Analyst upgrades:

• Credit Suisse upgraded Stancorp (NYSE: SFG) to Outperform from Neutral citing relative valuation and EPS visibility.
• Jefferies upgraded Cypress Semiconductor (NYSE: CY) to Hold from Underperform after its channel checks indicated the company's capacitive touch screen solution has design traction. The firm raised its target on shares to $10 from $7.50.
• FBR Capital upgraded Pacific Sunwear (NASDAQ: PSUN) to Outperform from Market Perform to reflect improving store channel checks, the company's brand focus and controlled inventory, as well as the firm's belief that guidance could be conservative. FBR raised its target on shares to $9 from $6.
• Advanced Micro (NYSE: AMD) was upgraded to Market Perform from Underperform at JMP Securities.
• Lam Research (NASDAQ: LRCX) was upgraded to Overweight from Equal Weight at Barclays.
• Philips Electronics (NYSE: PHG) was upgraded to Buy from Hold at RBS.

Analyst upgrades:

• Barclays upgraded Best Buy (NYSE:BBY) to Overweight from Equal Weight and raised their target to $35 from $28 citing the company's earnings power and free cash flow generation.
  
• William Blair upgraded St. Jude Medical (NYSE:STJ) to Outperform from Market Perform following the company's Q4 results on valuation and the company's "steady growth."
  
• Wunderlich upgraded Liberty Interactive (NASDAQ:LINTA) to Buy from Hold as they believe debt concerns are overdone. The firm thinks that language in the proxy statement for the Liberty Entertainment hard spin suggests that cash and cash flow from the stub Entertainment tracker could be used to provide inter-company support to Interactive. The firm raised their target to $5 from $4.25.
• Lloyds TSB Group (NYSE:LYG) was raised to Buy from Hold at Citigroup.
  
• BB&T (NYSE:BBT) was removed from Goldman's Conviction Sell List.
  
• Patni Computer (NYSE:PTI) was upgraded to Buy from Hold at KeyBanc.

Analyst upgrades:

• Merrill upgraded shares of General Motors (NYSE: GM) and Ford (NYSE: F) to Neutral from Underperform on expectations for fundamentals to improve in 2009.
  
• Citigroup upgraded Chubb (NYSE: CB) and Travelers Group (NYSE: TRV) to Buy from Hold as they expect the company to benefit from the AIG (NYSE: AIG) fallout. The firm raised Chubb's target to $57 from $56 and Travelers Group's target to $51.50 from $49.50.
  
• Credit Suisse upgraded shares of SAP AG (NYSE: SAP) to Outperform from Neutral as they believe margin expansion can drive higher profitability.
• JetBlue (NASDAQ: JBLU) was upgraded to Buy from Hold at Argus.
• Goldman raised Merrill Lynch (NYSE: MER) to Neutral from Sell.
  
• NetLogic (NASDAQ: NETL) was upgraded to Buy from Neutral at Piper.

Analyst downgrades:

• JP Morgan downgraded Eli Lilly (NYSE: LLY) to Underweight from Neutral citing the company's early stage pipeline and generic competition.
  
• Merrill downgraded Unilever (NYSE: UL) to Neutral from Buy as they believe the incoming CEO is unlikely to bring a major restructuring or split up the company.

Analyst upgrades:

• Oppenheimer upgraded shares of Shanda Interactive (NASDAQ: SNDA) to Outperform from Perform following the company's better-than-expected quarter to reflect its growth acceleration in the casual games platform and margin improvements.
  
• SAIC (NYSE: SAI) was upgraded to Outperform from Market Perform following the solid Q2 report and guidance.
  
• Susquehanna upgraded Zumiez (NASDAQ: ZUMZ) to Positive from Neutral citing positive August comps, revised merchandising, easier comps, and solid financial position.
• Goldman Sachs upgraded Pharm Product Development (NASDAQ: PPDI) and Steel Dynamics (NASDAQ: STLD) to Buy from Neutral.
  
• Novellus (NASDAQ: NVLS) was raised to Overweight from Equal Weight at Morgan Stanley.

