Analyst Upgrades

• Exxon Mobil (XOM), Netflix (NFLX), Noble Corp. (NE), Pioneer Natural (PXD) and Noble Energy (NBL) to buy from neutral at Goldman.
• Cenovus Energy (CVE) to conviction buy from neutral and Atwood Oceanics (ATW) to neutral from sell at Goldman as well.
• Southern Company (SO) to buy from hold at Citigroup.
• Chevron (CVX) to buy from neutral at BofA/Merrill.
• Ryder (R), Entergy (ETR) and Seaspan (SSW) to buy from hold at Jefferies.
• Gerdau (GGB), Crown Castle (CCI) and American Tower (AMT) to buy from neutral at UBS.
• Aon (AON) and Willis Group (WSH) to buy from neutral at Janney Capital.
• Ryland Group (RYL) to buy from neutral at Ticonderoga.

Analyst Upgrades

• Exxon Mobil (XOM) and BB&T (BBT) to outperform from perform at Oppenheimer.
• D.R. Horton (DHI) upgraded to outperform from market perform at Wells Fargo.
• Meritage Homes (MTH), Old Dominion Freight (ODFL) and Heartland Payment (HPY) to outperform from market perform at Wells Fargo.
• Toll Brothers (TOL) to overweight from equal weight at Barclays.
• Hershey (HSY) to buy from neutral at Janney Capital.
• UnitedHealth (UNH), Cigna (CI) and Allscripts (MDRX) to buy from hold at Deutsche Bank.
• Nationwide Health (NHP) to outperform from market perform at JMP Securities.
• Reynolds American (RAI) to buy from neutral at UBS.
• Adtran (ADTN), PG&E (PCG) and Wisconsin Energy (WEC) to overweight from equal weight at Morgan Stanley.

Analyst Upgrades

• Jefferies upgraded Computer Sciences (CSC) to buy from hold and raised its target to $53 from $47. The analyst said Computer Sciences' valuation has created one of the best LBO opportunities in several years and could provide a five year IRR of 25+%.
• Keefe Bruyette upgraded Comerica (CMA) to outperform from market perform, citing strength of the company's capital. The firm raised its target for shares to $44 from $43.
• RBC Capital upgraded Nokia (NOK) to outperform from sector perform and raised its price target to $14 from $12. The firm upgraded shares based on valuation, reduced execution risk on software development, and potential catalysts from new devices based on Symbian^3. RBS upgraded Nokia to buy from hold after the company named Stephen Elop as CEO.
• Allstate (ALL) was upgraded to buy from hold at Citigroup.
• Coca-Cola Enterprises (CCE) was upgraded to buy from neutral at BofA/Merrill.
• Moody's (MCO) was upgraded to overweight from neutral at Piper Jaffray.

Analyst Upgrades

• Canaccord upgraded Whole Foods (WFMI) to buy from hold based on the company's solid growth outlook. The firm has a $49 target on the stock.
• Bernstein upgraded Mylan (MYL) to outperform from market perform, citing valuation and expectations that its generic business will grow over then next two years. The firm has a $22 target on the stock.
• Jefferies upgraded Omega Healthcare (OHI) to buy from hold with a $26 target based on the company's earnings outlook, valuation and upside from its SNF portfolio.
• Procter & Gamble (PG) was upgraded to buy from hold at Argus.
• Ryland Group (RYL) was upgraded to buy from hold at Deutsche Bank.
• Deere (DE) was upgraded to buy from neutral at Longbow.

Everybody has been wondering what was going to happen to homebuilders once the Federal government's tax credit expired at the end of April. Well, we're starting to find out, and the picture doesn't look good.

Goldman Sachs has downgraded the entire Homebuilders industry from Attractive to Neutral, dropped MDC Holdings Inc. (MDC) from its Conviction Buy List and dropped its price targets on 10 stocks in the industry.

And really, who can blame them?

We've seen new home sales plunge from 504K in April -- right before the tax credit expired -- to 300K in May. We've also watched housing starts and applications for new building permits dry up. Plus, it is getting harder and harder for individuals to qualify for a loan.

Analyst Upgrades

• Oppenheimer upgraded Home Depot (HD) to outperform from perform on expectations that comp sales growth in the home improvement retail sector will accelerate. The firm has a $37 price target for Home Depot shares. The firm also reiterates an outperform rating on Lowe's (LOW).
• UBS upgraded Mattel (MAT) to buy from neutral, citing solid demand in core brands, strong free cash flow and improved cost structure, among other reasons. The firm raised its target to $26 from $21.
• Thomas Weisel upgraded Dreamworks (DWA) to overweight from market weight, citing upcoming releases and increased international expectations. The firm raised its target to $47 from $40.
• TD AmeriTrade (AMTD) was upgraded to outperform from market perform at FBR Capital.
• Whole Foods (WFMI) was upgraded to overweight from neutral at JPMorgan.
• Whiting Petroleum (WLL) was upgraded to overweight from equal weight at Barclays.

Options expert and stock trader Bernie Schaeffer combines fundamental, technical and sentiment-based metrics to select his specific trades.

