MOST NOTEWORTHY: Micron, China Sunergy and Medtronic were today's noteworthy upgrades:

• Deutsche Bank upgraded shares of Micron (NYSE: MU) to Buy from Hold as they believe improved pricing and the company's cost reductions should drive a strong margin recovery. The firm raised MU's target to $11 from $7.
  
• Jefferies raised China Sunergy (NASDAQ: CSUN) to Hold from Underperform following the company's Q1 beat to reflect its improved outlook for the production of higher efficiency cells and better controls over cash flow measures.
  
• Goldman raised Medtronic (NYSE: MDT) to Buy from Neutral based on potential earnings upside from strong market share and broad distribution.

OTHER UPGRADES:

• UBS upgraded National Fuel Gas (NYSE: NFG) to Buy from Neutral.
  
• Arris (NASDAQ: ARRS) was raised to Outperform from Market Perform at Friedman Billings.
  
• Piper upgraded Central Garden & Pet (NASDAQ: CENT) to Buy from Neutral.

MOST NOTEWORTHY: Lululemon, National City and Devon Energy were today's noteworthy upgrades:

• Thomas Weisel upgraded shares of Lululemon (NASDAQ:LULU) to Overweight from Market Weight as they believe the company's momentum continues following the strong results; the firm maintains a $43 target on shares.
  
• Bear upgraded National City (NYSE:NCC) to Outperform from Underperform citing favorable risk/reward following reports is is considering a transaction with KeyCorp (NYSE:KEY).
  
• JP Morgan raised Devon Energy (NYSE:DVN) to Overweight from Neutral citing solid organic growth with high rates of returns.

OTHER UPGRADES:

• Micron (NYSE:MU) was upgraded at Goldman to Neutral from Sell.
  
• Merrill raised eBay (NASDAQ:EBAY) to Buy from Neutral.
  
• Oppenheimer upgraded to Outperform from Perform Marathon Oil (NYSE:MRO).

UBS upgraded US Steel (NYSE: X) from "neutral" to "buy" according to MarketWatch.

Bear Stearns downgraded UBS (NYSE: UBS) to "peer perform" from "out perform" according to Briefing.com. The news service also reports that Thomas Weisel upgraded Micron (NYSE: MU) from "market weight" to "overweight."

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

MOST NOTEWORTHY: Micron, Chico's FAS and Lifetime Brands were today's noteworthy initiations:

• Oppenheimer assumed Micron (NYSE: MU) with an Outperform rating and $9.50 target, as they believe price declines in the DRAM market moderated in 2H of the December quarter and that concerns of oversupply are already priced into shares.
  
• Stanford believes shares of Chico's FAS (NYSE: CHS) will remain under pressure over the next three to six months given the adverse economic conditions and the company's "less-than-exciting" fashion assortment. The firm started shares with a Hold rating and $10 target.
  
• Lifetime Brands (NASDAQ: LCUT) was initiated with a Neutral rating at SunTrust. The firm prefers to wait for greater visibility on the U.S. consumer spending environment before becoming more constructive on the name.

OTHER INITIATIONS:

• Soleil initiated Worthington (NYSE: WOR) with a Hold rating.
  
• Jefferies started Esterline Technologies (NYSE: ESL) with a Buy rating and $58 target.
  
• Oppenheimer assumed Spansion (NASDAQ: SPSN) with a Perform rating.

Micron Tech (NYSE: MU) closed at $7.89 Modnay.

Goldman Sachs has a Neutral rating on MU and says: "The Street continues to call the bottom in the stock, we do not expect the shares to fully bottom until the excess DRAM capacity is significantly reduced."

MU December 7 straddle is priced at $1.10. MU January option implied volatility of 57 is above its 26-week average of 44 according to Track Data, indicating larger price risk.

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

MOST NOTEWORTHY: The technology and services sector, Cognizant, Infosys Technologies and Silicom Ltd were today's noteworthy initiations:

• Wachovia initiated shares of Dell (NASDAQ: DELL), Micron (NYSE: MU) and Nokia (NYSE: NOK) with Outperform ratings and IBM (NYSE: IBM), AMD (NYSE: AMD) and Motorola (NYSE: MOT) with Market Perform ratings.
  
• CIBC started shares of Cognizant (NASDAQ: CTSH) and Infosys (NASDAQ: INFY) with Sector Outperformer ratings and a $100 target and $60 target, respectively. The firm views risk/reward as favorable.
  
• Merriman initiated Silicom Ltd (NASDAQ: SILC) with a Neutral rating, citing valuation and low visibility into the quarter.