Analyst downgrades:

• Morgan Stanley downgraded the Semiconductor Capital Equipment sector to In-Line from Attractive citing optimistic expectations for Q4 orders following the recent bounce in stocks. The firm downgraded Lam Research (NASDAQ: LRCX) to Underweight from Overweight and KLA-Tencor (NASDAQ: KLAC) KLAC to Equal Weight from Overweight.

Minyanville Professor Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.

The earnings report from Applied Materials, Inc. (Nasdaq: AMAT) was not solid but the stock sure is, which is what happens when the market starts looking at enterprise value beyond a quarterly EPS report. The stock has been cheap for some time with only the solar catalyst providing occasional lift. Contrary to other noteworthy opinions, I have not heard AMAT call a bottom or "trough" in the cycle for many a quarterly call. It has called for a reduction in the decline in certain product lines, while calling for strength in others. But as far as a broad cyclical "trough" this is the first I heard them utter that since 2005 -- and at that point the company was half right and half wrong.

Lam Research Corporation (Nasdaq: LRCX) had the best report I've seen in the sub-group. If the (SOX) keeps showing strength then I presume the group may be led by the high quality semi-caps possibly through the first quarter of 2009.

Cree, Inc. (Nasdaq: CREE) report was also noteworthy as the shares have really been hammered of late. The company beat and raised revenue guidance by a touch. However, the thing that has kept me out of CREE for more than just an occasional trade is the lack of EPS traction it seems to have, even on higher revenues. And next quarter's guidance is more evidence of that. From time to time CREE can ramp, and when it does, it's usually a compelling move. So I mainly keep the name on the radar as a technical trading vehicle. If CREE were to back fill to the mid $19's I may add a partial.

Applied Materials (NASDAQ: AMAT), a technology company that provides solutions to industries involved with such things as semiconductors, flat panel displays and solar photovoltaic cells, and whose colleagues include KLA-Tencor (NASDAQ: KLAC) and LAM Research (NASDAQ: LRCX), reported earnings for the third quarter on Tuesday.

They weren't great. The top line decreased by 28%, coming in at $1.8 billion. Adjusted earnings per diluted share dropped well over 50% to 17 cents. Although these numbers are horrible, it should be noted that the company at least beat estimates of 14 cents per share.

Well, not to be a downer or anything, but Applied Materials is not the tech stock I want to be in right now. It is suffering through a dismal economic environment, and the growth rates just don't look good. Not only do you have these year-over-year declines, but you've also got sequential-quarter statistics showing a negative trend. Plus, new orders are down significantly, and the gross margin took a dive.

Is there any saving grace to the report? Yes. Cash flow from operations was essentially flat over the nine-month timeframe at almost $1.6 billion. Hey, flat is better than a decline, correct?

MOST NOTEWORTHY: Schiff Nutrition, Siemens and Priceline.com were today's noteworthy initiations:

• B. Riley assumed Schiff Nutrition (NYSE:WNI) with a Buy rating and $7.75 target. The firm believes downside is limited given the company's balance sheet and cash flows and sees opportunity for market share gains.
  
• Morgan Stanley initiated Siemens (NYSE:SI) with an Overweight rating and is positive on the company's revenue diversification and planned headcount reductions.
  
• Stanford believes Priceline.com (NASDAQ:PCLN) is positioned to benefit as consumers shift to the Internet and the company's bargain prices to make travel plans. Shares were initiated with a Buy rating and $140 target.

OTHER INITIATIONS:

• Bank of America initiated Novellus (NASDAQ:NVLS) with a Sell rating, Applied Materials (NASDAQ:AMAT) and KLA-Tencor (NASDAQ:KLAC) with Buy ratings and Lam Research (NASDAQ:LRCX) with a Neutral rating.
  
• ThinkPanmure assumed Smart Balance (NASDAQ:SMBL) with a Buy rating and $10 target.

MOST NOTEWORTHY: Lam Research, Deutsche Telekom and France Telecom were today's noteworthy upgrades:

• Credit Suisse upgraded Lam Research (NASDAQ:LRCX) to Outperform from Neutral citing margin expansion and valuation. Lam was named the firm's top pick in SCE names for 2H08.
  
