Portugal Prime Minister Jose Socrates stood by his promise and resigned late Wednesday, leaving the country with a higher possibility of a bailout. Socrates had hoped to push through structural reforms in the country in order to cut down borrowing costs and decrease its fiscal deficit.

The prime manager's resignation was just another undesirable event for Portugal, as Moody's downgraded the country's sovereign debt rating last week and gave Portugal a negative outlook. Although nothing is certain, the outlook suggests that further ratings cuts may ensue.

Analyst Upgrades

• GC Financial upgraded Microsoft (MSFT) to buy from hold, citing expectations that the company will raise its quarterly dividend by 15%. The firm upped its target for shares to $30 from $29.
• JPMorgan upgraded Agrium (AGU) to overweight from neutral, citing valuation and strengthening agricultural fundamentals. The firm raised its target for shares to $75 from $70. Note JPMorgan downgraded Mosaic (MOS) this morning to neutral from overweight.
• Susquehanna upgraded Baker Hughes (BHI) to positive from neutral based on valuation. The firm has a $53 target on the stock.
• Target (TGT) was upgraded to buy from neutral at BofA/Merrill.
• CF Industries (CF) was upgraded to conviction buy from neutral at Goldman.
• Portugal Telecom (PT) was upgraded to buy from hold at Deutsche Bank.

Analyst Upgrades

• JPMorgan upgraded Norfolk Southern (NSC) to overweight from neutral, citing the company's leverage to coal and position relative to peers. The firm has a $68 price target for shares.
• Benchmark upgraded Royal Dutch Shell (RDS.A) to hold from sell based on a more favorable earnings outlook and reduced dividend risk.
• UBS upgraded Costco (COST) to buy from neutral based on valuation. The firm raised its price target to $63 from $62.
• Visa (V) was upgraded to gonviction buy from buy at Goldman.
• KLA-Tencor (KLAC) was upgraded to outperform from neutral at Credit Suisse.
• Texas Instruments (TXN) was upgraded to outperform from perform at Oppenheimer.

Analyst Upgrades

• JPMorgan upgraded AstraZeneca (AZN) to neutral from underweight after the company's U.S. Crestor patent was ruled valid. The firm believes the ruling could lead to AstraZeneca announcing a sizeable share buyback program. AstraZeneca was also upgraded to buy from neutral at BofA/Merrill and to hold from underperform at Jefferies.
• Deutsche Bank upgraded Peabody Energy (BTU) to buy from hold, citing valuation and attractive fundamentals in the coal sector. The firm has a $57.50 price target for shares, and also maintains buy ratings on Arch Coal (ACI) and Alpha Natural (ANR).
• Oppenheimer upgraded NextEra Energy (NEE) to outperform from perform, citing valuation and an improving regulation outlook in Florida. The firm maintains a $55 price target for shares.
• Eaton Vance (EV) was upgraded to buy from neutral at BofA/Merrill.
• Dynamex (DDMX) was upgraded to overweight from equal weight at Stephens.
• Soleil upgraded RPM (RPM) to buy from gradually accumulate.

Analyst Upgrades

• Oppenheimer upgraded Alexion (ALXN) to outperform from perform, citing the recent pullback in shares and expected momentum in the second half of 2010. The firm has a $62 price target for shares.
• FBR Capital upgraded Blue Coat Systems (BCSI) to outperform from market perform, citing positive channel checks and the recent pullback in shares. The firm maintains a $27 price target on the name.
• Needham upgraded Hologic (HOLX) to buy from hold after its mammography survey confirmed that an upgrade cycle for digital mammography is emerging. The firm has a $20 price target for shares.
• eBay (EBAY) was upgraded to neutral from sell at MKM Partners.
• Athenahealth (ATHN) was upgraded to buy from hold at Auriga.
• Las Vegas Sands (LVS) was upgraded to overweight from equal weight at Morgan Stanley.