In his latest The Options Advisor, he looks at a trio of diverse trades: wireless semiconductor play, Broadcom (NASDAQ: BRCM); homebuilder, Ryland Group (NYSE: RYL); and miner, Southern Copper (NYSE: PCU).

"Broadcom has rocketed up the charts in 2009, racking up a year-to-date gain of about 74%. The stock has stair-stepped consistently higher since January, capitalizing on support at its 10-week and 20-week moving averages.

"BRCM's relentless upward momentum has forced many short sellers out of their bearish positions, as short interest on the equity dropped by nearly 20% during the past month.

General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F) may get help from the Bush administration. President Bush said in an interview today that "an abrupt bankruptcy for the autos could be devastating for the economy." He signaled he may use TARP funds for that, but didn't provide a timeline or other details. GM shares are up 4.8% in premarket, Ford's shares are up 2%. Shares of both opened about 3% higher.

Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) probably will report fourth-quarter losses this week on shrinking asset values and a decline in fees for businesses. But even the deep cost cutting measures the investment firms -- now turned banks -- may not help help shareholders enough as the companies face another year of slumping revenue. The demand for their services is and will continue to be limited in what is the worst financial crisis since the Great Depression. GS shares are down 2% in premarket trade.

Banco Santander (NYSE: STD), Nomura (NYSE: NMR) and Royal Bank of Scotland (NYSE: RBS) are among the victims ex-Nasdaq Chairman Bernard Madoff' $50 billion Ponzi scheme. Santander said its customers had an exposure of around $3.1 billion, while Japan's Nomura has an exposure of around $302 million. STD shares are down 1.5% and RBS shares up 1.7% in premarket trade.

[Update 10:00 am:
Huntsman Corp. (NYSE: HUN) shares were down about 35% a little after the open after it has ended its $6.5 billion agreement to be taken over by Hexion Specialty Chemicals Inc. and agreed to a $1 billion legal settlement.
Apple Inc. (NASDAQ: AAPL) shares were down about 4% a little after the open on a downgrade. Goldman Sachs downgraded the iPhone and Mac maker to Neutral from Buy due to deteriorating consumer spending.
JPMorgan (NYSE: JPM) shares slumped nearly 6% after a Merrill Lynch analyst downgraded JPM to Underperform from Neutral.
Honeywell (NYSE: HON) shares gained nearly 7.5% after the manufacturer affirmed a lower 2009 outlook and said it expects profits to fall 6% to 16% as the deepening global recession hits markets it serves.]

TheStreet.com's Jim Cramer says the scope of this crisis needs to be recognized.

The real deal is upon us. The October session that we always seem to get, the one that looks like we need intraday Fed meetings and lifelines to banks and a flood of liquidity and ... oops, we've already done that!

Yep. So often we have had the real hideous looks, only at the last minute to have the darned defeat we need to start over be defeated by some optimistic yahoos who come out of the woodwork and say, "buy, buy, buy!"

I don't want it to happen this time. We have to have some recognition that Ford (NYSE: F) (Cramer's Take) and GM (NYSE: GM) (Cramer's Take) and Chrysler matter and that they are all teetering, that the Boeing (NYSE: BA) (Cramer's Take) strike is going to soon shut down the part of American manufacturing that is not auto and that housing took a step down last month of unfathomable proportions. If you don't believe me, go read the Ryland (NYSE: RYL) (Cramer's Take) release: cancellations spiked up again! We will not hold those July lows that now make the HGX housing sector index run up look like a total ploy to make us feel better. When are Horton (NYSE: DHI) (Cramer's Take) and Pulte (NYSE: PHM) (Cramer's Take) going to merge anyway!

MOST NOTEWORTHY: BP Plc, Tenet Healthcare Franklin Resources were today's noteworthy upgrades:

• Lehman upgraded shares of BP Plc (NYSE:BP) to Equal Weight from Underweight on valuation and positive benefits from the company's TNK joint venture in Russia.
  
• Lehman also upgraded Tenet Healthcare (NYSE:THC) to Overweight from Equal Weight, citing increased confidence the company can meet guidance following the company's analyst day.
  
• Keefe Bruyette upgraded shares of Franklin Resources (NYSE:BEN) to Outperform from Market Perform as they believe flow trends have improved.

OTHER UPGRADES:

• Goldman added Allied Waste (NYSE:AW) to its Conviction Buy List.
  
• China Unicom (NYSE:CHU) and China Netcom (NYSE:CN) were raised to Hold from Sell at Deutsche Bank.
  
• UBS upgraded Ryland (NYSE:RYL) to Buy from Neutral.

MOST NOTEWORTHY: Suntech Power, Premier Exhibitions and the Homebuilders Sector were today's noteworthy initiations:

• Citigroup named Suntech Power Holding (NYSE: STP) their top pick for China solar due to its leading scale and technology roadmap for higher cell efficiency, initiating shares with a Buy rating and $55 target.
  
• Merriman believes Premier Exhibitions (NASDAQ: PRXI) can move to the $14.50-$17.00 through the continued monetization of the company's current tours, the launching of additional tours and the value of the Titanic artifacts on hand. The firm started shares with a Buy rating.
  