• JP Morgan upgraded shares of Deutsche Telekom (NYSE:DT) to Overweight from Neutral as they expect a stronger second half of the year for the industry.
  
• France Telecom (NYSE:FTE) was upgraded to Buy from Neutral at Merrill and to Buy from Hold at Societe Generale after the company walked away without bidding for Sweden's TeliaSonera.

OTHER UPGRADES:

• UBS upgraded American Express (NYSE:AXP), Capital One (NYSE:COF) and Discover (NYSE:DFS) to Neutral from Sell.
  
• New York Times(NYSE:NYT) was raised to Hold from Sell at Deutsche Bank.
  
• RBC Capital raised Sanmina (NASDAQ:SANM) to Sector Perform from Underperform.
  
• Merrill upgraded Sirius Satellite (NASDAQ:SIRI) to Buy from Neutral.

MOST NOTEWORTHY: DirecTV, Salesforce.com and Total SA were today's noteworthy upgrades:

• DirecTV (NASDAQ: DTV) was upgraded to Overweight from Equal Weight at Lehman, as they believe it is well positioned to outperform in the difficult macro environment.
  
• UBS believes Salesforce.com's (NYSE: CRM) Force.com platform has strong differentiation in the marketplace and will help CRM benefit from spending outside of the customer management area. The firm raised its rating to Buy from Neutral.
  
• ING upgraded Total SA (NYSE: TOT) to Buy from Hold as they believe positive results from the company's downstream operations in Europe will support the stock.

OTHER UPGRADES:

• Eli Lilly & Co. (NYSE: LLY) was upgraded to Equal Weight from Underweight at Morgan Stanley.
  
• Lam Research (NASDAQ: LRCX) was upgraded to Overweight from Equal Weight at Lehman.
  
• Goldman upgraded RightNow Tech (NASDAQ: RNOW) to Neutral from Sell.

"The August lows now represent important technical levels defining the U.S. markets' primary uptrend," notes Michael Ashbaugh. The editor of The Marketwatch Technical Indicator explains, "Specifically, the S&P 500's August low holds at 1,427 while the Nasdaq's August low holds at 2,492. In addition, the Dow's August low holds at 13,134.

Ashbaugh continues, "For the Nasdaq and the S&P, a break below those levels would mark a failed test of support, also placing each index under its 200-day moving average. And if the breakdown were decisive, the primary trend would likely turn lower.

Yet "as ugly" as the current backdrop looks, he contends, from a strictly technical standpoint, the primary uptrend still has the benefit of the doubt.

Meanwhile, he suggests, we continue to find some names that are well positioned technically. These, he says, are intended as radar screen names - sectors or stocks positioned to move near term. In this light, the technician sees ongoing strength among chip-equipment names.

Ashbaugh says, "Each of these names broke out decisively in mid-July. Since then, Lam Research (NASDAQ: LRCX), ASML Holding (NASDAQ: ASML) and KLA-Tencor (NASDAQ: KLAC) have pulled in, establishing support around the breakout point. Further, he adds, Applied Materials (NASDAQ: AMAT) and Varian Semiconductor (NASDAQ: VSEA) are the group's strongest names, knifing even higher after the initial breakout, despite a down market."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

MOST NOTEWORTHY: Countrywide Financial (CFC), Hoku Scientific (HOKU), Lam Research (LRCX), Weight Watchers (WTW) and NutriSystem (NTRI) were today's more noteworthy downgrades:

• Friedman Billings downgraded Countrywide Financial (NYSE: CFC) to Underperform from Market Perform until credit stabilizes.

• Piper Jaffray downgraded Hoku Scientific (NASDAQ: HOKU) to Underperform from Outperform and sees several near-term risks, including competitive threats from larger and well-financed polysilicon start ups as well as financing risk.

• ThinkEquity downgraded Lam Research (NASDAQ: LRCX) to Source of Funds from Accumulate, expecting a recovery in the foundry segment but at 90nm, the nodes where Lam's market share is not high.