Analyst Upgrades

• Deutsche Bank upgraded Murphy Oil (MUR) to buy from hold following the company's analyst day. In addition, the firm raised its target for shares to $70 from $59.
• SunTrust upgraded Petroleum Development (PETD) to buy from neutral based on higher price realizations. The firm has a $31 target on the stock.
• Sterne Agee upgraded P.F. Chang's (PFCB) to buy from neutral, citing valuation and SSS momentum. The firm has a $54 target on the stock.
• Royal Bank of Scotland (RBS) was upgraded to neutral from underperform at Credit Suisse.
• PepsiCo (PEP) was upgraded to conviction buy from buy at Goldman.
• Baytex Energy Trust (BTE) was upgraded to buy from speculative buy at Canaccord.
• Disney (DIS) was upgraded to hold from sell at Citigroup.

Analyst upgrades:

• Goldman upgraded Nokia (NYSE: NOK) to Neutral from Sell on valuation and believes the company's guidance is realistic.
  
• SMH Capital upgraded GMX Resources (NASDAQ: GMXR) to Accumulate from Neutral and is positive on the company's capex reduction.
  
• Wachovia raised Nationwide Health Services (NYSE: NHP) to Outperform from Market Perform to reflect the company's diversified portfolio and "solid" capital position.
• Portugal Telecom (NYSE: PT) was upgraded to Equal Weight from Underweight at Morgan Stanley.
  
• Omnicare (NYSE: OCR) was upgraded to Buy from Hold at Soleil.
  
• SKF AB (OTC: SKFRY) was upgraded at JP Morgan to Neutral from Underweight.

Analyst downgrades:

Analyst upgrades:

• Banc of America upgraded shares of Pepsi Bottling (NYSE: PBG) to Buy from Neutral on valuation as they expect better leverage in FY09 and believe an overly bearish outlook is priced in. The company's target was raised to $37 from $35.
  
• Goldman upgraded Washington Mutual (NYSE: WM) to Neutral from Sell and said Q3 results were worse than expected but not as bad as the decline in shares suggests. The analyst said WaMu's capital and reserves appear stable and that the company might be able to avoid another capital raise. WaMu's target was raised to $4 from $5.
  
• Greenhill & Co (NYSE: GHL) was raised to Outperform from Market Perform at Wachovia.
  
• F5 Networks (NASDAQ: FFIV) was upgraded at JP Morgan to Overweight from Underweight.
  
• Baird upgraded Gilead Sciences (NASDAQ: GILD) to Outperform from Neutral.

Analyst downgrades:

• Jefferies downgraded PharmaNet Development (NASDAQ: PDGI) to Underperform from Buy following the lowered guidance as they believe the company's execution and cost control problems have not been solved. The company's target was lowered to $15 from $27.
  
• JP Morgan downgraded shares of Ericsson (NASDAQ: ERIC) to Underweight from Neutral to reflect their weak outlook for the company's Sony Ericsson (NYSE: SNE) handset unit.
  
• Deutsche Bank downgraded shares of Danaher (NYSE: DHR) to Hold from Buy on valuation and concerns about the company's FX exposure.
  
• Best Buy (NYSE: BBY) was cut to Neutral from Buy at UBS.
  
• Portugal Telecom (NYSE: PT) was lowered to sell from Neutral at UBS and to Underweight from Neutral at JP Morgan.
  
• Quality Systems (NASDAQ: QSII) and BioScrip (NASDAQ: BIOS) were downgraded to Neutral from Buy at Piper.

Analyst initiations:

• Jefferies initiated Massey Energy (NYSE: MEE) with a Buy rating and $80 target. The firm expects substantial margin improvement, free cash flow, and earnings growth with eastern utility coal inventory levels under pressure and a robust export and met coal market.
  
