Analyst upgrades:

• FBR Capital upgraded U.S. Bancorp (NYSE: USB) and New York Community Bancorp (NYSE: NYB) to Market Perform from Underperform to reflect a new valuation framework. The firm raised its target on U.S. Bancorp to $21 from $14 and on New York Community Bancorp to $10 from $9.
• Stephens upgraded Insulet (NASDAQ: PODD) to Overweight from Equal Weight to reflect the company's top-line growth prospects and reasonable expectations. The firm raised its target on shares to $14 from $8.
• Baird upgraded Athenahealth (NASDAQ: ATHN) to Outperform from Neutral and raised its target to $46 from $37 based on expectations for revenue and gross margin expansion, and relative valuation.
• Broadcom (NASDAQ: BRCM) was upgraded to Overweight from Equal Weight at Barclays.
• Phillips-Van Heusen (NYSE: PVH) was upgraded to Buy from Neutral at BofA/Merrill.
• Reliant Energy (NYSE: RRI) was upgraded to Conviction Buy from Neutral at Goldman.

The dealmaking is heating up in the nuclear sector. Today, Exelon Corp (NYSE: EXC) upped its hostile bid by 12% for NRG Energy (NYSE: NRG). This new price tag translates into a valuation of $7.45 billion.

The wrangling between the companies has gone on for roughly eight months. In fact, hostile deals can be time-consuming (in some cases, lasting a couple years).

Something else: Exelon has indicated that this is the "best and final offer." Apparently, the company has realized new cost savings, which justifies the higher valuation.

Today's dip was probably due more to a technical selling fiasco than any particular major market broad news driving us lower, although all bad news took us lower after the overseas markets took a pounding. We are at well over 10-year lows in stocks and you can see Tattoo from Fantasy Island getting his introduction wrong yelling out, "Boss! The Pain! The Pain!".

Even the last line defensive stock list got hammered today. Here are today's unofficial closing bell levels:

Dow 6,762.98 -299.95 (-4.25%)
S&P 500 700.83 -34.26 (-4.66%)
Nasdaq 1,322.85 -54.99 (-3.99%)

Top Analyst UPGRADES and Top Analyst DOWNGRADES

Analyst upgrades:

• Jefferies upgraded shares of Red Hat (NYSE:RHT) to Buy from Hold after their checks indicated Red Hat's November quarter results will be in-line due to solid Jboss sales. The firm also believes a potential new partnership with Cisco (NASDAQ:CSCO) could provide share upside.
  
• Barclays upgraded Amazon.com (NASDAQ:AMZN) to Overweight from Equal Weight as they believe the company's competitive position will strengthen during the current downturn and that the company will gain share.
• JP Morgan upgraded YRC Worldwide (NASDAQ:YRCW) to Neutral from Underweight following the announcement that the company and the Teamsters will vote on contract modifications.
• Del Monte Foods (NYSE:DLM) was raised to Overweight from Equal Weight at Stephens.
  
• Thomson Reuters (NYSE:TRI) was upgraded at Morgan Stanley to Equal Weight from Underweight.
  
• Reliant Energy (NYSE:RRI) was lifted to Outperform from Market Perform at Wachovia.

Analyst downgrades:

• B. Riley downgraded shares of Hot Topic (NASDAQ:HOTT) to Neutral from Buy to reflect a lack of visibility into 2009 and valuation but raised their target price to $9.30 from $8.20.
• Citigroup cut KLA-Tencor (NASDAQ:KLAC) to Hold from Buy to reflect their more offensive stance on the semi group as they view KLA-Tencor as a more defensive name. The firm lowered their target to $22 from $31.
• KeyBanc downgraded Arch Chemicals (NYSE:ARJ) to Underweight from Hold citing global economic headwinds, the stronger dollar, pension costs, and continued weakness in North American housing, among other reasons.
  
• Jo Ann Stores (NYSE:JAS) was cut to Hold from Buy at Soleil.
• Calyon downgraded Schlumberger (NYSE:SLB) to Outperform from Buy.
• Amdocs (NYSE:DOX) was downgraded to Neutral from Buy at Goldman.

Analyst upgrades:

• UBS upgraded Pacific Sunwear (NASDAQ: PSUN) to Neutral from Sell and said liquidity is no longer a near-term concern. The firm lowered Pacific Sunwear's target to $1.50 from $3. Citigroup upgraded shares to Hold from Sell on valuation following the recent weakness and believes Pacific Sunwear has sufficient liquidity to remain a going concern.
  
• Calyon believes Reliant Energy (NYSE: RRI) will be successful in unwinding the Merrill Lynch Retail credit sleeve and obtaining alternative collateral. The firm upgraded shares to Buy from Add.
  
• JP Morgan said Cogent's (NASDAQ: COGT) position in homeland security and the defense markets make it less sensitive to an economic downturn, making valuation attractive. JP Morgan upgraded shares to Overweight from Neutral and raised its target to $13 from $10.50.
• Goldman added Research in Motion (NASDAQ: RIMM) to its Conviction Buy List and removed Riverbed (NASDAQ: RVBD) from the Conviction Sell List.
  