• Lehman downgraded Weight Watchers (NYSE: WTW) to Underweight from Equal Weight and NutriSystem (NASDAQ: NTRI) to Equal Weight from Overweight...

OTHER DOWNGRADES:

• First Albany downgraded Sketchers USA (NYSE: SKX) to Neutral from Buy.

• UBS downgraded Georgia Gulf (NYSE: GGC) to Reduce from Neutral.

• Bear Stearns cut GlaxoSmithKline (NYSE: GSK) to Underperform from Peer Perform.

• AG Edwards cut Peabody Energy (NYSE: BTU) to Hold from Buy.

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

Heading to Memorial Day, there's certainly no moratorium on the number of talked about potential deals. Receiving a fair amount of attention over the last few days include the companies below. There's more, of course, but hey, it's a three-day weekend.

LAM RESEARCH CORPORATION (NASDAQ: LRCX)

This supplier of tools that makes microchips keeps seeing its stock move up. Up about 13% over the last few months. And it may be more than speculation that it will soon be acquired. Investors looking for a deal are snapping up equity calls, some are then selling them, and keeping both eyes on the stock price. Others are looking out to see which private equity firms or "strategic" buyers come calling.

AMDOCS LIMITED (NYSE: DOX)

As Alltel Corporation (NYSE: AT) goes, so goes Amdocs? Well, not quite. Yes the Alltel sale has pushed Amdocs' stock upward. Some say this maker of software products for telecom services firms may want to continue to go forward by themselves. But that hasn't stopped that list of potential buyers from being passed around. Best bet: International Business Machines Corporation (NYSE: IBM).

CIRCUIT CITY STORES (NYSE: CC)

Again, here we go: Is it going to take a buyout? (Read: private equity buyer.) Or a miracle? (Read: new management) There are profit warnings. (Read: red flags everywhere) The stock is in miserable shape. (Read: cheap) Tough competition. (Read: Wal-Mart Stores Inc (NYSE: WMT)). Think there's a book to be written about all of this? (Read: who'd want to?).

APPLEBEE'S INTERNATIONAL INC (NASDAQ: APPB)

Food for thought. Kangaroo Holdings wants to buy OSI Restaurant Partners Inc (NYSE: OSI). Not surprisingly, Applebee's stock goes up. Are they cooking up a sale price for themselves as they "evaluate" offers? You betcha.

PALM INC (NASDAQ: PALM)

Going, going...almost gone. Even we're beginning to tire of this one. But it never gets old if you like to watch. Now, they're canceling conferences. The CEO is selling shares. The CFO has a bad back. Come on! The latest product review - Palm Treo 755p - is terrible. Market share is going down the tubes. R&D? Forgetaboutit. Sound like a company on the go? Right. Right into someone else's lap. And to think what they once were. Great job all around, everybody.

MOST NOTEWORTHY: Limited Brands, Inc (LTD), Applied Materials, Inc (AMAT), Williams-Sonoma, Inc (WSM) and Texas Instruments Inc (TXN) were some of today's noteworthy downgrades:

• Limited Brands Inc (NYSE: LTD) was downgraded to Neutral from Buy at Banc of America, to Neutral from Accumulate at Buckingham, to Hold from Buy at Citigroup and to Market Perform from Outperform at Wachovia following the news of selling a majority interest in its Express brand and announcing the intent to explore strategic options for the company.

• Elsewhere, Cowen downgraded shares of Applied Materials (NASDAQ: AMAT) to Neutral from Outperform due to Q3 order guidance and limited visibility. American Technology removed Applied Materials from its Focus List.

• Williams-Sonoma (NYSE: WSM) was cut to Market Perform from Outperform at Piper Jaffray on concerns about mall traffic trends at the end of Q1 for both Pottery Barn and Williams-Sonoma brands.

• Texas Instruments (NYSE: TXN) was cut to Sector Performer from Outperformer at CIBC on valuation...

OTHER DOWNGRADES:

• Merriman downgraded Lam Research Corp (NASDAQ: LRCX) to Neutral from Buy.

• UBS cut Air France-KLM (NYSE: AKH) to Neutral from Buy.