• William Blair started BioMarin Pharmaceutical (NASDAQ: BMRN) with an Outperform rating. The firm expects strong EPS growth during 2008-2010, thinks the company's pipeline is underappreciated by the Street, and feels expectations have been reset to a reasonable level.
• Friedman Billings initiated the Lodging sector with a Market Weight rating, starting InterContinental Hotels (NYSE: IHG) and Marriott (NYSE: MAR) with outperform ratings and targets of $16 and $34, respectively, and Starwood Hotels (NYSE: HOT) with a Market Perform rating.
• Citigroup initiated Diamond Offshore (NYSE: DO) with a Buy rating and $126 target.

MOST NOTEWORTHY: Goldman Sachs, Lehman and TD AmeriTrade were today's noteworthy downgrades:

• UBS downgraded Goldman Sachs (NYSE: GS) to Neutral from Buy. The firm believes liquidity problems and de-leveraging in the capital markets will get worst before they get better; UBS also downgraded Bank of New York (NYSE: BK), State Street (NYSE: STT) and Invesco (NYSE: IVZ) to Neutral from Buy.
  
• Following Bear Stearns' (NYSE: BSC) downfall, UBS also downgraded Lehman Brothers (NYSE: LEH) to Neutral from Buy and said the company could be the "next on the list" for the confidence/liquidity crisis by some investors.
  
• TD AmeriTrade (NASDAQ: AMTD) was downgraded to Neutral from buy at UBS and to Market Perform from Outperform at Friedman Billings. Friedman Billings downgraded TD Ameritrade citing slowing client activity as well as margin compression.

OTHER DOWNGRADES:

• JP Morgan cut Portugal Telecom (NYSE: PT) to Underweight from Neutral.
  
• Goldman downgraded Marathon Oil (NYSE: MRO) and Holly Corp (NYSE: HOC) to Neutral from Buy and removed Frontier Oil (NYSE: FTO) from its Conviction Buy List.

MOST NOTEWORTHY: StatoilHydro, Portugal Telecom and STEC Inc were today's noteworthy downgrades:

• Deutsche Bank downgraded shares of StatoilHydro (NYSE: STO) to Hold from Buy after the company cut its production forecast.
  
• Credit Suisse lowered its rating on Portugal Telecom (NYSE: PT) to Underperform from Outperform on competition concerns.
  
• B. Riley downgraded shares of STEC Inc. (NASDAQ: STEC) to Neutral from Buy on valuation, as they believe the risk/reward is neutral following the recent rally.

OTHER DOWNGRADES:

• Jefferies downgraded Red Hat (NYSE: RHT) to Hold from Buy.
  
• UBS downgraded Palm Inc. (NASDAQ: PALM) to Sell from Neutral.
  
• Deutsche Bank lowered Telekom SA (NYSE: TKG) to Hold from Buy.
  
• Goldman downgraded Trident Microsystems (NASDAQ: TRID) to Neutral from Buy.

MAJOR PAPERS:

• According to the Wall Street Journal (subscription required), NYSE Euronext Inc (NYSE: NYX) is investigating the trading of ABN Amro Holdings NV (NYSE: ABN) shares in March when it announced it may sell itself to Barclays plc (NYSE: BCS).
• Barron's (subscription required) "Inside Scoop" column reported that hedge fund ValueAct Capital Partners has boosted its stake in Advanced Medical Optics Inc (NYSE: EYE) to 12.6%, up from 9.9% disclosed at the beginning of June.
• The Financial Times reported that Citigroup Inc (NYSE: C) is not going to reduce its financing of buyouts in the near future, said Citigroup CEO Chuck Prince.
• Spanish telecom company Telefonica SA (NYSE: TEF) has made a EUR3B-plus offer to Portugal Telecom (NYSE: PT) for exclusive control of Vivo Participacoes (NYSE: VIV), reported the Financial Times.

OTHER PAPERS:

• Australian mining company BHP Billiton Limited (NYSE: BHP) has opened talks with private equity firms about a possible $40B takeover of aluminum company Alcoa Inc (NYSE: AA), reported the UK Times.