• J.M. Smucker (NYSE: SJM) was raised to Buy from Underperform at Merrill Lynch.

TheStreet.com's Jim Cramer says this is the first real deal to take advantage of the new low prices of this era.

Editor's note: Jim Cramer will present his 2009 stock outlook for the first time at TheStreet.com Investment Conference on Saturday, Oct. 25. Limited seating. Act now.

The Exelon (NYSE: EXC) (Cramer's Take) bid for NRG Energy (NYSE: NRG) (Cramer's Take) is what we need to see if we are going to find terra firma. We need to see healthy companies with good balance sheets going after other healthy companies that have balance sheets that won't let them do well.

If there were no credit crunch, NRG -- like Constellation Energy (NYSE: CEG) (Cramer's Take) before it -- would be doing just fine. In fact, you would be wondering what the heck it was doing so low. Reliant Energy (NYSE: RRI) (Cramer's Take) and Mirant (NYSE: MIR) (Cramer's Take) also fit the same pattern. These are all companies that need ready access to capital, and it doesn't exist right now.

NRG has a pro-nuke history and so does Exelon. Nuclear power has taken on an almost holy image in this country if the plants are already built because you simply can't afford to build new ones. NRG is one of the few utilities in the whole country that is trying to build plants, something that would be fabulous for Exelon and NRG's shareholders alike. It's a great match.

With the economy facing soaring crude oil prices for the past year, consumers and drivers have seen a major impact on their savings. It could seem as though the good old times are over. Gasoline at $4 a gallon is not something we can ignore, and if we take into account that Americans consume nearly 40% of the world's gasoline, you can see where the problems begin. So the surge in oil prices came with an imminent effect on consumers, who had to cut back on their spending.

But since we are already in this unpleasant situation, Kiplinger offers some solutions to help investors fight against high oil prices. Kiplinger underlines in this article that one smart move would be to minimize the cost of driving by making some good energy-related investments.

Gerry Jordan, manager of Jordan Opportunity, recommends investors invest in oil companies such as Schlumberger Ltd. (NYSE: SLB) and Weatherford International (NYSE: WFT), citing strong international business. In addition, Jordan believes that higher crude prices will increase drilling demand. On the other hand, Jordan also loves power companies like Calpine Corp. (NYSE: CPN) and Reliant Energy Inc. (NYSE: RRI) as he anticipates huge power outages across the globe during this year.

MOST NOTEWORTHY: UBS AG, Burger King and SAIC, Inc were today's noteworthy upgrades:

• Bear Stearns upgraded shares of UBS (NYSE:UBS) to Outperform from Peer Perform after UBS announced a $10B write-down and replenished capital, as they now believe the subprime issue is broadly behind the company and capital ratios are restored.
  
• Goldman raised its rating on Burger King (NYSE:BKC) to Buy from Neutral as they expect it to outperform the broader restaurant segment amid the current consumer weakness.
  
• SAIC, Inc (NYSE:SAI) was upgraded to Buy from Hold at Jefferies following the better-than-expected Q3 results, as they believe the company continues to outperform competitors and that margin expansion should continue.

OTHER UPGRADES:

• eBay (NASDAQ:EBAY) was added to Citigroup's CIR Recommend List.
  
• Banc of America upgraded Reliant Energy (NYSE:RRI) to Neutral from Sell.
  
• MasterCard (NYSE:MA) was upgraded to Outperform from Market Perform at Keefe Bruyette.

MOST NOTEWORTHY: Palm, Inc (PALM), Reliant Energy, Inc (RRI) and Take-Two Interactive Software (TTWO) topped today's more notable downgrades:

• UBS cut Palm, Inc (NASDAQ: PALM) to Reduce from Neutral citing valuation. Bank of America downgraded shares to Neutral from Buy with an $18 target and considers the risk/reward less favorable at these levels.

• Bank of America also downgraded Reliant Energy (NYSE: RRI) to Sell from Neutral on valuation.

• Hillard Lyons cut Take-Two Interactive Software (NASDAQ: TTWO) to Neutral from Outperform.

OTHER DOWNGRADES:

• CIBC downgraded Jabil Circuit, Inc (NYSE: JBL) to Sector Performer from Outperformer following the company's disappointing outlook. Bear Stearns cut Jabil to Peer Perform from Outperform. BMO cut the company to Market Perform from Outperform.

• Friedman, Billings, Ramsey downgraded shares of FormFactor, Inc (NASDAQ: FORM) to Market Perform from Outperform to reflect increased risks in the logic market and long-term growth concerns.

• Matrix USA downgraded Knight Transportation (NYSE: KNX) to Hold from Buy.

• American Technology downgraded shares of Comverse Technology, Inc (NASDAQ: CMVT) to Neutral from Buy as the firm believes a retreat to the $17 range is likely given the company's disappointing margin trends.

• CL King cut Claire's Stores, Inc (NYSE: CLE) to Neutral from Strong Buy following the buyout offer.

• Goldman downgraded Atmos Energy Corp (NYSE: ATO) to Sell from Neutral and Liz Claiborne, Inc (NYSE: LIZ) to Neutral from Buy.

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