OTHER INITIATIONS:

• BMO Capital started shares of Apple (NASDAQ: AAPL) with an Outperform rating.
  
• Solei initiated Lincoln Electric (NASDAQ: LECO) with a Buy rating and $114 target.
  
• Merrill initiated Northwest Airlines (NYSE: NWA) with a Buy rating and $23 target.

MOST NOTEWORTHY: Toronto Dominion, Cytec Industries, Ceragon Networks, Micron and Navteq were today's noteworthy downgrades:

• CIBC downgraded shares of Toronto Dominion (NYSE: TD) to Sector Performer from Outperformer following the Commerce Bancorp (NYSE: CBH) acquisition, as they see integration risks and believes the deal will limit the company's ability to buyback stock.
  
• Cytec Industries (NYSE: CYT) was downgraded to Hold from Buy at Jefferies, as they believe near-term risks to demand and margins could bring a better entry point by 1H08. Target lowered to $75 from $79.
  
• Collins Stewart downgraded shares of Ceragon Networks (NASDAQ: CRNT) to Underperform from Buy on valuation and uncertainties surrounding the stock, which include the NEC infringement issue and increased competition.
  
• Micron Technology (NYSE: MU) was downgraded to Accumulate from Buy at ThinkEquity. The firm is cautious on the sustainability of PC related demand and questions component order levels relative to PC sell through.
  
• Banc of America downgraded shares of Navteq Corporation (NYSE: NVT) to Neutral from Buy following Nokia's (NOK) proposed buyout.

OTHER DOWNGRADES:

• JP Morgan downgraded Companhia Vale do Rio Doce (NYSE: RIO) to Neutral from Overweight.
  
• Goldman removed Johnson Controls (NYSE: JCI) from its Conviction Buy List.
  
• Citigroup downgraded GameStop Corp (NYSE: GME) to Hold from Buy.
  
• Friedman Billings downgraded Brookfield Asset Management (NYSE: BAM) to Neutral from Outperform.

Micron Technology (NYSE: MU), the well-known DRAM manufacturer that has been expanding into new areas, reported results last night that simply will not get anyone excited.

What was interesting is how much DRAM growth has slowed during the past ten years, with management forecasting bit consumption of just 5% to 20%, not high for an industry that showed bit growth closer to 50% during much of its existence. Since this is an industry that always shows price declines -- expecting a 10% drop in DRAM pricing in the current quarter -- this slowdown in volume growth is not good.

Hoping to offset a structural slow down in DRAM growth, MU has expanded into the image sensor and NAND flash memory business, two more commodity-chip products. Micron's strategy appears to be to invest in businesses that do not earn their cost of capital.

However, with that said, Micron is selling for 1.2x book value, which is at the lower end of its historical trading range. Also, the seasonally strong demand for these commodity products last into November. As blogged yesterday, it is still worth a trade into November, when chip demand will moderate.

U.S. stock futures headed lower this morning, indicating a similar start for stocks ahead of services industry data and as banks remain in focus.

Yesterday, U.S. stocks finished the day mixed snapping Monday's rally that found the Dow closing at a record level. Data on pending home sales showed no sign of recovery in the ailing housing market and investors started to doubt the possibility of future rate cuts. The Dow Jones Industrial Average fell 40.2 points, or 0.29% as did the S&P 500 with a 0.41 points decline or 0.03%. The Nasdaq composite finished the day up 6.1 points or 0.22%.

Today, ISM services for September is due at 10 a.m. EDT and is expected to fall to 55 in September, from 55.8 last month, according to briefing.com. This reading is important as services account for 80% of U.S. economic activity. Should the service sector show weakness, the reading may support the case for a further rate cut and stocks may yet rise today.

The government will release its weekly fuel inventory report at 10:30 a.m. EDT. Oil futures held above $80 a barrel today ahead of the inventory report after falling for three straight days from the near-record levels of last Thursday. Many analysts say last week's rally was mostly fueled by the weak dollar and not necessarily by supply and demand fundamentals of the oil market. Analysts expect that crude inventories fell by around 400,000 barrels in the week ended Sept. 28, while gasoline inventories grew 400,000 barrels.

The dollar has been rebounding against several currencies, though, and dollar-denominated commodities have become less of a bargain. Today the dollar strengthened against the yen, but lost ground again against the euro.

Overseas, Asian markets were mixed, European markets are mostly higher.