• Lehman initiated D.R. Horton (NYSE: DHI), Ryland Group (NYSE: RYL), Toll Brothers (NYSE: TOL) with Overweight ratings and an $18 target, $31 target and $27 target; KB Home (NYSE: KBH) with an Equal Weight rating and $24 target; and Hovnanian Enterprises (NYSE: HOV) with an Underweight rating and $8 target.

OTHER INITIATIONS:

• Citigroup initiated Yingli Green Energy (NYSE: YGE) with a Hold rating and $24 target.
  
• UBS initiated Citrix Systems (NASDAQ: CTXS) with a Neutral rating and $38 target.
  
• JP Morgan initiated Biodel (NASDAQ: BIOD) with an Overweight rating.

Have home builders got an offer for you: sign a contract to buy a home and, if comparable homes in the area decline in value before closing, you can have the home at a reduced price.

According (subscription required) to the Wall Street Journal, companies including KB Home (NYSE: KBH) and Ryland Group (NYSE: RYL) hope such "price protection" guarantees will lessen consumers' paralyzing fears about buying real estate whose value is falling and get them sign on the dotted line, bring in much-needed cash and reduce high cancellation rates.

KB will roll out its price protection program in 35 markets this month. The move is an effort to move some impossible-to-sell new houses, and try to toss buyers a bone that will keep them from walking away from their down payments.

As an investor, I wonder whether this a sign of absolute desperation on the part of home builders, or is it a more bullish indicator that executives don't feel there's much risk in assuaging customers' fears with an offer to compensate them if the home declines in value before closing.

I would say the first option seems more likely.

TheStreet.com's Jim Cramer says until the public feels they won't lose money on a home, no problems will get solved.

Would you ever buy a house in this environment? That's really the ultimate question that has to be asked -- that the Fed should be asking -- if this junk is ever going to come back to life.

I know some of it is so short-term that the jury's back and the verdict is guilty, but most of it hinges on a simple issue: housing depreciation. If you think that your house is going to lose value, default on the second home lien. Which then, we know now, means defaulting on the ultimate mortgage.

The Fed can tinker with LIBOR (I still can't believe they wasted the banking system's time with the LIBOR/auction plan). It can issue statements that are a little more pro-growth than neutral.

Or it can try to change the psychology of the home buyer and homeowner.

The Ryland Group Inc (NYSE: RYL), the California-based homebuilder, released preliminary results last night. What continues to be most striking about homebuilder results is the magnitude of cancellations, suggesting either how widespread speculation was or how difficult it is for new homebuyers to get financing.

Cancellations were approximately 34 percent of gross orders for the quarter, compared to 35.9 percent in the second quarter 2006. Preliminary closings totaled 2,461 units in the period, compared to 3,803 units in the second quarter of 2006, a decline of 35.3 percent.

These are simply huge numbers. Add to this the shakeout that continues to unfold in the mortgage market as hedge fund and investment firms have to mark their portfolios to market for less liquid holdings, suggesting the housing and mortgage market still have a long way to go before the industry's problems are behind them.

Why does it seem that Citigroup Inc. (NYSE: C) is late to the homebuilding slump? Because they are. The housing sector has been in the dumps for months now and yet only this morning did Citigroup downgrade stocks in the sector. Citigroup downgraded D.R. Horton Inc (NYSE: DHI), Hovnanian Enterprises Inc (NYSE: HOV), KB Home (NYSE: KBH), Lennar Corporation (NYSE: LEN), Pulte Homes Inc (NYSE: PHM), Toll Brothers Inc (NYSE: TOL) and The Ryland Group Inc (NYSE: RYL) to Hold from Buy as they believe "shares will remain range-bound through the rest of the year."

Let's recap:

KB Home: The company reported a second quarter loss and sales hit three-year lows. The loss was partly due to land value-related charges that highlighted the continued decay of the U.S. housing market. The company also said it was unable to provide investors with a full-year earnings forecast and couldn't say when they thought conditions would improve.

Lennar: Reported a Q2 loss. The company said market conditions had eroded so much that it's not trying to limit its losses for the year.

Pulte Homes: In response to the "challenging operating environment that continues to exist in the U.S. homebuilding industry," the company announced a restructuring plan designed to reduce costs and improve operating efficiencies in May.

Get the picture? Here's one more:

Ryland Group: Reported a Q1 loss in April and said it wouldn't be able to provide new guidance due to the slump in the housing market.

See a pattern? Homebuilder after homebuilder, it's the same story -- company faces challenging housing market, company loses money, tries to regain profitability. You'd think Citigroup would have noticed.

Aside from the companies themselves, other firms and analysts have said their piece about the sector. March data showed sales of existing homes fell to a four-year low. In April, Census Bureau data showed there were 2.5 million vacant non-seasonal housing units for sale, way over many firms' predictions. Additionally, AG Edwards said on April 30th that "it is not a good time to buy shares yet." Standard & Poor's said in May that they believed over a third of all U.S. homebuilders were "vulnerable to rating downgrades" in the midst of a "three-year downturn."

This is not news. Maybe Citigroup just missed it.