Technology (NASDAQ: MTSN) was downgraded to Sell from Buy at American Technology; The firm said Q2 results were strong but bookings and gross margin outlook were weaker due to memory spending weakness.

• Credit Suisse downgraded P.F. Chang's (NASDAQ: PFCB) to Market Weight from Overweight at Thomas Wiesel to reflect below plan new store performance for the third consecutive year at Pei Wei...

OTHER DOWNGRADES:

• Citigroup cut Taiwan Semi (NYSE: TSM) to Hold from Buy.

• Merriman downgraded Fuel Tech (NASDAQ: FTEK) to Neutral from Buy.

• Bear Stearns cut Hess Corp (NYSE: HES) to Peer Perform from Outperform.

• Goldman Sachs removed Merrill Lynch (NYSE: MER) from its Conviction Buy list.

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

MAJOR PAPERS:

• Barron's Online's "Inside Scoop" column reported that Hess Corporation (NYSE: HES) CEO John Hess recently bought more $1M worth of Dow Chemical Company (NYSE: DOW), and now directly owns 23,350 DOW shares.
• The Financial Times reported that the European Union is concerned that Google Inc (NASDAQ: GOOG) may be skirting European privacy laws by keeping data on Internet searches for too long.

OTHER PAPERS:

• The U.S. Navy awarded an $11.9M contract to Force Protection Inc (NASDAQ: FRPT) to build and deliver 14 next-generation armored vehicles, according to the Associated Press.
• From BusinessWeek's "Inside Wall Street" section:
  
• In spite of its problems, Amgen Inc (NASDAQ: AMGN) is a long-term value play, according to Joseph Battipaglia, chief investment officer at Ryan Beck's Washington Crossing Advisors unit.
• Bioenvision Inc (NASDAQ: BIVN) is attracting big investors because the company has teamed up with biotech biggie Genzyme Corporation (NASDAQ: GENZ) to develop clofarabine, a treatment for leukemia in children.
  
• Big truckers see YRC Worldwide Inc (NASDAQ: YRCW) as a tempting asset play with "compelling earnings power and potential value," according to Justin Yagerman of Wachovia Securities.

MOST NOTEWORTHY: Hess Corp (HES), American Home Mortgage Investment Corp (AHM) and Anglo American plc (AAUK) were today's noteworthy downgrades.

• Lehman Brothers downgraded Hess Corp (NYSE: HES) to Underweight from Equal-Weight based on valuation.
• American Home Mortgage Investment Corp (NYSE: AHM) was cut to Underperform from Market Perform at Keefe Bruyette, to Market Perform from Outperform at Friedman Billings, to Equal-Weight from Overweight at Lehman Brothers, to Sell from Hold at Citigroup and to Hold from Buy at Deutsche Bank.
• Anglo American plc (NASDAQ: AAUK) was downgraded to Underperform from Market Perform at BMO Capital Markets based on valuation.

OTHER DOWNGRADES:

• Murphy Oil Corp (NYSE: MUR) was cut to Equal-Weight from Overweight at Lehman.
• Credit Suisse downgraded Alaska Air Group, Inc (NYSE: ALK) to Neutral from Outperform.
• Gabelli downgraded shares of A. Schulman, Inc (NASDAQ: SHLM) to Hold from Buy to reflect the company's weak second-quarter.
• Raymond James downgraded Avnet, Inc (NYSE: AVT) to Market Perform from Outperform.
• Blyth, Inc (NYSE: BTH) was cut to Sell from Hold on valuation.

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

Most readers, and certainly trader/investors have heard of OPEC -- the Organization of Petroleum Exporting Countries that controls about 35% of the world's oil production.

On Friday, OPEC, as expected, voted to keep oil production at current levels. Analysts considered it a prudent move, given the fact that, despite a slowing global economy, demand for petroleum-based products remains strong, which has helped keep oil's price above the $55/barrel level.