After warning from UBS and Citigroup yesterday of earnings hit due to charges, today Deutsche Bank (NYSE: DB) announced that losses related to the U.S. subprime crisis, would offset better-than-expected gains from asset sales and tax credits, with third-quarter net profit expected to reach $1.98 billion, better than a year ago. This despite a charge of as much as $991.6 million on its leveraged loans and loan commitments, the German bank said it would take, in addition to the $2.27 billion it took in the second quarter. DB shares are up over 2% in premarket trading.

Micron Technology (NYSE: MU) shares are down nearly 3% in premarket trading after the company reported earnings last night. Micron posted a fiscal fourth-quarter net loss after a year-ago profit, mainly because of lower selling prices for its memory products.

Toshiba Corporation (OTC: TOSBF), the large memory chip manufacturer, said that it has sold out of its supply of NAND flash memory. Also, there have been reports that increased handset and smartphone demand is leading to a pick up in demand for chips in general.

Micron Technology (NYSE: MU) reports results today so it will be interesting to see what they have to say and whether any of their diversification efforts are having success.

Intel Corporation (NASDAQ: INTC) recently upped its revenue guidance, National Semiconductor Corporation (NYSE: NSM) reported results in line with positive guidance and Texas Instruments Inc (NYSE: TXN) provided mid-quarter guidance with no positive surprise.

Micron is one moribund stock sitting at a low. The stock looks pretty washed-out with limited downside risk. It may be worth a look going into today's earnings release.

MOST NOTEWORTHY: Select newspaper stocks and Dolan Media were today's noteworthy initiations:

• Banc of America initiated six stocks in the newspaper sector with Neutral ratings: Gannett (NYSE: GCI) was started with a $51.50 target, citing a lack of clarity into the company's acquisition strategy; New York Times (NYSE: NYT) was started with a $21 target, reflecting a lack of clarity into the company's acquisition strategy; E.W. Scripps (NYSE: SSP) was started with a $43 target, as the firm feels the company's Interactive division is a "big question mark" that could drag down company growth; McClatchy Co (NYSE: MNI) was started with a $26 target, as the firm is positive longer-term, but sees downside risk to 2007 consensus estimates; Lee Enterprises (NYSE: LEE) was initiated with a $19.50 target; Gatehouse Media (NYSE: GHS) was started with a $12.50 target.
  
• Dolan Media (NYSE: DM) was initiated with an Outperform rating and $24 target at Piper Jaffray. Piper believes DM's Q3 guidance is conservative given the default rates in July and August and notes the company processes defaults in two of the three highest default rate states. Dolan Media was also started with a Buy rating and $26 target at Merrill Lynch and with a Buy rating and $28 target at Craig-Hallum.

OTHER INITIATIONS:

• Think Equity assumed coverage of Intel Corporation (NASDAQ: INTC) and Micron Technology (NYSE: MU) with an Accumulate rating and $26 target and a Buy rating and $18 target, respectively.
• Citigroup started shares of Royal Caribbean Cruises (NYSE: RCL) and Carnival Corp (NYSE: CCL) with Hold ratings.
• SuperValu Inc (NYSE: SVU) was started with a Hold rating and $47 target at Citigroup.
• Rodman & Renshaw initiated shares of Omrix Biopharmaceuticals (NYSE: OMRI) with a Market Outperform rating.

MOST NOTEWORTHY: Advanced Micro Devices, Hancock Holding, Town Sports and Gerdau SA were today's noteworthy initiations:

• Nollenberger started shares of Advanced Micro Devices (NYSE: AMD) with a Buy rating and $18 target. The firm believes the company's issues are widely known and already baked into the valuation and feels the Barcelona ramp and performance are likely ahead of expectations and demand for the latest family of ATI graphics is solid.
• B. Riley initiated shares of Hancock Holding Company (NASDAQ: HBHC) with a Buy rating of $43 target as the firm believes a higher premium is warranted given the company's superior growth prospects and conservative management profile.
• Town Sports International Holdings (NASDAQ: CLUB) was initiated with a Sector Outperformer and a $23 target at CIBC. The firm expects shares to be driven by improving fundamentals.
• Citigroup believes Gerdau SA's (NYSE: GGB) acquisition of Chaparral was expensive and will provide near-term headwinds for the stock, starting shares off with a Hold rating.

OTHER INITIATIONS:

• UBS initiated shares of Baker Hughes Incororated (NYSE: BHI), Halliburton (NYSE: HAL) and Schlumberger Limited (NYSE: SLB) with Buy ratings and targets of $102, $52 and $121, respectively.
• BMO initiated shares of Health Care Reit (NYSE: HCN) with a Market Perform rating.
  