• ThinkEquity downgraded Jazz Technologies, Inc (AMEX: JAZ) to Source of Funds from Buy.

• Nordstrom, Inc (NYSE: JWN) was taken down to Market Weight from Overweight at Thomas Wiesel.

• Longbow downgraded Ingersoll-Rand Co Ltd (NYSE: IR) to Neutral from Buy on valuation.

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

MOST NOTEWORTHY: Kraft Foods, Inc (KFT), Healthways, Inc (HWAY), PepsiCo (PEP) and Lam Research Corp (LRCX) were some of today's more noteworthy upgrades:

• Morgan Stanley upgraded shares of Kraft Foods Inc (NYSE: KFT) to Equal Weight from Underweight on valuation. UBS upgraded shares to Buy from Neutral on expectations the company may benefit from a purchase of Cadbury Schweppes' (CSG) confectionary unit; UBS believes Kraft could purchase Cadbury's confectionery unit for $20.8B and still see 7% accretion in 2008.
• Elsewhere, Goldman Sachs upgraded Healthways Inc (NASDAQ: HWAY) to Neutral from Sell on valuation.
• Bernstein raised PepsiCo's (NYSE: PEP) rating to Outperform from Market Perform with a $77 target, expecting the soft-drink maker to outperform rival Coca-Cola (KO) by more than 10% over the next year.
• Citigroup upgraded Lam Research Corp (NASDAQ: LRCX) to Hold from Sell to reflect a more bullish 2-3 year memory capex view and the firm believes customers of Samsung/Hynix continue to have an upward bias.

OTHER UPGRADES:

• Vodafone PLC (NYSE: VOD) was upgraded to Buy from Hold at Deutsche Bank on valuation.
• JP Morgan upgraded shares of Intersil Corp (NASDAQ: ISIL) to Overweight from Neutral.
• Dreamworks Animation SKG, Inc (NYSE: DWA) was upgraded to Buy from Neutral at Pali Capital.
• Sappi Ltd (NYSE: SPP) was raised to Buy from Sell at Merrill Lynch.
• JP Morgan added VCA Antech, Inc (NASDAQ: WOOF) to its Focus List with a $46 target, citing the company's near-term growth prospects.

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

MOST NOTEWORTHY: SanDisk (SNDK), JetBlue (JBLU), and the Semiconductor Equipment Sector filled out today's notable downgrades:

• Baird downgraded SanDisk Corp. (NASDAQ:SNDK) to Neutral from Outperform with a $43 target, citing the company's reduced gross margin outlook.
• Morgan Stanley downgraded JetBlue Airways Corp. (NASDAQ:JBLU) to Equal Weight from Overweight.
• The Semiconductor Equipment sector was downgraded to Market Weight from Overweight at Credit Suisse, citing first quarter memory chip margins that are lower for the first time in three years.
• Credit Suisse also downgraded Lam Research Corp (NASDAQ:LRCX) to Neutral from Outperform, citing negative catalysts ahead, despite the cheap valuation, and Varian Semiconductor Equipment Associates, Inc. (NASDAQ:VSEA) to Underperform from Neutral, citing valuation.

OTHER DOWNGRADES:

• Soleil Securities downgraded AK Steel Holding Corp. (NYSE:AKS) to Sell from Hold on valuation.
  
• Merriman cut the Nautilus, Inc (NYSE:NLS) to Sell from Neutral. They believe shifts in spending patterns to "big box" retailers are hurting direct channel results. The firm also believes Nautilus lacks near-term catalysts.
• Citigroup downgraded Volkswagen (OTC:VLKAY) to Sell from Hold.
• Matrix USA downgraded Kulicke & Soffa Industries, Inc. (NASDAQ:KLIC) to Strong Sell from Strong Buy, citing decreasing revenues and growing valuation.
• Wedbush downgraded LeapFrog Enterprises, Inc. (NYSE:LF) to Sell from Hold and expects a better entry point in the future.
• RBC cut Abercrombie & Fitch Co. (NYSE:ANF) to Sector Perform from Outperform citing the lack of near-term catalysts.

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