Prior to the meetings, several price-hawk OPEC members had floated the idea of a production cut, arguing that the global economic slowdown could propel a substantial drop in oil's price, perhaps to below $40 per barrel. However, with no let-up in demand seen in either the Western or Eastern hemispheres, and oil showing few signs of falling below $50, let alone $40, the decision by OPEC to maintain the status quo regarding production was the appropriate choice, in the view of most oil analysts.

Still, the OPEC cartel has not been known for placing the interest of the global economy over the cartel's interest. OPEC was responsible for the devastating 1973 oil shock, and has not been too effective at reigning-in hawkish members, such as Iran, who helped precipitate the world's second oil shock, in 1979.

Way back, it seems now, in the 18th century -- no, actually, just in the 1980s, the rock group The Tubes released an album titled, "The Completion Backward Principle" -- a solid album, with several hits.

Well, right now the crude oil and gasoline markets are an example, of sorts, of "The Completion Backward Principle."

Most consumers know that when the price of crude rises, a rise in the price of gasoline follows, as most U.S. gasoline is a petroleum-based product. But what many consumers do not realize is that the reverse -- or "the completion backward principle" -- is also true: A rise in the price of gasoline can drive the price of oil higher and/or keep oil's price elevated.

Crude oil's dip below $59 early in Monday's trading session gave oil bears -- those who believe the price of a commodity will decline -- some encouragement, but the bears' brighter day may be short-lived, and pyrrhic.

Since oil's drop from the July 2006 high of around $78 to about $60, each news item suggesting greater-than-expected-production has prompted renewed optimism regarding another price break, perhaps below $50 or even $40.

Monday was a classic case in point, with oil falling below $59 after Bloomberg News reported that the Organization of Petroleum Exporting Countries (OPEC) won't reduce output at a meeting in Vienna this week.

If OPEC does not reduce output, that would be a bearish data point for oil, short-term. However, that one data point does not change oil's long-term supply and demand characteristics: Fed by large increases in demand from emerging market economies (particularly China) and by steady demand from other developed economies, global demand is increasing, and the cushion between global daily oil demand and daily oil produced (or supplied) is small.

MOST NOTEWORTHY: Bristol Myers Squibb Co (BMY), Krispy Kreme Doughnuts Inc (KKD), Martha Stewart Living Omnimedia Inc (MSO) and New Century Financial Corp (NEW) were some of today's more notable upgrades:

• UBS upgraded shares of Bristol Myers Squibb Co (NYSE: BMY) to Buy from Neutral. The firm finds the recent pullback an attractive buying opportunity given the possibility of a takeover approach. The broker also believes BMY will likely win its Plavix patent case.

• CIBC resumed coverage of Krispy Kreme Doughnuts Inc (NYSE: KKD) with a Sector Performer rating, up from its recent Underperformer rating, citing resolutions to numerous accounting and legal issues for the upgrade.

• Morgan Stanley upgraded Martha Stewart Living Omnimedia Inc (NYSE: MSO) to Equal Weight from Underweight.

• Bear Stearns upgraded New Century Financial Corp (NYSE: NEW) to Peer Perform from Underperform saying downside risk is limited to $10-$11, but sees upside if business stabilizes and liquidity improves...

OTHER UPGRADES:

• JP Morgan raised Eaton Vance Corp (NYSE: EV) to Neutral from Underweight to reflect the company's strong fund sales and continued capital returns to shareholders.

• AG Edwards replaced Exxon Mobil Corp (NYSE: XOM) on its Focus Portfolio, adding Chevron Corp (CVX) to reflect the company's improved financial strength and attractive valuation.

• Lehman Brothers upgraded Apple Inc (NASDAQ: AAPL) to Overweight from Equal-Weight with a $105 target based on the recent pullback in shares.

• Friedman Billings raised Hess Corp's (NYSE: HES) rating to Outperform from Market Perform, based on growth reserves and an improving outlook.

• Merrill Lynch upgraded Logitech International SA (NASDAQ: LOGI) to Buy from Neutral.

• Matrix upgraded Abbott Laboratories (NYSE: ABT) to Buy from Hold on valuation.

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