• Lazard initiated shares of Micron Technology (NYSE: MU), SanDisk Corporation (NASDAQ: SNDK) and Silicon Motion Technology (NASDAQ: SIMO) with Buy ratings and targets of $14, $63 and $29.

MOST NOTEWORTHY: McDonald's (MCD), Micron Tech (MU), ManPower (MAN), ASML Holding (ASML) and Wm. Wrigley Jr Co (WWY) were today's notable upgrades:

• McDonald's (NYSE: MCD) is creating shareholder value by selling 1600 under-performing restaurants and using the money for share buyback programs and dividends and was upgraded to Buy from Hold at Matrix.

• AG Edwards upgraded Micron (NYSE: MU) to Buy from Hold on the belief notebook unit growth could stay in the 25-30% YoY range over the next two quarters, while desktop growth could pick up from the 4% attained in the June quarter. Up from a low of close to $5 in February, NAND spot prices are in the $8-$9 range for an 8Gb chip over the last few weeks.

• ManPower (NYSE: MAN) was upgraded to Strong Buy from Hold at Matrix based on the growing demand for search services in Europe, Africa and North America.

• Friedman Billings upgraded shares of ASML Holding (NASDAQ: ASML) to Outperform from Market Perform and added them to their Top Picks list based on recent checks that indicate a sustainable recovery in lithography tool bookings beyond Q3.

• Bear upgraded shares of Wrigley (NYSE: WWY) to Peer Perform from Underperform citing the better-then-expected response to competitor Cadbury (CSG), UK momentum in developing markets, and likely strong performance by new gum, "5."

OTHER UPGRADES:

• Calyon raised Capital One (NYSE: COF) to Buy from Add.

• Goldman raised Darden Restaurants (NYSE: DRI) to Buy from Neutral.

• Lehman upgraded National Semiconductor (NYSE: NSM) to Overweight from Equal Weight.

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

MOST NOTEWORTHY: J.B. Hunt Transport (JBHT), Gold Fields (GFI), Anheuser-Busch (BUD), CBS Corp (CBS) and Amerigroup (AGP) were today's noteworthy upgrades:

• Wachovia upgraded shares of J.B. Hunt Transport (NASDAQ: JBHT) to Outperform from Market Perform citing strength in the company's Intermodal franchise.

• Matrix USA upgraded Gold Fields (NYSE: GFI) to Buy from Sell, citing the strong demand for gold jewelry from affluent customers in developing markets and investors.

• AG Edwards upgraded Anheuser-Busch (NYSE: BUD) to Buy from Hold based on valuation and improving fundamentals.

• CBS Corp (NYSE: CBS) was upgraded to Buy from Neutral at SMH Capital based on expectations for CBS to continue to increase its annual dividend 10% a year.

• Jefferies is more confident in Amerigroup's (NYSE: AGP) ability to see further medical cost improvements in its GA market and it its TN expansion, upgrading shares to Buy from Hold...

OTHER UPGRADES:

• Goldman upgraded Micron Tech (NYSE: MU) and Novellus Systems (NVLS) to Neutral from Sell.

• CIBC raised Darden Restaurants (NYSE: DRI) to Sector Outperformer from Sector Performer.

• BMO Capital upgraded National City (NYSE: NCC) to Market Perform from Underperform.

• Needham raised OmniVision Tech (NASDAQ: OVTI) to Buy from Hold.

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

Apple Inc. (NASDAQ: AAPL) -- August volatility Elevated into EPS as AAPL at record High. AAPL is recently down $1.08 to $142.67. RBC Capital Markets says "Reports Q3 July 25, with focus on iPhone, but expects Mac momentum to drive results." Thomson First Call expects EPS of 72 cents. AAPL August option implied volatility of 58 is above its 26-week average of 37 according to Track Data, suggesting larger risk.

First Data Corp. (NYSE: FDC) -- volatility increases into KKR's $22 billion FDC debt offering. FDC, the world's largest processor of credit-card payments, announced on April 2 that it would be purchased by Kohlberg Kravis Roberts & Co. (KKR) for $29 billion. FDC shareholders will receive $34 in cash for each share. FDC named Michael Capellas as CEO of FDC on June 10. KKR is expected to raise $22 billion in late July to finance FDC buyout. FDC over all option implied volatility of 18 is above 14-week average of 14 according to Track Data, suggesting larger risk.

Option volume leaders today are: Alcoa Inc. (NYSE: AA) and Micron Technology Inc. (NYSE: MU) according to Track Data.

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